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Johannesburg - Microsoft South Africa has unveiled a R472m empowerment project that it says will bolster local black-owned software companies. The investment will be rolled out over seven years.
Kethan Parbhoo, equity equivalent lead at Microsoft, said on Friday the process of choosing companies to take part in the programme would begin next week. KPMG has been selected to oversee the tender process and a request for proposals will be put out between April 28 and May 19.
"In order to qualify, companies must have been running for a minimum of three years already; we are not looking for start-ups," said Parbhoo.
"These companies must also be majority black-owned with a maximum of 30 full-time employees and a maximum turnover of R10m per annum - and they must be in the business of developing software," he explained.
Parbhoo said once all applications have been received KPMG will conduct verifications and checks to create a shortlist of companies. This list will be provided to a team of both Microsoft and non-Microsoft industry representatives, who will select the partner companies. The final decision will be announced at the end of July 2010.
"We haven't fixed an exact number of companies we are looking for," said Parbhoo.
"We are going for depth, not breadth, in our approach. That said, we will probably end up with between 10 or 15 selected companies as a maximum, but this depends on the responses we receive," he said.
Parbhoo emphasised that Microsoft would not take a stake in the selected companies.
"They will remain independent. Their intellectual property will remain theirs too, along with the products they produce. We will use other investment initiatives to help grow these companies. This will include an extensive gap analysis and business planning process between ourselves, the selected companies and consultants to understand where they are and where they need to be in seven years' time. Then we can invest in the appropriate things to help them get there," he explained.
Parbhoo said these measures would include software, infrastructure and other resources, including the ability to hire 20 employees per year, per company. If successful, he predicted these measures could create 1 400 direct jobs and 4 000 to 5 000 indirect jobs.
"Our intention is to take these local partners and grow them into multinational companies, developing software on Microsoft's platforms, for which they will receive full support," he said.
Parbhoo said Microsoft currently had a BEE level four standing, which he excepted to be bolstered to level two once the full effects of this investment programme were realised. He said that Microsoft was unable to provide equity in its operations and instead met its BEE requirements through equity-equivalent schemes such as this.
Microsoft was also establishing a new division to identify what software was in global demand and how it could be provided to the international market by South African companies, said Parbhoo. He added that categories such as healthcare, cloud computing, mobility and consumer had already been identified as areas of opportunity.
- Fin24.com
