What does the closure of ThoughWorks Uganda say about the software industry in Uganda?Samuel Mugisha
On November 27th, ThoughtWorks closed office in Uganda. For those who don’t know, Thoughtworks is a US based global software development and products company with office in many countries which include but not limited to : South Africa, India, Australia, Germany, Turkey, Brazil and many others. Thoughtworks is well known for the agile methodology that spurs their ingenuity and creativity.Coming to Uganda, the company had aimed at concentrating on health-related software development by channeling all global requirements to Uganda. We were all excited to get such an addition to the software industry. Gone too soon; 2 years and they close.In their official statement, they did not highlight the reasons as to why they closed but only promised to keep working on African solutions. I have been pondering on a number of reasons as to why such a tech giant; Thoughtworks would close. I mean, unlike the very many startup businesses in Kampala, they have the entrepreneurial capital to invest in business for years with the aim of reaping benefits later.
Having worked in the software industry in Uganda for five years now, I can guess some of the reasons right away:
- Few paying customers in humanitarian fields like health, agriculture and education: If you are planning to build software in such sectors, you must be aware of the little government spending in these critical sectors of the economy. The other customers would be the average Ugandan, who depends on subsistence agriculture. So, how do you get money to sustain business in such situations?
- Corruption: If a project does not satisfy the personal interests of the people with the decision power, they will not listen to you.
- Infrastructure: Whereas it is improving by the minute, the penetration of technology in Uganda is still low. Internet is still expensive. Internet should be a maximum of UGX 5000 for 1 GB. It should be accessed everywhere and at a fast speed. The cost of organizations adopting technology is also high. You need servers, computers and Local area networks etc. This is all very expensive.
- Unpatritotic government policy: Ugandans are so good at promoting foreign business at the expense of Ugandan talent. The government is also busy doing this. I mean, Indians are given deals at the expense of Ugandans. Well, I agree it should be on merit, but there should be policies to nurture, favor and motivate Ugandan talent in Uganda. In addition, i havent heard any single presidential candidate talk about technology. It’s always agriculture, roads etc. Whereas these are the immediate challenges faced by a Ugandan, Technology would be another obvious channel to boast the agriculture driven economy. We need to look at internet for instance as part of the infrastructure plan.We need to have cable internet flowing through all areas of Uganda like it is for power and water lines. Why not?This is the information age.
So, what does this mean for Ugandan software firms?
Software as a service: Productivity solutions seem to be selling more than the rest. I mean, every supermarket, pharmacy etc wants software of late. Restaurants, hotels, schools are highly in need of software. Though the pay is small, software as a service model will work best here. Getting small monthly payments and subscriptions from customers makes solutions affordable. But no matter how affordable, if the expenses of a company like Thoughtworks are based on the American standard, you won’t realize profits.
Software for Africa is unique: I like the notion that Thoughtworks came with to Africa: ‘Solutions for Africa by Africans’. This is still the way to go. Solutions here will be different from solutions in the USA. A typical example is the mobile money industry that is booming like a bush fire in Africa at the expense of Credit card payments. So, you cannot copy and paste here.
E-commerce is moving in at a very good pace. When you hear about Hello Food, Checki, masanyu,Olx, you know we are getting there. I like what my friends at Yo Payments and Jpesa are doing to come up with online payment gateways based on Mobile money. I have been selling domains and hosting online in Uganda at hostingdoves.com for close to 2 years now. What a boast to this industry!
Like any other business, it takes time to build a niche. Software companies can still make it in Uganda. You just need to know what you are down and up against.
Samuel Mugisha is CEO at Rimpscom Company Limited