October 16, 2013

Cyberton adds facility and staff in Egypt to supplement U.S. growth

Despite the political turmoil in their native Egypt, the founders of Wichita’s Cybertron PC like the bet they’ve placed on the country.

Despite the political turmoil in their native Egypt, the founders of Wichita’s Cybertron PC like the bet they’ve placed on the country.

Ahmed Aziz, Shadi Marcos and Emad Mekhail came to Wichita as college students in the early 1990s and built a company making custom-built computers.

That business today, at 4747 S. Emporia, has 75 employees and is a fast-growing maker of consumer and business computers and servers, sold largely through online re-sellers. In recent years, Cybertron began to also provide computer services.

They’ve created a vibrant business in the U.S., but they have big dreams, so they decided to try a small expansion in their native country.

They thought Egypt would be perfect: It has a huge pool of well educated, underemployed talent; and a market of millions.

But even as they planned the move, the Arab Spring broke out with its protests and political upheaval across the MIddle East. In Egypt, months of bloody demonstrations led to the fall of long-time ruler Hosni Mubarak. One of the leaders of the long-banned Muslim Brotherhood, Mohamed Morsi, was elected president and spent a tumultuous year in power. Three months ago, the Egyptian army cracked down on the Muslim Brotherhood and jailed Morsi. Independent sources estimate that hundreds were killed in the resulting violence. The population remains polarized, but the situation in Cairo has calmed somewhat.

Even with the turmoil, Aziz, the CEO, and Marcos, the president, said last week they are happy with their decision.

Cybertron has opened a small office in Cairo’s futuristic Smart Village, a protected technology park in the suburbs. The sleek glass buildings and green lawns of the park contrast with much of the rest of Cairo’s packed-tight construction and crowded streets.

The seven people there handle software problems for Cybertron’s U.S. customers, as well as software and Web development. It’s nice to have technicians working half a world away so that problems can be fixed overnight in the U.S., Marcos said.

The Egyptian workers’ skills are great, but the economy is so gummed up that there aren’t many jobs for them, Aziz said. Every one of their Egyptian employees is a four-year college engineering graduate. The same isn’t true of the company’s U.S. work force.

There are some cost savings hiring people in a low-wage country, but not as much as there might have been, Aziz said. Cybertron pays toward the top of the local market, he said, because it wants to be viewed as a quality company — and it’s their small attempt to give back.

“I wanted quality people,” Aziz said. “I didn’t want to go cheap. We are going there to benefit the economy. It’s not all business. I’m Egyptian-American; I’m trying to get the benefit on both sides.”

And no U.S. workers lost their jobs because of the expansion abroad.

“We’re supplementing the growth here,” Marcos said.

The plan was to start selling computers and parts to Egyptian consumers and businesses, he said. Those computers would be built in Wichita, first, but later Cybertron would duplicate the Wichita assembly operation in Cairo. Eventually, the goal is to sell to the rest of the Middle East, Aziz said.

The two are sensitive to those unhappy with U.S. outsourcing and off-shoring.

It’s critical to their business, they said. To compete with others in their industry, they need to increase skills and lower costs. Most of their larger competitors have already moved some services or productions overseas. International giants such as Microsoft, Hewlett-Packard, Nokia and Oracle also have operations in the Smart Village outside Cairo.

“Everybody is moving to an international pool of employees,” Marcos said.

“And that is where education is becoming very important,” said Aziz. “That is the key is to mitigating that kind of threat. They have to understand that; we have to understand that. This is very scary. Don’t expect to get out of high school and get six months of training, because there is some guy across the world who will get one third of your wage and will have better skills than you.”

As to whether the political disruption in Egypt changes that equation, they say no. Egypt isn’t really a violent country, unlike some others in the Middle East.

They have to schedule staff around curfews, and ocassionally have employees work from home, but otherwise their existing operation is unaffected. However, the nation’s economic collapse has put their plans to sell computers on hold.

“I would have a little concern going back with my family right now, but not much,” Aziz said. “You live where you live. You work. You’re fine. It’s not like Syria … it’s chaos, but don’t go to the protest, and you’ll be fine.”

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