Software Business in the Middle East

Part 1.

This example is not really from the software business, but it gives a good understanding of the local mentality.

I have a partner in Saudi Arabia whose uncle lives in Dubai. The uncle owns a building with a few apartments that he rents out. The manager of the building was a guy from Egypt who dealt with all tenants, payments, maintenance and so on.

Once the Egyptian guy told there were no tenants who wanted to rent an apartment. At the same time, one of the owner’s friends was looking for an apartment and the owner offered him to take any flat from his building. That was the moment of truth. It turned out that all apartments were actually rented out, and the Egyptian guy had simply taken all the money for himself.

The Egyptian guy was kicked out the same moment, of course, and the owner asked his nephew to take care about the building and tenants. I asked my partner that making business together with relatives might be a very large headache. What if the nephew will still money too – you wouldn’t kick him out easily, right?

My partner gave me an answer that I was very surprised of: “It is no problem if the nephew steals the money. The money will still remain in the family as the nephew spends them for his wife, kids, or himself”. That’s the logic.

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It is known fact that Arabs are good traders. It seems to be natural for them to have business buying and selling something.

Recently we had negotiations with one of our customers about software purchase for about 200 users. While they studied our quotation, they got a brilliant idea to install our software in one more branch with about 15 additional users. Of course, those 15 users were supposed to have free licenses.

If they called me, I would agree to it without even thinking – what is the deal with 15 extra licenses if you get purchase for 200 plus support contract?

Fortunately, the customer seemed to prefer speaking Arabic, so they called my partner. They bargained about the price over the phone for about an hour. As result, they agreed to get extra 15 free licenses…and agreed to double the price for the technical support contract.

The customer would save money if they called me. And I would lose money in this case. I think it’s worth learning from my partner how to bargain efficiently – it looks like a good way to increase the profit in some cases.

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When I came to Dubai in the beginning of 2006, there was only one telecommunication company here – Etisalat. They banned a lot of web sites on the Internet. It was enough to get banned even if a web site had a banner with a naked girl. They banned not only xxx sites, but also everything that’s not consistent with the religion.

The ban policy also had a business reason – Skype was banned too, until they released the later version of the software that had no way to be banned.

Somewhere by the end of 2006 they launched a new telecommunication company – du. After the launch it happened that we moved to the area where du was the only alternative to get Internet from. Everything was super, no bans, all just fine.

I mean everything worked fine until a few day ago when I got SMS and then e-mail from du customer support that ”dear friend, we think about your moral sentiments so we go ahead and ban all the sites you don’t want to visit”. Fy fan.

UAE Community Blog has a small test about what is banned and what is not. Playboy is banned, of course. Article about Fitna is banned on English Wikipedia – but it is available in Swedish, Russian and many other languages. Even Arabic, if I understand it right.

du has also banned some blogs I used to read – despite the fact these blogs have no ”bad” content, just probably “bad” domain name like fuckingbusiness.com. I get this nice page instead. Vivat Google Reader.

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