CEO for Microsoft in Europe, the Middle East and Africa (EMEA)

Could Africa become the next India?

Faced with the daunting challenges of poverty, underdeveloped infrastructure, disease and civil war, few might consider the continent a budding technology hotspot. Yet over the last decade Microsoft Corp. has been investing money and resources to foster growth in the region and its efforts are starting to pay off.

“Obviously there is a significant gap between Africa and more developed countries, but I must admit it’s one of the fastest growing regions in the world,” said Jean-Philippe Courtois, chief executive officer for Microsoft in Europe, the Middle East and Africa (EMEA).

The continent is made up of relatively young countries — in some, over half the population is between 25 and 30 years old — and its leaders are looking to IT to narrow the development gap, Courtois said. Obviously there is a significant gap between Africa and more developed countries, but I must admit it’s one of the fastest growing regions in the world.Jean-Philippe Courtois>Text

While Africa is nowhere near supplanting India as an outsourcing location, or China as a consumer market, five to 10 years from now that may start to change as governments in the region focus on hemming up the digital divide.

As an industry powerhouse with profit to burn, Microsoft has made itself central to many of these aspirants’ plans. From South Africa to Kenya, and along the Ivory Coast, the software titan has been investing millions of dollars in offices, training centres, education programs and e-government projects to help bring developing communities into the digital age.

While it’s clear that Microsoft hopes to eventually reap the benefits of its efforts, allowing it to grow market share at a time when there may be few markets left to claim, it casts its participation in a philanthropic light.

“Our activity in Africa goes way beyond pure business thinking,” said Ali Hoballah, Microsoft’s general manager for West, East and Central Africa.

The company’s broad activities may in part stem from Bill Gates’ interest in the region. The Microsoft chairman appeared at the World Economic Forum in Davos, Switzerland, last week, where he attended a panel discussion on increasing aid to Africa. Flanked by British Prime Minister Tony Blair, U2 lead singer Bono, former U.S. President Bill Clinton and the presidents of South Africa and Nigeria, Gates’ spoke of his passion for the region.

“Time spent in Africa will definitely make companies on the business side and the giving side be more involved,” he said.

Microsoft itself signed 10 African governments to its Partners in Learning program last year, offering IT training, tailored curriculum development, technical support, cash grants and free Microsoft software to schools.

Under the program, Microsoft expected to reach 8,000 African schools and some 500,000 students, Courtois said.

The company has also invested a hefty amount to establish information and communication technology (ICT) training centres and develop local language versions of its software in Zulu and Swahili, for example. Courtois declined to estimate how much money Microsoft has invested in Africa recently, saying only that it was “many millions.” He added that he doesn’t expect to start seeing real development and return on the company’s investment for five to 10 years.

Microsoft has already spent over a decade in Africa, having begun operations in the more developed region of South Africa around 12 years ago. South Africa is now one of the company’s fastest growing markets, according to Courtois. What’s more, the EMEA head sees it as a model for how Microsoft can foster growth through its various education and investment initiatives. IT related jobs in the country have been growing at an average of 40 per cent a year for the last 10 years, and of the current IT jobs, almost half are Microsoft-related, he said.

ICT has become a small part of South Africa’s GDP (gross domestic product) and that “puts it on the map,” according to Courtois.

South Africa isn’t alone in its efforts, as governments in Tunisia, Algeria, Gabon and Kenya, among others, are working to come up to speed on technology development.

Gabon, for instance, hopes to become a hub for IT services. It has historically relied on oil revenue, but recent price drops have prompted the government to look to alternative industries to employ its young population.

The Senegalese government is also looking to invest in technology development to help it meet its goal of becoming a tourism destination, according to Hoballah.

Microsoft is working with these and other governments in the region to try to support their specific areas of interest, Hoballah said.

“They each want to be the next ‘I’ —India, Israel, Ireland,” Hoballah said, referring to the countries success in turning themselves into thriving IT outsourcing or development centres.

Microsoft is not the only major software vendor that can see past the forest of Africa’s problems to its potential.

Rival Sun Microsystems Inc. also has a presence on the continent, with one office in South Africa serving the sub-Saharan region and another office in Egypt. Sun is not as active as Microsoft in partnering with African governments, as its focus is investing in the software developer market and promoting its Java programming language, according to Dumisani Mtoba, senior systems engineer at Sun’s South Africa office.

“We are working to gain exposure and there is a growing Java ecosystem in the region, which delights us,” Mtoba said.

The African market has grown significantly over the last few years, and there is a lot of interest in software development, according to Mtoba. Sun’s challenge is to make sure that local developers are taught Java since they usually continue to program in the language they learn in school, Mtoba said.

Microsoft, on the other hand, is able to gain exposure for its .Net programming language through its broad work with governments and investment in training centres.

Sun has one centre for Java training in a South African university, but its activities have been mainly focused on reaching the developer community.

“We are not actively trying to move against Microsoft but we are certainly promoting Java and our products,” Mtoba said.

There is a lot of interest among African developers in open source software, and adoption of Sun’s OpenOffice open source productivity suite has been strong, according to Mtoba.

Developing countries are the most likely to adopt free and open source software, he noted, and predicted that interest in OpenOffice would continue to grow. He added that he expects to see even greater OpenOffice growth as African nations begin to clamp down on their piracy problems. With a minority able to afford licensing fees, African buyers will show greater interest in free alternatives, he said.

While Microsoft’s Courtois acknowledged competition from open source software, he sought to dispel the assumption that African governments would be more likely to chose it on the basis that it is cheaper or free.

“Governments have learned there’s nothing like a free lunch and you will have to pay for installation and training,” Courtois said. It’s more important for governments to partner with IT vendors to create jobs and a dynamic IT economy, he added.

Open source software proponents on the ground don’t appear particularly concerned right now about waging a war over using open source versus proprietary software when the market in general is so underdeveloped.

Guido Sohne, a founding member of the Free and Open Source Foundation For Africa who is now an independent software developer and consultant, believes that if African governments work to modernize aspects of government and industry by working with partners such as Microsoft, eventually it will lead to capacity that can then be used by the IT community at large.

Those “indoctrinated” by Microsoft may be steeped in the company’s technology, but once they are trained it will be easier to teach them Linux development, compared to those without training, Sohne wrote in an e-mail interview.

“The real battle is not at the government level but at the grassroots,” Sohne wrote.

But until the infrastructure is in place, any vendor participation that helps the continent’s development appears welcome.

Although Sohne has been active in the African software development community as an open source proponent, even he said that he cannot “in good faith” criticize Microsoft’s widening influence in the region. “What they are doing is really going to help; others could help but they haven’t,” he wrote.

Just because Microsoft is a primary player in Africa’s software development, doesn’t necessarily mean it will dominate the growing market, however.

Africa is large enough to accommodate most players, Sun’s Mtoba pointed out, and considering the continent’s development backlog, they seem more than welcome.

“Obviously, it’s a long journey and a fantastic challenge,” Courtois said.

For South Africa, Kenya, Gabon and other IT aspirants, it may just be a great opportunity as well.