Luncheon Address to American Chamber of Commerce

Good Afternoon,

I would like to thank His Excellency, Minister of Communications and Information Technology, Dr. Tarek Kamel for hosting this luncheon and for the opportunity to address the distinguished members of the American Chamber of Commerce. I would also like to thank, Taher Helmy, President of the Board and Board Members for your visit to the Smart Village. It is a privilege to share my experiences and insights with all of you on the relationship that Microsoft has enjoyed with Egypt for the past 10 years.

10 Years in Egypt

10 Years ago, in 1995, Microsoft Egypt was established as a representative office. Two years later it became a limited liability company, reflecting early on our commitment to the Egyptian market. We went from a few people setup to a much bigger investment in state-of-the-art offices as we became the first Multinational to go into the Smart Village in August of 2003. Today, these offices host over 70 Egyptian talents striving to further integrate Microsoft into the Egyptian community.

In January of 2004, we established the Microsoft Developers Support Center for Middle East and Africa at the Smart Village premises which reflects Microsoft's strategy of promoting a distinguished relationship with official institutions and proves Egypt's pivotal role as a regional hub for the industrialization and investment of IT. The center offers state-of-the-art technical support for IT developers in the region in multiple languages including English, French, Arabic and Urdu.

More recently, in January of 2005, we announced that Xceed, located right here in the Smart Village, will be providing product activation servicing across all of EMEA in 7 languages including Arabic, Spanish, Italian, French, English, Portuguese and Greek through a 140-strong Egyptian team working around the clock.

Like any other subsidiary in the world, we have sales, marketing, finance and support personnel in Egypt. We have a network of partners that distribute and resell our products as well as offer additional products and services to the local market. Exceptionally, Egypt also provides a service for the regional market where we have specialists that test our products for the Arabic markets.

Microsoft & Egyptian Government Partnership

Our relationship to Egypt is important. It is a large market, representing 74million citizens. There have been a number of factors that have made Egypt a favourable place for investment including the growth in mobile phones and internet usage. Perhaps, most importantly, has been the economic reforms’ agenda that the Egyptian Government has been steadily driving.

Our first key milestones in partnering with the government came in April 2001 when we signed an agreement aiming to provide a shared vision for an agile government through “Trusted Infrastructure”, “Empowered employees”, “Connected Citizens”, Business operations” and “Supplier integration” which is more commonly known as the E-Government. Through which, we have jointly launched 19 projects in 2005 and much more is in the pipeline for 2006. Some of these projects relate to citizens’ services liked e-payment of phone bills and car registrations, some relate to businesses like QIZ Services, while others are strategic to the country like the investment portal and the ministry of foreign affairs portal.

One of our first key milestones in addressing education in Egypt was even earlier in 1997 when we signed our first partnership with the Ministry of Education to introduce personal productivity and development tools to Egyptian students. This partnership has evolved over time and is now manifest in Partners in Learning which supports the Ministry of Education’s initiative to improve access to and use of information and communications technology (“ICT”) in primary and secondary schools. It offers a spectrum of educational resources to empower students to realize their full potential.

Since November of 2002, Microsoft has worked with the MCIT, the national banks, and Telecom Egypt to offer an innovative Affordable PC Initiative 'PC for Every Home' that has delivered more than a quarter of a million PCs to Egyptian homes. Today, H.E. Dr. Tarek and I have just announced an extension to this program which will make PCs even more affordable and user friendly for new users with a customized version of newly launched Windows XP Starter Edition that works in Egypt’s main language – Arabic. Today only 1.91% of households in Egypt have a PC, and we hope that this affordable, easy to use version of Windows will bring the benefits of computing to much more people. With Starter Edition, we’re giving first-time PC users the opportunity to use a computer in a language that is familiar and comfortable to them, and which is localized and tailored to their needs. We believe these efforts will help create economic opportunities and nurture knowledge economies here in Egypt and around the world.

Microsoft is committed to building capabilities and competitiveness in emerging markets around the world, and part of our job as a responsible leader is to put our innovations to work in ways that meet the unique needs of Egypt at every level. Today’s announcement reflects real progress on our efforts to address the issue of digital inclusion by providing access to technology skills, as well as building greater awareness and understanding of the benefits computers can provide.

Our partnership with Egypt has come a long way. Our relationship with public and private sector leaders in Egypt has grown. Our company has affected the Egyptian market, but we have also been affected by it. Our partnership has been a dialogue that has helped us reach a clear understanding of what it takes to achieve growth while, at the same time, what it means to be a socially responsible corporation with a focus on the country’s long term prosperity and well-being.

Microsoft and the Non/semi-Governmental partnerships

We realized very early on the importance of a vibrant local Information Technology economy and the importance of strong local IT players in Egypt. So in addition to our efforts to certify professionals and develop local partners, in 2002 we launched the Microsoft Partners Academy in cooperation with the MCIT.

The academy helps Microsoft partners gain access to technical, sales and management skills. A total of 260 participants representing 35 Egyptian companies graduated from the Microsoft Partner Academy. Among them were 39 managing directors and CEOs who received strategic leadership training that focused on how emerging companies can sustain their strength and growth in a competitive environment, and how they can collaborate to compete in the global market.

We’re also supporting several projects to develop SMEs with a special focus on empowering women particularly in remote geographies like Siwa. These projects were created in partnership with the government of Egypt, NGOs and our industry partners. The aim is to empower SMEs through the use of ICT to enhance productivity, increase market share and open new markets both locally and internationally. We are very proud to report that all women who graduated from this program have secured jobs that enabled them not only to enhance their family’s stature, but also to enable them to realize their potential.

For the greater masses’ ACCESS to technology, and in collaboration with MCIT and UNDP, we’ve trained 150 instructors representing 75 Technology clubs in delta and Upper Egypt using an Arabic localized version of Microsoft’s Unlimited Potential curriculum with another 200 instructors representing 100 Technology clubs to be finalized in 2006.

It is this focus on partnerships which is the cornerstone of the Company's philosophy globally and locally. The inauguration of these Microsoft Governmental and Non-Governmental partnerships is definitely a great achievement for Microsoft in Egypt and a model for proactive engagement in countries we operate in to drive more technology access while cooperating to shift the entire Ecosystem to realize the full potential IT provides.

Conclusion

The Egyptian Government and Microsoft have enjoyed a fruitful 10 year partnership where we have worked together to build a strong, vibrant, global IT economy. We are proud of our accomplishments and see the Smart Village as being instrumental in our joint success. We are looking forward to the next 10 years and the many great things we can accomplish together in Egypt.