Microsoft earmarks $67 million for South African companies

Microsoft is investing about US$67 million over the next seven years in South Africa's software industry in a bid to help small, black-owned software development companies grow into competitive global companies.

The move, announced by South African Deputy Minister of Trade Maria Ntuli, is aimed at empowering black-owned software development companies based in South Africa to grow and develop effective skills in the software industry.

Ntuli said Microsoft wants to grow software development companies in South Africa into companies that would compete in the region and around the world. Microsoft further wants to create a new model of entrepreneurship and set a new benchmark for developing talent in the local software industry. As in many African countries, South African software industries have been struggling to survive due to lack of funds and skilled software developers.

"The South African government wants to ensure the growth of the local software industry and growth them into big business able to compete anywhere," Ntuli said.

Microsoft is the first multinational company to put both financial resources and expertise behind the growth of small and medium size enterprises (SMEs) developing software. The process of selecting software development companies to benefit from the investment started last week with black-owned companies nationwide invited to submit proposals.

Companies will be selected after being vetted by external consultants KPMG. By July this year, Microsoft hopes to start working with the selected companies. Microsoft said it will focus on growing fledging companies in a bid to build partners in new, potential high growth areas and hopefully generate greater competition in the South African software industry.

As in Zimbabwe, companies in South Africa have to meet quotas on black ownership, employment and procurement as part of the government's drive to shift more of the white-controlled economy in to the hands of the black majority.