Landing a hot deal

2011-04-12 00:00

MOST people would give anything to retire at the age of 32 — and if they could do so, very few would bother to return to business and the world of work.

For three and a half years, Pietermaritzburg-based entrepreneur Anujah Powell travelled the world, enjoying the fruits of her labour, having retired just eight years after establishing her first business.

However, the lure of “being part of something bigger than myself”, and the chance to transform the business she started from scratch into an international company, were too tempting to resist.

Powell’s journey culminated in a remarkable deal last week when it was announced that her company, Pietermaritzburg software development house Chillisoft, was chosen to be part of Microsoft South Africa’s R475 million broad-based black economic empowerment (BBBEE) “equity equivalence programme”.

Powell, who matriculated at Heather Secondary School in the city’s northern suburbs, hails from humble beginnings.

She secured a bursary from Hulett Aluminium (now Hulamin) to study engineering — qualifying at Wits as a materials and metallurgical engineer.

After working for the company for two years, she chose to start her own business with only R10 000.

“I decided that I either had to leave and start something for myself, or settle for the golden handcuffs of working for a company.”

Powell identified a gap in the market for interpreting the information technology (IT) needs of a business and Core Business Solutions was born. Powell was only 24 years old.

However, establishing one’s own business in the IT sector in 1999 was a major risk. She did so at a time when IT’s role in the business environment was still in its infancy. Furthermore, the company did not attract any outside funding.

“It was the equivalent of one month’s salary. It was challenging. It was built on blood, sweat, tears and raw initiative. I saw the opportunity for growth. I identified the language and communication gap that existed between the business’s needs and its IT requirements. I wanted to understand business and in order to do this I had to understand the systems, as they drove businesses,” she said.

The company soon thrived as Powell’s strategy of basing Core Business Solutions in Pietermaritzburg paid off.

“The costs of software developers were low, and so were the overheads.”

The business therefore benefited from top-notch skills in the form of young university graduates, as well as a low-cost environment.

Although Powell decided to hang up her boots after eight years, she was mindful of the major impact her retirement would have on staff members.

“Chillisoft started as a vehicle for ex-Core Business Solutions staff. Key employees got shares in the company. I could have sold the company but here was an opportunity for employees to experience starting and growing a business with a reduced set of risks. Core’s main customers, contracts and revenue streams were handed to Chillisoft.”

But even the best-laid plans can be upended. A three-and-a-half-year sojourn spent in — among other places, India and Brazil — came to an end when the directors of Chillisoft asked her to return to the firm as CEO and help them navigate through the recession in late 2008.

“When I travelled and had a break, I realised that I wanted to grow the business into an international business. For them [the directors], it was also a realisation that they wanted to grow Chillisoft.”

However, this seemingly perfect fit did not materialise immediately.

Powell is candid about her experiences as a 30-something retiree living in suburbia.

“To retire and live in suburbia, without contributing or being part of the working world, was self-indulgent and soul-destroying for me. You simply can’t relate to your friends, who are in a different place in their lives.”

Powell’s return to Chillisoft proved successful and the company soon made attempts to benefit from Microsoft SA’s empowerment deal.

One of Powell’s core values is that of running a business that is built on a corporate culture that recognises the value of its people. Staff retention remains extremely high — clearly a sign of how well her people have been treated in the work environment.

So, apart from the financial benefits, what does the Microsoft deal mean to Powell?

For her, it is about “building a legacy” by transforming the business she created “out of nothing” into an international company.

“We’ve always asked for this type of assistance.

“Coming from an underprivileged background, I did not have someone with an MBA [Masters in Business Administration] or a mentor with the connections to guide me on growing the business.”

The deal will undoubtedly go a long way towards boosting Chillisoft and turning Powell into an even more successful businessperson, while helping to grow the company into an international brand.

 

The Microsoft B + BBEEE Deal

IN April 2010, Microsoft South Africa launched an equity equivalence deal of almost half a billion rand, which would result in Microsoft’s BEE status being changed from a level four to a level two BEE contributor, provided that the relevant audit criteria were satisfied.

In return, Microsoft would invest R 475 million, over the next seven years, into local, black-owned software-development companies so that local companies grow into global companies by 2017. Microsoft recently announced four of its equity equivalent partners, selected from the 683 hopefuls who had responded to its B+BBEE competition. The four partners were Chillisoft, Maxxor, Bui and HomeGrown Integrations. One of the reasons that Chillisoft was chosen was for its public-health software solutions that assist in alleviating service-delivery bottlenecks.

“Microsoft selected the businesses based on their products. It offers usaccess to finance but a lot more than this. There is access to skills, expertise, research and mentorship. We will now present a business plan and receive the relevant investment to achieve this plan,” Powell said.

“We will be focused on developing software solutions for the health-care sector. We are particularly excited at developing solutions that are tailored for Africa by Africans, since we believe that we are able to relate to service-delivery issues, technology constraints and technology accessibility.”

Chillisoft

SOFTWARE development house Chillisoft offers technologically advanced solutions. Its flagship product is “Habanero” (a very hot chilli), which is used in more than 160 countries and was released in late 2008. Habanero is a software quality and productivity tool that uses Microsoft technologies and is developed for software developers and software development teams. It addresses the current international shortage of software developers and low software quality. 

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