Microsoft's mideast strategy (page 1 of 3)

Q. What's the outlook for Microsoft for 2003 and 2004, globally and in the Middle East region?

A. We just released our financial numbers for the third quarter, and we're happy to report 10 percent growth in revenue and 12 percent growth in operating income. But we've got to be cautious when talking about the next 12-18 months, given the fact that the economy is slowing down both in Europe and in the United States.

When you look at Western Europe, it's true that many of the countries are experiencing the same pain: slow GDP growth, growing public deficits, CEOs who are cutting costs. Therefore, IT spending might increase by three to five percent, which isn't too bad. It's not negative.

The Middle East and Africa is growing fast, which is why we have opened a number of subsidiaries in the region. We started five years ago in Turkey, which is our headquarters for the Middle East and Africa, and then we created another headquarters in Dubai to serve the Middle East. We created a headquarters in Morocco for North Africa, and in South Africa for the continent. All in all, the growth in the region is above 30 percent, which is extremely healthy.

Q. Where is growth highest? What's the outlook for Saudi Arabia and Egypt, for example?

A. All the Gulf states are seeing very strong, solid growth: the UAE, Kuwait, Oman and Qatar, where we have opened an office. For us, Egypt is a key market. Why? Because we've been able to develop some very strong and deep partnerships with the government. Dr. Nizif, the IT minister, is a visionary.

Working with the IT ministry, we've developed an education partnership, a partnership with local IT companies, with whom we work to provide services to both government and the private sector - and not just in Egypt.

In Jordan, the king has been adamant about providing a very good IT infrastructure environment, and we've established a number of partnerships there. In North Africa, we've seen pretty good growth in Morocco and also Algeria, where we decided to open an office. In Tunisia, where we've been for four or five years, we see positive signs as well.

Q. When you talk about deals in the region, you use the word 'partnership.' What does that imply about the way Microsoft does business in the region?

A. Having held this post for the last three years and having worked at Microsoft for the last 19 years, I know that there's no way that you can succeed unless you take a very long-term approach.

That's true not just for the Middle East; it's true for every country in the world. You've got to find a way to define your expectations, and so does the community you're working with. You've got to be very clear about the building blocks, about who will do what.

Q. What does that mean? You've got to be clear about, for instance, intellectual property rights. There's no way you can build a software industry if there's no legal support for intellectual property rights. There's no way to do that. It's also about building e-government solutions. It's about education.

Providing your products at very affordable rates, especially in this region. It's about donating your software to the poorest communities. In many countries in the region, you've got rural areas where people have no access to technology. We can do good things, with governments, to create the right environment for that.

A. Yes, we are a big company. Let's be honest, we are there to develop our business.