Microsoft announces BBBEE partners

Johannesburg, 31 Mar 2011

Microsoft South Africa today unveiled the first small black-owned software development firms that will benefit from the company's R475 million investment in a broad-based black economic empowerment (BBBEE) equity equivalence programme.

The four new BBBEE partners, revealed this week by the Department of Trade and Industry and Microsoft South Africa, were chosen after an exhaustive five-month process examining and analysing the 683 hopefuls that had responded. The DTI welcomed the announcement of the selected beneficiaries, saying the programme had the potential to boost transformation within the South African ICT sector.

“This is a significant step in driving BBBEE within multinational companies operating in South Africa. Microsoft is a major player in the global technology industry, and its backing will hopefully add new impetus to our vision of creating a strong home-grown South African software industry,” said Sipho Zikode, acting deputy director-general within the DTI.

The companies chosen include Pietermaritzburg-based Chillisoft, which creates public health software solutions that assists in alleviating service delivery bottlenecks; Cape Town-based Maxxor, which creates consumer applications for mobile phones; security solutions specialists BUI from Johannesburg; and Durban-based Home Grown Business Integrations, which creates cloud-based software that boosts government service delivery to rural people.

Microsoft's managing director, Mteto Nyati, said the investment directly addresses key challenges facing the government and South Africa - namely creating jobs, developing enterprises, building the local software economy and developing scarce technology skills. It is anticipated that the deal will take Microsoft from a Level 4 to a Level 2 BEE contributor, subject to the relevant audits.

“We're satisfied that our choices not only meet the letter of BEE, but also the spirit thereof,” said Nyati. “To every applicant who submitted themselves to this intensely competitive process in which only a handful would be successful, the journey is not yet over and there are numerous opportunities for you to continue working with Microsoft in various ways.”

The four companies were chosen after a panel - including representatives from the Black Management Forum and the UKZN Centre for Entrepreneurship, and well-known venture capitalist head, Julia Fourie - had shortlisted 12 companies. These companies were invited to present their business plans and demo their technologies to the panel, with the DTI observing. Following the panel interviews, seven companies were shortlisted to proceed to the due diligence phase, after which four were selected to be the first beneficiaries of the programme.

Microsoft, its advisors and venture capital backers Vunani will immediately start working with the successful companies to establish their specific needs.

“Some companies may need more help with marketing; others with recruitment; others with building a watertight business model to take their product global,” said Kethan Parbhoo, Equity Equivalence lead at Microsoft South Africa.

“When this process started, we had little insight into the potential partners. But we did identify high-growth areas in South Africa and other emerging markets, such as healthcare, education, security, software plus services and mobility, where we saw the biggest opportunity of success for incumbents.”

Parbhoo said the company would be reviewing the programme on an ongoing basis, and would select additional partners over the seven-year period depending on market conditions and performance.

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Quotes from the panel and new partners

Thaisi Shale, Managing Director, Home Grown Business Integrations

“Home Grown is very excited to be part of this programme and to be in such esteemed company. We are proud to have been afforded this opportunity to provide even greater value to South Africans and eventually to people outside our borders. We realise that the hard work begins here and are looking forward to the challenges and opportunities ahead. We thank Microsoft and the DTI for assisting us in our quest in realising our vision.”

Miles Kubheka, Executive Director, BUI
“It was only a matter of time before our passion for solving our customer's IT security and advance infrastructure needs, led us to developing our own product. With time, it became very apparent to us that most of our clients had the same security challenges that weren't being addressed by products in the marketplace. We believe the key to our success is our understanding of the wide range of technologies around Microsoft products and a well-developed understanding of the underlying infrastructure of medium- to enterprise-size networks.”

Anujah Powell, CEO, Chillisoft
“It takes continued courage, perseverance and passion to operate and grow a self-funded software company, particularly in South Africa. So being chosen as one the Equity Equivalent partners, out of 683 companies, is a huge honour and testament of Chillisoft's skill and strength as a company. Needless to say, the Chillisoft team is on cloud nine at the moment. For years, we have been growing organically, where our pace of growth was largely constrained by finances and access to markets. Therefore, finally, having readily available access to expertise, assistance and resources is a dream come true. Chillisoft is committed to this exciting process and we are energised by the thought of converting our dreams that we have nurtured for seven years into the reality of being an internationally recognised software house. We are proud to be part of the equity equivalent programme, since it will pave the way for other multi-nationals, dramatically altering the concept of BEE investment and the investment landscape for SMME's and South African software.”

Mustapha Baboo, CEO, Maxxor
“We are ecstatic to be chosen as one of the partners for Microsoft's Equity Equivalent programme. Not only will the programme be good for Maxxor and the other partners' future growth prospects, but it will provide a much-needed skills development boost for the country as a whole. I also feel that this is a unique opportunity for my company to continue playing our part in the transformation of this industry that we all love.”

Dr Malome Khomo, formerly Director and Associate Professor at the UKZN Centre for Entrepreneurship and currently involved with entrepreneur development across SA and abroad
“It is a happy coincidence that I became a part of this selection process, since entrepreneur development is so close to my heart. I have seen similar candidacies, and realize that the initiative is so filled with promise for them - it's fortuitous - for so many talented entrepreneurs - and I wish to congratulate them all, that the world's foremost software company to be knocking at their proverbial door, and asking them of their dreams to fulfil. Good work Microsoft, together we can see their dreams through!”


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