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Going soft on software

Pakistan has great potential to attract foreign IT vendors to boost local software industry

Going soft on software
Software development a click away.

The software development has come of age from all directions. It has become a promising industry, lynchpin of the modern economy, a phenomenon of digital science and it means business all over the world. It is the business at home, it is the business offshore, and it is the business unusual. Every country in the world — no matter large or small, developed or underdeveloped, rich or poor — needs the help of information technology to carry out day-to-day functions, launch research and development projects, and make improvement in industrial growth.

The software industry — a small portion of information technology — does not need big infrastructure, mass electricity supplies, import of sophisticated machinery, a large number of technically skilled workforces, or a mechanical work to launch a product. No huge local or foreign investment is required. The essential part of the software industry is the brain, which we have in abundance in Pakistan, but are wasting away in a devil-may-care manner.

The development of the software industry in Pakistan needs futuristic approach for startups and contributing environment for the software concerns already in the business. In turn, any facilitated step will generate job opportunities at mass scale and will pave the way for billions of dollars foreign exchange earnings without physically handling the ‘finished products’. The exports of the software products do not need processing of any export documents like bill of lading or airways bill, and transportation, etc as the export process of a software product is a click away.

Global trends: Currently, it is a major trend all over the world to computerise everything possible and get rid of paperwork. The software industry is one of the most rapidly growing segments of the information technology industries. The size of the worldwide software industry, which was $303.8 billion in 2008, has increased to $457 billion in 2013, showing an increase of 50 per cent in just five years.

The value of the United States software market is about 50 per cent of the global market value as the US software developers are the world leaders in development and production of software management systems which are used in businesses, homes, educational institutions and cellular phones.

According to industry analyst Gartner Inc, the top 10 software giants — including Microsoft, Oracle Corporation, IBM, and SAP — earned the lion’s share of the world software market in 2013 whereas a high degree of consolidation, mergers and acquisitions of the software giants have a value of $1.45 trillion. The highest value deals were set in 2000 with 6,757 transactions valuing at $447 billion while in 2010 alone, 1,628 deals were announced valuing at $49 billion.

The US corporations are the world leaders in software industry with only one each company from Germany and Spain in the top 10. No Chinese or Indian company could find a place in the list. The second to the US software industry in terms of volume is in China. According to the Chinese Ministry of Industry and Information Technology, the size of the industry — including software and information services — remained nearly $493 billion in 2013.

India is a major beneficiary of offshore jobs which it attains from the US and European countries by utilising its vibrant software force in Bangalore and other parts of the country. The Indian IT industry consists of IT services and business process outsourcing, earning aggregated revenue of $100 billion in 2012. According to another study, the estimated value of the global IT services industry will reach $1.147 billion by 2017.

Potentials for Pakistan: The United States software market is estimated at nearly $70 billion with high demand of enterprises software systems. A boom in the Chinese and Indian software industry is due to offshore jobs generated by software vendors in the US, Canada and European countries where demand for the management systems is high but expensive too. To offload their burden, the large software vendors hire IT professionals from Pakistan, India, Bangladesh and the Philippines which have the high rate of English-speaking professionals.

Pakistan has great potentials to attract the foreign IT vendors and has launched various plans not only to produce quality computer engineers and software developers, but also spread out various incentives to software development organisations to enhance their capacity building. Brain drain is one of the big hurdles in the development of indigenous software market which has to be stopped by providing generous incentives to the IT professionals. It is not only difficult to get orders of software projects, but much harder to deliver. A good project manager, in-depth project analysis and a proper team of software engineers are required to make a large project successful.

Pakistan can be made a destination of choice for the international IT vendors which offer offshore jobs, but there is a need to develop an appropriate IT infrastructure and high-speed connectivity gadgets to deliver the jobs in time. According to an official at the Pakistan Software Export Board, the global share of Pakistan’s IT industry is around at $2.8 billion. He said that the board has launched various projects, including establishment of technology parks, to facilitate the software developers and startups.

However, Naeem Akhtar, owner of an IT solutions company, says that most of the startup companies cannot join any technology park because it is expensive. He says that the government departments, especially the taxation officials, dealing with the software companies are confused.

Traditional attitude: The Pakistan Software Houses Association is a prime software association in private sector but it is not easy to approach any of the officials even for business purposes. On another note, the federal government has set up Pakistan Software Export Board with a mission “to enable fast track sustainable growth of Pakistani IT industry.”

However, it is unfortunate that the officials of both bodies did not break the traditional routine as, despite repeated efforts, no one was available to share information with TNS. The software industry is the future of the country’s economy. The question is when lethargy prevails in this vital sector, who else will infuse a new spirit of business life in this industry to challenge the established competitors in the region.

5 comments

  • Ahmad Raza Aslam

    Our government should pay special attention to IT sector.Hope it will make some difference in thoughts

  • “Brain drain is one of the big hurdles in the development of indigenous software market which has to be stopped by providing generous incentives to the IT professionals.”
    Well said sir. But let people go out of the country in search for greener pastures and a greater exposure.
    Good piece, indeed.

  • I think the most important thing missing in our software industry is the marketing of products.
    Companies and government should provide Techno Sales facility and channelize sales of Software Industry.

    One suggestion for developers is to do a market survey of local Telecoms, Banks and other heavy software buyers in local market and provide them with similar solutions that they usually buy from foreign companies.
    This will not only provide business to local market but also help retain our foreign reserves.

  • We need to exploit this potential. India is way ahead in this sector!

  • To find a place for Pakistan in the global IT market, the government should help local software developers. Like China, India, and other developing countries, Pakistan can greatly benefit from the booming software market. This task can be easily accomplished in a country like Pakistan that is blessed with abundant human resources.

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