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Slovak IT firms taking skills to world

Slovak students worked on outdated computers in the 1980s as machines aged and the government had no money to invest into IT. One of the consequences was that they remained fluent in the basic computer language Assembler, long after their Western cohorts had abandoned it. By using this language, one Slovak company was able to turn a seemingly disastrous situation in schools on its head.
Software company Eset, whose NOD32 anti-virus software may, IT experts say, be the best on the planet, bagged clients such as Microsoft America and Microsoft Ireland in 2000, while its revenues grew 200%. The firm says this success was due partly to the fluency of its programmers in Assembler. Anti-virus software is more difficult to write in Assembler, Eset officials claim, but the programmes that result are more efficient.
"Sometimes, potential clients are uncertain about Slovakia," said Tipor Papp, chairman of Eset's advisory board. "But they are excited about the computer language."

Slovak students worked on outdated computers in the 1980s as machines aged and the government had no money to invest into IT. One of the consequences was that they remained fluent in the basic computer language Assembler, long after their Western cohorts had abandoned it. By using this language, one Slovak company was able to turn a seemingly disastrous situation in schools on its head.

Software company Eset, whose NOD32 anti-virus software may, IT experts say, be the best on the planet, bagged clients such as Microsoft America and Microsoft Ireland in 2000, while its revenues grew 200%. The firm says this success was due partly to the fluency of its programmers in Assembler. Anti-virus software is more difficult to write in Assembler, Eset officials claim, but the programmes that result are more efficient.

"Sometimes, potential clients are uncertain about Slovakia," said Tipor Papp, chairman of Eset's advisory board. "But they are excited about the computer language."

Eset's history may be unique, but company leaders say that many Slovak software firms could enjoy brighter futures abroad. They argue that with traditionally strong programmers, Slovakia could develop an internationally competitive software and programming industry, because the start-up costs for such firms are less prohibitive than in other industries.

"Big firms with Slovak affiliates - that's the role for hardware in this country. But software could be different," said Papp. "Slovaks have always been strong in maths and science. You can't buy IT knowledge, and software development doesn't have to be expensive. Eset is an exception that shows Slovaks can compete with the world."

Eset was founded in 1992, three years after the NOD32 anti-virus technology was pioneered by a team of Slovak programmers which, according to Executive Vice President Anton Zajac, was powered by know-how, not money or access to expensive technology.

"The software developed in the minds of talented programmers capable of working miracles," said Zajac. "A company couldn't achieve their success by spending money any more than I could build a Formula-1 car from scratch if given a billion dollars."

The programmers' knowledge of the archaic Assembler language was a major help. "Because Assembler is the basic language of the CPU, [Central Processing Unit - the central hardware on which a computer runs - ed. note]" said Zajac, "The NOD32 is faster than competitors by many orders of magnitude." In November 2000 tests by the English consumer advocate group Virus Bulletin, NOD32 performed three times faster than NAI and Norton anti-virus software.

NOD32 was translated into English in 1998 and received positive reviews from the Virus Bulletin last year. Since then, company representatives say, revenues have grown exponentially. Zajac declined to offer actual figures, but said that Eset had seen a 451% sales increase of NOD32 since 1996.

Other success stories

Štefan Dobák, marketing director for software firm Gratex, says his company is also an example of the potential of Slovak software firms to succeed abroad. Gratex expanded its customised software systems business last year to Australia, and has its sights set on the United States.

"All Slovaks need to do is get used to the idea that the world is open and that opportunity is out there," he said. "Slovakia has an excellent chance of being a high tech country."

Expansion abroad was inevitable for Gratex, says Dobák, as revenues had doubled yearly since the company was founded in 1991. Although Gratex found initial capital in Slovakia, they eventually felt cramped by the domestic market. "The Slovak market has only 5.4 million people," he said. "It just wasn't big enough."

Breaking out of the local market is a challenge other software firms face. Eset solved the problem by opening an office in California in 1999 and putting together a board of academic advisors to solidify its reputation abroad and attract clients. Founders of the web-design firm Magic Systems skipped the domestic market altogether when they opened business in 1998 and immediately went after foreign clients.

"The market wasn't big enough here to support a web-design company," said Magic Systems Marketing Director Tomáš Zeman. "So we found partners from abroad on the web. We have American, English, German, Canadian and Maltese clients now."

Although Gratex had to invest in fully-staffed branch offices to design custom software systems for foreign clients, firms like Eset and Magic Systems, analysts say, can penetrate global markets without large investments abroad. "There is potential for countries like Slovakia on the global market because with software it's possible for companies to be based anywhere in the world and access the bigger Western markets," said analyst Jiři Donát of audit firm Deloitte & Touche Prague.

The Three I's: IT, IT, IT

As encouraging as the Gratex, Magic Systems and Eset success stories are, Papp believes IT education will have to improve dramatically if they are to be more than exceptions. Although Slovak students have won programming awards, including five gold medals at the last ten International Olypics of Informatics, 84.5% of high schools still don't have access to the Internet.

"We have very skilled programmers," said Papp, who is also co-founder of Project Infovek, a non-profit organisation that aims to connect every school in Slovakia to the Internet by the year 2005. "But to develop a whole industry we'll need to produce a lot of mediocre programmers too.

"The IT boom in California didn't happen spontaneously. It was the result of years of cheap IT education made available to many people," he added. "The next two years will be crucial in deciding whether or not Slovakia's IT education can provide Slovaks with the same chances."

Dobák agrees, and hopes his company will help. Gratex is supporting a new Master's Study programme in computer science at City University Bratislava, beginning next fall. The company has promised to supply equipment, course materials and lecturers.

Zajac pledged that his company would also support IT education: "When Eset becomes a major world software player, we will sponsor a major education campaign in Slovakia."

But the Slovak government will have to be the main source of funding for an IT education overhaul. Papp said that Slovak legislators had begun to come around to the importance of funding IT education development, but that it was still unclear whether the process was happening fast enough to help fuel the development of a programming and software sector in Slovakia.

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