Egypt: a Prospective Player on the World Software Outsourcing Market

Traditionally, Egypt always was a technical region of the Middle East. No wonder, the IT education was and still is one of the most popular and respective education in the region. Such well-known Egyptian universities as Cairo University, Ain Shams University etc. as well as new establishments with more innovative approach for IT specialists education, such as the American University in Cairo (AUC), Modern Academy and others, educate a new prospective generation of young IT professionals, ambitious and purposeful.

It’s obvious, Egyptian students win in international contests, and show true professionalism and ability to enter a business life immediately, hence, to play the first fiddle in the labor market.

That is why governments of Middle East an European countries encourage Egyptian programmers to come and to work there. Emirates is the best example of a country that understands all pros and cons of Egyptian IT professional, thus it’s the country that sees its benefits of employing Egyptian programmers.

Another one important factor is the cost of labor. In Egypt, usual hourly rates for programmers are $10-$25. Although they are almost like Indian ones, they are still 1.5 times lesser than Russian ones and several times lesser than American or European costs. If you consider the high level of professionalism and responsibility, then you add a perfect time zone, plus a fluent Arabic, English, of the most of IT people, you realize that Egypt is that happy medium each company looks for. Hence, many companies that outsource have already realized it.

Due to the Market Visio’s researchs the volume of Egyptian IT-services export in 2003 was estimated to be $70M, 40% more in comparison with 2002. The market prospects for 2005 were to be $150M; that is three times more in three years.

There are about 250 public companies that work for export. They are located mainly in Cairo the capital city of Egypt. There are also a huge amount of groups of professionals who are mainly engaged in export on a level of freelancers. The total number of IT specialists engaged in IT-export services was about 10,000 in 2003 and grew considerably during next years.

Everything mentioned above shows that Egypt has great prospects to become and equal player to the most known leaders of the market. Its well-developed IT infrastructure, level of services, and professionalism of programmers made Egyptian companies able to compete for complex and complicated projects with other well-known developers. There are several companies that invest in their own software solutions and market them internationally with success. However, all of them are engaged into smaller or bigger software development projects as subcontractors.

The next step of Egyptian gait into the world IT market seems to be a wide establishment of offshore development centers based on currently existing software development companies. Prerequisites are obvious:

1. Egyptian IT companies have whole infrastructure required to develop reliable custom application and deliver it in time.

2. The gross yearly expenditure per one programmer will vary from $20,000 to $30,000.

3. Egypt’s time zone is GMT +02:00. Hence, all programmers and project managers will be available on daytime for any European, or Gulf company.

The only thing remains to be done, though. Egyptian IT companies are making only their first steps in self-promotion. The more professional they become in this field, the more obvious it would be that Egypt becomes a competitive player on the world software outsourcing market.