Size of Software Market

    A 1998 study conducted by the Harvard Computing Group estimates the domestic software sector at around US $50 million. This is consistent with estimates from the Egyptian Software Association (ESA), although multinational companies such as NCR and ICL peg the market a bit lower at $40-45M. (Harvard Study)

    This compares with a 1994 total market size that was estimated at $35.5 million.  Of this total, 55 percent was generated through the resale of imported packaged software. According to a report published in 1994 by Access/IDC Egypt, locally developed software made up the balance (19.525 million). (AmCham)

Number of Software Firms

     The same study estimated that approximately 120 Egyptian firms are engaged in software production.  The firms range from 1-5-person start-ups through relatively mature firms with more than 50-150 employees. As is the case with most private industry investment in Egypt, other than the tourist sector, the majority of these companies are located in and around Cairo, or Alexandria. Government incentives and infrastructure investments have resulted in a number of new software companies locating in the new industrial areas of 10th of Ramadan and 6th of October cities. (Harvard Study)
 

Software Categories in the Egyptian Marketplace:

      
    A majority of Egyptian software companies are focused on producing Packaged, Tailored and Multi-media applications.  The Software Tools segment has virtually no  representation amongst Egypt’s software companies. 

Revenue Generation by Software Category

     The packaged software category, most of which is imported, accounts for an estimated 74 percent of total software revenues. Primarily, this category consists of system-level tools, office, cross-industry and vertical application packaged software. 

     The development of local ready-made packages, Arabization and turnkey contracts constitutes 45 percent of software sales, of which the first accounts for 19 percent of revenues. Ten percent is generated through Arabization, and the remainder by large-scale contracts. (Egypt and Middle East)

Software Exportation

     Of the approximately 120 software companies, only 15-20 are actively engaged in exporting software. Eighty percent of the software exported by these companies goes to Saudi Arabia and other Gulf countries.  Although the percentage of companies exporting, in comparison to the total, is relatively small, there exports account for 20 percent of regionally developed software. 
Furthermore, the increasing prevalence of IT in regional markets portends strong prospects for Arabization activities in Egypt for the foreseeable future.
(Harvard Study)

     In 1994 exports of locally developed software were estimated at  $4.9 million, representing 25 percent of the $19.525 million in total local development revenues. (Egypt and Middle East)

Software Demand 

     The GOE continues to generate the largest demand for software,  these public sector purchases generate 25 percent of total software revenues. In contrast, only 6 percent of revenues are derived from sales to SOHO (small office/home office)--partially accounted for by widespread piracy in this segment (Harvard Study)