Impact Overseas

Tech Firms Mull New Landscape For Offices Abroad

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Most U.S. technology companies kept their Middle East subsidiaries open for business following the terrorist attacks last week in New York and Washington. They are, however, carefully reviewing evacuation and security plans for their global offices in the event of a U.S. strike in the region.

Leading technology firms including IBM, Compaq Computer, Microsoft and Novell have offices scattered throughout the Middle East.

IBM Chairman Louis Gerstner issued a statement to all employees last week reiterating the company's focus on protecting their safety. All employees, including those overseas, were urged to "use their discretion as to how they conduct business," an IBM spokeswoman said.

Compaq, which has offices throughout the Middle East, has contingency plans in case of potential threats, a spokesman said, but he refused to discuss them. Another Compaq spokesman said the company has not taken any action as of now.

Microsoft, which has three regional subsidiaries covering the Middle East,including Saudi Arabia, Egypt, Pakistan, Lebanon and Kuwait, and headquarters at Dubai, United Arab Emirates,would not comment on its security plans for those offices.

Novell has offices in Dubai and the United Arab Emirates but did not return calls by press time.


Indonesian police guard the U.S. Embassey in Jakarta, Indonesia, last Thursday. Security around the embassey in the world's most populous Muslim country has intensified following the terrorist attacks on the World Trade Center and the Pentagon last week.

U.S. companies with global subsidiaries generally have emergency evacuation plans in place and are in close touch with the U.S. embassies, said Middle East experts.

"The embassy plan includes the names of all Americans, and there is close cooperation between companies and embassies. When I was in Tehran [Iran], we had regular sessions with the top brass of companies," said Andrew Killgore, the former ambassador of the state of Qatar and now publisher of the Washington Report on Middle East Affairs. He said he does not foresee any American strike in the near future.

International business experts said it is important for U.S. businesses with overseas offices to continue operations unless military action is imminent. "The United States and its companies cannot isolate themselves from the rest of the world," said Nicholas Economides, a professor at New York University's Stern School of Business. "If the United States or U.S. companies retreat to U.S. or allied soil, it will be a major victory for the terrorists and others who want the world to retreat to the dark age of mutual isolation and prejudice."

Others, meanwhile, said the Middle East is a growing market for technology products. "PCs and software are becoming like staples of everyday life and these countries substantially lack infrastructure; Americans' exports are growing [in the region] and can be a big supplier in this market," said Saeed Samiee, a professor of marketing and international business at the University of Tulsa in Tulsa, Okla.

For non-U.S. tech companies, already hit by the global slowdown in IT spending, the landscape remains murky, said some executives.

"It is too early to make a reasonable estimation of the impact of this tragedy on the [Indian] economy, industry and its professionals," said Amit Sircar, group general manager with Wipro Infotech, a Bangalore, India-based solution provider.

"However, our thoughts and prayers are with the families and friends of those who are still missing, and they continue to remain the immediate focus."

Raj Saraf, chairman and managing director with Zenith Computers, a Mumbai, India-based computer manufacturer, is confident about the long-term viability of the market.

"It is but natural that trade and commerce will definitely be impacted by such incidents," Saraf said.

"[However], the Indian market is not entirely dependent on the U.S. and will not be gravely affected by the tragedy," he said.

Phaneesh Murthy, CEO and chairman of Infosys Technologies, a Bangalore-India based solution provider with offices in the United States, Canada, Europe and Asia, expressed his shock and sorrow over the U.S. tragedy. Murthy said, however, in a statement to customers, that Infosys will press on with business as usual.

"Our employees will continue working on tasks assigned to them. I have requested our employees to volunteer assistance as needed. . . . If there is anything that any of us can do to help, please do not hesitate to contact us."

Editions of CRN in India contributed to this story.


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