Skills and support short

After many years of local companies buying overseas products in preference to local equivalents, it seems that local software is finally lekker - in certain quarters anyway. The industry hasn't entirely overcome the international-is-better prejudice, however, and it faces serious challenges on other fronts too.

On the funding front, despite its many promises, government still isn't providing any real support to software developers. The Department of Trade and Industry (DTI) recently suspended its small and medium enterprise development programme in order to "refine the guidelines". None of the other grants it makes available are applicable to software development. The IDC manages the Support Programme for Industrial Innovation on behalf of the DTI, which does provide support to software developers.

The programme provides some financial assistance for projects that develop innovative products and/or processes. While those in the industry say the programme is well administered, and certainly beneficial for SMEs and start-ups, the process is long-winded. As one industry player noted, it's easier just to get private equity funding than jump through the hoops to get government assistance.

Thanks, but no thanks

That said, the majority of the players interviewed didn't see the need for government assistance. Says Softline Pastel MD Steven Cohen: "The only time it would be worth getting government involved is if there's an opportunity to export."

Says Andy Kudla, MD of local accounting package developer and distributor Omni Accounts: "If there is too much government support, unless it's justified, you are not creating free enterprise. Unless you specifically want to build up certain things, for example, getting start-ups off the ground, you risk creating a false economy."

Comments Nik Steffny, COO of L@W Holdings: "From a funding point of view, there are not many constraints, in that funding is available from the private sector for businesses with proven models, expertise and so on." L@W Holdings provides secure electronic data and document delivery for bond registrations to banks and attorneys.

"From a public sector point of view, it is very difficult to come across credible funding. We went through the experience and, by the time you've gone through the process and jumped through the hoops and red tape, [you realise] it is easier to just go to the private sector."

On the other hand, software development is a time- and manpower-intensive process. Some companies do believe government funding would be useful, at least while they're still in the R&D stage.

Sybase SA has developed and distributes a point of sale (POS) and retail management solution, the flagship product known as Avatar.

Says Steve Mallaby, GM of Sybase SA's Avatar division: "Ultimately, you need funding from government for staff, development tools and development kits. The biggest expense from a development perspective is manpower and resources."

Jarred Cinman, product director at Web development, content management and marketing process management company Cambrient Internet Solutions, says government needs to encourage local innovation. "We need government to recognise that it needs to foster and grow a local software development industry that is capable of producing world-class products like India does. The tax breaks and incentives available there have helped to create an incredible software development culture.

"It's not about protectionism or anything like that," he adds, "because the exchange rate is protection enough and the costs here are infinitely lower than overseas. It's about giving companies a cost break so that they can spend energy and time on developing world-class software."

It's not about protectionism.

Jarred Cinman, product director, Cambrient Internet Solutions

Funding issues aside, skills scarcity is another challenge raised by many local developers. Companies like Dariel Solutions develop bespoke software for the local market. Dariel executive director Greg Vercellotti says his company's main challenge is finding skilled developers. "We're short," he says, "but I think it is almost at a balance. There is a need for programming, management and domain expertise, and demand is slightly ahead of supply. This could get worse, however, because we're not bringing new skills and new people into the fold. The government and education system is not bringing them through. In black education particularly, we have a legacy we are trying to get over, and people don't have the background skills necessary when they get to university level to get into the development space."

Vercellotti says the skills base is not growing in line with demand and this situation is exacerbated by the perception that international companies use SA as an offshore location to get development work done.

"Microsoft and Google have been poaching here aggressively," he says. "They will find opportunity disappears very quickly as international companies soak up the good guys, because they can pay more. I think this will be to the detriment of the local market because locals will be competing with internationals for a limited pool of skills. The internationals will win out and the local market will be depleted."

The lack of skills is a symptom of a larger problem, says Craig Arenhold, MD of Fundamental, a Cape-based financial services products company. "Guys come out of university and face an uncertain future in terms of jobs, security and so on, so they go overseas. It's a no-brainer."

He adds the problem goes beyond the ICT sector, and if SA had more skills, Fundamental would be in a far better place as a company. "We work through three recruitment agencies," he says. "We recently needed someone to do work for a specific client; we put out an open mandate, salary no issue, but had to close the position because we couldn't find the skills."

Beyond the shortage of technical skills, there is the problem of finding skills that meet employment equity targets. "Software development is just another form of manufacturing," says Pastel's Cohen. "It's people-intensive and you need high skills levels. Employment equity is a big issue," he states. "We're battling to find good programmers who can hit the ground running."

Pastel has a 150-seat call centre that is staffed almost entirely by black agents. "On the programming side," he says, "that's just not happening yet."

Cape-based Software Technology Training (STT) produces application training and support software that is used to rapidly generate custom simulations and documentation for end-user training and "moment of need" support. The company was bought out by UK-based Kaplan IT Learning, a division of US-based Kaplan, last year. Naturally, BEE is a problem.

It makes more sense to hire an extra salesperson overseas... and keep the development [local].

Geoff Lander, GM, STT

Says STT GM Geoff Lander: "We're continually challenged about being owned by a US corporation, which has no intention of taking on shareholders, and our budget isn't enough in terms of procurement to get points. When we sold STT, there were huge question marks around whether [Kaplan] wanted to buy the company and invest in us; one, because of exchange controls, and, two, the BEE thing worried them to death. It was a negative right from the beginning. From Kaplan's point of view, it is investing capital in this company, and to resell its product locally, it has to give a certain percentage of the company away to make it viable in the local market.

"I'm at the point now where I'm really considering if I want to continue with salespeople here. It makes more sense to hire an extra salesperson overseas, where they don't have these issues, and keep the development here," he says, adding that, "the cost of doing development in SA is very positive for the company."

DIY

As Dariel's Vercellotti points out, the industry needs to start registering learnerships and establishing internship programmes. "The market has to do it to ensure its own future," he says. "Today's kids are the ones who will be in the industry tomorrow. We need to get them aware of, and passionate about, technology and software development. We're not getting enough qualified programmers through the system."

And that pretty much sums it up. If the industry wants to get anything done, it really should take matters into its own hands. Whether it's funding, marketing itself internationally or ensuring it has skills for the future, relying on government to fix the problems is out of the question, especially when local developers are capable of sorting issues out for themselves.