Kenya pumps Sh230m in building a software hub

The outlook for technology and innovation in Kenya looks bright. As the country positions itself to ride the wave of web and mobile products and services, an merging group of talented software developers, made up of fresh IT graduates and tech entrepreneurs, is opening a new growth area using technology.

In a country where mobile phones are accessible to more than 50 per cent of households, high uptake of the technology is pushing more software developers to create solutions to tap into this global growth.

Inspiration is coming from a number of successful software companies in Kenya, such as Craft Silicon and Software Technologies, two of the software pioneers in Kenya. University curricula are being updated with specialist courses.

Big opportunities lie in the opening up of data, which will see more value-added services that will address emerging consumer needs.

Mr Moses Kemibaro, co-founder of Dotsavvy Ltd, a digital services provider, says although Kenya has a number of local software development firms and entrepreneurs doing everything from building Sacco applications, mobile and web applications, it still lags behind.

“We have a long way to get to where India is today,” Mr Kemibaro says.

India is the capital of software development and outsourcing in a global market estimated at $303.8 billion in 2008, an increase of 6.5 per cent from the previous year, according to market researcher DataMonitor, which forecasts that in 2013, the global software market will be $ 457 billion, an increase of 50.5 per cent from since 2008.

Its software industry, mostly based in Bangalore, generated four million jobs, which accounts for 7 per cent of India’s total GDP, in the year 2008. India exports software and services to over 95 countries.

It is these kind of stories that have the Kenyan government smitten with the tech industry. It has created a Sh320 million ($4 million) content generation grant for developers.

“We have seen the number grow,” says Communication and Information minister Mr Samuel Poghisio. “It is a clear indicator that Kenya is rife with innovative talent and with requisite investment. It is expected that content will transform the way Kenyans live, work and play.”

This wave has given rise to hubs and labs to nurture innovation. One of them is Nairobi-based iHub, shorthand for Innovation Hub, founded by tech nerds and blogging enthusiasts, which seeks to link technologists, innovators and investors.

Nailab, also based in Nairobi, incubates space for ICT-based start-ups. Nokia has also been active, with its Research and Sub-contracting Lab and User Experience Unit at the University of Nairobi.

On its application store Ovi, Nokia is promoting two local applications – Afro Hot and Wazzup – developed by two students at the University of Nairobi.

Afro Hot is a vanity application that rates how hot you are while Wazzup gives tracks what is happening in Kenya, Uganda, Tanzania and Mozambique.

The world’s leading mobile handsets maker, Nokia, awarded a Virtual City, a Kenyan IT company, Sh80 million in a global competition for innovative applications.

Tech giants and telecoms players are vying to win software developer mindshare to add value to their devices and networks. No wonder Nairobi is home to tech giants such as Google, Microsoft, Nokia, HP.

Last week, Google launched Android Market in Kenya, a distribution platform, to help developers sell applications developed for use on Android-powered cell phones. Recently, Safaricom unveiled Safaricom Academy at Strathmore University build IT talent for its business.

Software developers have formed Skunkworks, a group that hosts online discussions with occasional real-life meetings.

Probably one of the Kenya’s biggest software innovation success stories is Ushahidi. The open-source platform was developed in the aftermath of the disputed General Election of 2007 and was used with Google Maps to identify hotspots of ethnic tension.

It uses the concept of crowdsourcing, which involves outsourcing tasks traditionally performed by an employee or contractor to a large group of people or community (a crowd), through an open call.

Ushahidi received global recognition after it was used extensively during rescue operations in the Haitian earthquake. Recently during the referendum, the solution came in handy and even Computer Aid uses it to map out its activities in Africa.

One of the founders, Erica Hagen, and Mikel Maran have used Ushahidi to map Kibera slum using GPS-enabled devices.

Mr Eric Hersman, one of the founders of Ushahidi and iHub says: “We’ve learned that technology does overcome inefficiencies, but that it still takes people to make it happen. We’ve learned that Africans can build world-class software. Ushahidi is now very successful and the adoption is high.”

Ushahidi funds the iHub. “Nairobi is quickly becoming a tech hub in Africa and we wanted to get a place where those who aspire to develop their skills can meet,” he said.

Wananchi, through Zuku, has wired the iHub with fibre optic to provide internet, Google organises brings experts to train innovators and provides Android phones to assist in developing mobile applications. Microsoft donated a server while Nokia sponsors the developers’ day.

At the iHub recently, located on Ngong Road, Smart Company met with a number of software developers/innovators.

Mr Will Mworia runs africanpixel.com, which is a software application for high-end mobile phones, such as the iPhones, Androids, high-end Nokia and Samsung.

He also manages Afrinnovator, a content website, which he says celebrates start-ups in Africa.

On iHub, he notes: “Here internet is free, working area is free. This is a good place for developers and this solves the disconnect that existed before.”

Mr Oscar Njuguna, a co-founder of Zege Technologies, is also a beneficiary of iHub. Zege is developing software that integrates bank accounts with M-Pesa, Safaricom’s mobile money transfer service. Mr Njuguna says the biggest challenge for Kenyan innovators is gaining recognition.

Charles Kithika and Joshua Musau are part of the group of innovators aiming to build the tech movers of tomorrow. Mr Kithika has developed a software for human resources to manage employees, payroll and time, currently on trial in a number of firms.

Mr Musau is working on a solution that will enable media houses link directly with advertisers and another software for hospitals to manage data storage.

Payment solutions
The iHub manager, Ms Jessica Colaco, is a huge proponent of the mobile web. She says users and developers need to get together to scale ideas into projects that can be fine-tuned to meet the growing demand for information in Kenya.

Ms Colaco has worked as the principal researcher at Strathmore Research and Consultancy Centre. As an undergraduate Computer Science student, she developed a mobile application known as Wireless Map Service (WMS), which received great accolades at the 10th annual IEEE Engineering Students Exhibition in September 2007.

She organised the first Nairobi Facebook Developer Garage and Mobile Boot Camp in Kenya in March 2008 and November 2008 respectively to spur innovation within the country.

Kenya has been gaining a competitive advantage in mobile payment, in which M-Pesa leads.

The service has 12 million users. By end of July, it had transferred Sh525.84 billion since its inception in 2007.

There’s huge value in mobile transactions and most innovators are working on applications that can integrate mobile payment systems.

Pay.Zunguka, a payment gateway and aggregator, for instance, allows merchants, developers and content providers to monetise their work. The platform was developed by Mr Mbugua Njihia of Symbiotic Media, a mobile/software development company based in Nairobi.

“We are seeing technology rise as a force to reckon with in job and wealth creation,” says Mr Njihia, who has developed a number of applications.

As the world moves to a knowledge-based economy, markets are adapting and entrepreneurs are using technology to create profitable businesses in information management.

Mr Agosta Liko developed PesaPal, an internet-based mobile payment gateway, three years after relocating to Nairobi from the US and starting Verviant. PesaPal is bridging the mobile and electronic payment divide, and recently Mr Liko launched SchoolPay, which enables payment of school fees using Safaricom’s M-Pesa or Zain’s Zap.

Mr Liko says software outsourcing is growing locally. “I would not say they are challenges – it’s just that it takes time,” he said.

“Look at Craft Silicon and Software Technologies, they are approximately 10 and 20 years old. So it takes time to build a solid company.”

Another Kenyan innovator, Mr David Kagiri has developed Zynde, a payment gateway based on the SaaS (software as a service) model. Saas is deployed over the internet and/or is deployed to run behind a firewall on a local area network or personal computer.

It is normally licensed on demand, through a subscription, in a “pay-as-you-go” model.

It targets small businesses seeking to track their finances and can’t afford expensive software.

It not only stores and tracks money but gives insightful analysis on how it moves. He has also created an online payslip generator and tax calculator.

Mr Kagiri says the software market in Kenya is still young and growth will depend on the cost of data services.

As the costs comes down, techpreneurs will be able to create and deliver more products and services.

Changing perceptions
Developers who repackage solutions to take advantage of this market, Mr Kagiri says, will emerge winners because of the enormous cost savings in this model because it removes the headache of maintaining and updating multiple implementations.

“Be warned, however, that having data in the cloud will get people asking about security and make your solution a tough sell,” he adds.

Behind all of the excitement, challenges remain. Developers are compelled to price very competitively to gain customers. This though is expected to change as perception changes.

Mr Kemibaro says software development in Kenya is yet to be appreciated in tune with global standards, meaning software is often under-priced making it hard for entrepreneurs.

This requires setting standards and ensuring ICT offerings conform to global best practices.

The good news is that there are universities, colleges and other establishments that are improving software development and ensuring that students are trained to global standards.

Mr Kagiri says local developers are yet to learn the business aspect of innovation and focus on applications that people need as opposed to just creating hype.

“Creating sustainable solutions is quite a challenge and taking up programs such as SITT of Strathmore will go a long way in enlightening them on this aspect,” he adds.

“As the founder of zynde.com a simple financial suite I have learned this the hard way and I’m repackaging my product to make it viable and sustainable.”