Mideast investment hinges on piracy 
By Reuters
November 4, 1996, 12:15 p.m. PT 

                Software giant Microsoft (MSFT) said today the
                Middle East was a major growth area for the
                information technology industry, but that further
                investment hinged on a more serious approach by
                state officials to rampant piracy.

                "Piracy is a cancer that could destroy the whole
                thing. The information technology industry will not
                flourish unless there is good return on investments,"
                Ahmad Chami, Microsoft Middle East general
                manager said at the Gulf Information Technology
                Exhibition.

                Analysts put the size of the computer market in the
                Middle East at $1.5 billion a year, and growing at
                12 to 15 percent annually.

                The U.S.-based Business Software Alliance
                estimates software makers lost $400 million to
                piracy in the Middle East in 1995, of which $100
                million was in Saudi Arabia.

                Lebanon, Syria, and Kuwait are also big violators.

                Chami said Microsoft plans to invest in
                tailor-made products for the region by entering
                partnerships with Middle Eastern firms. A
                partnership agreement with a Saudi company will
                come into effect next year and others are planned,
                he said.

                Chami declined to put a value on Microsoft's
                current and future investment in the Middle East,
                but said it invested more than $2 billion in research
                and development worldwide, most of which was in
                Internet and intranet applications.

                Microsoft, which introduced the Arabic-language
                versions of its latest software programs in
                September, said its first Arabic language Internet
                explorer would be launched soon.

                Chami said Microsoft would urge governments in
                the region to address the "harmful piracy issue."

                "Through increased investments and local
                partnerships we hope to create awareness at
                government level," he said.

                "We have seen progress, especially in the United
                Arab Emirates and Egypt, but there is still much to
                be done elsewhere," he added. "We expect to see
                fewer losses to piracy in the Gulf and mainly in the
                Saudi Arabia," Chami said.

                He said manufacturers' figures show 350,000 PCs
                are shipped to the Middle East every year. 

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