By Courtesy Intel Intel CFO Justin Rather showcases 3D video at the Intel Developer Forum in San Francisco.

By Jessica Gray

It’s hard not to be awed by the sheer amount of brain power in the room as a hush descends on the audience at the official opening of the 2009 Intel Developer Forum (IDF) in San Francisco. Where self-proclaimed geeks literally come out to play, the three-day forum is a launch pad for technology producers, offering sneak peaks at the newest gadgets, concepts and tools designed to keep us connected anytime, anywhere, and in ways we never thought possible. It’s also where companies provide glimpses into the next “big thing.”

This year’s biggest draws at the forum included demos of 3-dimension commercial televisions, the advent of Microsoft’s new operating system, Windows 7, trends in netbook and handheld mobility and Intel’s plans to build even smaller processors under 22 nanometers, proving Moore’s Law is still alive and kicking.

Not surprisingly though, while the globe’s best-known technology firms have a presence in much of the developing world, little was said at the September conference about when these same companies will unveil their latest inventions in countries such as Egypt.

Experts on developing nations blame a number of variables for the often late adoption of new technologies, spanning the spectrum from personal computers (PCs) to smart phones and handhelds in developing countries. The top reasons they say emerging markets find themselves lagging behind are poor infrastructure, insufficient government funding, spotty distribution channels and a lack of investment from international brands.

But companies operating in Egypt say this trend is slowly changing as businesses match the appropriate technology to emerging markets, which offer vast potential due to low penetration rates and reduced costs of doing business. Though infrastructure is still a problem, most are confident that Egypt’s high growth in mobile subscriptions and competitive internet capacity will compliment the education initiatives they believe are the answer to low technology penetration and adoption rates in addition to finding the right technological ‘fit’ for Egyptian consumers.

Becky Davis, director of marketing for Intel’s emerging market platforms group, says her company formed its emerging markets division almost five years ago to find out exactly why technology wasn’t as prevalent in the developing world. The answers the team uncovered changed the way the company looked at the market segments, most of which struggled to cope with technology simply not designed for their needs.

“The group [] endeavored to answer the question why technology is so slow to be adopted in emerging markets and what are some of the unique challenges that emerging markets experience in technology adoption and consumption [as well as] what we can do in the product development cycle to address some of those technology challenges,” Davis says.

After seeing how few children had access to computers and mobile technology in and out of the classroom, Intel decided to switch its focus to bringing children — from kindergarten to grade eight — and technology together, a partnership whose offspring include the Intel Classmate PC, a small laptop designed for class use, and the Intel Learn and Teach programs that provide direct one-on-one PC literacy training. Intel is betting that children’s daily lives will be so integrated with computer technology that going back to the “tech void” will be impossible. The hope is that they will also promote this way of life within their circle of family and friends.

According to Davis, the world’s latest technical innovations frequently debut in emerging markets later than they do in the West because of developing nations’ immature infrastructure, including unreliable electricity and internet, as well as a challenging business environment. Governments may also have problems allocating appropriate funds to grow their IT sectors.

ITWorx president and chairman of the Export Council for High Technology and Software, Wael Amin, admits Egypt’s IT resources cannot compete with the West in spite of important gains in the nation’s internet bandwidth and the large investment being made to get Egypt connected. That being said, he sees several cutting-edge technologies and concepts that could revolutionize technology adoption for businesses and consumers alike, making it cheaper to put technology to use and easier to find technological solutions to meet Egyptians’ needs.

“Today, the penetration of computers as business tools in Egyptian small- and medium-sized enterprises [SMEs] leaves a lot to be desired. The penetration of computers as a lifestyle accessory in households still has a long way to go as well. The government has done quite a bit of work with programs to [reverse the trend], but Egypt still faces a number of challenges, including e-readiness,” says Amin.

“You have so many challenges in terms of routing out services in areas where there’s little infrastructure and in terms of locating and finding IT management resources,” he continues. “This is especially true in the public education [...] and health sectors where your infrastructure is spread out across the country.”

In its quarterly report released in June, the Ministry of Communications and Information Technology (MCIT) put the number of mobile subscribers at 44.6 million Egyptians, with internet users reaching 13 million, representing penetration rates of almost 60% and just under 17%, respectively. Cheap mobile phones, the aggressive marketing pushes from international and domestic telecom operators and the licensing of 3G wireless spectra here have helped grow mobile and internet use over 20% per year. However, the MCIT says only 7% of homes have PCs.

ITWorx hopes to solve these issues by simplifying the equation via a concept widely discussed at IDF called cloud computing, which is the general term for IT services delivered ‘on demand’ over the internet. The services range from simple data storage in the cloud to running applications to remote IT management.

The idea is to free up resources spent on IT departments in companies as well as increasing internet bandwidth, while decreasing the cost of purchasing software and hardware.

Cloud computing also allows employees or users to be connected to relevant data or applications anywhere, anytime using a variety of tools. Examples of cloud computing at work include the popular online email hosts Hotmail, Gmail and Yahoo Mail. So far, cloud computing has not taken off beyond personal email, says Amin, despite the cost advantage it offers to large companies as well as SMEs struggling to manage their IT resources.

ITWorx, which provides IT solutions and services to government, financial, heath and educational institutions, plans to change that with its first offering to the domestic market. With health officials predicting school closures at all levels in the future should an epidemic of the H1N1 virus break out, ITWorx has created a learning management portal giving students and teachers access to their curricula from home computers or internet cafes. Amin says there are an infinite number of ways cloud computing can be applied and that his company plans to lead the pack with its offerings.

His firm’s current cloud projects involve tailor-made solutions used to catalogue products and keep track of supply chains, with more to come.

Setting up a cloud-based portal for businesses costs between $25,000 and $50,000 (LE 136,000–273,000), half of what it costs to build and maintain an internal system, says Amin. He believes that this solution is well-suited to emerging markets because it fills a human resource gap Egypt has largely been unable to tackle up to now.

“Cloud computing stands a better chance of quick adoption in developing countries because it is logistically simpler to consume cloud services than traditional services. It’s a technology that could potentially help Egypt catch up [to the West],” he says. Netbooks, ultra lightweight laptops, are another technology that could push Egypt’s PC penetration rates to the next level.

But promoting services like cloud computing and netbooks is not the only solution, says Amin. The government must continue to support technical universities, such as Nile University, and entrepreneurship at home. The export council, a 12-member think tank that makes recommendations to the government on public policy, works closely with the state-run Information Technology Industry Development Agency (ITIDA), the MCIT and the Ministry of Trade and Industry, to create programs propping up homegrown operations, nurturing start-ups and enticing larger multinationals to do business in Egypt.

Ahmed Reda, ITIDA’s media and communications manager, says the entire industry shares the same goals — making Egypt a competitive destination for IT companies to operate and boosting the export positions of domestic SMEs and corporations in the region and beyond. To do this, ITIDA offers direct subsidies, incentives and grants on top of management training, capacity building courses and access to market research in the region. The idea behind the schemes is to invest in the top technologies and then produce them in Egypt, which both bolsters Egyptian businesses and offers cheaper alternatives for consumers.

“ITIDA supports local Egyptian businesses entering new markets and [helps] increase their exports, strengthen business ties with existing markets and enhance the capacities of local startups,” said Reda in an email.

“As part of its national development strategy, ITIDA created three core areas to enable it to grow and nurture its local IT industry. These focus on increasing awareness of available IT solutions, reimbursing product costs and supporting SMEs.”

The programs include: Grow IT: Expanding your IT Business, which is currently helping 100 IT exporters realize their potential, and The RITI Advanced Management Program that focuses on SME human resource development.

The ITIDA is expanding its role by launching two other schemes — one to boost Egyptian companies’ presence in Gulf Cooperation Countries called Go to GCC and another that offers international market insight, discusses partnership opportunities and arranges networking events called Egypt on Exports.

Ministry figures from June show the real GDP from the IT sector in Egypt was worth LE 7.2 billion in 1Q2009, up from LE 6.3 billion in 2008, posting year-on-year growth of around 13.5%. The amount represents 3.7% of the nation's GDP. There are more than 3,000 companies registered as IT operators, providers or related businesses here.

Reda would not say just how much these programs are worth in total, saying that the cost is more than worth the trade off, particularly since ITIDA is also committed to improving the sector with the help of international firms that bring their technological insight and newest products with them.

One of those international firms is Microsoft. Like Intel, Microsoft has taken the needs of emerging markets seriously and devised a plan that involves the element of education for its potential customers via training sessions for university students, business people and NGOs.

The company then took its emerging markets strategy further by sharply reducing the cost of its products to better meet Egyptian budgets. The basic Windows 7 kit retails for between LE 180 and LE 200.

“Our aim is to increase penetration in emerging markets. To give you an example, the number of mobile subscribers in Egypt is around 50 million. When you’re talking about PCs, it’s much lower. There is a huge difference between those numbers and where Egypt, and emerging markets in general, should be,” says Mohamed Salah, Microsoft’s Windows 7 group leader.

To keep Egypt abreast of the latest trends, Microsoft introduced the much-touted Windows 7 operating system on October 22, the same day as its global launch. “Generally we try to bring emerging markets on board at the same time,” he says.

The company has tailored certain products to emerging markets as well, such as the Windows Starter Kit editions, creating more opportunities for consumers to become lifelong customers.

Windows 7 has several options that make it easier for consumers to make the switch to a new operating system. It is compatible with programs and applications that work with Windows XP and operates on two- to three-year-old computers and laptops, meaning customers do not have to buy new machines to use the product. The software will also soon be available on local brands like Envision, produced by Egyptian firm ETE, alongside mainstays Dell, Acer and IBM.

While some of the latest and greatest gadgets and technical solutions may take longer to catch on here, there is no doubt they will get here eventually, if the technology makes sound business and consumer sense, says Amin.

This is particularly true in light of the fact that the next billion internet and technology users, a much sought after segment for global multinationals, live in emerging markets.

“I think emerging markets are absolutely essential for business growth. That is where there has been a slower technology adoption or penetration and from a business perspective there’s massive opportunity across all the market segments in all emerging geographies,” concludes Davis.  bt