/ 13 January 2011

Microsoft empowerment deal gets the nod

Microsoft’s R472-million black empowerment deal will finally come to fruition after months of delays and discussions with the Department of Trade and Industry.

Microsoft was supposed to announce the names of four or five black-owned and black-managed software companies in August as part of an “equity-equivalence” plan that would have resulted in the United States (US) software giant assisting them financially and nurturing them.

However, Microsoft was forced to negotiate a new way of complying with empowerment requirements with government, resulting in several delays.

The equity-equivalence plan was hatched between Microsoft and the department because, like other US companies, Microsoft can’t sell a stake in its SA operation for regulatory and other reasons.

Microsoft South Africa Managing Director Mteto Nyati says the details of the memorandum of understanding between Microsoft and the department have now been ironed out. “All we need to do now is sign on the dotted line,” he said.

Nyati said the department had wanted to ensure the companies being sponsored received a “fair deal”.

He said Microsoft will announce the first set of investments in mid-February. It’s expected to name four or five firms then, with further names possibly to follow later in the year.

Microsoft received 650 applications from companies interested in benefiting from the programme.

KPMG has assisted the software company in the process. Representatives of the Shuttleworth Foundation, the Black Management Forum and the Centre for Entrepreneurship helped in making the final selection. — TechCentral