Software Firms Seek to Tap Into Global Markets
By Baek Jong-jin
Korea was the object of scorn from industrialized nations earlier this year.
The issue was Microsoft's new PC operating system, Windows Vista, and the ``big problem'' was that Koreans could not use major Web services such as banks, online portals, Internet shopping malls and online games.
It made headlines in foreign news. The New York Times reported on fears that Internet banking, e-government sites and portal sites in Korea would not work properly with Windows Vista.
It was a surprise to foreigners that the cause of the problem was that most Web services in Korea had been developed using a previous Microsoft technology called ``ActiveX,'' and these services ran only under Windows and Internet Explorer.
Overseas Web services were developed using international Web standard technology, and the release of the new Windows Vista was not a problem.
Foreign countries continued to use Internet services without interruption even when they used a different PC operating system than Microsoft Windows or used a Web browser product developed by another company.
Korea _ IT Powerhouse?
Korea is known as the world's leading IT power in flash memory production, high-speed Internet penetration, and online game propagation.
However, this case revealed to the world that all of these depend on Microsoft, a software company.
With Microsoft's release of Windows Vista, all Web services in Korea, as well as public services, had to be modified to work correctly. This situation is not a comedy, although the foreign media chuckled.
The real issue is more serious due to the way that it was handled.
To avoid problems occurring, many Internet service providers, including the government, chose to change security solutions and Web sites to fit Windows Vista rather than to eliminate ``ActiveX,'' or to develop their Web sites according to international standards that would allow them an opportunity to use any Web browser or operating system.
And they recommended that consumers wait to purchase Windows Vista until the problem was solved. Again, international Web standards were ignored, and the IT environment is still dependent on Microsoft.
Significant Lesson to Be Learned _ Globalization
The chaos involving Windows Vista in early 2007 has subdued half a year later. PCs installed with Windows Vista are crowding electronics stands. From the consumer's standpoint, Internet banking is running properly and Internet users playing exciting online games don't experience any particular inconvenience.
Sales on Internet shopping malls have increased and big portal sites are still jammed with people.
But we need to remember an important lesson.
The debacle related to Windows Vista served as a valuable example for us that competitiveness in the software industry of one nation relates directly to global competitiveness.
It is not an exaggeration to say that software specialists expect Korea to suffer setbacks in tapping into overseas markets if it continues to ignore international standards while overly depending on foreign programs.
IT has established itself as the base in all industries and is closely associated with businesses such as banking, stock exchanges, automobiles, airplanes, communication devices, home appliances and education.
IT is not limited to PCs and the Internet. Software affects the entire industry.
It is said that the F22, often called the next-generation fighter, has over 10 million lines of software code that take care of 80 percent of its functions. It is an open secret that half of the cost of an automobile is for its software.
From high-tech equipment to TVs, refrigerators and small consumer electronics, the importance of the software industry is growing.
According to recent data, the size of the global software market is more than $700 billion. That amount is over 10 times the cellular phone market and over four times the semiconductor market.
The global IT industry focuses on software from the standpoint of its size and importance. Each country is working to obtain independent competitiveness not governed by the giant global software company Microsoft. Noticeable among these efforts is the ''Open Source Software'' policy.
Fundamental Changes in Software Landscape
We recognize the United States as the country that tops the world for software competitiveness. Microsoft, its flagship software company, aims for $56 billion sales this year.
This is equivalent to almost eight times Korea's entire software market. Most global giants, such as Oracle and IBM, that have a firm grip on the world's software market, are enterprises from advanced countries.
Until recently, there have not been many opportunities for us to compete with these global companies. However, fundamental changes in the world's ironclad software industry structure are coming.
Each country in the world that has recognized the importance of the software industry has implemented a policy for reinforcing the industry and IT competitiveness based on open source software (OSS).
OSS is not owned by any giant global software company, and the OSS-based software market is growing rapidly. This is a great change in the software market structure.
According to the Korea IT Industry Promotion Agency, approximately 260 stimulus policies for OSS have been developed around the world.
The most active area is Europe, which accounts for 47.7 percent, followed by Asia (27.7 percent), South America (15.2 percent) and North America (6.4 percent).
With national support, OSS tends to gradually replace commercial software. Central and local governments in Europe such as those in Germany, the United Kingdom, France and Sweden, are promoting OSS by converting administration systems into OSS-enabled ones.
In these countries, government policy mandates consideration of OSS when purchasing software to avoid dependency on commercial products.
In Korea, Asianux, an OSS platform developed by Korea's homegrown Haansoft, was successfully introduced in 2005 for the National Education Information System (NEIS), as well as at 16 municipal or provincial offices of education and other sites with about 2,300 independent servers.
The Gartner Group expects that OSS products will replace over 22 percent of total sales in commercial software over the next five years, and that OSS business application will occupy over 80 percent of the market by 2009.
As many as 71 percent of developers in the world are already using OSS, and 54 percent of companies have introduced and used it. The survey expects that OSS will lead the maturity and integration of the software market over the next 10 years.
Another remarkable movement that the domestic software industry should note is the trend of ``Software as a Service (SaaS).''
As the concept of Web 2.0 extends to the software market thanks to progress of the Internet, a new paradigm breaks the traditional concept of the developer writing software for a passive user.
An exciting flexible market is opening for consumers to participate interactively as the user and developer of software and easily customize software as needed.
Software distribution is also being converted from the traditional methods such as the PC bundle, package purchase, license purchase, and software piracy to new Web-based distribution. SaaS and OSS are the two main streams bringing big changes to developing and selling software in the world.
New Chance for Korean Firms
China and Japan accounted for more than half of the country's overall software exports last year.
Domestic software companies using OSS and SaaS development will be able to push ahead aggressively with the diversification of export markets to more Asian countries, to South America, and to Europe.
This is why indigenous software companies such as Haansoft view Linux as essential to their global business. It is an area where Korea's software industry should select and focus as part of its global strategy.
It is not exclusively my idea that we become an ``OSS power'' in order for Korea to obtain global competitiveness for software.
OSS, development over the Internet and SaaS are new challenges and opportunities coming to Korea's venture software developers at the same time that we have insufficient original software technology and relatively few people who develop software.
There has been good news recently.
The Ministry of Government Administration and Home Affairs (MOGAHA) will standardize all public institutions' home pages in Korea by 2009.
As the international standard to be established by the government is applied, home pages of government agencies will be available regardless of the PC operating system or Web browser.
MOGAHA plans to promote private home page standardization as well, starting with public institutions. It won't be easy, or inexpensive, or quick to change software from code that has fit Microsoft technology into code written for international Web standard technology.
It is the right decision for the future, although we are late in making it. Globalization of our domestic software industry will be almost impossible without independence of domestic IT services from the giant global company.