Access Kenya has been struggling

Safaricom has been growing their corporate data offering (after their purchase of Onecom) and have systematically gone after Access Kenya’s key market (the corporate data market). The writing was on the wall for Access Kenya (and perhaps other ISP’s) after the Kenya Bankers Association gave the interconnection contract for the cheque truncation system to Safaricom (more here).

Best Exits in EA are still through M&A’s

There has been high activity in the M&A space in East Africa, but almost no listings with only two IPO’s so far (Access Kenya & Safaricom). If the DD/AK deal goes through, we will be down to one listed tech company (Safaricom has a huge data services business) on the Nairobi Stock Exchange.

• Internet Solutions Kenya was an aquisition of Interconnect Kenya (link here).
• Internet Solutions itself is an acquisition by Dimension Data South Africa.
• Dimension Data got it’s foothold in East Africa by buying ICL East Africa (then owned by Naushad Merali Read more).
• Dimension Data Group itself was eventually bought out by NTT Docomo.
• Copy Cat got into Tanzania by buying BMTL.

Revenue is still in System Integration & Infrastructure

The system integration sector does not get too much praise in Kenya, but there is quite an amount of money to be made in that space along with traditional IT infrastructure.

• Zuku has been able to raise a further 57.5 M USD (more here).
• Safaricom is currently rolling out it’s fiber network (the Safaricom Digital City project has a budget of 10B KES more here) and has had it’s data revenues grow to 4B KES (over the first half of FY2013)
• Even with all the issues plaguing it, KDN was able to find a suitor in Liquid Telecom.
• In the system integration space, you have Copy Cat Limited which closed last fiscal with revenues hovering around 65M USD and they have a target of 100M USD in FY2013 (more here), Seven Seas Technologies now rolling out in Zambia, Ghana and Nigeria.

Interesting times

Dimension Data is not yet out of the woods. Whilst they are offering a significant premium on Access Kenya’s trading price as of Friday the 3rd of May 2013, there may be other offers for Access Kenya. Whatever the outcome, it will be interesting to watch (and possibly lucrative for current Access Kenya shareholders).

• Jacana Coffee - Available at the River Cafe, you have a choice on how it’s roasted (they stock green beans) and ground. So, depending on the machine you have at home (espresso coffee typically requires darker roasts, finer grinds – percolated coarser grinds and you can get away with a medium roast), you can order what you want. It helps that the beans are fantastic. I buy 1 kilo every two months from there.

• Pete’s Coffee - Available at the iHub. Pete is the de facto  barista for the tech community in Kenya. His coffee is a blend of Kenya’s finest though he refuses to disclose his sources (we demand Open Source coffee!!). This coffee is one of the best blends available in the Kenyan market for espresso based drinks. He sells whole beans and can also grind to your specifications on request.

• Gatamboya Coffee – So, I’ve had more than my fair share of coffee in this life, but this coffee blend, by Dormans, is hands down the best I’ve had out of a filter machine. Not as great when you use it for espresso based drinks, but for filter coffee or the french press, it’s divine. The beans are available from the new Dormans outlets. You will need your own grinder though, as I do not think they grind the beans for you.

• Java’s Ethiopian Gourmet – Nairobi Java House stock this. Decent for espresso. It’s the best beans they have in stock at the moment.

• Out of Africa  – They have great coffee, they just do not sell whole beans which means that the coffee does not retain it’s flavour as long as it ought to, nor do you get options with regards to the grind. I only use their medium roast coffee for filter coffee purposes. They currently have a sale though at all Nakumatt stores.

If you think I have left out any great sources, please feel free to comment and we can add to the list. There are other sources but I have left them out as they are not as reliable (quality-wise)/easy to find/accessible etc.

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I–
I took the one less traveled by,
And that has made all the difference.

To the unknown

Software development is still not lucrative

Given the state of the market, this seems counterintuitive, but observe the numbers…. Which are our largest system integration outfits?

1. Seven Seas Technologies -  One of the largest indigenous System Integrators. Revenue? As of 2010, 24 Million USD (with today’s exchange rate, 2.14 Billion KES, read more).
2. The Copy Cat Limited -The oldest local System Integrator, they have revenues of over 50 Million USD (according to their website), with the current exchange rate, 4.45 Billion Kenyan shillings).
3. Dimension Data East Africa  – Though it’s not Kenyan, strictly speaking, it is of Kenyan heritage and still partly owned by the Sameer Group. They went over the 1B KES revenue mark a few years ago.

Now, these are very well run companies, the developer community would do well to learn from them, however, my issue is with the government.

The government is the single largest customer for ICT products and services in the country (for a while the telco’s were ahead though, but given the recent USD 117.9M grant (with the current SDR Conversion rate) which translates to roughly 10.5 B KES, given the current USD/KES conversion rate). The governments policys should look internally for services and products to use before looking externally, especially in manufacture. This is because the government has a greater responsibility that transcends the need to increase uptake of ICT. The government has a duty to ensure that:

You be the judge…

• Cloud Computing
• Mobile Apps
• Mobile Platforms

Hilarious video I found thanks to my friend one Corvinus Maximilus. Original music by Ella Fitzgerald . A tribute to Jazz and Coffee .

REFORM

Why do I have a problem with this? It’s the Go-To term for any civil servant who has one thing in mind – to disappoint the citizen… To elaborate:

• Police Reforms – Police commissioner after police commissioner, we were told how crime would be fought and the police fource cleaned up… the net result? Kenya Police is the most corrupt institution in the country and actually in greater East Africa.
• Parliamentary Reforms – Our members of parliament basically still set the bar for human dysfunction. Do we really need to expound?
• Electoral Reform – Took the death of 1,000 people for us to start trying to figure out how to run proper elections.
• Education Reform – The free Primary education was poorly implemented, 844 still a mess.
• KPLC – Really, this is the epitome of silly. An organization that has not figured out, in the last 50 odd years, that it does rain in Kenya from time to time, in fact, they *depend* on the rain to generate power, but somehow, seems that their latest product is an instant blackout, just add water. Additionally, the gall to say that they compete with kerosene?
• Presidency – We heard this, all of us…. “Gone with the fancy motorcades”, “Gone with the roadside declarations”… End result? The presidential motorcade is as large as it has ever been in Kenya’s history, roadside declarations had to be nipped in parliament…
• Judiciary – We have a new CJ, let’s wait and see if he’ll have fries with his words…
• Corruption in General – We had a wanted drug barron as the head of our anti corruption effort. If we kept on in that direction, we would have one Tom Cholmondeley as our Minister for Internal Security, Kamlesh Pattni leading the finance effort, William Ruto as a minister (oh, wait, that’s actually the case etc etc.

At the core of this problem, in my opinion, is an issue of honor. We never keep our word in Kenya. Our leaders don’t and consequently, we don’t. We have lost faith in our leaders and in each other… Proof? We never show up on time, knowing full well that chances are, the other person will be late. The real tragedy is that  most of the time, they *are* late. What do I want from a leader? Someone to tell me, flatly, that the situation is bad. Dire. And that it will take a tonne of work to get it done. We have such leaders, the problem is, they are rarely elected… We need honesty. Integrity. We keep appointing people of questionable ethics into positions of leadership, not realizing that you are affected at the end of the day, whether directly or indirectly. At the end of the day, it heavily reflects on our character as Kenyans, who we choose to be our leaders. We complain that our leaders do not pay taxes, yet we happily avoid paying taxes in a shop when buying a PC. We complain when the president stops traffic, yet the real tragedy is that we can’t overlap because of the police. If we as a society embrace the fundamentals of social justice, it will eventually trickle upwards to our leaders.

Friends had been going to the Art Caffee and seemed to enjoy the experience, when it opened, but it was always out of my way, so I never really bothered going there. So, the first time at the Westgate Mall, I decided to try it out. Here goes experience one:

First Experience: House Coffee is a Latte

This was during one the first #140 Conference. The service was prompt. I asked what I then thought was a pleasant waitress (this would change by the time I had left the establishment) for a latte. I was served standard house coffee. She apologized about it, said something about the machine.  I figured, oh well, I’m was going to be there for a short time, let me enjoy the coffee and the ambience. So, I requested the bill which again promptly arrives, but it reads that I had a double latte (which is in excess of 200 bob), I tell her I had house coffee.  She then tells me that I had a ‘Double Latte’ and that it’s the same thing as house coffee. I explain the difference between the two to her and she simply says I ‘don’t know what I’m saying they are the same thing, if I don’t want to pay, I should say so. The price difference was 100 bob, I was leaving, I let it slide.

Second Experience – Coffee is above 100 KES

A friend of mine started working at the Art Caffe and suggested that I should give them a second chance. One Sunday evening, in June, I chose to stop by for a quick meal & coffee. As I approached the place, I noticed that it seemed congested, I asked the waitress at the door for a seat, politely informing her that I will not have company, hence I needed space either at the bar or at a two seater table. She chose to ‘politely’ inform me that in said establishment, coffee was in excess of 100 KES, and that  I should bear that in mind. I responded by telling her that I was well aware of the pricing and that she should get a handle on her job, there is a menu if I needed to check pricing, I’m perfectly capable of reading. It later hit me that she actually had not listened to a word I was saying and probably was assuming I chose to speak to her to find out the pricing. I did go in, had a cappuccino, which I did not finish due to time constraints.

Experience 3 – Still not good enough

This particular issue got to their management and that weekend they requested me to come back for a ‘better experience’… Being rather open minded, I showed up the next Saturday. I was seated. Chose to work. Waited. For two odd hours, no service, the initial excuse was that they were having their morning team meeting and hence would get to me in a while. The meeting ended and every waiter I beckoned said they have gone to get me the ‘waiter responsible for my table’. I did place an order, eventually, but it never arrived. You can imagine my surprise when, a few min later, a european family came to order breakfast got roughly 3 waiters taking their orders (suddenly table responsibility was not an issue) and had their meal in roughly 17 min. While I sat. Idle. I left without as much as a blink from the staff…

I eventually figured it out, after speaking to a couple of their waiters I realised why. Apparently, it’s because I’m black… Yes… According to the waiters, Kenyan’s tip badly hence you don’t prioritize serving them, while the others tip well… My problem with such reasoning is that it perpetuates the myth, because, if the Kenyans are necessarily treated badly, they will not tip, because the service was poor. So it’s a nasty cycle. The management has been made aware of this, but they don’t seem to really care about it. On speaking to my friends, I found out that they all had had issues at one point or another with the Art Caffe, similar issues. These have been raised severally to their management but have fallen on deaf ears… I don’t know whichI find worse, the persistent poor customer service that management ignores or the incorrigibly provincial thinking shown by their staff.

My suggestion? They should hang one of these at their door, that way, I’d have known not to bother…

Familiar tune, horror movies and such . By J. S. Bach