Strife Disrupts Egypt's Tech Firms

Anti-government protests in Egypt are disrupting the country's growing tech operations, keeping employees away from their offices and making Internet access spotty at best.

Yahia Megahed, vice president and supervisor of the Egyptian branch of Symbyo Technologies Inc., a U.S.-based IT services firm, said the protest and government Internet shutdown is "definitely affecting" business.

"People are not able to go to work and the Internet is down," said Megahed, who was reached by telephone in Cairo on Friday.

Some people have been able to get Internet access via proxies, but the outage is still affecting the majority of people, said Megahed. The problems with the Internet are now into their third day, he said.

Many IT companies, including Hewlett-Packard, are located in Cairo's "Smart Village," a large office park with 120 companies and some 28,000 workers.

HP is telling its Egypt-based employees to temporarily work from home.

"HP will continue to provide service to its customers during this time," said HP, in written response today to a query.

An HP spokeswoman said they didn't know whether those home-bound employees have Internet access.

The Smart Village's Web site was accessible today, but government Web sites that promote technology development in Egypt appeared to be off-line.

The Egyptian government has been aggressively selling the country as an outsourcing destination and has seen its tech sector grow.

"Egypt is considered, despite of what happened this week, to be a stable country," said Megahed.

Major U.S. tech companies, including Microsoft, IBM, Oracle, EMC, and outsourcing firms such as India's Wipro, all have operations in Egypt.

Microsoft has established an innovation lab in Cairo to work on a variety of research projects, including improving the effectiveness of content search in the Arabic language.

According to consulting and research firm Everest Group, U.S. companies in Egypt are providing application development and maintenance services, technical service desks, as well as data center operations and disaster recovery services.

Megahed said the IT industry in Egypt sells outsourcing services mostly to U.S. companies, and to some European firms. Egyptian officials say that among the advantages over India the country can offer outsourcing operations is the ability to find talent. In Egypt, they say, there's less competition for talented tech workers.

"Egypt has a very high rate of college graduates who speak English as well," said Megahed.

Megahed said it was unclear when the demonstrations will end, but he believes it will have a short effect. "I do not think it will be something major," he said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov , or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com .

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