Despite Pakistan’s Reputation, the IT Industry is Thriving
Right or wrong, when most Americans think of Pakistan, images of war, terrorism, and remote mountain villages come to mind. But there is a different side to Pakistan – a more modern side where the infrastrucure is stable and a fast maturing IT industry is gaining recognition. Software outsourcing to Pakistan has become a viable option.
Today I’m joined by Umair Shahid from 2ndQuadrant in Islamabad, Pakistan. Umair will be sharing his insights on the Pakistani IT outsourcing world, and how software development companies in Pakistan overcome their country’s reputation when doing business with the West.
Transcript of This Interview
Dave: Hey everybody, I’m Dave Hecker. And today we’re going to talk about outsourcing to Pakistan. It seems like every year we’re hearing from more new companies out of Pakistan. And we’re hearing a little bit more every year from clients who are interested in going to Pakistan. But there’s a lot of apprehension, and here to talk about that today is Umair Shahid from Stormatics. He’s coming from Islamabad, Pakistan, and I’ll be meeting him for the first time. Here we go.
Dave: Hey everybody, I’m Dave Hecker. And today we’re talking with Umair Shahid from Stormatics out of Islamabad in Pakistan. You know in the United States, Pakistan’s reputation is totally dominated by the news. There’s politics, and war, and terrorism, but despite that we’re seeing the IT industry in Pakistan steadily growing and evolving. We’re hearing from more Pakistani teams all the time, and it’s really emerging into the world software market. But what we hear from our U.S. clients is that they don’t think of software when they think of Pakistan, they think of other things. And today Umair and I are going to talk a little bit about how people in Pakistan are overcoming that and bringing their software shops to the world. So Umair, welcome, and nice to meet you.
Umair: Yes, I’m here.
Dave: Good. and I was reading your LinkedIn, and it looks like you’ve spent quite a lot of time in the U.S.
Umair: Yes, I have.
Dave: It sounds like you would be a very good person to tell us a little bit about these cultural barriers, and how people in the States really think about Pakistan, and how it affects your industry. So what’s it been like for you trying to take your business, and really bring it to the U.S. market? What kind of objections and feedback do you get about a Pakistani company?
Umair: Right. So it’s unfortunate that the only news that come out of this region are not too good news. They revolve around terrorism, they revolve around the issues that the geography has. The issues are real. I’m not going kind of brush them under the carpet or anything. The issues are real, but that doesn’t mean that that’s the only thing happening in this region, not by far. So the technology industry in Pakistan is certainly very vibrant. It’s emerging, it’s expanding. There’s some very dynamic, some very intelligent people coming out of technology universities every year, and they’re feeding the tech industry. And the good thing about the tech industry is that all you need is a laptop, and an internet connection, and you can pretty much be anywhere in the world and serve anywhere in the world.
Umair: So yeah, I’ve been working very closely with a U.S. company for about 12 years, and you know I’ve always felt an initial hesitation because of the mindset that is kind of hard with the news that’s coming out. And that’s not to be blamed, it’s just the way it is. The initial hesitation, I’ve seen it convert into acceptance, and then very happy with that acceptance very very quickly. So you know any new person that I talk to initially would be a little hesitant, but very quickly would get to accept, and see that it’s just the same kind of people living the lives trying to make ends meet, having families and kids. But the normal life that you’re used to in the U.S, so the cultural difference is out there, but on thia side they’re just people just like in the U.S.
Dave: Yeah. That’s always the case with all these offshore companies that we deal with. We always have to remind people that they seem so far away and different, but then I travel all over the place. I’ve been to Pakistan, and everybody is sort of the same. People are trying to make money in their business just like we are here. But you said that when people first hear the idea of outsourcing to Pakistan, there’s this hesitation. This part I’m familiar with, because part of my whole business is to look for emerging regions, certainly Pakistan is one. So I’m very familiar with the resistance. And in the U.S. it’s this sort of vague resistance like they say, “Really, Pakistan? It’d have never occurred to me to send IT work there.” But what I don’t really know is how do you address those objections? What do you tell people? An American when they say. “Gee, I don’t know. It sounds dangerous.” That’s really common. So how do you warm people up to the idea? What do you tell them?
Umair: So you’re right. When somebody who does not know Pakistan or does not know a Pakistani, there’s a very different concept in their mindset that they come with. As an example I was once talking to this friend of mine, became a friend of mine in Boston. I was visiting Boston, and I was there for a conference, and I was telling him about this place that I went to for my honeymoon. It’s a ski resort in the Northern part of the country, and I was telling him about how to get there, what kind of facilities are there and everything. And after my story was over, his comment was, “I never knew there could be a ski resort in Pakistan.”
Umair: Yeah, that was his comment was.
Dave: There’s a pretty substantial mountain range in the north of Pakistan.
Umair: But the concept is that the ski resort is kind of it’s modern, it’s contemporary, it’s fun. And in a typical mindset fun and Pakistan really don’t come together for some reason. Well, I wouldn’t say for some reason, I know the reason why. They just wouldn’t come together. So it’s about when you start talking to people. It’s when you start exchanging ideas, when you start discussing technology. When people get to realize that there’s some very intelligent folks out here. There’s some very hardworking folks out here. You can have a very meaningful conversation, a very meaningful business partnership with people in this country. It’s about starting that conversation. and that’s why I said as soon as you start that conversation, starting it is a barrier, but as soon as you get started, people get warmed up to the idea very quickly.
Dave: So do you think that one of the reasons that Americans have such a negative view of Pakistan is that they learn everything from the news, and the news is terrible. And they don’t really know any Pakistani people. They’ve never met anyone like yourself who has good communication skills and understands the tech world. They’ve never been exposed to that.
Umair: It’s very possible, yes. And I think that plays a very big role. As I said, it’s unfortunate that the only news that come out of this region are negative news.
Umair: So as an example, I’m going to tell you a couple of things that I’m fairly certain that people in general in the U.S. will not know. So you would know about that terrible tragedy in Peshawar where school kids were attacked, but what you would not hear about is that Pakistani Stock Exchange actually gave a return of 27% in dollar terms in 2014.
Umair: That’s a phenomenal percentage by any standards.
Umair: So you would not know that Islamabad which is my hometown, I was born and raised in Islamabad, it’s a very vibrant technology city being fed by 26 universities within the vicinity.
Umair: That’s again a large number of universities. And in general, people will not know about the culture of entrepreneurship that prevails the organizations that people, the Pakistanis in the U.S., and in Western Europe and the UK, and Far East have started up to promote the culture of entrepreneurship back home. So you’ve got chapters in the major city of the country that are actively promoting the concept, and while the entrepreneurship actually help people overcoming some of the challenges that you get to hear about so much in the news.
Umair: So these kind of things don’t really come out. The only things that come out are, well, not that good.
Dave: No. Those are great facts, and I’ve written them down. That’s how impressed I was with them. But I haven’t been to Pakistan in a long time. The only places I’ve been are Islamabad, and I was in Karachi. And my impression was that the cities were fairly modern, and the infrastructure was good, and it seemed like a full blown legitimate city. But people in the States have rarely been there, and I think they worry about the infrastructure. A lot of Americans have these images of everybody is riding around on a donkey cart or something. Pakistan is a solid outsourcing destination. I don’t know what they’re thinking, but what do you say to people that worry about the infrastructures? I think the feeling is that there’s all these issues in the country, and there’s fighting and things like that. How is it possible that the banking, and the internet, and the electricity, and all of that can be stable? How do you respond to questions like that?
Umair: Right. So one way is we’re having this conversation, we’re having it through the internet. And it’s a bit of conversation, and it’s coming out pretty smooth, and I’m in Islamabad. So your point is very valid because the infrastructure is just taken for granted in the U.S. It’s just there, you flip on the switch the light will turn on. You turn on your computer, the internet is just there. You just take it for granted, and there’s so many things that you get concerned about when you’re talking about a third world country 10,000 miles away. And the third world country where anything that’s coming out is negative. So yeah, I think again it’s part of starting off that conversation, talking about stuff, telling people about what the infrastructure is like. So the very first time that I worked with a U.S. firm, this was back in 2003. Before I was able to start working with it, I actually went around my city with a handicam in my hand making videos, and turning it across saying, “This is what my city looks like. Let’s take a look. This is my normal everyday kind of thing.” I’m not just picking up the nicest place is and …
Umair: … shooting them for you. This is my everyday routine, right? This is where you can see a KFC or a McDonald’s or a Subway, all these brands that you’re so used to in the U.S. These are the roads that you see. These are the cars that are running on the road, and you know what, I made that video, a 15 or 20 minute long video, there’s no donkey cart in it.
Umair: You just don’t see a donkey cart there. It’s just not present. So yeah, I’m not going to say that the infrastructure is as good as what I’ve seen and I’ve experienced in the U.S. It’s nowhere close to that, but it’s definitely stable, it’s there. Power is there, although there’s some work we need to be working with. Connectivity is good, the road infrastructure, the banking system is very solid. Pakistan sees a huge amount of remittance coming in from Pakistanis that are living outside of the country, sending money back home. So the banking system just needs to be very, very solid. And I think a very good example of how good the industry is, at least, the banking side, Two thousand eight, 2009 was really bad in financial terms for the entire world, and even during that time the Pakistani banking industry did not collapse. It did not give a huge amount of returns, so you know the 27% that I’ve talked about in 2014 just a little while back, that was close to one or two percent, but it was definitely not in the negatives. It did not collapse. The structure was there, the unemployment did not skyrocket. And the impact due to the whole international collapse was there, but it didn’t have a domino effect in the country. The banks were able to sustain themselves.
Dave: It’s great information. And I love the idea of the video. And one of the reasons why we do these videos is because there’s no substitute for familiarity. So people think of these faraway countries especially in the States where we don’t watch outside TV or media, most people haven’t been to these places. If you know somebody from there or, at least, you get a chance to see what it’s like, it really increase the comfort level. You don’t think about the news so much. I’d love to see that video if it’s something that’s going around. I think it would be good for some of our clients. Let me ask you a totally different question. Another thing that I’ve heard quite a bit from U.S. clients is that they say, “Pakistanis, they don’t want to work with us.” They have a negative view of Americans as well. That wasn’t really my experience when I went there, although my experience all over the world was that people are genuinely warmer towards Americans than you think they’ll be. Maybe not so much what the government is doing, but that’s how it goes. What do you think about Pakistani impressions of Americans? In the street, and in companies, what do we look like to you?
Umair: So I think when it comes to people to people contact, I think that it’s very warm, a lot warmer than the impression that goes out would tell you. So people in general would welcome Americans, would welcome working with Americans, would actually look forward to working with Americans. There is some hesitation initially, just like we talked about the hesitation from the U.S. side. There’s some hesitation, so I’ll tell you about myself, right? I don’t need to talk about other people, because I was in that stage myself as well when I was visiting the U.S. for the very first time. So I’d heard all these horror stories about all these tactics when you go through to immigration, all the humiliation that you have to go through. And they sort out the Pakistani passports differently, and they take you to the other room, and there’s some interrogation in there. There were all these horror stories, and then there was about street mugging, and how the brown skin is really a target for everyone, and you get singled out, you won’t get served in fast foods and restaurants. There were all these stories out there, and I was honestly a little bit scared when I went there for the very first time.
Umair: But you know, as soon as I landed, and I went through immigration, the comfort level just increased exponentially very, very quickly. I was very comfortable there, and I moved about very freely. Everybody treated me with respect, and that’s the story that I actually brought back. It’s like not one of the horror stories that ever I heard. I didn’t even go close to it, there wasn’t a treatment that was even close to what I had heard before. So I think that the people to people contact is very, very important, and as soon as that happens, I think the warmth increases significantly. I won’t say that there’s an aversion of working with the Americans. People want to work with the U.S., but there’s a little bit of hesitation in the beginning, and again it warms up very, very quickly.
Dave: Okay, good. Do you think that Americans lump together Indians and Pakistanis, because I’ve spent a lot of time in India, and a little bit in Pakistan. And I know that you really don’t want to mic them up. Those are very different countries. They’re not the same, and I know that some people would sort of lump them together into one category. Do you hear this a lot?
Umair: Yes. And you know what, no one is to be blamed for that. We do look very, very similar. Our values and culture are very, very close to each other, and I would say that I don’t think there are any two nations on the planet that are closer to each other culturally than Pakistan and India are. Political differences aside.
Umair: Culturally speaking, I don’t think there are any two nations in the world that are closer together than Pakistanis and Indians.
Dave: When I worked with American clients, I want to start relationships off on the right foot. So I try to teach clients that make sure you’re working with a company from India, say, try to learn a little bit about them so that you can come in from a place of respect, and not be just a completely ignorant person. And one of the things I always teach them is to get an idea for their identity, but don’t mix them up with Pakistanis, because if you look at the history between the two countries, these identities are really important to them. Do you agree with that? It’s a little bit of a sensitive issue, I think.
Umair: Yeah, well …
Dave: Or is it not a big deal?
Umair: I wouldn’t say it is as big of a deal as it is made out to be. So, I’ve worked very closely with Indians for a very long time so as part of my work with the U.S. companies, it’s natural that I get to work with my Indian counterparts as well. And I’ve actually made very good friend across the border. So I think it’s made out to be a bugger deal than it actually is.
Dave: Okay, good. That’s good to hear. So where do you think …
Umair: I’ve actually been to India a couple of times. It’s rare that people actually go across the border, Indians and Pakistan, and Pakistan and India. I’ve actually went there a couple of times for trainings. We were starting up offices there, and I was sent over for training. And I actually took my wife there with me, and when we stepped out she was actually scared. She said, “Let’s make sure that nobody realizes that we’re Pakistanis.” And I asked her if you come across an Indian on the street of Islamabad, how would you treat that person? And she said that I’d probably take that person to my home and serve him good food, and make sure that he’s very, very welcome. And I said, “I’m pretty sure the Indians feel the same way about us.” And that’s exactly what happened. Everywhere we go as soon as people realize that we’re Pakistanis, we were actually treated royally.
Dave: It’s great to hear. What do you think the future of the IT industry in Pakistan is going to be? Would you describe it as right now, they’re struggling to emerge as a full blown player on the world scene? Or where do you see it and where do you see it in, say, three years?
Umair: I think the industry is definitely growing, and I love the fact that the concept of entrepreneurship is actually taking route in the universities across the country. So I do see it do continue to grow. The scale of the industry will probably not be even close to the scale that India has. They started off a lot earlier than we did. They have a much larger population than we do, so we are probably never going to match them or beat them at scale, but the industry definitely is growing, and I see it continuing to grow. The infrastructure continues to improve, the technology that’s available continues to improve, and the quality of people that are actually coming into the industry continues to improve.
Dave: All right. Very good. This is a very positive outlook. I’m happy to hear it. Okay, Umair, thank you very much for your insight. And it’s nice to meet you, and I’ll look forward to talk more with you soon.
Umair: Sure, sure. Absolutely.
Dave: All right. Thank you very much.
Umair: You’re welcome. Have a great day. Bye.
Umair Shadid, 2ndQuadrant
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