Axact Scandal For Dummies: What you need to know

I have been avidly following social media and news commentary on Axact’s involvement in running diploma/degree and accreditation mills. A popular stance on this matter is faulting Declan Walsh for planting a colossal conspiracy to defame Pakistan and/or sabotage the launch of Bol.

In a state where various news-reporting agencies seem to have their own vested interests, prevalence of bureaucracy and dubious reputation of law enforcement agencies, it is imperative that we school ourselves on why Axact’s role in this controversy is not as black and white as one may like to believe. There are mixed responses to the story when it comes to the non-tech-savvy population. However, most IT specialists would agree on one point: Axact is a dodgy company. Why is that? Read on.

What is Axact?

In one sentence, Axact claims to sell software and provide IT services. They have tons of offerings listed on their website; anything from CRM, CMS, Online Payments to Mobile Applications Development and Research Services.

axact-homepage

axact services

Each service has a dedicated landing page, which contains very generic copy about the product. There is no clear call to action on any of its product pages that may encourage potential clients to enquire further about the product. Anything close is a nonspecific (and rather annoying) popup, which guides you through a bunch of questions and eventually results in a lead.

generic popup

For a company that claims to be “World’s Leading IT Company”, this is extremely poor user experience. It almost gives one the impression that the company does not want potential clients to know too much about the product. There is no portfolio, list of clientele, success stories or case studies; something an IT business feels rightfully obligatory to show off.

The website also boasts about its 2 billion users worldwide. That’s more than:

  • Facebook: 1.2 billion
  • QQ: 818 million users.
  • Gmail: 425 million, at least.
  • Hotmail: 300 million users.
  • Yahoo Mail: 281 million users.
  • LinkedIn: 260 million registered users.
  • King.com: 247 million monthly active users.
  • Whatsapp: 350 million monthly users.
  • WeChat: 236 million.
  • Twitter: 232 million monthly active users.
  • Instagram: 150 million users.
    Source

Considering the world population standing at 7 billion, this means every 2 of 7 people on the planet use a product developed by Axact. Yet, no one is absolutely certain about the specifics of Axact’s products. Axact has been throwing a number like that and easily getting away with it. Even our grandparents have heard about Facebook because of its staggering 1.2 billion user base. Yet, no reputable IT professional can pinpoint any of Axact’s products in the market despite 2 billion users.

2-billion-axact-users

Most Pakistanis are still not up to speed with how an IT business functions and hence, the figure has never been questioned before.

How Axact makes so much money “axactly”? Why is it nowhere to be found on the list of Fortune500? Those are the “million dollar” questions.

How much money does Axact make?

According to a recent interview, the CEO of Axact Shoaib Ahmed Sheikh claims to generate a revenue of approximately 1 billion dollars. That is a lot of money. Sheikh added that this revenue includes the commission of resellers (distributors). Roughly 20% (200 million dollars) of the total revenue comes from Axact’s “educational services”.

reselling

 

In Sheikh’s own words, the educational services make up a considerable proportion of the total revenue since Axact runs 10 business units. Sheikh did not declare actual profits (after reseller commissions) as he believes doing so will benefit his competitors (watch the full interview below).

What type of “educational services” does Axact offer?

According to Sheikh, Axact develops and sells software to institutions that enable them (the institutions) to provide online education (distance learning). IT professionals refer to them as Learning Management System or LMS. In a nutshell, it’s an online system for a student to undertake coursework without the need to visit a classroom. LMS also allows teachers to monitor student progress online and mark them accordingly using online assignments, quizzes, essays or papers.

Recently, I was given the task to develop a similar product for a client. I looked into the biggest names in LMS but never came across Axact’s offerings in this area. It is unusual for a “World’s Leading IT Company” to not come up once in the search results when looking for an eLearning platform.

top-20-lms-software

Going back to the interview, the interviewer then asked Sheikh about the confiscated degree/certificate samples during the raid on their offices in Islamabad and Karachi. Sheikh, after dancing around the question for a few minutes, did not deny the accusation. Then out of nowhere, Sheikh stated that a university might completely outsource its business to Axact allowing Axact to deal on its behalf; including accounts management, finance, issuing degrees or what not.

When asked if any of these fake universities are Axact’s clients, Sheikh neither denied nor approved. He did, however, confirm Axact serving thousands of educational institutions.

“We first confirm if they are operating legally. If they do, we take them on as clients. In America, there is no legislation on unaccredited universities so there is no problem” – Sheikh.

When specifically asked about Belford University, Sheikh took a moment to deny Axact’s association with the university.

“Lets assume you sell cricket bats. A guy walks in and buys a bat from your shop and then kills someone with it. Should the murder be blamed on you?” – Sheikh

I am not sure why Sheikh quoted this example when asked about Belford University, but here is the thing … If a guy comes into a shop to buy a cricket bat with a clear intention of using it as a murder weapon, what does that say about the salesman? The salesman is an accomplice in this situation. May be the high profile cases of Belford University and Morrison fell on deaf ears as Axact chose to ignore the problems its business was causing around the world.

Are Axact’s “educational services” illegal?

It is legal to run unaccredited universities in some states in the US. After several complaints, some states have taken the initiative to prohibit distribution of false or misleading college degrees. Washington is an example state where a degree-granting institution must:

  • be accredited by an accrediting agency recognized by the United States Department of Education;
  • have an House Bill Report – 1 – ESHB 2507 application for accreditation pending; or
  • have been granted a waiver or exemption by the HECB from the accreditation requirement.

But there is more to this. Slate recently published an article debunking fake faculty members on diploma mill websites. I am not any law expert but faking faculty photos, videos and churning degrees attested by Secretary of the State is clearly fraud on Axact’s behalf if they were outsourced to run administrative tasks for any of these fake universities.

Is Axact really running these diploma mills?

As I have already cited, Sheikh did not deny it during his interview. We have to wait for the official findings of FIA after they have completed data forensics. However, any IT expert can run a few tests and confirm connections between Axact and fake universities.

Traceroute

In simple words, traceroute is a tool that displays data path from one network/computer to another. Like Google Maps, you specify a starting point and ending point. Traceroute then figures out a path between the specified points and the time it took to complete the route.

If we traceroute from our computer to axact.com and compare it to the route from one of the fake universities (lets say, columbianauniversity.com), they end up on the same server. Note that a server may host thousands of websites so there is no way to be sure that they are owned by the same person just by looking at traceroute. But consider this … there are millions of servers around the world. What are the odds of axact.com and Columbiana University being hosted on the same server? In a court of law, this can be potential incriminating circumstantial evidence.

traceroute

Code search engine

Just like a regular search engine like Google.com, there are search engines for website source code. If we sample code from one of the fake universities and test for code similarities, we get tons of matches.

The bit of code I chose to match is the LMS login link. Majority of the fake websites are running the same LMS. The link pattern is domain.tld/pla/singin.aspx which turns up about 121 matches. What we conclude from this exercise is that these websites have a common LMS supplier.

pla-signin-nerdydata

Alexa

Majority of fake these universities are running an online chat system (xchatlivepro.com), which allows prospective students to talk to a support representative. Traceroute tells us that online chat system’s domain is served from the same server as the fake universities/axact.com.

Alexa is an online tool, which lets you analyze web traffic. Have a look at the following results from Alexa for xchatlivepro.com.

xchatlivepro.com-alexa-Site-Overview

Why am I not surprised to see that Pakistan is at the top of the list? It’s evident that xchatlivepro.com is operating from Pakistan. Note how the traffic on xchatlivepro.com starts to drop out in the beginning of April and falls dramatically exactly a month before New York Times published their article and close to the launch of Bol. The timing of this dramatic loss in traffic is nothing but ominous.

Wrapping up with thoughts on media coverage and Bol

It is important that we set aside emotions and only look at this story objectively and rationally. It will be unfortunate for Axact’s unsuspecting employees if the guilt is proven. Many are of the stance that standing by Axact and Bol is their way of being patriotic. I think the best way forward would be to only side with the law. If Axact is found guilty, imagine the hurt it will bring to the IT industry of Pakistan.

I would also like to see news anchors invite IT professionals and legal experts to their shows in order to educate the masses. Not everyone is on the same page when it comes to awareness of online scams or even IT in general.

There is also controversy surrounding the timing of this scandal. As with many controversies, we might never be able to find out if it was a way to derail Bol’s launch. However, we must understand that Axact and Bol are two sides of the same coin. If Axact is found guilty, ask yourself this: Would you trust a media infrastructure built on money earned off an extremely unethical business model?

Remember, if something is legal, it does not imply that it’s ethical. As conscious consumers, it’s important that we realize this distinction.