MERGERS, ACQUISITIONS AND FINANCIAL RESULTS

EGYPT WELL-PLACED AS THE NEXT HOT SPOT FOR IT OUTSOURCING

Yankee Group says that it thinks Egypt could soon become the India of the Middle East as it seeks to develop its share of the global outsourcing market. As this market continues to grow, with India holding 60% of the market share, more multinational companies are using IT outsourcing and business process outsourcing as tools to transform their organizations into global operations, becoming what Yankee Group calls the Anywhere Enterprise. Global companies such as Cisco, Google, IBM, Microsoft, Oracle and Orange Business Services are already exploiting Egypt's IT talent pool.

Egypt faces some significant hurdles. But it possesses unique advantages as well, which could enable Egypt to reap the economic benefits of outsourcing opportunities. The Egyptian government has set an ambitious target for the country to reach $1.1 billion of the global outsourcing market by 2010, quadrupling from its 2005 revenue.

According to a Yankee Group Report, although interest in Egypt as a location for outsourcing services is growing rapidly, there are number of structural and perceptual problems the Egyptian government must address to facilitate the ascendance of this market.

"Egypt has a number of the required ingredients in-place to become a major hub for IT outsourcing in the Middle East," said Tony Marson, Yankee Group senior analyst and report co-author. "In an anywhere environment, where time and place are irrelevant, IT outsourcing will continue to be a strong and resilient revenue opportunity for those regions that successfully enter it. For Egypt, the government will have to steer the development of the ICT industry cautiously through the next 5 years."

Mindy Blodgett, Yankee Group analyst and report co-author, adds, "Anywhere enterprises interested in outsourcing are demanding options for locating the work in many regions -- and Egypt could become a favored outsourcing location if they meet the many challenges."

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