Arabs were rather smart at that time (and later the Ottomans). They were governing very large territories, but actually they were very few people. So they had to find ways to be accepted by the local people. Hence the special status granted to Christians and Jews. For the same reason, they initially had very few scientists, writers, artists and administrators.
They also were often smart about conversions. Non-Muslim were tolerated, but had some economic drawbacks, such as paying more tax or being barred from lucrative occupations, so there was a strong economic motive to convert to Islam.