Bill Gates white kids not eligible for my scholarships.
Now Microsoft is looking to invest in South Africa: but only in "black-owned" companies.
No, I'm not making this up: read on.
Microsoft seeks firms to empower in R492bn BEE deal
Rather than sell a stake in its company to local investors, Microsoft has opted to empower between five and 10 small information technology businesses in an equity equivalence deal worth R492 million.
The transaction, which has been endorsed by the Department of Trade and Industry (dti) and the Department of Communication, will be announced today.
Mteto Nyati, the managing director of Microsoft SA, said the process would lead to the selected companies being transformed into entities with the clout to compete locally and internationally.
"We want to create a new model for entrepreneurship," Nyati said.
The programme, which kicks off on Monday with a nationwide request for proposals, would be geared towards black-owned companies involved in developing technology solutions in areas such as health care, education and safety and security. Qualifying companies should have a turnover of no more than R10m and be a software developer in areas including cloud computing, which involves delivering common business or research needs such as the storage of data, across the internet to a service provider.
Microsoft hoped to work with the finalists from July.
"We are giving them access to Microsoft SA and its infrastructure, access to our labs for software development; (we are) specifically targeting unemployed graduates so that they can be placed in these companies," Nyati said.
Motse Mfuleni, the general secretary for the Black IT Forum, yesterday said the deal would contribute significantly to the information and communication technology (ICT) sector in terms of intellectual property development and job creation.
"But it must not be used as a short cut to redress the ownership of the industry," he said.
"It is focusing on only two pillars of broad-based black economic empowerment (BEE): enterprise development and skills transfer. The core is ownership," he pointed out.
Mfuleni said a recent study revealed that ownership in the ICT industry was "still in white hands".
Andre Wills, the managing director of Africa Analysis, an independent ICT consultancy firm, said any investment to lift the profile of the declining local software market was key.
Wills said a challenge would be to keep the skills and money in the country once these companies attained success.
"It's always tempting to lift the company offshore," he said.
Arthur Goldstuck, the managing director of technology research company World Wide Worx, said this was the first time a major multinational invested financial muscle and expertise in the small to medium enterprise sector, as opposed to a generic offering of money that was not applied to a specific outcome.
Thabo Masombuka, the director of the BEE division at the dti, said Hewlett Packard was the only other multinational in the ICT sector which had pursued a similar path to Microsoft. The rest were in construction and engineering.
Masombuka said many companies were interested but dropped out when they realised the complexity of this process. "It becomes a very expensive and long process. Eventually many of these companies pull out," he said.
He said the dti only gave Microsoft a conditional approval, but the company promised to fulfil "one or two things".
Friday, April 23, 2010