While the UAE is emerging as a significant source of demand for IT outsourcing services, it is struggling to compete with more established nations to become an outsourcing destination.
On Tuesday, the SS Lootah group, a local business conglomerate, announced its information technology division will open an offshore development centre in the Indian state of Kerala.
Lootah Information Technology Services (Lits) will use the centre to develop and maintain software systems for the company's GCC clients. The company joins businesses like Emirates airline and Dubai World in working with the Indian outsourcing industry on key technology projects.
Lits had been working with IT firms in India for some time, said Abdullah Saeed Lootah, the company's chief executive. "As a natural progression, we are now looking to establish our permanent base in India, known for its IT stronghold and skilled manpower," he said.
Authorities in the UAE have long spoken of their ambition to turn the country into a hi-tech hub that global companies turn to when looking for advanced IT services.
But the realities of a serious skills shortage, skyrocketing costs and increasingly competitive industries in nearby nations like Egypt and Jordan have challenged this vision. Instead, a new trend has arisen, with major Indian outsourcers opening local offices to offer closer customer support, regional customisation and increased sales efforts.
In 2005, the Government of Dubai, through its Tecom Investments wing, established the Dubai Outsource Zone (DOZ). Offering 100 per cent foreign ownership, no taxes and full repatriation of profits, the DOZ aimed to attract at least 200 companies to the free zone by 2010. Less than 50 are active there today.
The largest domestic outsourcing business is Injazat Data Systems, a joint venture between the Mubadala Development Company, an investment business run by the Abu Dhabi Government, and EDS, the US-based IT services company that recently merged with Hewlett-Packard.
"Of course the rising costs of inflation play a part in the cost of a service," said Eddie Cunningham, the head of marketing at Injazat. "But you can counter that by increasing the levels of automation and efficiency."
Injazat will open a new US$100 million (Dh367.3m) data centre in Khalifa bin Zayed city in the coming months. It will be considered a "Tier IV" centre according to industry standards, meaning it will essentially never need to close for maintenance, with data stored there being available 99.995 per cent of the time.
"That's how you keep your costs down," said Mr Cunningham. "Better technology will keep us competitive. And companies outsource for different reasons, not all of them cost-related."
@Email:tgara@thenational.ae
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The biog
Title: General Practitioner with a speciality in cardiology
Previous jobs: Worked in well-known hospitals Jaslok and Breach Candy in Mumbai, India
Education: Medical degree from the Government Medical College in Nagpur
How it all began: opened his first clinic in Ajman in 1993
Family: a 90-year-old mother, wife and two daughters
Remembers a time when medicines from India were purchased per kilo
The biog
Favourite books: 'Ruth Bader Ginsburg: A Life' by Jane D. Mathews and ‘The Moment of Lift’ by Melinda Gates
Favourite travel destination: Greece, a blend of ancient history and captivating nature. It always has given me a sense of joy, endless possibilities, positive energy and wonderful people that make you feel at home.
Favourite pastime: travelling and experiencing different cultures across the globe.
Favourite quote: “In the future, there will be no female leaders. There will just be leaders” - Sheryl Sandberg, COO of Facebook.
Favourite Movie: Mona Lisa Smile
Favourite Author: Kahlil Gibran
Favourite Artist: Meryl Streep
The specs: 2018 Nissan Altima
Price, base / as tested: Dh78,000 / Dh97,650
Engine: 2.5-litre in-line four-cylinder
Power: 182hp @ 6,000rpm
Torque: 244Nm @ 4,000rpm
Transmission: Continuously variable tranmission
Fuel consumption, combined: 7.6L / 100km
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
The%20specs
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THE POPE'S ITINERARY
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
South Africa squad
Faf du Plessis (captain), Hashim Amla, Temba Bavuma, Quinton de Kock (wicketkeeper), Theunis de Bruyn, AB de Villiers, Dean Elgar, Heinrich Klaasen (wicketkeeper), Keshav Maharaj, Aiden Markram, Morne Morkel, Wiaan Mulder, Lungi Ngidi, Vernon Philander and Kagiso Rabada.
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000