30 Korean Software Worthy of Global Recognition in 2012
30 Korean Software Worthy of Global Recognition in 2012
  • Kim Yea-rim
  • 승인 2011.07.08 09:23
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Korea Software Enterprises Association (KOSEA), Korea IT Times and Computer World made the selection of 30 Korean Software Worthy of Global Recognition in 2012 for the first time this year, and is planning to make it an annual project. From this month's issue, the IT Times will run a series of articles on the 30 Korean Software Worthy of Global Recognition in 2012 to examine the software solutions and introduce companies as well as their success stories. This is the very first story from the year-long series.


Lee Young-sang, chairman of KOSEA and CEO of DataStreams

Korean Software Industry Moves into the Global Market

The total value of the global software market has recently exceeded one trillion dollars and the figure continues to grow. That is three to four times bigger than that of global semiconductor market and about six times the mobile market. Despite the software market's coming of age, the share of Korean software products in the international market is a mere 1.8 percent.

Many experts in the country's software industry have asserted that we 'need to discover a Korean Steve Jobs,' or that 'software is the key to future growth,' urging more attention to the development of the industry that has often been neglected. Then, what is the current status of Korean software and what should it target for the future

"For the industry's development as a whole," says Jeong Daejin, director of Software Industry Division in the Ministry of Knowledge Economy, "it is inevitable for Korean software to advance to foreign markets. The government is strongly encouraging companies to advance to the global stage."

For that, quality assurance is crucial as well as marketing power and service networks, the latter being particularly important as software by nature requires constant maintenance. It is quite a demanding task for many small Korean software developers, however. Therefore, the government decided to select some star companies and to support their QA, promotion, and marketing activities. Before going into details about the government's efforts, it is better to first comprehend the software industry in general.

Software can be largely classified into three types: package software, IT services, and embedded software. DBMS and MS fall into the first category, whereas IT service includes e-government and transport system.

With package software, it is easier to cross the border as it is essentially a commercial product, which, however, also means that it requires a higher level of technology in order to meet with the needs of the majority. Although less mobile, IT service is relatively easier to develop in a sense, because the service is based on the customers' specific requirements.

The Korean market has shown strong preferences for foreign software packages, which resulted in the Korean products taking up only around 10 percent of the market. Meanwhile, 60 percent of IT services, which is mostly based on direct-order, and 35 to 40 percent of embedded software in the Korean software market are produced within the country. Therefore, package software remains the biggest challenge for developers.

"Semiconductor and shipbuilding industries have from the beginning targeted the overseas market and achieved huge growth as a result. I believe the software industry could also benefit from a global market," said Mr. Jeong. In fact, it is safe to say there is no border between countries for software industries. In many ways, he added, we should aim at the international market. The software developers need to have a global mindset, targeting customers abroad from the development stage of their products.

Strengths and weaknesses of Korean software

There is a long way to go for Korean software industries. Apart from the small size of the domestic market, one of the things that hinder its growth is consumer perception regarding software as a product. Unfortunately, Korean consumers have yet to fully consider software as an intellectual and creative product or service and respect its value like in other countries. Since they are viewed more as a free service for which consumers do not need to pay, it is harder to foster competent specialists in Korea.

Another problem lies in the less-than-systematic process of software development. Countries like the US and India have very advanced software engineering as well as a sophisticated production system. By contrast, Korean companies tend to have a short timeframe for software production, often leaving room for improvement.

However, it is not to say Korean software falls short of being valuable. Software is by nature linked to businesses, and only a few countries respond to customer needs as quickly as Korea does. In other words, when it comes to business-related software, the country has a clear advantage. That is why Korea is deemed to have strong potential for embedded software development. The country's position as one of the world's top manufacturing industries can be useful for software development. "Korea's strong points include shipbuilding, medical and electronic equipment, and mobile phones," Mr. Jung explained. "Therefore, software products that are related to these industries can create a lot of needs and demands."

Software Industry: Led and Pushed by the Government

Without a doubt, the government's support is vital to Korean software industries' entering the international markets. For that reason, the government is making efforts to create a market suitable for global practices, by, for instance, encouraging companies to ask for reasonable prices when the government places an order so that they can appropriately compensate the software developers.

In addition, quality must be one of the top priorities for the Korean software industry to improve and succeed in overseas markets. The government and Telecommunication Technology Association runs a quality certification program called Good Software in which products go through many tests before final evaluation. "Software is all about process. And regular tests are essential to reduce possible errors," Mr. Jeong emphasized. For this purpose, TTA is also operating tests to find out if the companies are following valid development processes. Software process (SP) is not the end of certification procedure provided for domestic products by TTA. The government is spending budget on quality control for tens of companies each year to maintain the quality of their package software.

"Many small companies are not capable of managing quality control process on their own yet," Mr. Jeong explains. "So the government decided to open a quality control center for them. Customers from countries with more advanced software industries such as Japan and the U.S tend to be more demanding than Korean consumers. It will be very helpful if we could raise the level of their customer satisfaction."

In addition, the government is assisting small software developers in creating distribution channels and promoting their brands. One of those support programs is called Market Enabler for which KOTRA officials act as software sales representatives in international cities including LA, New York, Beijing, and Johannesburg. Companies could also benefit from financial support program to incentivize customer review magazines, software market research agencies, Gartner, IDC, and analysts to write more reviews of their products.

Last, human resources pose a huge problem for the industry as well. Knowing that the industry cannot grow with a solid base of talent, the government is currently operating the SW Maestro course to cultivate more experts by selecting 100 students with great talent and potential in software development for a two-month program, and then 10 of them receive government support for business startup and management as well as help software businesses find qualified developers. Also, the government launched a Master's program based on software employment contract by linking with universities such as Sung Kyun Kwan University, Kaist, Gwangwun University, and Gyeongwon University. The government's efforts also include specialist courses related to the convergence of software and domain.

Selection of 30 Reputable Software Products

It was in the late '90s that Korea began to make a real effort for informatization of the country and establish an Internet infrastructure. Around this time, the US was buzzing with the Information Highway, a concept strongly advocated by then vice-president El Gore. The Information Highway, to put it simply, referred to a communication system in which a large volume of information was rapidly delivered via a high-speed telecommunication network. Watching this new trend, Korea's Ministry of Information and Communication - with Minister Lee Seok-chae at that time - also began to spur the setup of Internet infrastructure, which consequently gave birth to many software companies dedicated to authentication, security, portals, and games.

"In fact, before then, there was no competent software company in Korea except Hancom, Ahn Lab, and Handy Soft. However, with the newly built Internet infrastructure around the year 2000, many software products were rapidly developed and Korea's software technology began to grow," explained Lee Young-sang, chairman of Korea Software Enterprises Association (KOSEA) and CEO of Datastreams. Furthermore, tens of billion wons were spent on next generation system for IT services to which the market responded positively.

From then on, Korean software accomplished remarkable growth despite difficult circumstances. The domestic software market, however, is nearly saturated at the moment, which means expanding exports are inevitable. In fact, many Korean companies including huge SI companies have recognized and agreed on this for a few years now. What, then, does it take for a company to be noticed abroad

What does it take for a company to be noticed abroad

According to Mr. Lee, "First of all, the company should be one of the top in the relevant field of the domestic market at least." He added, "Second, the most important factor is globalization within the company, and third, the quality must be up to international levels to support the overseas markets." Globalization of software means that the software is accommodated to fit the targeted markets in terms of language and design from the development stage. Based on these criteria, KSEA in association with the IT Times and Computer World recently selected, after rigorous examination, "30 Korean Software Worthy of Global Recognition in 2012" based on solutions that are developed targeting the world and domestic markets.

Twenty products out of 500 from over 150 KOSEA member companies and 10 non-member companies were chosen, Mr. Lee said. They also took into account the efforts the selected companies are actually making, development competence and globalization level, current performance in the market, and potential growth and value in overseas markets.

The evaluation, which was carried out by 13 experts who belong to member companies with experience and knowhow in overseas markets, was largely divided into four categories: domestic market share; export competitiveness and environment; technology; and financial assessment. The association is planning to promote co-development among the selected companies through joint marketing, investment, and technology development/sharing as well. "The selection was based on originality of the products," Mr. Lee said, "and they will cooperate in establishing overseas branches as well as promotion and financing activities." He added, "The selected products have also satisfied Korean customers' demanding standards and are therefore ready for successful performance in global markets."

Unlike in the past, Korean software solutions boast performance, function, and technical support that are parallel to, or sometimes better than, foreign products, KOSEA emphasized. According to the Association, "That is why we selected the 30 Korean Software Worthy of Global Recognition in 2012." Their goal is to change the idea that Korean software solutions lag behind foreign software and also promote excellent Korean products in Korea and elsewhere by creating a platform for the member companies to advance to global markets.

KOSEA made the selection of 30 Korean Software Worthy of Global Recognition in 2012 for the first time this year, and is planning to make it an annual project. Among the selected companies are Data Streams, Altibase, M2 Soft, Hancom, TILON, and Ware Valley.

Reputed as the top software company in Korea, Data Streams, a data extraction and conversion specialist best-known for Terastream, is popular in both domestic and international markets. As a major product of the company, TeraStream is well known to the public. It is a universal Batch work tool including ETL which uses CoSORT as a main engine for powerful data sorting and transformation. Quickly yet easily processing the required tasks such as transforming, refining, verifying, and managing file and database formatted data in Unix, Windows, and Linux, TeraStream successfully integrates data through ETL or EAI. In most mainframe working environments, batch work (file system) and on-line (DB, iSAM) tasks are divided.

One of the most renowned Korean DBMS developers, Altibase is dominating the domestic DBMS market with their Altibase HDB, which uninterruptedly manages large-volume database services in real time. The product also provides large-volume disk DBMS performance, database upgrade management, reliability, expandability, and convenience improvement.

M2 Soft is an IT business that owns the oldest history and technology in Korea when it comes to reporting solutions. The famous Report Designer, released in 1997, has the longest history and reference in the country, having proved its performance and reliability in a wide range of industries including public services, finance, education, medical care, and national defense. Based on such unparalleled technology, the company is working with more than 100 clients in their main market abroad, Japan. CEO Park Yu-seong said "For our 10th anniversary and preparation for the overseas markets, we launched a new brand, CROWNIX, under which new products and versions will be released. Our expectation is high." M2 Soft is soon to supply the Report Designer and Enterprise Printing System (EPS) service to a major Japanese IT corporation, Mr. Park added.

"Lowering the technological threshold will raise the competitiveness in the global market," says Choi Baek-jun, CEO of TILON, whose A-Station provides optimized virtualization solutions and cloud services. This product is said to be the epitome of presentation virtualization that overcame the restrictions of a terminal environment. Lately, the company is also spurring the promotion of the desktop virtualization solution D-Station.

A database security specialist, Ware Valley's weapon is Chakra, a database security solution purely developed by Korean technology. The solution is equipped with real-time monitoring and control of database access, while recording and analyzing all the access history, to protect datbases without overloading the original system. In addition to sample data generation, the Korean-technology based features are efficient and user-friendly. Since database security is one of the important issues of this age, Chakra's high performance is recognized in the world. In fact, Chakra is the number 1 database security solution in Japan and ranked at the biggest market share. "Charkra entered into the Taiwanese market and is getting lots of attention from the market as having 9 references," says Son Sam-soo, CEO of Ware Valley.

Hancom, best-known for Hancom Office, was also included in this year's selection. Think Free Mobile is what the company introduces proudly. It enables users to view, edit and create office documents very easily. "In this Smart age, people would like to stay connected even on the moves. In that matter, ThinkFree Mobile gives people efficiency in working," said a representative from the company. Since ThinkFree Mobile works with Microsoft Office and even Google Docs, it can create the ideal office document. Hancom also has recently released Hancom Office 2010, to great fanfare, which is compatible with the mobile system for smart work. Apart from processing large-volume data, the product enhanced the compatibility with improved pivot table and filter.

Cyber Logitec is one of the most notable contributors to the development of port logistics IT in terms of system integration, IT consulting, solution development, and sales. For the last 10 years, the company has grown remarkably by successfully completing large-scale projects such as Hanjin Shipping's process innovation. With technological knowhow and constant quality innovation, the company is aiming to bring more value to time and space in this world.

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