Microsoft comes off the ropes and fights back against Apple

Microsoft was among the world's first truly global technology companies and for years was the best-known name in personal computers - until Apple knocked it off its perch. Now, it is fighting back.

Ali Faramawy, the vice president of Microsoft for the Mena region, says his company is working hard to close the competition gap with Apple.
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Microsoft was the largest technology company in the world back in the 1990s.

With the boom in personal computers, the US giant ruled the roost and the company's co-founder Bill Gates became a household name.

But just as fast as technology changes, so did Microsoft's fortunes.

As the iPad and the iPhone became must-have items, Apple started to catch up. Last year, the darling of Silcon Valley replaced Microsoft as the world's top technology company by market value.

Now Microsoft is looking to reclaim top spot and the Middle East will be a key battleground, says Ali Faramawy, the vice president of Microsoft International with responsibility for the Middle East and Africa.

"As a company, we were used to competing from behind," says Mr Faramawy.

"In a way, competition is healthy and it's a reminder that if you don't have your best people, you fall behind."

In the region, Microsoft sales climbed more than 20 per cent last year compared with 2009 when the economic downturn squeezed revenue by about 15 per cent on the previous year.

Along with new, compelling consumer products such as the Xbox Kinect device and the tie-up with Nokia to launch smartphones, Mr Faramawy is confident the future is bright for Microsoft.

How has the past year been after the decline in sales growth in 2009?

There was a dip in 2009, which was a difficult year, but we expected to bounce back. This year we're expecting substantial growth numbers, but there are some territories that we can't really judge [how business will go].

By that, do you mean the unrest in certain Mena region countries?

Yes. Right now, we are thinking about Egypt, Tunisia and a few other countries. We are talking about how do we take care of our customers and what can we do during these tough times. We're also making sure we can take care of our partners who employ hundreds of IT-qualified people. These guys need to get decent opportunities so they can contribute to their countries. The IT industry in Egypt and Tunisia is an asset. You don't want it to be affected too much. On a long-term scale, Egypt and Tunisia have great days ahead but the question now is how do you limit that impact in the short term.

What is Microsoft's main priority in the region?

Using information technology to improve education and governance is exceptionally high, and it's getting higher. I would say that the recent developments in Tunisia, Egypt and elsewhere have brought a new level of respect to the combination of youth and technology. Of course, that's a very encouraging thing because technology isn't just about social networking and communication. It also about building applications and infrastructure that allows you to make great things. People are also asking how technology can support small and medium-sized businesses and the role in helping labour-intensive industries such as tourism and textiles.

What is Microsoft doing in research and development in the region?

We're looking to do more applied research, but development is another story. We do direct Microsoft research and "enabled" research. The enabled part is how to support research in universities. Three years ago, we started a Microsoft facility in Cairo, where we have a number of engineers who are quietly working and collaborating with other researchers. They're working on improving Arabic search and the relevancy to certain Arabic terms in Bing. What I'm hearing right now is ideas such as can a country like Egypt do advanced research to increase the productivity of wheat farming? That would require a great deal of technology, but Microsoft is helping in this.

Will Microsoft help expand the Arabic web?

I think it's a good thing that we are all [including Google and Yahoo] involved in this because it's certainly beyond the reach of one single company. Content is going to be locally generated and all we do is create venues to share these types of content. We're expecting things to take off in Egypt. All of a sudden, everyone is a publisher. There's room for us to adopt some broader content incentives and it's something that we will investigate.

About 10 years ago, Microsoft was king and Apple was rather small. Today, things are different. What are you doing to change that?

We spent a lot of time improving our enterprise side. Now we're one of the largest enterprise players in software but it came at a price. We probably didn't pay enough attention to the technologies that arrived such as the smartphone. The first attempts to commercialise the smartphone and tablets were done by Microsoft. But did we spend enough time in terms of modernising design and the features? Obviously we've missed a couple of cycles there. As a company, we are used to [coming] from behind. At one point we were behind IBM and Lotus Notes before becoming number one. In a way, competition is healthy and it's a reminder that if you don't have your best people, you fall behind. We're working hard at closing that gap now.

When are we going to get Windows Phones with Arabic support?

You get more every day. At the same time, we have added some code and applications that allow you to use Arabic on your phone. But we need to improve the features and capabilities it has before we start thinking of languages such as Arabic. The exact release date for [Windows Phone 7] in Arabic I can't tell you right now. But we're on the right track with that.