Spectator on facebook

Spectator on facebook

STRONG DOMESTIC IT SKILLS UNDERPIN ADVANTAGES OF SLOVAK MARKET

Domestic software firms outpacing foreign competitors

SLOVAK domestic software producers are holding their own with international software corporations like Microsoft, SAP and Siemens, pitting the wits of their employees against the capital and advanced technology of the foreign leviathans - and winning.
"Less than half of the revenues generated by software companies in Slovakia come from foreign-owned firms, or from companies with a foreign investor," estimated Juraj Sabaka, president of the Information Technology Association of Slovakia (ITAS).
"If we take into account the value they add to products, the market share of foreign companies would be even smaller. Foreign companies tend to generate revenues from sales of their own products, which they import, rather than from producing software," added Sabaka.

SLOVAK domestic software producers are holding their own with international software corporations like Microsoft, SAP and Siemens, pitting the wits of their employees against the capital and advanced technology of the foreign leviathans - and winning.

"Less than half of the revenues generated by software companies in Slovakia come from foreign-owned firms, or from companies with a foreign investor," estimated Juraj Sabaka, president of the Information Technology Association of Slovakia (ITAS).

"If we take into account the value they add to products, the market share of foreign companies would be even smaller. Foreign companies tend to generate revenues from sales of their own products, which they import, rather than from producing software," added Sabaka.

Moreover, says Sabaka, outsourcing to Slovak firms generates a significant part of foreign companies' output.

"Big software houses trying to win government tenders and big projects usually supply their business name, know-how, financial resources or experienced project managers, but it is small Slovak companies that provide a huge amount of the remaining work," said Sabaka.

Although Sabaka had no figures for software production last year, the overall info-communication market in Slovakia was worth 1.6 billion euros in 2001, showing annual growth of 22 per cent. ITAS expects 17 per cent growth in 2002 and 16 per cent in 2003. IT technologies - including software production - account for approximately one third of this market.

The best example of domestic software potential is the Slovak firm ESET. This anti-virus software producing company, employing less than 30 people, was awarded the title IT Firm of the Year 2002 at the COFAX industry show in April and has won the praises of significant IT trade magazines. This year, ESET received certification from the International Computer Security Association Labs.

ESET also won 17 Virus Bulletin 100% Awards, more than any competing anti-virus product in the world. The Virus Bulletin magazine focuses on anti-virus software and gives its award to the best software after thorough tests.

The very human resources that are powering the domestic software sector are also luring foreign technology giants to set up operations here, drawing them through low costs, the proximity of software supply companies and the high level of technological skills.

"Siemens SWH is an example of an international corporation exploiting the capacities that the Slovak labour market offers, in terms of the ratio between price and quality," said Peter Prónay, country manager of Siemens Business Services, and former director of software house Siemens SWH.

"The quality of Slovak programmers is very comparable to other nations' software producers. On top of that, it is important that a software team is close to the place where its product is used - so besides a lower price, the proximity of domestic software producers is another advantage," said Sabaka.

"The Internet and improved communications have allowed big software companies to transfer part of their production to countries like Slovakia, which still allows them to have face-to-face meetings if needed, as this region is relatively close to the EU.

"Compare Slovakia's situation to software houses in India, which also have a cheap labour force but require expensive business trips in case of need. In the end it has proven cheaper to move production to eastern Europe than to India, and has promoted easier co-operation," said Prónay.

Pronay credited Slovakia's labour force for being behind Siemens' decision to start a branch here a decade ago.

"This step proved right; universities in Slovakia produce well-educated graduates. Their advantage is that they are less specialised than, for example, their American colleagues, which enables them to think in a wider context," explained Prónay.

However, software firms which demand more specific skills say the quality of IT education is insufficient, with Slovak universities producing a sufficient number of programmers, but graduates who lack some key skills.

"Even our association's biggest member firms are not satisfied with the quality of the employees they hire," said Sabaka. "Our education system is not able to produce high-level specialists. The companies have to train their newly hired employees."

But Prónay said the market was still developing, and would eventually work out any kinks. "Siemens' software producing staff in Slovakia has grown to approximately 600 people in 10 years," said Prónay. Siemens employs approximately 5,000 programmers in central and eastern Europe.

"The demand for programmers will steadily increase, especially given the increased use of electronic devices," said Prónay.

Top stories

It takes nuts to help Kenyans

Slovakia has provided more than €10 million to the Kenyan people since 2005.

Muruku slum in Naorobi

Woman who urinated on the Quran arrested, awaiting trial

Some observers believe the video might lead to increasing security risks for Slovakia.

The accused woman arrives to the court.

EC praises economy, but problems remain

The recent report highlights Slovakia’s economic development. The country however still lags behind in several areas affecting people’s lives.

Famous books on totalitarianism popular in Slovakia too

Internet bookstores have recorded an increased interest in books exploring totalitarian regimes, including demanding theoretical works.

George Orwell in Slovak bookstores