Microsoft to expand empowerment programme in South Africa

Computing

Microsoft SA is about to embark on a second phase of its R475m black economic empowerment “equity equivalence” investment programme and is looking for as many as five black-owned independent software vendors to which it will provide financial, technical and business support.

The company, a subsidiary of the US software giant, has long said it is precluded from selling equity in its local operation and, instead, reached an agreement with the Department of Trade & Industry to support small, black-owned businesses to help them expand.

In the first phase of the investment, announced in March, Microsoft said it would assist four companies — Pietermartizburg-based Chillisoft, Cape Town-based Maxxor, Durban-based Home Grown Integrations and BUI from Johannesburg — by providing them with financial, managerial and technical support and skills development.

Microsoft plans to invest 4% of its annual revenue over seven years as part of the programme. It will not take an equity stake in the companies it is investing in and will assist them to develop solutions that can be sold internationally.

Now, the company is looking for additional companies to join the programme. It has issued a new request for proposals to recruit majority black-owned independent software vendors. It says it will add at least one more company to the programme, but possibly as many as five.

Microsoft SA MD Mteto Nyati said earlier this year that it has no intention of taking an equity stake in any of the companies. “We hope they will also develop some of their solutions on Microsoft platforms, so there is an indirect benefit, but the primary reason is help these companies become large, global companies.”

More than 600 companies applied to the first request for proposals, of which 300 met Microsoft’s initial investment criteria. Following the first phase of investment, the department of trade & industry has awarded Microsoft SA 20 additional points, raising its black empowerment rating from level 4 to level 2.