|Wikileaks:||View 02AMMAN2706 at Wikileaks.org|
|Classification:||UNCLASSIFIED//FOR OFFICIAL USE ONLY|
|Tags:||ECPS BEXP EINV JO|
|Redacted:||This cable was not redacted by Wikileaks.|
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 AMMAN 002706 SIPDIS SENSITIVE DEPT PASS FOR ANE/MEA KIM FINAN USDOC FOR 4520/ITA/MAC/ONE/PAUL THANOS USDOC FOR 6400/ITA/TD/OEC/KFERGUSON TREASURY FOR PIPATANAGUL TDA FOR SIGLER E.O. 12958: N/A TAGS: ECPS, BEXP, EINV, JO SUBJECT: MICROSOFT EXPANDS INVESTMENT IN JORDAN SENSITIVE BUT UNCLASSIFIED; PLEASE HANDLE ACCORDINGLY ------- SUMMARY ------- 1. (U) Estarta Solutions, the result of a merger between two prominent and well-established Jordanian IT companies, represents a significant expansion of Microsoft's investment and presence in Jordan. The new company bills itself as an international IT solutions company and consultant specializing in e-government, e-education, banking and finance, telecom, and logistics. The deal demonstrates the GOJ's determination to boost the development of the IT sector. End Summary ---------- BACKGROUND ---------- 2. (U) On May 20, following weeks of speculation and negotiations, and amidst a great deal of fanfare, Microsoft Vice President for Europe, the Middle East, and Africa Emre Birkin announced the launch of Estarta Solutions, the result of a merger between Jordan's two leading IT firms, ONEWORLD Jordan and Zeine Technological Applications. Birkin said that reform of Jordan's investment framework laws and a favorable "IT investment ambiance" in the country were behind Microsoft's preference to launch a new project in Jordan. The new firm, which will be based in Amman, will employ 200 people. Among its current clients are Thomson Financial, Apple, Siemens, and the Jordanian government. 3. (U) Microsoft will take a small share in the company, as will al-Foursan, a local venture capital fund specializing in IT companies. In addition to its investment stake, Microsoft has committed to channel business to Estarta (such as for creating an Arabic version of its Excel 7.0 spreadsheet program). According to a banker involved as an adviser in the merger negotiations, some issues relating to the corporate structure and management of the new company remain to be worked out. ------------------ THE HOPE OF JORDAN ------------------ 4. (U) At a dinner reception given by Estarta to celebrate the launch and attended by the Ambassador, Minister of Planning Bassem Awadallah, Minister of Trade, Industry and Commerce Salah al-Bashir, and local IT professionals, Minister of Information and Communications Technology Fawwaz Zu'bi opened the proceedings and said the "young entrepreneurs" who forged the new company represented "the hope of Jordan". He said the merged company represented a model for "what we would like to see in Jordan", and expressed his hope that other international IT companies might now be more encouraged to invest in Jordan as a result of the deal. The Ambassador cited Microsoft's participation in the venture as "a vote of confidence in Jordan's ability to grow". 5. (U) Earlier, at a press conference announcing the merger, King Abdullah stressed the importance of cooperation between the private sector and the government, particularly the Ministry of Information and Communications Technology, in working "to open new horizons for IT in Jordan". Contacts between Microsoft and Jordan developed following a meeting between King Abdullah and Microsoft CEO Bill Gates at the World Economic Forum in Davos in 2000. Their relationship drove Microsoft's plans for expanding its presence in Jordan. One reason for the long gestation period was the change in Jordan's Companies Law required to permit the formation of a joint stock company (as opposed to the more common form of a limited liability partnership), as demanded by Microsoft. --------- SYNERGIES --------- 6. (U) We spoke with Estarta Senior Director Basil Qubain about some of the upcoming projects the new company had in the pipeline. He stressed that Estarta was all about creating new approaches and synergies for its clients, not using existing applications to solve problems. He cited Mobius, a wireless platform that enables content providers to send web-based content to any mobile phone, and Gaia, Estarta's patent-pending pattern recognition software, as two major projects with broad applications, ranging from commercial to military, forged as solutions to client problems and challenges. As an example of Estarta's cooperation with Microsoft, Qubain pointed to Muse, an automated intelligence interface that plugs into Microsoft programs and acts as a virtual information manager and organizer. By way of example, Qubain explained that once an email is received by a user, Muse will list all previously received emails linked either by subject or sender, enabling the user to access and consolidate related information. 7. (SBU) Qubain said that the merger itself has gone quite smoothly, as clients and personnel from Zeine and ONEWORLD complement each other rather well. He added Estarta did face a challenge regarding rival mobile telecom companies Fastlink and MobileCom, as each was a client of Zeine and ONEWORLD respectively. While theoretically it was possible to retain both firms as clients, he said given current tensions between the two it was impractical and unlikely. Qubain said he did not yet know how the dilemma would be resolved. ------- COMMENT ------- 8. (U) Coming after a dry period following the September 11 disaster, Microsoft's decision to invest in Jordan represents a shot in the arm for Jordan's efforts to attract foreign investment despite its volatile neighborhood. It is also a boost for the Jordanian IT sector. Not just another IT shop, Estarta has the goods and the drive to become, as it hopes, the leading IT solution provider in the region with worldwide reach. The success of Microsoft's investment in Estarta could well attract more likewise innovative firms and investors to a sector that Jordan expects to be a key to its continued economic growth. Gnehm
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