My Reading List, 24.06.2014

Thought I’d share my [current] reading list. My blogging habits have not really changed, still intermittent.

Will keep updating this, it’s a fairly low blogging target.

 

 

 

Dimension Data makes a bid for Access Kenya

Dimension Data South Africa, a subsidiary of Japanese telco, NTT Docomo, has made a bid for Access Kenya, a Kenyan ISP listed on the Nairobi Stock Exchange. Details here (via Reuters). This is interesting for a few reasons

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).

Magic Beans – Where to get great coffee beans in Nairobi

I’d like to firstly point out that this is purely subjective (has everything to do with my palette). The following are my top picks for coffee in Nairobi, in no particular order.

  • 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.

ICT Policy Incongruence in Kenya

Kenya has made great strides in ICT in the last eight odd year.  We have moved from being what can only be considered 19th Century living (poor electricity supply, no internet connectivity, barely any telephone access etc), to being one of the regional ICT innovation hubs, with companies like Safaricom (Kenya’s telecommunication juggernaut, which is one of 4 companies in Kenya to have revenue of USD 1B + [KenolKobil, KPLC & Kenya Airways being the others], they are behind M-Pesa.), Ushahidi (who build crisis mapping software), the iHub, multiple incubators and more co-creation facilities. We have the capacity to innovate. We have a great developer base in Kenya. We have all it takes to be successful…

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:

  • Our tax money is used to employ as many citizens as possible.
  • Government contracts are given to as many citizens as possible.
  • Fix our balance of trade.

Now, we have many multinationals setting up shop in Kenya (Oracle, Microsoft, EMC, Cisco etc etc). We have a large corporate market who should have no qualms buying imported product, their responsibility is to balance their books, source of products notwithstanding. However, this should not be the case with the government. The government is large enough to sway ICT trends.

Simple example. If the government standardizes say on FreeBSD for it’s server operations, all application vendors who want to deal with the government will have to port their application to FreeBSD or stand to lose business from the government. Simple enough. Given that the government is one of the largest employers, demand for UNIX administrators will necessarily increase (especially those with a bias towards FreeBSD). This will have a knock on effect because you will now increase the number of FreeBSD resources available in the market, making FreeBSD a viable server OS for corporations as there are enough skilled resources in the market to support it. The System Integrators will also ensure that they have adequate resources to maintain FreeBSD as they risk losing support and maintenance contracts if they are unable to competently manage the FreeBSD servers. Why is this important? Because we don’t have to spend a dime on FreeBSD. It’s free. We are paying the WorldBank loan with interest. It’s our tax money and the government has a duty to be as prudent as possible with the funds.

This plays out on a larger scale when you consider OS purchases, Information Management System (IMS) purchases etc. It’s a market that’s estimated by the Kenya ICT Board (MIS + Software and associated services) at roughly 200M USD. If this money was channeled to the local developer community, the  wealth creation will actually increase interest in the ICT space (it will be a viable career for the best and brightest) and will actually position Kenya to be a software *exporting* nation. I’m not against commercial software. I believe that companies like Oracle, Microsoft etc have many brilliant products that actually merit the government paying for them. All I’m saying is that paying for them should not be the first option. The first option should be the option that increases growth locally, even if it’s slightly inefficient. At the end of the day, whether the government buys an ERP from Oracle/Microsoft/SAP/OpenBravo, the final product is supported by Kenyan companies, with hefty fees paid to the mother companies, we might as well ensure that as much money goes into growing these organizations as possible. When we need to import software we might as well again ensure that the System Integrator who gets the final contract is a Kenyan company. This may be a bit tedious (involving breaking the tender into smaller manageable bits) but again, the government has a duty to grow Kenyan companies and keep as much of the citizen’s tax money internally…

So yes, we may be talking of improving the local dev ecosystem but the policy should actually actively aid the same, not pay lip service to the developer community and local entrepreneurs and leaving them in the dark when they have an actual business opportunity…

Hardware. Unexplored Potential

Kenya has a technology sector that has been accelerating over the last four odd years. We have had many startups move from oblivion into the mainstream and a lot of emphasis has been given to the new cutting edge sphere’s of technology. Some of these are:

  • Cloud Computing
  • Mobile Apps
  • Mobile Platforms
My problem? It’s great to have innovation around all these sectors, but the infrastructure required to run them will always be a source of money. Let me give a simple example. It’s not ‘cool’ to work on TFT Screens etc. However, an expertise in building TFT screens/CRT’s etc will eventually lead to the expertise required to build low power devices for devices such as the iPhone. Much as Samsung competes with Apple, Apple was one of their single largest customers last fiscal, contributing 5.7B USD to Samsung’s books (roughly 4%). Much as it’s good for Kenya to be leading in the mobile arena, it’s really unfortunate that we have not began innovating around the hardware side.
The ‘Kabambe’
The ‘Kabambe’ was a simple phone with only the most basic features that was developed by ZTE Technologies. It’ had a basic LCD screen with horrible visibility during the day. This was five years ago. Currently, ZTE are now OEM’s for Android. They have manufactured many high end android devices and they are one of the largest providers of hardware for Orange, both with regards to the devices and BTS infrastructure.
The ‘ZTE 225′ or Kabambe, as it was known in Kenya
How does Hardware Innovation Come in?
Huawei started off by running, then eventually building PBX switches targeted at SMEs. This eventually gave them enough legroom to launch their first digital switch (which at the time had the largest switching capacity in China). They continued expanding and eventually were able to start offering CDMA/GSM/UMTS, in roughly 1997.
This is similar to Nokia/Siemens/Ericsson/Motorola etc. Most of the companies that traditionally provided back infrastructure for PBX systems moved into the mobile space (it was only natural, fixed line communication was a dying business). Thing is, the skill-set required to launch and maintain a good GSM network works very closely with the skill-set required to make a good mobile phone (issues around network stability, power utilization etc). It was rare, at the time, to find a mobile phone manufacturer who did not deal in telecommunications infrastructure. The eventual entrants into the space (HP/Samsung/Acer/Palm etc) all had a previous background in electronic devices. We never really had a startup that was able to penetrate the smartphone market without either a telecommunications infrastructure background or a computing device background. As smartphones picked up, the manufacturers of said computing devices (HP/Samsung/Palm etc), grew at a higher rate as the devices took a a more end-user focused orientation which the companies had better experience in.
If you cycle back to ZTE & Huawei, they are now making amazing devices (both affordable and useable e.g.
The IDEOS, a USD 100 smartphone from Huawei
The ZTE Blade, a USD 150 Smartphone, available in Kenya
The Point?
In our Vision 2030 statement BPO is one of the pillars of the new economy. I believe (personally) that this is a waste of time primarily because one of the pillars of our economic growth is based on us maintaining low income rates for skilled labour (if we become expensive, we lose out), which is a conjecture, really.  I like the direction that has been taken with regards to software, but I believe more emphasis should be placed on hardware in Kenya. We will never be able to produce affordable phones before we are able to produce affordable computer monitors (the materials required are the same and the monitors reduce the cost of the raw materials in the economy). Why should we produce affordable phones? Because no matter how much software we develop, the customer will need to have a device to use the software/consume our media. Why can’t we be the ones manufacturing the devices? That will also give the local ecosystem an edge with regards to software development (the hardware devices will need to have some form of software be it from Microsoft/Google etc). If you think about it, Apple has expertise in both hardware & software and that’s what makes it a great company. All the great software companies today are acquiring a hardware skillset (Google/Microsoft/Oracle etc)… It’s time Kenya started thinking in the same direction…

Art Caffe – Overdue Post

I first started blogging about the Art Caffe in Nairobi in June last year. I’m finally publishing the post. Now, this is less a ‘review’ more a ‘rant’. Let me explain. I’ve been to Art Caffee three times… All three times I’ve had a *bad* experience.

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…

EDIT – 20th June 2013

Just to clarify – my issue is that the waiters conduct racial profiling, but management couldn’t be bothered to address this issue. This issue keeps cropping up too many times to be pure hearsay. If you go through the comments, the waiters openly say that they do racially profile customers. Management, even with direct feedback from staff have chosen to do nothing about this – and that’s my problem. It may not be a problem of Art Cafe’s making but the’ve failed to address the issue.

Going back to class… Piano class…

Some of my friends know that I am a former pianist. I used to play. Had played for a few years, then I took a rather long break, prompted by, but not limited to, my KCSE exams amongst many other such unnecessary distractions :-).  So, I resumed my classes. And I have learnt quite a bit.

Firstly, the Piano is one of the few last true pleasures that I really have in this planet. I really don’t know how to describe it, but playing the Piano is one of those things that regardless of mood, relaxes me. For some reason, I never really believe that the otherwise bungling buffoon is capable of having a musical bone in his body (referring to self).

I was then reminded of why it is generally important for one to learn an instrument, regardless of age and what point they are in their lives. There are quite a number of virtues associated with playing an instrument, that are beneficial to a person. They are, in my opinion:

  • Patience – The saying ‘Rome wasn’t built in a day’ has never been more elaborate. Learning is slow, but extremely rewarding at the same time. It may take you a long time to learn a particular piece of music, but the feeling of accomplishment after is surprisingly rewarding. It’s basically a reflex you are building, so it’s like becoming a master soccer player. Practice is largely mundane. However, when you finally get to the game, it all comes together in an extremely rewarding fashion (in this case we assume you are on the winning team :-) ).
  • Humility – Now, I went in for my classes. My playing sucked. So, I was forced to do basic piano drills, you know, this is *middle C* this is *F* etc etc etc… Basically, the same classes I went through when I was 9 years old. I was about to tell the instructor to take a long walk off a short pier, until it hit me that I had lost the ability to read music, and really I did need that back to basics instruction. Leave your pride at the door. The instructors often know much more than you and you only need to let them play to realise that.

Another two skills that are much often ignored are both rhythm, generally… Additionally and more importantly (for me at least) is natural finger dexterity. My typing speed has always been markedly higher than the average person, and given that most work today involves using a computer and hence using a keyboard as your single mode of getting data into the PC, it kinda helps if you can do that faster. You basically work much faster than the average person. This is a general skill that you get so long as your instrument involves complex finger movements.

Steinway Upright Piano - I want to get me one of these

If you can, please, sign up to learn whatever instrument you have been dying to play. For me, its worth it’s weight in gold and a better spend of my time and money than watching that extra episode of “24/Dexter/Smallville/”Ubuntu”<where Ubuntu = any other series ;) “.

On a related note, you can get Piano’s at a really affordable rate locally, depending on where you choose to look. Typically, I’d recommend getting a grand piano, but these are really only practical if you own the house you live in (if you don’t it’s simply fiscal imprudence, buy the house first, given that they typically cost in excess of 1 million KES). Option two is to get an upright Piano. But the option that presents the lowest cost of entry is the Electric Piano. Does not have exactly the same feel as an upright piano, but is as close as it get’s and is actually much better than most of the Electric Keyboards you get in the market… They cost roughly the same as a high end smartphone :-).

The Fairmont Norfolk – A Coffee Lovers Dream :-)

The Norfolk hotel is one of the oldest hotel establishments in Kenya, I believe they are roughly 107 years old, having been established in 1904 thereabouts. I won’t do a full review of the Norfolk coffee experience. Or hotel experience for that matter.  My focus is on the coffee in this particular case. I was attending a conference and was surprised by the great quality of the brew that they served. The brew was well done, not burnt, and the coffee was full bodied, not acidic, which basically pointed to well roasted beans. They were gracious enough to let me into their kitchen to see their equipment, where they have the full range, from the percolator, to the French press and espresso machines. I took a picture of the ground beans that they were serving, in hopes that someone will be kind enough to identify where they purchase them. The brand is “Safari Lounge Specialty Coffee” depicted below:

Safari Lounge Specialty Coffee

Now, what really impressed me about the Norfolk (and the reason I gave the title) was two things:

  1. They know how to choose their beans. Normally, most hotel establishments leave it up to the procurement department to figure out where to get the cheapest beans, and this normally defaults to the usual Java/Dormans etc brands, you never get anything unique.  Not so here. They took the time to actually find great tasting beans, regardless of cost/hustle.
  2. Helpful staff. The staff at the Norfolk may not necessarily know much about the coffee they are serving you, but should you have a query, they will go out of their way to make sure your questions are answered. Which is rare, in the Kenya service industry.

All in all, save for cost, I wholeheartedly recommend the establishment for one’s coffee’s. The brew was nothing short of brilliant, and their other espresso based coffees should also be great (I have only tasted the Americano :-) ).

Savannah Coffee Lounge Review

Started in 2007, by Sasini, this coffee chain had a refreshing new approach, at least as far as the Kenyan market was concerned. They were going to have the first Coffee Lounge. The competition they faced was from Dormans and Java. Dormans have a hybrid diner/”stall :)” model. Java have primarily focused on the diner model, with great success. They currently have four outlets (that I know of, feel free to correct):

  • Savannah Loita Street
  • Savannah Kenyatta Avenue
  • Savanna Museum Hill
  • Savannah Upperhill

Now, Savannah seem to be going through some “teething issues”, they may not have “found themselves” as it were. Why? They keep toying with different models of running their cafe’s. For example, their new outlet on Kenyatta Avenue is more of a diner than it is a lounge, they are focusing more on volumes, however, in Museum Hill, they have  fully embraced the lounge model, along with the Loita Street outlet.

Apologies, I was too lazy to go take pictures of any Savannah (not been there in a while), so I only have the logo for now :(, will get more pictures when time allows.

Savannah's Logo

Enough with the nonconstructive banter for the pro’s:

  • Menu – They have a relatively good menu, with a wider variety of foods to serve. Their range of pastries is also quite impressive (I unfortunately quit taking sugar so I’m about as useful as a vegetarian lion is describing meats :( ), with a bunch of new pastries that were previously not available e.g. the white forest cake was previously not available in most coffee shops.
  • Coffee – They do serve a good cup of mud. They have the advantage of having some of the best beans available in Kenya (in my opinion). However, their one issue is the choice of beans. (for me at least, this is an issue : ). They randomly oscillate between dark ground and medium ground beans for their espresso, which in my view is sacrilege :). You only have two options for espresso beans, dark roast and dark roast :). Their cappuccino’s are also quite good as they seem to have perfected their frothing/pouring process.
  • Herbal Teas  – In a weak moment (having felt sufficiently motivated to go ‘healthy’), I decided to try out their  herbal teas. They are actually quite good. I particularly enjoyed their mint flavored tea. I hope never to get quoted on this :).
  • Atmosphere – This is particularly for the Museum Hill Branch.One of the most relaxing views one can get in a coffee shop today. It is simply the best place within 2 km of the CBD where one can relax and get some work done over a cup of good coffee. For smokers there is the added advantage of a smoking zone.

Now for the con’s

  • Service - Started out brilliant, however, in typical Kenyan service industry fashion, their service standards have been deteriorating with time. Staff are less willing to help etc.
  • Furnishing – While the lounge concept was good it is more expensive to maintain. With time however, they have been unable to keep up the standards, and their couches (especially in the Loita Street Branch) need new upholstery… which leads to the next point
  • Pricing – They were more expensive primarily because they offered the best experience, however, they are still more expensive while they let the experience drop :(, so it’s not really the first choice for coffee :(.
  • Coffee Sales - One of the primary benefits of having a coffee shop is the opportunity to sell your beans and branded merchandise (mugs, French press’s, t-shirts etc). It is a big let down and huge oversight that after a lovely cup of coffee, I cannot buy the beans that the coffee came from, and I have to try and figure out which beans they used.
  • Lack of knowledgeable staff – Their staff know little to nothing about the coffee they sell. Added to the above point on lack of coffee sales, makes appreciating coffee a hard task, as the staff members themselves have no clue as to which beans were used and you are left to your own intuition.
  • Internet Access – they used to have butterfly access, but this is now intermittent. Anyone working has to find their own means of connection :(.

All in all Savannah makes for a good place to relax and have a slow meal, if you are not in a hurry. My favorite location has to be the Museum Hill branch. If they put some more effort into coffee appreciation and staff motivation, it may just be a hit. :)