Tech Startup Bridges Mideast Divide

With his cutting-edge offering G.ho.st—and its West Bank operation—Zvi Schreiber hopes to soften the edges between Israel and Palestine

by Neal Sandler

An Israeli border guard orders a Palestinian driver to stop at the Anata checkpoint on the outskirts of Jerusalem and the West Bank village of Anata Getty

Zvi Schreiber is a British-born serial entrepreneur who established the headquarters of his latest tech startup, a software company called Global Hosted Operating System (G.ho.st), in Israel last year. G.ho.st has developed a "virtual PC" that saves all of a person's files online so data and programs can be gathered from any computer. As Schreiber sees it, the Microsoft (MSFT) Windows and Apple (AAPL) Macintosh operating systems that cram applications and documents all inside one physical computer will soon be obsolete.

"Our G.ho.st virtual computer will enable users to get their computing environment from any browser—and we'll eventually compete head-on with Microsoft," Schreiber predicts.

Taking on Microsoft is tough enough. But Schreiber is embracing another challenge: He's helping create a high-tech economy in the Palestinian territories, one of the most poverty-stricken, crisis-riddled spots in the world. He has located the development center for G.ho.st in the West Bank.

A Tough Commute

It's a bold move at a time when the Palestinians are facing an unprecedented economic crisis due to years of Israeli restrictions and border shutdowns imposed for security reasons. Some $7.4 billion in aid was pledged by international donors at a Dec. 17 conference in Paris to shore up the government of President Mahmoud Abbas. But what is really needed, according to a recent World Bank report, is economic integration of Israel and the Palestine territories—a task that's far easier said than done.

Consider the challenges Schreiber confronts. Though he has hired three dozen Palestinian engineers and programmers in Ramallah, Schreiber has yet to set foot in the development center, located a mere 12 kilometers (7.5 miles) north of his home in Jerusalem. As an Israeli citizen, he is barred for security reasons from entering Palestinian-controlled parts of the West Bank. And Israel's security fence prevents most Palestinians from entering Israel.

Still, the hassle of managing long-distance is worth it, Schreiber reckons. "We'll only make progress on the peace front if there is a dramatic improvement in the Palestinian economy," says the 38-year-old computer engineer.

Hoping for High-Tech Cooperation

In October, Schreiber was able to meet with his Palestinian development team for the first time—in a restaurant on the road to Jericho accessible to both sides. But that's not the only contact he's had with his Palestinian employees. "For the most part we stay in touch daily through video conferencing, Skype, e-mail, and phone," says Tareq Maayah, a 40-year-old U.S.-trained Palestinian electrical engineer who heads up G.ho.st's Ramallah operations.

Schreiber isn't alone in trying to tap the Palestinian economy for high-tech talent. Despite many obstacles, Israel's Industry and Trade Ministry and the Peres Center for Peace—an independent nonprofit organization founded by Israeli President Shimon Peres to foster regional cooperation—are holding discussions with Palestinian entrepreneurs about expanding high-tech cooperation.

"Unlike the case of other forms of economic cooperation, blockades and other restrictions do not present a barrier to software development," says Yossi Vardi, a local Internet guru and one of the country's most successful high-tech entrepreneurs. He believes G.ho.st can serve as a model for future cooperation between Israelis and Palestinians, as each side has a lot to gain.

Help for a Tight Labor Market

Indeed, with its thousands of computer engineers and programmers, the West Bank could be an excellent resource for Israel's high-tech industry. Its biggest advantage lies in lower costs: With wages in Israel's high-tech sector up 15% this year, Israeli computer engineers can expect to command a salary of $60,000 or more.