The local software industry is in need of a boost from government and, with the imminent publication of the ICT black economic empowerment charter, the time is right for legislators to take a long, hard look at current software procurement practices in SA.
So says Mike Leeuwen, director of South African systems integrator and software development house, PM Tech, who adds: "There is a groundswell of support for local software suppliers from local companies that are increasingly aware of the huge cost savings that SA products can offer.
"However, the same cannot be said for the government, which insists on dealing with foreign suppliers as a matter of policy."
Leeuwen says considerable sums of money are being paid to overseas software suppliers, to the detriment of SA`s own software industry.
"If government could be encouraged to support local industry - and the black empowerment initiatives that will be mandatory in terms of the new ICT empowerment charter - then both local industry and previously disadvantaged individuals would benefit enormously."
According to Leeuwen, government`s vast project to standardise and centralise its immense IT-infrastructure is fuelling foreign currency software purchases to the tune of many billions of dollars each year. "If this revenue, and budget spent on a variety of projects under the umbrella of the e-government implementation, could be ploughed into the local economy, SA`s software industry would boom - and empowerment initiatives would be given an almost immeasurable boost," he stresses.
Leeuwen points to press reports that associate many local software implementations, featuring foreign brands such as Oracle, SAP, Microsoft and others, with cost figures often well in excess of R50 million each. "In most cases, this money is repatriated abroad. This is hurting the country and actively destroying the local software industry," he says. How does local software measure up to global alternatives? Leeuwen says purchasers of overseas-originated software often rationalise their decisions by accusing locally developed systems of below-par performances.
"Nothing is further from the truth. There are SA-developed systems that are just as capable as their foreign counterparts - often more so because they are designed from the ground up with local requirements in mind.
"They deliver the same functionality at a fraction of the price. They are also generally better supported because the local software house is geared to addressing problems - and providing fixes and patches - as the need arises.
"This is generally not the case with international suppliers who do not address local business opportunities with the same levels of urgency and importance as local vendors do."
Leeuwen says the local software industry is guilty of nothing more than "hiding its light under a bushel". Little is known of local developers as they lack the huge marketing budgets of their foreign counterparts, and word-of-mouth marketing is a slow process, he says.
"The problems centre on a lack of knowledge of these systems by local decision-makers, who, after being influenced by the `heavy-hitters` of the international companies` marketing departments, are then won over by the intensity of the vendor`s hospitality and the high visibility of the brand in glossy financial publications and on TV."
Leeuwen says the situation is the 21st century equivalent of the thinking behind the IT manager`s mantra of the 1970s: "Nobody gets fired for buying IBM." In other words, he says, there is job security in signing cheques to well known overseas vendors.
"The situation is worsening," he stresses. "Local venture capital companies and financial institutions are just as blinkered to the value of local software and the efforts of South African entrepreneurs. There are very few start-up companies - let alone software developers - who have benefited from venture capital in this country."
Are big brand software users being lulled into a false sense of security by the current strength of the rand? Leeuwen thinks so. "If the rand falls in value, foreign software licence fees will increase. This could reach the point where the total cost of ownership of foreign software will become prohibitive.
"We experienced this phenomenon at the turn of the century when the rand spiked to 20 against the British pound, but it was relatively short lived. Who says this cannot reoccur on a more permanent basis?"
Is there any light at the end of the tunnel for South African software vendors? Leeuwen says there is a faint glimmer. "Web-based applications are becoming more prolific and many companies are re-evaluating their systems in the light of the need to potentially invest many millions of rand in upgrades.
"Technology may yet come to the rescue of the local software industry. There are many local vendors who are expert at adding functionality to legacy systems - even proprietary systems - at minimal cost through the use of new-generation technologies, such as Web services and service-oriented architectures (SOAs).
"These technologies will play an increasing role in business software solutions of the future as they promote the cost-effective re-use of software components within new or re-engineered applications.
"They offer local developers the chance to create low cost solutions which will be able to compete head-on with overseas options due to their ability to `plug directly` into these applications. This is because of the emphasis on open standards and compatibility associated with both Web services and SOAs."
However, adds Leeuwen, the window of opportunity is not open very wide. It is up to the local vendors to get government on their side, demonstrate the big benefits that they can bring to community upliftment programmes and, most importantly, make their presence felt where it counts most - in the boardrooms of the big-budgeted, large corporates, multinationals and South African government departments.
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