IBM invests in growing its Egypt connection

US technology and consultancy giant IBM has been in Egypt since 1954 and, it seems, will not be leaving any time soon. The company recently announced the opening of a $3m digital sales facility in Cairo and a government deal to create 800 jobs in the country over the next three years, signalling a huge investment in Egypt’s growing technology sector and significant optimism in its potential as a regional digital hub.

As the Arab world’s most populous country, Egypt, despite facing security threats and rocky government transitions in recent years, represents a highly lucrative market for many foreign companies operating in the region. Amr Talaat, general manager of IBM Egypt since 2010, testifies to his company’s success at the heart of the Middle East and Africa region. “We have six specialised centres in Egypt that have been expanding since 2005. We started the expansion both horizontally, by expanding employee numbers and expanding our mission, and vertically, by adding more centres,” he says. Mr Talaat is a Cairo native who first joined IBM Egypt as a sales representative in 1988.

Huge potential

IBM's six Cairo-based centres offer a full spectrum of services: call centres and outsourcing; two maintenance service centres for clients in North America; a delivery centre executing IBM’s international projects from Europe to Latin America; a recently expanded digital sales centre; and a highly specialised software development centre producing embedded systems, voice recognition and the Arabisation of IBM products.

And domestic instability has not deterred the company’s ambitions. “Strangely enough,” says Mr Talaat, “since 2011, despite the turmoil and the uprisings within Egypt’s political scene, we have added three more centres.

"Egypt is definitely a strategic market, despite the turmoil of the past four years, because, despite what it has gone through, the fundamentals of the market remain valid. It has about 90 million people who need banks, telecommunications, they need to consume food, and they need health, education and transport services. So this creates potential in these sectors and, consequently, in IT to serve and better the performance of other sectors.”

Beyond its size, Egypt offers strategic proximity to markets in Africa, the Gulf and Europe. It also has a young and vibrant population; 50% of the country is under the age of 20. “What needs to be enhanced,” says Mr Talaat, “is education and training – whether academic or vocational. This is what we’re working on as part of our mission and responsibilities in growing Egypt’s IT sector.”

IBM works with Egypt's ministry of IT, whose training institute helps new graduates gain IT skills. It also partners with Egyptian universities, offering free curricula, software and a well-established internship programme. “We do have very promising IT skills [in Egypt], and it is easy to hire people at relatively low cost to grow our centres. The jobs provided by IBM are [up] in the thousands, and 99% of them are [filled by] Egyptians,” says Mr Talaat.

Good signals

Indeed, IBM has goals to engage with Egypt on multiple fronts. “We want to increase our partnership with the government, providing IBM IT solutions that will enable it to face Egypt’s current challenges – challenges such as security, education, health, energy consumption and tax fraud. All these challenges that are facing the government have solutions in IT. And IBM has world-class solutions in all of these sectors,” says Mr Talaat.

On the topic of the country's business climate, Mr Talaat admits there is room for improvement. “There are difficulties; there is a legacy of bureaucracy and slow decision making. However, regionally speaking, Egypt is not an exception. These difficulties can definitely be overcome,” he says.

Mr Talaat cites efficient help from the ministries of IT and foreign affairs in areas such as visa processing as a sign that the government is prioritising the improvement of the investment ecosystem. In February, IBM CEO Ginni Rometty visited Egypt and met with president Abdel Fattah Al-Sisi and prime minister Ibrahim Mahlab. “The fact that the president gave us one hour of his time is, in my view, a strong signal that he realises the role of multinationals in expanding and growing the economy,” says Mr Talaat.

Concerning the future, Mr Talaat is positive. “I think we’ve overcome the difficult years. There are still challenges, but I am definitely full of optimism for the future of the country,” he says.