Egypt is poised to become the "India of the Middle East" as it seeks to ramp up its share of the global outsourcing market, experts predict.

Yankee Group noted that more multinational companies are using IT outsourcing and business process outsourcing as tools to transform their organisations into global operations.

The report points out that that India is currently holding a 60 per cent global outsourcing market share, but companies such as Cisco, Google, IBM, Microsoft, Oracle and Orange Business Services are staring to exploit Egypt's IT talent pool.

However, according to Yankee Group, Egypt faces some "significant hurdles". But it possesses unique advantages as well, which could enable the nation to reap the economic benefits of outsourcing opportunities.

Key to this growth is the Egyptian government's move to set an ambitious target for the country to reach $1.1bn of the global outsourcing market by 2010, quadrupling from its 2005 revenue.

According to the Yankee Group report, although interest in Egypt as a location for outsourcing services is growing rapidly, there are structural and perceptual problems the Egyptian government must address to facilitate the ascendance of this market.

"Egypt has a number of the required ingredients in place to become a major hub for IT outsourcing in the Middle East," said Tony Marson, Yankee Group senior analyst and report co-author.

"In an anywhere environment, where time and place are irrelevant, IT outsourcing will continue to be a strong and resilient revenue opportunity for those regions that successfully enter it.

"For Egypt, the government will have to steer the development of the ICT industry cautiously through the next five years."

Mindy Blodgett, Yankee Group analyst and report co-author, added: " Enterprises interested in outsourcing are demanding options for locating the work in many regions, and Egypt could become a favoured location if it meets the many challenges."