Dubai, Mideast’s answer to Silicon Valley

Miral Fahmy

DUBAI: Rising from the desert sand lies what Dubai hopes will be the Middle
East's answer to Silicon Valley.

The Gulf emirate, striving to become the information technology center for
the area, has created the Dubai Internet City (DIC) a free trade zone designed
to lure international and regional technology firms to the United Arab Emirates.

The $250 million project is the latest brainchild of Dubai's Crown Prince
Sheikh Mohammed bin Rashid al-Maktoum, a savvy businessman who, to make up for
the city's dwindling oil reserves, has already transformed it into a prime trade
and tourism destination for the region.

Now, he wants to put it on the IT industry's map.

The International Data Corporation describes the Middle East as one of the
world's fastest growing IT markets, expanding at around 20 per cent a year
despite a global economic slowdown. Apart from Israel, high-tech is a relatively
new concept for the region and industry experts say most of the demand comes
from Arab governments keen to update their archaic systems and small-and
medium-sized businesses looking to improve productivity.

IT giants such as Microsoft, chip-maker Intel and Compaq have said they see
great promise in Middle East. These companies and others are moving their
regional headquarters and projects to the Dubai's DIC.

"E-volving community"

It took the Dubai government less than a year to build the DIC, a cluster of
modern, glass and concrete buildings set amid lush gardens along one of the
emirate's main highways. A self-proclaimed "e-volving" community, the
DIC has also managed to attract big IT names such as Oracle, IBM and Cisco and
it is currently expanding its base to meet growing demand from small and medium
firms.

Ahmed bin Bayat, DIC's chief executive officer, says one of the project's
main aims is to turn Dubai into a magnet for creative minds and IT firms in the
area. "We hope to create a base, a cluster of these companies here where
many of our people in the region, instead of migrating westwards, can come in
here and get jobs and settle in this country and produce something
innovative," he told Reuters.

"The environment in their countries... does not allow these sort of
innovative ideas to come up so they can actually come here instead of moving
into Silicon Valley or other places." Although the DIC is not the only
purpose-build IT center in the area, it is certainly the most successful.
Investors are given many perks that include a 30 percent discount on telecom
services, sponsorship and hassle-free procedures.

Many companies partially attribute DIC's success to its location in one of
the area's most business-friendly, stable and cosmopolitan cities. But
Microsoft, which based its Gulf and East Mediterranean operations in Dubai
several years ago, has invested millions of dollars into moving to the DIC
because of the competitive environment it offers.

"If the companies find they could be more productive at a lesser cost if
they move to the Dubai Internet City, then of course that is an obvious choice
for anybody," said Bahram Mohazzebi, general manager for the region.

"And I am looking forward to go and take advantage of the opportunities
that can come to us."

Real estate project?

Not everyone, however, has high hopes for the DIC. Some businessmen have
dismissed the project as a whim of the Dubai government while others have
described it as a real estate, rather than IT, scheme.

Some DIC tenants say they had hoped for faster and smoother telecoms while
others expected the project to achieve more than just grouping IT companies
together. DIC officials admit to some teething problems, the result of speedy
construction, but they brush aside detractors and maintain a positive outlook
for the future.

However, Compaq, which is not based at the DIC but in the nearby Jebel Ali
free zone, says the DIC will only become a real success if it provides software
specific to the Middle East. "I think the creation of the DIC was an
excellent first step in moving towards a digital world," said Joseph
Hanania, the firm's Middle East managing director.

"But obviously the real test is that the DIC should be able to produce
from the talent and the manpower it uses the kind of applications and solutions
that would benefit the region."

Braving the criticism, and the scorching summer heat, construction work on
the project continues around the clock. Buildings are put up at lightning speed
while workers plant and tend gardens intended to soften the harsh desert
surroundings.

Some IT investors, such as Cisco, say the DIC's ability to group so many IT
firms together was what attracted them to the project in the first place. The
landscape also adds to DIC's charm, even if it is totally artificial.

"Having been there several times visiting partners and customers, I
think it has a very nice feel. It feels like a campus environment," said
Cisco's regional director Rowland Griffiths. "When you look out the window
and see green grass and lakes it gives you a nice feel to just come into
work."

(C) Reuters Limited 2001.