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Microsoft shifts some work out of Egypt

Patrick Thibodeau | Jan. 30, 2011
It is among some 120 companies located in Cairos Smart Village IT office park

FRAMINGHAM 30 JANUARY 2011 - WASHINGTON -- Egypt has been aggressively attracting tech companies to its wired office parks to help create jobs for its young, educated and often English-speaking workforce. But by cutting off Internet access last week in the wake of civil unrest, Egypt's government demonstrated just how quickly it can unwind its hi-tech goals.

Microsoft is among the 120 companies located in Cairo's Smart Villages, an office park created in 2003 to be Egypt's "prime" information technology park. It includes a health club, swimming pool, video conferencing services, a conference center and a pyramid-shaped restaurant called the "Think Tank Café."

Egypt's move to block Internet access prompted Microsoft to respond. Asked about the situation in Egypt, Microsoft said in a written response to a query that it "is constantly assessing the impact of the unrest and Internet connection issues on our properties and services. What limited service the company as a whole provides to and through the region, mainly call-center service, has been largely distributed to other locations."

Another tech firm with a presence in Smart Villages is Hewlett-Packard, which has asked it employees to stay at home .

President Barack Obama and other administration officials are urging the Egyptian government to restore Internet services and see access as a human right. "It is our strong belief that inside of the framework of basic individual rights are the rights of those to have access to the Internet and to sites for open communication and social networking," White House Press Secretary Robert Gibbs said at a briefing Friday.

Egypt's decision to cut Internet access was apparently intended to disrupt the ability of protestors to use social networks to organize. But hi-tech companies have similar flip-the-switch abilities and can shift services in response to a natural or manmade disaster. It is almost certain that tech companies in Egypt will respond to the current uncertainty much the same way Microsoft did -- if they haven't already.

Phil Fersht, the CEO and head of research at Horses for Sources, an outsourcing research and advisory firm, said top-tier providers rely on Egyptian resources largely for call center work and software support and development. For these firms "it's a massive, massive concern when the government shuts off the internet and all hell is breaking loose," he said in an e-mailed response to questions.

"Egypt has proven capable as a good quality resource location for the Middle East, Africa and European regions in areas such as IT, BPO and call center services and has invested significantly in promoting its capabilities worldwide," said Fersht. "The country has invested millions to promote its capabilities -- and now that investment is looking under threat."

 

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