South Africa: Microsoft to Empower IT Companies


Global software group Microsoft will today unveil a R500m empowerment programme that, instead of selling shares to individuals, will assist black-owned software companies to grow into global entities.

Microsoft is one of the few multinationals to get government approval to do an equity-equivalent transaction that includes investing in areas such as skills and enterprise development rather than selling 30% equity to black investors.

Microsoft will spend R472m on skills, product development and leadership training to assist between five and 10 majority black-owned software companies over the next seven years. Mteto Nyati, MD of Microsoft SA, said the investment would directly address some of the key challenges such as job creation, developing enterprises, building the local software economy and developing scarce technology skills. "This is not just another broad-based black economic empowerment deal that features familiar faces and just ticks the boxes," Nyati said.

"We're looking to take existing software development companies and transform them into companies that compete in SA and around the world. We want to create a new model for entrepreneurship and set a new benchmark for developing talent in the local software industry."

The selection process is expected to start next month. Microsoft is targeting companies that have been in business for about three years and their software solutions should focus on health, mobile communications, education, and safety and security. Nyati said Microsoft would also train graduates with the intention of deploying them in those software companies.