The Palestinian ICT Sector

Outsourcing Workshop –Tel Aviv July 8, 2008
By Ihab Jabari, PITA CEO

PITA’s Mission
• To promote and defend the ICT Sector through:  Advocating  Promoting  Developing

PITA Members

Specialties: Software development, Hardware, IT training and capacity building, Telecom services, Education , and Outsourcing.

Emerging Market with Hi-Gains
1. 2. 3. 4. 270 ICT Enterprises $0.5 Billion ICT Industry %5 of GDP $10-14 Million Software Exports (Recent Study) 5. Companies Average Net Profit: 1530% 6. Highest productivity value added: $62,000 per employee 7. Average annual wages = $15,000

ICT main Indicators
• ICT usage and spread in Palestine is in line (in some cases better than) with Arab countries, and constantly improving since 1997. 32.8% of households own a computer 15.9% have access to the Internet About 400,000 Internet Users About 62,000 ADSL subscribers

• • • •

Tap Into Our Talented Human Capital
1. 44% of ICT employees have programming and software engineering skills- 15% with 10+ years of experience 2. 13% of ICT employees have a Master and/or PH.D degree 3. 35% of ICT companies have at least 11 years of business experience 4. 9% of ICT companies have at least 16 years of business experience

Talent Pool
• 10-university engineering and IT faculties. • About 1100 new engineers and IT graduates every year - this excludes diploma graduates. • About 17,000 enrolled students in engineering, math and IT fields.
– Source: PITA recent study on ICT workforce in Palestine

Fields of Competencies
1.
– – – – –

Software Development
Data and Operations Software Educational Software Accounting, and Financial Software Inventory, and Customer Care Management Software Health Services Software

2. 3. 4. 5.

Software and content Arabization System integration and software conversion Automation testing Data mining

A Place for Viable Investment STRENGTHS OPPORTUNIT • Proven products & services • Growing local and regional markets IES • Location & languages • Proximity to Israeli/Arab/ EU
• Skilled workforce & competitive costs • Advanced telecom infrastructure • Liberalized telecom market markets • Multinational companies seeking investment • A pipeline of innovations

WEAKNESSE • Absence of VC S and • Business know-how
marketing channels

THREATS
• Political conflict & Perception • Brain drain

Competitive Advantages of the ICT sector
• Cost Advantage: – Developers rates: – Team Leaders rates: 30% of Israeli rates 35% of Israeli rates

Operational Advantages: – Low turnover of employees – Excellent command of English – Proven on time delivery at all times and situations – Reliable and advanced telecom infrastructure – Continuous access to fresh and skilled ICT resources

Benefits of Palestinian Outsourcing
• • • • Same time zone Same currency Reduction of cost Software/hardware outsourcing and management experience • Proximity and minimal costs for transportation, accommodations and communication • Low churn rate (turn over of employees within the Palestinian IT company) • Social and economic dividends

Benefits of Palestinian Outsourcing
• Use of international standards • Outreach and connection in USA, Europe, ME & Gulf • Excellent command of English, some in Hebrew • Proven on time delivery at all times and situations • Reliable and advanced infrastructure in telecommunications (All modern telecom means)

The Middle East - Emerging Outsourcing Market
• Region has a yearly growth of 5%+ • Increasing private equity activity • Outsourcing opportunities:
– Information technology outsourcing: e-learning, e-government, multimedia, etc – Business process outsourcing: finance, payroll, telemarketing, accounting, etc – Arabization and localization services

• • • •

Custom software development Web based analysis, design and development IT project management QA & testing

Success Stories
Palestinian IT companies have successfully penetrated regional and international markets via outsourcing or sales of product and service to the following countries: • • • • • • • USA Israel Germany Italy Sweden Switzerland UK • • • • • • Saudi Arabia UAE Jordan Yemen Iraq Egypt

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