The signing of an agreement between Oracle and Palestinian software company ATS provides an opportunity to evaluate cooperation between Oracle Israel and the Palestinian firm. The agreement gives the ATS value added distributor (VAD) status.
Palestinian-Israeli cooperation in the field provides the basis for the Palestinian Authority's strategy of developing information technologies. Following this agreement, Palestinian software companies, which have until now worked with Oracle Dubai, will work with Oracle Israel through ATS.
Like most Palestinian software firms, which were set up after the Oslo Agreements, ATS was founded in 1994. This development, which anticipated the strengthening of demand for information systems in the Palestinian market, took place parallel to the consolidation of the Palestinian Authority and the founding of new Palestinian companies.
The Palestinian Authority requires information systems in Arabic to replace the systems used by the civil administration. The demand for information systems in the Palestinian market will strengthen following the creation of large Palestinian companies, such as the Palestinian communications company Paltel, which operates both telephony systems and wireless communications.
Hassan Kassem of Kfar Gedera, adjacent to Givat Ze'ev, is general manager and chief owner of ATS. Kassem, who has a BA in computer science from Alquds University in Jerusalem and an MA from Washington University, has succeeded in developing his company, despite the chronic problems of the Palestinian software sector: a shortage of infrastructures, mainly skilled manpower.
"Globes": How did you develop the business connection with Oracle to the point where you received VAD status?
Kassem: "When the Palestinian Authority entered the picture, a demand was created in the Palestinian market for solutions for large information systems. Like other Palestinian companies, we naturally chose Oracle's tools. Initially, we were in touch with Oracle Dubai, since it was Oracle's closest branch. When the Israeli branch was set up, we were the only company to work with it.
"The geographical closeness was one of my main considerations in transferring activity to Oracle Israel. Some of my competitors claimed that I was collaborating with Israel, i.e. a traitor to the Palestinian cause, and they slandered me. I think I can get some of the best technology and support from Oracle Israel, which is important for the development of the Palestinian market.
"We found open-minded people and full cooperation in Oracle Israel. I was amazed by the treatment and warm reactions I received from the Israeli team, and I understood the importance of doing business parallel to the peace process. As far as I am concerned, when an Israeli comes here without a military uniform, like Oracle Israel marketing channels manager Hanan Maoz, for example, who did military service at the same military base in Ramallah where Arafat's headquarters is located, we can do business with each other".
How would you characterize the work environment of a Palestinian software company?
"The biggest problem of Palestinian software companies is a shortage of work experience with large systems. This field was not developed, since, on the one hand, there were no large Palestinian companies, and on the other hand, the civil administration computer systems were written mostly by Israeli companies in Hebrew.
"Following the signing of the VAD agreement, we received responsibility for distribution of Oracle tools and for setting up appropriate infrastructures, including educational infrastructures. In this context, Oracle donated over $100,000 worth of software to Bir Zeit University. Next year, we will operate a training program in Oracle tools for over 500 computer science graduates. The program will be financed by the US Agency For International Development, with the support of the World Bank.
"In addition, we are operating a large training center in Ramallah, which will train 400 computer science graduates next year. I hope that these training programs will facilitate the connections with Israel's software sector. We are also examining the possibility of loans to trainees. The loans will be paid back after the trainee is employed.
"Many Palestinians claim that Israeli companies do not give them serious consideration when they look for ready professionals. As I said, we have good human capital with a good professional basis, but specific training for current technology is lacking. In my opinion, Israeli companies that train Palestinian software engineers and computer science graduates will gain educated manpower, which does not expect the salary earned by their Israeli counterparts. You have to remember that the cost of living here is much lower, and the average wage is very low. The Israeli market has a manpower shortage".
What are the characteristics of Palestinian-Israeli cooperation in the field? How are obstacles overcome? Does the Khdurri industrial park for software personnel near Kfar Sava constitute a solution for these problems?
"Khdurri is only one type of cooperation between Israelis and Palestinians in the field, but most software companies are in Ramallah. The location is due to the characteristics of the town's population and the nearby universities in Bir Zeit and Alquds. If Israelis fear entering Palestinian towns, they can do business with Palestinians in nearby Israeli settlements, such as Givat Ze'ev.
The most important thing is to find serious businessmen, who understand the state of the Palestinian market and are willing to invest in several months of training before beginning business activity. For example, I am currently in touch with Sapiens, which is training five of my employees in its technologies, in preparation for business cooperation between us.
Another obstacle is that Israel does not issue entrance permits to young people. On the one hand, the civil administration is encouraging software cooperation, but on the other hand, it is preventing the entrance of unmarried young people. It is the 21 year-old educated people, who have just completed university degrees, who constitute the appropriate human material for high tech activity. People in their thirties, who are entitled to get entrance permits, are considered too old for the field".
How will receiving VAD status affect your activity?
"The new status will give us responsibility for the Palestinian market. We are looking for a strategic partner to expand our activity, and not just in the field of Oracle. Due to our responsibility, we will be selling a wider variety of Oracle products. We will receive more support from the company, and we will be in charge of manpower training. The link to Oracle Israel will also be strengthened, and we will be in charge of enlisting Palestinian partners for Oracle. The Palestinian partners currently operating with Oracle Dubai will have to work with us, and rely on our assistance and that of Oracle Israel".
Published by Israel's Business Arena on February 24, 2000