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International IT companies still prefer Mother City

By   |  February 28, 2007

Foreigners are still looking favourably at South Africa as a launchpad into
Africa but, according to one new entrant, Cape Town is proving far more
popular than Johannesburg for international IT companies.

Integration specialist, Bluescribe has recently opened its African offices in business accelerator, Bandwidth Barn. This marks its first foray into what it describes as a lucrative market.

“Opening the Cape Town office was a natural progression into an exciting and dynamic region to compliment the operations that are running for Asia Pacific and Europe. There are excellent growth opportunities and Bluescribe is already well connected in the South African market,” explains Russell O’Brien, CEO of Bluescribe.

The decision to move to Cape Town was not based purely on superior views and lifestyles. According to Bluescribe’s local MD and Australian national, Bryan Hooley, the company specifically chose the Bandwidth Barn because of the numerous referrals.

“Opening in Cape Town was a no-brainer for us, we spoke to a number of people already in the market and we realised that not only was Cape Town the logical decision, but that the Bandwidth Barn is an excellent place to kick off your business. We’ve already formed a number of partnerships and find it a great networking opportunity.”

But the country isn’t all sunshine and signed deals. Hooley says one of the biggest drawbacks of doing business in South Africa as a whole is the infrastructure or lack thereof.

“The infrastructure is way behind what we are used to. We are always shocked when we see our bill, we’re paying three times what we are used to for an inferior service. If anything is a hindrance to companies investing in the country, this will be one the key ones,” he says.

Hooley believes that although South Africa is around four years behind the rest of the developed world in some industries, this can be viewed as an opportunity by some foreign businesses.

He also notes that South Africa seems to have a culture of poaching staff rather than training them up and says local companies are not investing enough in skills development.

He does, however, qualify his criticisms by noting that our banking infrastructure and systems are far and away better than anything he’s experienced before and says that our standards and new legislations are cutting edge, in particular the RICA and EC Acts.

“My findings, and those of most of my fellow immigrants is that what South Africa needs most is a more competitive landscape. This will free up the market and bring down prices. However, we still think South Africa in general and Cape Town in particular holds enormous potential for companies looking to break into the lucrative African markets,” Hooley concludes.


One Response to “International IT companies still prefer Mother City”

  1. incautius
    March 6th, 2007 @ 12:00 am

    It\’s psychological. They rest easier with one foot in Cape Town and the other on the next boat out. Not like Gauteng which is SO deepest, darkest, Africa.


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