Microsoft races to establish foothold in Africa
By The Seattle Times
Published: Saturday, March 23, 2013, 9:00 p.m.
SEATTLE — When Microsoft announced recently that it was starting a big push to grow its market in Africa, it cited the continent's growth opportunities, calling Africa a “game changer in the global economy.”
Similarly, IBM, Google, Intel, Hewlett-Packard and other tech companies have begun expanding their presence in Africa.
As the growth of tech hardware, software or services flattens or declines in mature markets such as the United States and Western Europe, and markets in China, India and Russia grow increasingly competitive, many of the largest tech companies are looking to Africa.
“The U.S. and Europe are stagnant. China is growing but plateauing, as is India,” said Roz Roseboro, principal Middle East and Africa analyst at research and consulting firm Analysys Mason.
“You've got these big multinational companies looking at Africa and saying: ‘You've got growth here,' ” she said.
Some factors have coalesced to make the continent attractive to major tech firms. The political situation in many countries has become more stable, with governments open to cooperating and forming joint projects with foreign, multinational corporations.
More tech infrastructure is being built, including undersea fiber optic cable systems bringing faster broadband connections to Africa's coasts and terrestrial cables to extend the networks inland.
China's government and some of its companies have invested in African infrastructure, such as electricity grids, in return for natural resources.
There is a growing middle class and rapid urbanization. And the population of the continent, as a whole, is young — with an average age younger than 20 in some countries, Roseboro said.
“They're the ones who want this (tech) stuff and the most willing to pay for it,” she said. “And they're the ones evangelizing — it's going to be the 16-year-old student who shows his mom how to use it.”
Still, there are challenges to overcome.
More education and skilled labor are needed to help build the economy and the tech ecosystem, to say nothing of the consumer and business markets.
Basic infrastructure is lacking. While strides have been made in increasing broadband access, most people in Africa don't have online access. For those who do, connections can be slow or costly.
“For Microsoft to sell software, for Google to sell ads, you have to get people online,” Roseboro said.
In other words, to have a market to sell to, the tech companies must invest in building the market.
Toward that end, many of the strategies pushed by tech companies expanding their footprint in Africa include investments in infrastructure as well as increasing Internet access, developing people's skills and education, and establishing research and technology hubs.
Microsoft began its 4Afrika initiative last month — an effort that has the company spending an additional $75 million in the next three years over what it's been investing there.
The initiative includes working with the Kenyan government and a Kenyan Internet service provider to deliver low-cost, high-speed wireless access; getting millions of smart devices into the hands of African youths; bringing a million small- and medium-sized businesses online; providing skills training; and starting an “online hub” through which small- and medium-sized businesses can gain access to free products and services from Microsoft and others.
It includes a partnership with Chinese phone manufacturer Huawei to introduce a Windows Phone, called Huawei 4Afrika, with features and apps specifically designed for the Africa market.
Getting a foothold in the mobile market is especially important in Africa, where, for many, a PC is too expensive and a feature phone or a smartphone is the first and possibly only computing device for many. Indeed, mobile payments — using a phone to make payments or do banking — are common in Africa.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- PNC plans to do away with tellers
- Consol acquires drilling rights from Dominion
- Barra breaks GM glass ceiling
- Poll: Women’s pay up, but so is negativity
- Lululemon to make changes in top brass
- Wholesale stockpiles up 1.4% in October
- Nestle cuts ties with farm over dairy cow abuse
- Education Management Corp. suit settled for $3.4 million
- RBS group finance director to step down
- Fab Universal disputes kiosk claims; will restate earnings
- Stocks decline on heels of record close