GulfNews Technology

Pakistan aims to double IT industry in two years with tech zones

Technology|Pakistan|: Islamabad: Pakistan is looking to double its IT industry in two years by setting up dedicated tech zones across the country, after missing out on tech booms that helped nations like India and Philippines become back-end operators for the world. The world's fifth most populous nation expects to open a dozen such zones by next year, said Amer Hashmi, who heads the government body responsible for developing science and technology zones. It's offering a 10-year waiver on corporate tax and imports of any equipment or building material needed for the areas, which will give Pakistan's IT industry a "catapult push" that could double its size to as much as $6 billion in two years, he added. Pakistan is banking on the new tech zones to create employment for its masses of young people - nearly two-thirds of its population is below 30. It's already home to the third-largest gig economy globally after India and Bangladesh, according to Online Labour Index by Oxford Internet Institute. A flood of overseas capital into startups from fintech to e-commerce that began during the coronavirus pandemic is also creating demand for dedicated zones to serve these industries. The initiative first emerged after Prime Minister Imran Khan sought answers at a meeting last year as to why Pakistan was missing out on the tech boom. Tapping on his own experience as an entrepreneur, Hashmi told the prime minister that the South Asian nation lacked a tech eco-system or an enabling environment. Hashmi, who left his job with International Business Machines Corp. in Canada and moved back to Pakistan to open a technology company, had to grapple with people asking for bribes and faced delays with setting up his own fiber network and data centers. The new areas will not have such issues and will be a plug-and-play model, he said. Attracting tech giants "How do you get a Google or Microsoft or Amazon? You attract them and for that you have to give special incentives, which well I think we would have probably been the last in the region to give," Hashmi, now chairman of Special Technology Zones Authority, said in an interview. "Dubai Internet City gave them. They got all the big companies." Cash-strapped Pakistan has tried several times to start similar projects in the past. In 2006, it planned to spend $1 billion to build dozens of software parks, though that effort failed. This time, the government's efforts will involve attracting global investment to ensure the project takes off. About half a dozen global companies and 50 domestic firms have expressed interest in setting up in proposed zones, Hashmi said, adding that as much as $1.5 billion of private investment will pour into these projects over the next two years. He is also convincing the government, which is spending millions of dollars on technology-based projects, to give more contracts to local companies. TPL Corp. is building one such tech zone in commercial capital Karachi. "Pakistan can't have a full blown tech explosion. We don't have the money," said Habibullah Khan, founder at Penumbra, a digital marketing agency that also assists startups. "The latest public-private partnership model makes clear sense." The nation's newly appointed finance minister has also pledged to support the IT industry, which he says could help diversify exports and help the nation get out of its regular boom and bust cycles. The industry can be a game changer and will be given "anything they want," Shaukat Tarin said in an interview in May.

GulfNews Technology

Microsoft rises to join Apple in exclusive $2 trillion club

Technology|: New York: Microsoft Corp. took its place in the history books as just the second US public company to reach a $2 trillion market value, buoyed by bets its dominance in cloud computing and enterprise software will expand further in a post-coronavirus world. Its shares rose as much as 1.2% in New York on Tuesday, enough for the software company to briefly join Apple Inc. as one of only two companies trading at such a lofty value before closing pennies short of the mark at $265.51. Saudi Aramco eclipsed that threshold briefly in December 2019, but currently has a market value of about $1.9 trillion. Since taking the reins in 2014, Chief Executive Officer Satya Nadella has reshaped the Redmond, Washington-based company into the largest seller of cloud-computing software, counting both its infrastructure and Office application cloud units. Microsoft is also the only one of the biggest US technology companies that has so far evaded the recent wave of scrutiny from increasingly active American antitrust regulators, giving it a freer hand in both acquisitions and product expansion. Big gains Microsoft has gained 19% so far this year, outperforming Apple and Inc., as investors piled into the stock on expectations of long-term growth for both earnings and revenue, and expansion in areas like machine learning and cloud computing. The company's third-quarter results, released in late April, topped expectations and demonstrated strong growth across its business segments. The tech-heavy Nasdaq 100 Index outperformed the S&P 500 Index on Tuesday after Federal Reserve Chair Jerome Powell reiterated his view that inflation will be short lived. Both benchmarks extended gains after Powell's comments with the Nasdaq 100 closing up 0.9% and the S&P 500 up 0.5%. Microsoft "has its hands in a lot and it is doing it all well: gaming, cloud, automation, analytics, AI," said Hilary Frisch, senior research analyst at Clearbridge Investments. "It is an attractively valued name within tech, and it should benefit from both the economy reopening as well as from a more pronounced shift toward the cloud." Co-founded in 1975 by Bill Gates and Paul Allen, Microsoft created the personal-computer software industry and dominated the market for PC operating systems and Office software for years. As internet browsers like Netscape grew in importance in the 1990s, Microsoft raced to introduce its own product that it bundled with Windows software. That led to a bruising antitrust lawsuit, filed in 1998 by the U.S. government, with a federal judge finding the company guilty in 2000. Though Microsoft avoided a breakup of its business, the penalty the government originally sought in the antitrust case, the next decade saw the software maker largely miss the advent of mobile software, social media and internet search, falling behind newer rivals such as Google and nimbler ones like Apple. With a series of strategic shifts, in the past seven years Nadella has restored Microsoft to the vanguard of technology with a focus on cloud, mobile computing and artificial intelligence. While it took Microsoft 33 years from its IPO to reach its first $1 trillion in value in 2019, the next trillion only took about two years amid a surge in popularity in tech stocks before the Covid-19 pandemic and during the health crisis. Apple made Wall Street history when it reached $2 trillion last year. Among U.S. names, the pair are trailed by Amazon, which has a market cap of nearly $1.8 trillion, and Alphabet Inc., which is valued around $1.6 trillion. "Microsoft checks all the boxes: it is in the markets that investors favor, it offers strong and sustainable growth, and it remains very well positioned to capitalize on the long-term secular trends we see in technology," said Logan Purk, an analyst at Edward Jones. A $2 trillion valuation "is warranted, given how it has pivoted toward the cloud, and it remains attractively valued even given the strong performance." According to data compiled by Bloomberg, more than 90% of analysts recommend buying Microsoft, while none has the equivalent of a sell rating on the stock. The average price target points to upside of about 11% from current levels. Growth drivers Microsoft's cloud-computing business has been a central force behind the advance. According to data compiled by Bloomberg, the Intelligent Cloud business accounted for 33.8% of Microsoft's 2020 revenue, making it the largest of the three major segments for the first time, and up from 31% in 2019. The division showed revenue growth of 24% last year, compared with the 13% growth in Productivity and Business Processes, and the 6% growth of Microsoft's More Personal Computing unit. Nadella's strategic moves had put Microsoft in a position to benefit from business trends that arose during the global pandemic. Lockdowns and remote work accelerated a shift to the company's meeting software and pushed clients to speed up modernizations of software networks and applications around the cloud. The software maker's Xbox gaming subscriptions also lured users looking for diversion during months stuck at home. As workers return to the office, Microsoft has tried to push new ideas for managing meetings where some attendees are in person and some remote, and has been hawking features to boost wellness and productivity for workers that the company says are burned out by the tribulations of the past year. "At a high level, the two core pillars of Microsoft's bull narrative "- Microsoft 365 and Azure "- are well understood by the investment community," William Blair analyst Jason Ader wrote in May. "What is perhaps less appreciated is how over the last 15 years Microsoft has expanded its IT wallet share through expanding into new product areas" and taking market share. The wallet share doubled from 2006 to 2020, and "we believe it can double again over the next decade," it wrote. Wall Street is also positive on the company's M&A strategy. It recently announced that it is buying speech-recognition pioneer Nuance Communications Inc. The company also tried to acquire Discord Inc. for $12 billion, but the video-game chat company rejected Microsoft's offer.

GulfNews Technology

Buy Now Pay Later portal tabby picks up a cool $50m in record fintech funding

Dubai: The Buy Now Pay Later phenomenon sweeping through UAE and Gulf retail and consumer space is not abating. One of the key platforms offering such financing support, tabby, has picked up a staggering $50 million from Partners for Growth – the biggest such facility to date in the region for a fintech company. This investment will "bolster tabby’s capitalization to expand lending capacity and support the company’s growth," said a statement. "The vision is to grow the size of the facility as tabby’s underlying sales scales over time." "As our transaction volumes and merchant numbers have continued to surpass all our expectations, it was essential for us to partner with an organization that would support our current and long-term growth,” said Hosam Arab, CEO of tabby. Read More FAB’s Magnati partners with Al-Futtaim to offer Buy-Now-Pay-Later at IKEA online UAE consumers could soon be paying off school or medical bills on 'Buy Now Pay Later' - and on 0% Palazzo Versace Dubai becomes first luxury hotel in Gulf to offer ‘buy now pay later’ At a time when consumers are still squeamish about spending on anything other than essentials, the BNPY platforms allow them to pick their choice of goods or service and pay in short monthly instalments. No interest rates are charged. These portals have carved up quite a good deal of visibility within the broader fintech space - the $50 million funding just proves that. “tabby is one of the fastest growing companies in the MENA region and they have an attractive market opportunity ahead," said Max Penel, Investment Director at PFG. "We are excited to support the tabby team and provide financing that can enable tabby to scale the platform, harnessing the continuous growth of the buy now pay later sector both regionally and globally.”