Success Story

TAIK Interview: Microsoft in Turkey

TAIK recently interviewed Microsoft’s Vice President for Europe Middle East and Africa (EMEA) and Chairman of Microsoft’s Middle East and Africa (MEA) Emre Berkin about the company’s operations in Turkey, the nature of the Turkish market, the advantages and challenges of doing business here and the company's corporate social responsibility inititatives.  Berkin, who is responsible for overseeing 79 countries, also shares his views on how Turkey can attract more foreign capital.

Background
Microsoft Corporation, operating in Turkey since 1993, moved its regional Middle East & Africa headquarters from London to Istanbul in 2000.  Overall, the region comprises 31 offices.  Microsoft’s Turkish subsidiary employs 160 people, while headquarters employs about 60 people.  The company also has branch offices in Ankara and Izmir.  Microsoft’s core business in Turkey consists of sales, marketing and services.

TAIK: Why did Microsoft decide to locate the Middle East & Africa region headquarters in Turkey?
E.B.: Turkey is one of the fastest growing markets in this region and it has the largest economy.  Pakistan and Nigeria are larger countries but Turkey has the largest economy. In terms of GDP per capita, it’s about average, right in the middle. Also, the infrastructure in Turkey is good in terms of telecommunications.

In addition, its geographical location makes it ideal.  Turkey is close to Europe and the flying time from country to country within the region is about equal as our regional staff travels a lot and we have a lot of incoming traffic to headquarters for meetings as well.   We also really depend on Turkish Airlines which has very good connecting flights. 

TAIK: What are the advantages of doing business in Turkey?
E.B.: There is no issue finding the right talent in Turkey.  Also, you don’t have to reinvent a lot of things to be successful in Turkey.  If you’re already a successful business, you can apply the same templates and plans here with only minor adjustments.

TAIK: What are the challenges of doing business in Turkey?
E.B.: The challenges of having a regional headquarters here is that 40-50 percent of our staff are ex-pats, comprised of 15-16 different nationalities.  After work or on weekends it can be a challenge for those who don’t know the language.  We pay for private Turkish lessons, even during work hours, but their travel schedules make it difficult to really learn the language.

In addition, talent wise you can find anything you want in Turkey.  However, because of income taxes, the higher you go in terms of expertise, the costlier it is.

TAIK: What kind of products and content are most popular in Turkey?
E.B.: In Turkey, we sell 80 percent of our products in Turkish.  The growth of MSN Messenger has been phenomenal, with 3 million users in Turkey today, considering the overall pc user market in Turkey is about 6 million.

TAIK: Does Microsoft do business with both the private and public sectors in Turkey?
E.B.:Overall our revenue is about 75-80 percent from the private sector and only 20 percent public sector.  We would like to see that change.  There is more room to absorb technology in the public sector, more opportunity, so we should see that change over time. 

The banking sector is our largest client market, followed by general industry/manufacturing and retail and distribution companies.

TAIK: How has your return on investment been in Turkey?
E.B.: Our return on investment is definitely good even despite the cyclical issues here.  We get the Turkish economy.  In Microsoft’s 12 years here, year over year we have never had a negative growth year.  We’ve had stagnant years, with just three percent growth.  On the other hand, on the high side we’ve also had as much as 280 percent growth per year.

TAIK: What kind of corporate social responsibility initiatives does Microsoft have in Turkey?
E.B.: Worldwide our focus is on education.  We run a large scale program here with the Ministry of Education where we try to leverage what we know best and apply it from both angles: the use of technology to create more effective learning environments and teaching technology and how to use it.  We work both with teachers and students.  In addition we work with several NGOs in Turkey on education initiatives as well.

TAIK: In your opinion, how can Turkey attract more foreign capital?
E.B.: It’s not easy to attract people to Turkey because of certain perceptions they have about the country.  Once they do agree to move here there is a lot of red tape.  So, the Turkish government should make it easier for ex-pats to work here. 

In the long run it helps the Turkish economy.  For example, today our Turkish subsidiary is comprised of 100 percent local employees.  But you must have ex-pats initially for proper knowledge transfer. 

The government should also make it financially more attractive for companies to support the ex-pat structure, such as giving tax incentives.  We have to realize that it’s not just for the good of the company but it helps in breaking down cultural barriers, speeds up knowledge transfer and cultural exchange.  What better way to have your country, culture, people introduced to the world than have foreigners relay their positive experiences here?  Every person who comes to work in Turkey is a ‘goodwill ambassador,’ if you will.

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Overall, Berkin is responsibile for 79 countries and is credited with accelerating the growth and expansion of Microsoft’s operations in Middle East and Africa. Berkin and his team worked closely with key government leaders, industry partners and customers to enable governments, citizens and businesses to benefit from the information technology revolution. Today, as a result of this sustained effort; Microsoft is seen as the number one preferred enterprise partner and a driving force in software development and IT growth in this region.
 
Besides his commitment to the development and deployment of IT, Berkin is commited to education in the developing markets. He has been personally leading the company’s community affairs efforts through which Microsoft has contributed to various community activities improving education and helping underprivileged people in the region over the years.

Berkin joined Microsoft in 1993 to establish company’s operations in Turkey. As General Manager of Microsoft Turkey, he was responsible for making it one of the company’s fastest growing subsidiaries worldwide.  

Prior to joining Microsoft, Berkin was with Digital Equipment Corporation. During his ten-year career with Digital, including six years in the United States, he managed sales, consultancy, support and service organizations.

Berkin has a Bachelor’s degree in Computer Engineering from Middle East Technical University in Ankara and a Master of Science degree from DePaul University in Chicago.

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