The It and IT-enabled Services (ITeS) marketplace ofers lucrative opportunities for

developing countries to join the ranks of the developed world. The scale and pace of
growth in this sector is faster than in any other industry, and a number of developing
countries are attempting to emulate the success enjoyed by countries such as China,
Thailand and India.

The Government of Pakistan has been proactively developing the IT sector in Pakistan
since the last few years. A few of the incentives offered include tax exemption till 2016,
establishment of IT Parks with low rent, foreign ownership of equity invested in IT and
100% repatriation(returning to the country of origin) of profit allowed to IT companies.

Pakistan’s IT industry has been rising steadily since the last three years. A marked
increase in software export figeres are an indication of this booming industry’s potential.
STATISTICS OF THE PAKISTANI IT/ITES INDUSTRY (Source: PSEB)

Total number of IT companies registered

1082
with PSEB(pak software export board)
384 Karachi
Number of substantial IT companies city- 276 Islamabad
wise breakup 353 Lahore
69 others
Total number of foreign IT and
telecommunication companies working in 60
Pakistan
One CMM Level 5 company, one CMMI Level
Number of CMM-assessed companies 5 company, three CMMI Level 3 companies
and four CMMI Level 2 companies
Total industry size US$ 2.8 billion
IT and IT-enabled services exports US$ 1.4 billion
Percent growth in exports over the last one
61.18%
year
Number of IT graduates produced per year Approximately 20,000
Export targets for the current fiscal year
US$ 108 million
2006-2007
Number of universities offering IT/CS
110
programs
Number of IT professionals engaged in
export-oriented activities (software More than 15,000
development/call centers etc.)
Total number of IT professionals employed
110,000
in Pakistan
Total IT spending in the fiscal year 2005- US$ 1.4 billion
2006
Total space utilized in IT & Software Eleven IT Parks covering an area of 750,000 sq
Technology Parks ft

A recent Bearing Point study places Pakistan’s global IT export revenue in the Financial
Year 2004-2005 at around US$ 400 million. The basis of the figure was the State Bank of
Pakistan’s IT export revenue figures of just under US$ 50 million. Bearing Point
multiplied this figure by two to account for the IT export revenue brought into the
country, but not registered as such with the State Bank. BP further estimated that for each
dollar brought into the country, three dollars are retained by Pakistani IT companies
overseas. The global IT revenue of Pakistani IT companies therefore added up last year to
US$ 400 million. Therefore, for official IT export figures of just under US$ 75 million
reported by the SBP for FY 2005, the actual global receipts of Pakistani IT firms should
be around US$ 600 million.

State Bank Reporting Estimated Total IT Industry Estimated Total IT

Earnings Export Revenue Industry Size
US$ 116m US$ 1.4b US$ 2.8b

The total IT services export from Pakistan in FY 2005 amounts to US$ 1.050 billion, or
conservatively US$ 1 billion.

Pakistan offers various competitive advantages over other outsourcing destinations, such
as high quality software development, swift and easy establishment of business, lowest
cost basis and emerging and state-of-the-art telecommunication and IT infrastructure.
Experts estimate an average annual growth of 33% in the sector. This will result in
thetotal IT export revenue crossing US$ 10 billion in the next five years.

EMERGING OPPORTUNITIES

Animation
One of the truly emerging areas in the context of software i.e. gaming has only begun to
gain significance in Pakistan over the last few years. Animation is not just about making
interesting clips using software such as Macromedia Flash and 3D Studio Max; rather, its
complexities can involve the improvement of viewing capabilities of a website,
utilization in games where movie clips are concerned, or even in advertisements. A
number of Pakistani IT companies are successfully and making use of animation in a
variety of possible dimensions. An example of such is the advertisement campaign for
7UP based on the Fido Dido character, which makes major use of animation.

In 2004, the Government of Pakistan acknowledged the animation sector as a core and
profitable component of software development, initiating a project in which 40 graduates
were selected for placement through an apprenticeship scheme in some of Pakistan’s
premier animation companies. Most of these graduates went on to find permanent places
in those very firms. The project ended in the last quarter of fiscal year 2005, with some of
leading animation firms of Pakistan.

BPO
Business process outsourcing is an emerging concept that gives numerous cost
advantages over the conventional in-house development. Already, many of the fortune
500 companies have established their offshore development centers in Asia to reduce
their cost and sky-rocket the profit. The BPO industry is growing rapidly in Pakistan,
with exports up by 45 percent in the fiscal year 2003-4 alone.

Pakistan has a large untapped labor pool of English-proficient graduates willing to work
at wages 60% below their US counterparts. Furthermore, consolidated operating costs are
estimated roughly 30% lower in Pakistan as compared to India or Philippines, two of
Asia’s major BPO contenders. The Government has provided numerous incentives and is
willing to invest heavily in the infrastructure required to jumpstart growth in the BPO
sector. Pakistan has one of the fastest growing cellular industries in the world. This,
along with the fast-growing Karachi Stock Exchange, has put the country in the spotlight
of corporate managers worldwide. This positive tone has been seconded by a Harvard
Business School analysis, entitled "Business Process Outsourcing (BPO) opportunities in
Pakistan". The report touts 30 percent savings in costs in Pakistan as opposed to India,
along with infrastructure advantages such as high-speed connectivity in all the major
cities at competitive rates.

ERP
Enterprise Resource Planning (ERP) is perhaps one of the toughest and most demanding
software solutions to provide to any client, involving the complete automation of the
customer’s company processes. ERP comes in two basic forms: customized ERP
(software made as per the demands and needs of the client) or standard ERP (a solution
such as SAP that can be bought ‘off the shelf’ to be implemented).

Pakistan's Small and Medium Enterprises (SMEs) sector is currently operating at a

disadvantage. This is primarily because a majority of the manufacturing and planning
processes are either not automated, or, if automated, are not being utilized to their fullest
potential. In order to close this gap, PSEB's ‘Automation of Domestic Industry on Open
Source Systems’ project is underway for developing complete ERP solutions to automate
the processes and procedures for the SMEs in HR & Payroll, Finance, Inventory,
Production and Sales in those sectors of the economy which have the highest export
potential. The ERP solutions are being developed using open source software code,
allowing for further enhancements to be made to the applications as per the needs of the
units.

The project has collaborated with software consulting companies with expertise in
developing/implementing ERP solutions for the industry.
Gaming
Computer games are now a huge market with firms such as Electronic Arts and Capcom
investing billions of dollars into the industry, and earning similar amounts through the
widespread fame and sales of hits such as FIFA 2005, the Prince of Persia trilogies, Halo
and Counter Strike etc. Game development is emerging in Pakistan’s IT Industry as well
with some serious work being done in the field indicating progress. One such example is
Commando 4, Pakistan’s first ever 3D animation game. Anther such popular character is
Commander Safe Guard launched for leading international chain P&G.

With the IT leaders of the country realizing the potential of the game development
market, Pakistan’s IT industry is making more investments to develop country’s own
gaming industry.

Convergence
Pakistan is fast heading towards the convergence of IT, telecom and other services, and
IT & Telecom have great importance for the country. The country is responding rapidly
to the era of convergence and coming up with the appropriate policy and regulatory
frameworks to go hand in hand with the converged networks.

Technology convergence in the telecom and the IT sectors has led to service and
company convergence. During the last decade, liberalization of the telecom sector in
countries where it was a State monopoly has spawned intense competition within and
across borders. The rise of consumerism and the need to anticipate consumer demand
have been a catalyst to convergence of services. This has in turn inspired innovation in
communication technologies.

The trend is clearly evident; traditional telecom operators have started offering audio-
visual programming and Internet access. Cable TV operators are rolling out a variety of
telecom services including voice telephony. Cable modems are deployed to provide high-
speed Internet access. Broadcasters are switching over to program bouquets, pay per view
and experimenting with digital transmission in more advanced countries.

Technological changes are leading towards growing demand and innovations are
significantly modifying the structural features of the telecom industry with emerging
convergence across fixed, mobile, Information Technology (IT) and media sectors.

Web
The name Web 2.0 refers to a combination of improved communication between people
via social-networking technologies, improved communication between separate software
applications via open Web standards for describing and accessing data, and improved
Web interfaces that mimic the real-time responsiveness of desktop applications within a
browser window.

In general, Web 2.0 refers to a supposed second generation of Internet-based services -

such as social networking sites, wikis, communication tools, and folksonomies - that
emphasize online collaboration and sharing among users.
Significant progress has been made by Pakistan in this arena as well with a number of
featured examples of web 2.0 technology utilization.

Pakistan leads the offshore in their technology expertise and experience with keeping up
with the trends. There are fewer firms working on cutting-edge Internet portals at this
time but in terms of quality and value-for-money, Pakistani firms are far ahead than
others in the region.

Policies and related issues

For most of the 1990s, Pakistan invested heavily in information technology (IT) and an
industry began to emerge. Thousands of people there are now online, but developing
quality software that sells in the international market is a different matter — and one that
needs a radical rethink.

During the initial flush of enthusiasm, IT training institutes opened across Pakistan, and
the government funded increased Internet access in villages, towns and cities. The
assumption was that Pakistan would somehow become a big software exporter, and reap
a projected US$1 billion by 2000.

Today, things have changed considerably. On the plus side, there are signs that the
industry has become more sophisticated. Many entrepreneurs who formed companies in
the early 1990s — believing in the mantra 'I will make it, they will buy it' — have learnt
the value of specialization (e.g. cybernet is not more into software development now),
good marketing, and quality software development.

Software companies have developed an increasingly strategic vision, and the 'reverse
brain drain' has also helped by bringing in fresh ideas, capital and contacts.

On the downside however, the industry faces serious organisational and managerial
challenges. These include a lack of human resources, venture capital and — most
importantly — an inspiring, world-class success story.

The problem with policy today, as opposed to the 1990s, is that while policymakers
generally recognize that the IT sector is going to be important to Pakistan's long-term
growth, there is considerable ambiguity on how big that role can be. The policymakers
have, therefore, failed to tackle the biggest challenges directly.

They need to decide whether their objective is to build an industry that challenges those
in some emerging countries (whether big players such as India or smaller ones such as
Malaysia, the Philippines and Ukraine) or merely one that remains a user of IT. If you
just want to be a user then don’t invest much on IT institutes, which is never a right
choice for developing countries.
If Pakistan is serious about emerging as a global IT leader (or even a second-tier
follower) it needs to take drastic policy measures.

Although the industry continues to grow at a healthy rate of 20-30 per cent, it is stuck in a
low-level equilibrium: there are no imminent technological leaps, such as those that
transformed India's IT industry in the 1990s.

The roots of the problem lie at many levels — from individual companies through to
policymakers in government, and the industry as a whole.

Infrastructure, investment, image

Pakistan's IT industry suffers from a lack not just of physical infrastructure, but of
carefully distributed telecommunications capacity — i.e. multiple access points and extra
capacity to link with the international telecommunication network.

For instance, until recently, the country's Internet access was through a submarine cable
that was cut off twice in 2004. While this was an eye-opener for policymakers and forced
them into launching a standby undersea cable, Pakistan's telecommunications capacity
and access remain too restricted to support a fast growing industry providing constant
support to serve the Western market.

This clearly shows the government's failure to provide a public facility that is critical to
the growth of the IT industry.

A clear, consistent and uniform investment policy is the second key element in elevating
Pakistan's IT sector. Attracting investment not only boosts image, but also exposes the
local market to foreign ideas, management practices and capital.

The government must develop policies for attracting foreign investment in IT. Providing
tax-free status to the industry has clearly not worked as well as expected, primarily
because too many other countries do the same(this is not a sustainable thing to do).
Unconventional approaches are needed.

One might be to develop a package of incentives specifically designed to ease bottlenecks

such as a lack of real estate and manpower training. This might level the playing field for
foreign companies looking to invest abroad.

Such a package would not have to be an outright subsidy (shouldn’t miss the economic
engine), but could be a scheme that recovers its value quickly — through job creation and
tax revenues. It should also be openly communicated and implemented fairly (which is
again a major issue wherever Govt. of Pakistan is involved), transparently and
consistently.
The widespread perception of Pakistan as a backwater also needs to be tackled because
this can affect the economic interactions needed to jumpstart its IT industry — such as
'selling' the country as an alternative to China, India or the Philippines. (As we saw in the
case of textile industry; export marketing is crucial)

Branding Pakistan is not a job for individual companies, but a collective task for the
industry as a whole, and one in which the government must become an equal partner.
Doing so would require a sustained and meaningful interaction with academics, business
leaders, and policymakers in the West.

The human factor — and beyond

The quality and quantity of human resources is another critical issue facing Pakistan's IT
sector. Cheap labour, often seen as a strategic advantage, is in reality a major weakness
(people are now moving away from IT field). Not only does Pakistan produce too few
software professionals (programmers, managers, entrepreneurs) for the proper
development of an industry, but it also fails to provide the quality of training needed.

Of the 5,000 or so IT professionals trained within Pakistan's various IT institutions, only

1,000 or so are immediately employable. A high-quality curriculum and efficient trainers
are obviously needed, yet our policymakers have so far failed to grasp this.

But while it is important for policymakers to take on these four challenges —

infrastructure, investment, image and human resources — ensuring unrestricted growth in
Pakistan's IT industry could depend on a number of other policy issues.

One is the creation of a vibrant domestic IT market. Significant barriers stand in its way,
however.

Several IT leaders (according to an article in Spider magazine) complained of a lack of

government contracts, the slow pace of the 'e-government' initiative and the award of
major contracts to large public sector organizations and foreign entities. They argue that
major IT clusters such as Silicon Valley in the United States and Boston Route 128
would not have met with success if major contracts for US defence research had not been
awarded to the local industry.

Policymakers, on the other hand, complain — with some justification — of the IT

industry's 'lack of sophistication' and inability to deliver.

Other issues that require careful analysis and comprehensive policy interventions include
providing venture capital and protecting intellectual property rights.

These policy measures, however, require reciprocation by the industry as well. The
industry would need to commit to these goals — ideally through a public-private
partnership designed at making, and realising the benefits of, contingent commitments by
both public and private sectors.
INDUSTRY ASSOCIATIONS

Following are some of the renowned IT associations of Pakistan.

PASHA

CSP

OPEN

TIE

ACCO

PCA

PAKISTAN SOFTWARE HOUSES ASSOCIATION (PASHA)

Pakistan Software Houses Association (PASHA) was formed in the last quarter of 1992
by nine software houses. By 2003, PASHA had grown to over 200 members. Its main
objective is to promote and develop the software and services industry in Pakistan and to
protect the rights of its members.

The software and services industry is growing at an enormous pace in Pakistan and
PASHA, along with its members, is playing an important role in making their presence
felt, both nationally and internationally.

COMPUTER SOCIETY OF PAKISTAN (CSP)

The Computer Society of Pakistan (CSP) is the national organization of Information

Technology professionals in the country. It was established in 1973 to promote the use of
computers, increase general awareness among the public and to look after the
professional interests of the IT personnel in the country.

The Society holds lectures, seminars and technology forums which provide an excellent
platform for the interaction of professionals. It organizes annual computer exhibitions and
software competitions all over the country with the objective of fostering a better future
for IT in Pakistan.

The Computer Society of Pakistan sponsors students to take part in the international
software competitions in various countries as well as organizes various programs for the
youth. The current membership of the Society is over 2000 professionals working in over
350 public and private sector organizations.
THE ORGANIZATION OF PAKISTANI ENTERPRENEUS OF NORTH AMERCIA (OPEN)

The Organization of Pakistani Entrepreneurs (OPEN) is a voluntary not-for-profit

association dedicated to providing leadership opportunities for our members and
community. The organization was formed in 1998 by a group of Pakistani-American
entrepreneurs and corporate executives and registered in the Commonwealth of
Massachusetts in the year 2000. The association's charter is to provide networking
opportunities and enhanced business opportunities for entrepreneurs and professionals
who work in high tech, finance and biotech fields in North America. OPEN meetings and
events are open to the public. OPEN has chapters in New England, Silicon Valley, New
York, and Washington DC.

OPEN Chapters have boards comprising the most successful Pakistanis in the areas of
finance, technology, telecommunications, biotech and consulting in North America.
OPEN regularly organizes events pertaining to current issues in business and
entrepreneurship. In addition to OPEN'S highly successful Board of Directors, OPEN is
comprised of executive committees of seasoned entrepreneurs and professionals from a
multitude of industries and professions that help plan, coordinate, and execute OPEN's
mission.

THE INDUS ENTERPRENEURS (TiE)

A global not-for-profit network of entrepreneurs and professionals dedicated to the

advancement of entrepreneurship. TiE's mission is to foster entrepreneurship globally
through mentoring, networking, and education. TiE, The Indus Entrepreneurs, also
known as Talent Ideas and Enterprise is a global, non-profit network dedicated to the
advancement of entrepreneurship.

Founded in 1992, in Silicon Valley by a group of successful entrepreneurs, corporate

executives, and senior professionals with roots in the Indus region, the organization today
has over 10,000 members across 44 chapters in 9 countries.
Dedicated to the virtuous cycle of wealth creation and giving back to the community,
TiE's focus is on generating and nurturing our next generation of entrepreneurs. In order
to achieve this organization has built programs to energize and inspire its constituencies
and the flagship event being TiEcon, the largest conference for entrepreneurs worldwide.

The one constant guiding the evolution of TiE has been its philosophical framework. It
has kept the vision and decisions of TiE's leadership true to its basic beliefs that wealth
creation and giving back to society are invaluable human endeavors, and that an open,
inclusive and forward-looking organization is the right vehicle in which to reach their
objectives.

A global not-for-profit network of entrepreneurs and professionals dedicated to the

advancement of entrepreneurship. TiE's mission is to foster entrepreneurship globally
through mentoring, networking, and education. TiE, The Indus Entrepreneurs, also
known as Talent Ideas and Enterprise is a global, non-profit network dedicated to the
advancement of entrepreneurship. Founded in 1992, in Silicon Valley by a group of
successful entrepreneurs, corporate executives, and senior professionals with roots in the
Indus region, the organization today has over 10,000 members across 44 chapters in 9
countries. Dedicated to the virtuous cycle of wealth creation and giving back to the
community, TiE's focus is on generating and nurturing our next generation of
entrepreneurs.

In order to achieve this organization has built programs to energize and inspire its
constituencies and the flagship event being TiEcon, the largest conference for
entrepreneurs worldwide. The one constant guiding the evolution of TiE has been its
philosophical framework. It has kept the vision and decisions of TiE's leadership true to
its basic beliefs that wealth creation and giving back to society are invaluable human
endeavors, and that an open, inclusive and forward-looking organization is the right
vehicle in which to reach their objectives.

ASSOCIATION OF CALL CENTERS & OUTSOURCSERS (ACCO)

ACCO is an organization rich in information and experience with a wealth of knowledge

and wisdom in its members. The key to the continuing success is the sharing attitude
among its members. The industry in Pakistan is now in a growing phase and many
organizations require advice around realizing the investment in their contact centre in
terms of enhanced customer service. ACCO is in a unique position to assist today's
contact center market place in their quest for improved delivery.

ACCO provides valued services, at both individual and

organization level, encouraging the promotion of best practice and professional standards.
ACCO is established as a pivot for building new memberships with other professional
bodies, government departments, overseas organizations and other agencies who have an
interest in the successful development of contact centers, organizing the said conference
is a link to this commitment

PAKISTAN COMPUTER ASSOCIATION (PCA)

Pakistan Computer Association (PCA) was established in December 2000 as an

autonomous, non political, non partisan, non-profitable and service
oriented organization. The Computer Association has been formed with
the involvement of professionals, specialists, manufacturers, institutions and the related
organization of Computer and Information Technology within the country.
Local Scene:

PRODUCTS

For the local market, where the software houses begin from , major products that is in
demand is mostly financial programs for banks and other financial institutions followed
by range of other applications for the production and manufacturing industry, the power
and energy, communication, human resources, quality control, general accounting, point
of sales, education and skills development leasing as well as other finance related
matters, there are other specialized software for pharmaceutical, textile, cement,
insurance and transport industries for both local and international market.

MAJOR PLAYERS

Most of the software houses, though established in the 80s, came to limelight after the
formation of Pakistan Software Export Board and prospective exporters were asked to
register.

During the first year of the board less than a hundred companies registered with the board
while the number increased to 116 in 1996 and about 200 last year.

Likewise, the Pakistan Software Houses Association which started with less than five
members in the first year of its formation has more than 150 members by the end of last
year , 18 out of which are presently working on various international contracts.

Among the players, Systems Private Limited is regarded as the first software house to be
established in the country. Established in Lahore in 1977, by a group of professionals led
by Aezaz Hussain, the former president of PASHA.

The company is regarded as the market leader in the country at present, its major
specialty has been the ability to deliver complete turnkey and customized computer
solutions ranging from project conception, system study and design.

Sidat Hyder Morshed Associate Private Limited represents the worldwwide organisation,
Arthur Anderson in Pakistan and the relationship has enable the local company to tap its
principal's resources in over 72 countries.

The company has been in computer related and financial as well as management
consultancy since 1986, and has designed and developed various customised software
and products both for local and foreign clients.

Some of its services and clients include the World Bank, the development of accounting
systems, general ledger and procedures for Sandoz, Merck Sharp & Dohme, Orix
Leasing, Oxford University Press, design and development of a foreign exchange
application system for a LAB-based PC for the International Finance Investment and
Commerce Bank, designing and development of Windows-based client server MIS
application for the training region of the International Telecommunication Union for
PTC.

Established in 1983, Noble Computer Services offers full-scale system and development
of solutions and specialises in customised software development on AS/400, NT,
Windows platform, NCS software products, implementation services as well as training
and education services for BPCS, NCS and Microsoft products.

ACE-Advanced Information Management Services or ACE-AIMS belongs to a

multidisciplinary firm of professional consulting engineers and is specialised among
other services in designing and developing software for database management.

Recently the company designed a system for maximum flexibility in human resource
management.

'HR-2000' which is a locally developed, international level software for automizing the
HR department is a comprehensive Human Resource Management system geared
towards helping proactive HR managers achieve organizational goals with speed,
accuracy and objectivity.

The system is based on the translation of corporate culture, policies and methodologies
for succession planning, carreer development, performance appraisal, competencies, and
the overall tracking of each movement of employees.

ACE-AIMS is among the few companies in the sector to have so far responded to the
government's call to establish a computer education institute by establishing an education
services department.

The company is currently operating in Saudi Arabia, USA, U.K., Iran, Malaysia,
Indonesia and Nigeria.

Crescent Software Products Private Limited is a member of Crescent Group, is one of the
largest software export companies in the country, developing software and related
services in the domestic as well as in the international market

KPMG Peat Marwick Informationa Technology is a member firm of the worldwide

KPMG organisation with over 800 offices in 120 countries with annual turn over of over
six billion.

Paksoft, another major player in the local software market, is a joint-venture company set
up by five well known software houses in the country which include Infosys, Noble
Computer, Sidat Hyder Morshed Associates, Globalsoft and KPMG.
Metrosoft, another software exporter is a subsidiary of Expert Systems Private Limited
which has been in the local software market since 1989.

ZRG International is one of the foreign based software houses with office here in
Pakistan, it opened its first foreign office in Pakistan in 1991 and offers a variety of
ready-made products to the financial institutions.

CompSoft International Private Limited is a subsidiary of Forbes Computer Technology,

based in California, it provides a full line of hardware, software applications and
specialized technical services to Fortune 500 to 2000 companies.

XIBERCOM is the pioneer in introducing Web designing in Pakistan, a brainchhild of

Dr. Altamash Kamal, the company is involved in a number of web related services which
include providing and authoring web space, customised domain names, personalised
electronic mail addresses and communication consultations.

CroXx Linc International, a sister company of CroXx Linc Mines has been in the local
software market since 1993 and is incolve is software designing, consultancy,
development and networking, network project management, game design and support
service.

PSEB

Realising the importance of exports in the industry, the Export Promotion Bureau
presented a proposal to the federal government to form a board which will constitute
among its members practitioners from the software industry with main objective of
encouraging software exports from the country.

Headed by a managing director, who is a software developer, the board has as its
members federal secretaries of the ministries of commerce, communications, education,
environment and urban affairs, finance, interior, science and technology, board of
investment.

The president of the Pakistan Software Houses Association (PASHA), the head of PTCL,
the chairman of central board of revenue and the vice chairman of Export Promotion
Bureau are all members of the board.

The first task of the board was to approve a policy framework and incentives package for
the industry which include both fiscal and corporate incentives.

It is said that among the fiscal incentive recommended for the industry is the exemption
of duties, tax, surcharges and leviable octroi on all computers and related hardware,
peripherals including communication hardware and software, telemetric infrastructure
and software development tools to be used excusively for software exports.
Other incentives include the exemption of corporate tax for a period of seven years
during the company's ten years of operations on export earnings from software related
services.

Financial assistance has been promised to the Software houses both in the forms of loan
through nationalized banks and other financial institutions as well as equity support from
government funds for the purchase of computers, communications and the equipment.

International high speed data circuits have also been promised to the Software houses at
the rates that will be highly competitive to rates offered by other telecom companies in
the region, this is important if the rates of these software houses are to competitive in the
international market.

And most importantly is the permission to the software houses to re-export their capital
goods without any levies.

It is said that support from the Board has not only brought these companies together, it
has also provide an opportunity for a smaller firms in smaller cities to introduce
themselves to the international market by participating in international exhibitions.

By encouraging the members to participate in international shows, PSEB has focused the
attention of the sector on the vast potential offered by the international market

Efforts:

In collaboration with the University Grants Commission (UGC), PSEB launched what it
called the 'Action Learning Centers of Excellence (ALCoE) two years ago by inviting
proposals from the private sector.

The programme is a frame work which allows a private sector party to join hands with
existing universities of repute to create high quality institutions.

Following the invitation, more than 200 institutions were reported to have showed an
interest in setting up this institute which includes international giants like IBM,
Microsoft, Oracle and other industrial groups like TCS, Jaffer Brothers and Shaheen
Foudation.

Some of the universities which were selected for the programme at that time include the
Institute of Business Administration, IBA Karachi, Sir Syed University and Technology,
Karachi, NED University of Engineering and Technology, Karachi, Mehran University of
Engineering and Technology, Jamshoro.

Others include National University of Science and Technology, Rawalpindi, University

of Engineering and Technology, Taxila and Arid Agriculture University, Rawalpindi.
The program which include a one-year curriculum, which was developed by the PSEB
and was approved the UGC, emphasis more on hand-on-training is yet to pick up at the
speed it was conceived.

Another objective of PSEB is to develop and execute marketing plan to help local
software houses, as the companies dealing in software are known, reach out to potential
clients abroad, at the same time PSEB will attract and facilitate foreign software firms to
establish their software development facilities in the country and facilitating international
trade fair participation.

The board will also plan, develop and execute the software technology park scheme to
provide office space, communications and electric power facilities to companies and
firms willing to establish in the park.

Issues of Local Market:

First and foremost among the problems facing the local industry is the level of awareness
among the local populace, and according to experts, unless something is done in this
aspect, the gap will continue to widen due to the fact that most of the experts in the field
at present are concentrating outside the country while the country is not producing
enough substitutions.

According to one of the systems analysts in the city, all PASHA and PSEB who claimed
to be struggling for the cause of IT in the country could do is to trade accusations among
each other and not paying attention to the problems facing the nation.

It has been observed that the two always avoid sitting together and does not attend each
other's functions talk less of meetings.

By the way of subsidizing the government spends more than 200,000 dollars on each
COMDEX exhibition that software developers from the country attended, which causes
the main tussle between the two as PASHA members accuse the other members of using
the platform for their own self interest.

There is a need to encourage the smaller companies too to participate in the international
exhibitions, to reach the projected figure we will certainly need more than five large
companies that seem to dominate the scenario at present.

And most importantly, we will need more than six-monthly programmers to serve as
professionals in the field, if we are to address the issue effectively today, by establishing
proper departments in the universities, it wwill take another four years to produce
professionals.
Some of the Success Stories:

Company: CresSoft

www.cressoft.com

CresSoft has a splendid track record of delivering technologically challenging software &
e-business solutions for fortune 500 clients and large businesses in the US. From its
earlier ventures in object technology, communications and security related products to its
present focus in business-to-business e-commerce and web related technologies; CresSoft
has been the pioneer software exporter in the country.

Project overview

Developed object oriented customer care system for local telephony that included
functionality for ordering, trouble ticketing, revenue management, product catalog,
campaigns, inventories and workforce scheduling. Front end was based on small talk and
Sybase. The system is in production in Time Warner divisions.

Also developed an ordering system for dedicated telephony using small talk and Sybase.
The system reduced order-processing time considerably and can be easily extended
through a rule-based editor to support fast evolving standard.

Company: Xavor Pakistan (Pvt) Ltd

Project overview

Xavor partnered with Cable and Wireless, a major global telecommunications business,
to create a trade banking exchange for one of C&W's biggest enterprise customers. Xavor
led the program and carried out development, systems integration and deployment.
Powered by TIBCO, the exchange offers a comprehensive and integrated portfolio of
trade-related products and services spanning sourcing/procurement, banking and logistics
delivered direct to their customer's desktop. The result is a scalable, highly reliable, fully
managed trade-banking offering with 24x7 support - the first of its kind in the industry.

Company: NetSol

NetSol is a global information technology (IT) solutions and consulting services

company. The company offers a broad range of capabilities ranging from consulting and
application development to systems integration and outsourcing. Their current client list
includes some blue chip corporations like DaimlerChrysler, ICI, Volvo Finance, GMAC
Finance and Citibank. The services offered by NetSol are delivered by our global team of
over 270 people from offices located in Pakistan, USA, and Australia.

Staring from Lahore, Pakistan in 1995, the company now is listed on NASDAQ (ticker:
NTWK). The software development facility in Lahore is ISO-9001 certified and is
currently on its way to achieve CMM Level 3 accreditation.

Project overview

NetSol has developed a complete suite of products for the lease and finance industry. The
entire suite is the first end-to-end solution, which encapsulates the core business
requirements of any type of lease and finance company. These business critical products
are successfully implemented at DaimlerChrysler operations across Asia including
countries like Singapore, Australia, Taiwan and Thailand. NetSol is also the preferred
software solution partner for DaimlerChrysler Services in Asia Pacific.

The following are the key software products that are currently being used by
DaimlerChrysler:

Dealer front-end (ePOS) - online quotes, credit application submission and monitoring

Proposal Management System (PMS) - back-end workflow and credit evaluation system

Contract Management System (CMS) - management and maintenance of lease/finance

contract throughout the life cycle.

Wholesale Finance System (WFS) - complete solution for floorplan business covering
credit limits, loan management, billing and settlement, stock auditing, dealer information
and pay-off functions.

Global Scenario
IT Rivalry and collaboration

Giving a boost to the feel good created by the ongoing Confidence Building Measures
(CBMs) between India and Pakistan, the IT firms of both the sides have also signed
several business deals.

"Arwen Tech signed up with Hewitt India for HR skills assessment and strategy for
training of call centre personnel. Another Karachi based company Emmaculate Solutions,
signed up with IFlex Solutions of Bangalore. Compare, Delhi has gone into a joint
venture with Creative Chaos, Karachi to develop 6 web portals," Azeem Premji,
Chairman of India's largest IT company Wipro has shown interest in establishing a
development centre in Pakistan. The agreements were inked during a nine-day visit of a
15-member delegation of the IT and IT Enabled Service (ITeS) companies from Pakistan
to Mumbai, Hyderabad and Bangalore on the invitation of NASSCOM (National
Association of Software and Service Companies).

According to news NASSCOM and PASHA would be lobbying for the governments to
allow countrywide visas for business people from IT industry as visa issue is proving to
be a major hurdle in the way of co-operation and collaboration.

These agreements have generated hopes that software and service companies in India and
Pakistan would work together to generate more business for the region.

Confidence Building Measures should be implemented on business front also.

If we analyze, we will find that reason behind these collaborations is China that is
emerging as a major threat to both India and Pakistan in the global software industry.
Chinese American entrepreneurs from the Bay Area are going back to their homeland
with Silicon Valley know-how, connections and capital to help build a burgeoning
software industry. Blessed with cheap technical talent, Chinese firms have begun to
undercut the bargain-rate companies in India.

Among China's advantages:

-- Cheap labor. In China, salaries of information technology professionals are roughly

one-sixth (or even less) of those earned by their U. S. counterparts, according to an
article. That's on a par with India, industry watchers say. But the final cost of any
software outsourcing project may vary, experts say, depending on tax breaks and other
incentives, the experience level of the staff and other factors.

-- Market opportunity. China's entry into the World Trade Organization in 2002, its
selection to host the Olympics in 2008 and double-digit economic growth are luring
multinational corporations that need help localizing their products for the Chinese
market. Foreign investment in China reached $53.5 billion in 2003, up from $3.41 billion
in 1990.

-- Domestic demand. China, too, will have domestic demand for software, as the
country's booming home-grown companies require these services.

-- China as gateway. Chinese programmers can also serve customers from Japan and
Korea, whose language, culture and geography are closer to the mainland than India.
India and Pakistan’s outsourcing firms have struggled to access these markets.

-- Government incentives. China's government has fostered its software industry, offering
tax breaks and space in high-tech parks to startups, expanding universities and providing
funding to software vendors for international-standards certification. Shenzhen is a chief
contender for the title held by Bangalore, India, competing with cities such as Hangzhou,
Guangzhou and Shanghai.

India and Pakistan: A Comparison

Some of the Success factors of Indian Industry:

1) The number one reason has to be the large well educated population in India.

2) The highest number of English speaking people. (one of the rare positives of Indian
invasion by British)

3) Low wages in India as compared to West. Although this factor is slowly becoming a
disadvantage, it was one of the main reasons for International Software companies to
outsource IT work to India.

4) The Indian culture itself is a huge contributor. For e.g: Parent’s commitment to
children’s education. The importance of education is ingrained by them on their children
at a very young age. They see good education as the only means to have better standard
of living.

5) As much as Indian IT Industry has grown due to offshoring, equal amount of credit
should go to growth of domestic companies in Auto, retail, banking, telecommunication,
manufacturing etc. They have equally contributed in its growth .

6) The young and dynamic working population. More than 60% of Indian people are
below age 25 ! (study by Wipro,India)
7) The opening up of economy starting in early nineties. The outsourcing / offshoring
started taking roots due to the change in policies back then.

8 ) Partial privatization and growth in Telecommunication, in late nineties.

Telecommunication forms an integral part of Information technology Industry.

9) The rapid growth in IT parks in India in last 10 years. Government setup SEZs
(specialized economic zones), where opening of software services companies would get
certain tax subsidies. This attracted lot of companies to setup software shops.

10) The tax breaks and sops offered by Indian government for upcoming software firms.
This made India one of the most attractive markets for setting up Software shop.

11) The commitment of Indians towards their work. It is a common knowledge that
people in Software Industry normally put more than 10 hours a day in their work. I do not
subscribe to the view that working long hours necessarily leads to higher productivity,
but I think this “hard working Indians” definitely plays on people’s mind.

12) Rapid growth in Infrastructure and transportation facilities that started in mid
nineties.

13) The entrepreneurial spirit and Innovative tilt of Indians. This may be controversial,
however I think it is a factor that has made Infosys and Wipro such huge success stories !

14) The time difference is one of the reasons for growth of Indian IT Industry. Western
countries get advantage of having a 24 hour work cycle.

15) Basic business and marketing sense even in fresh engineers is one of the key success
factor.

Why choose Pakistan? 8 REASONS

Pakistan offers various competitive advantages over other outsourcing destinations, such
as high quality software development, swift and easy establishment of business, lowest
cost basis and emerging and state-of-the-art telecommunication and IT infrastructure.
Experts estimate an average annual growth of 33% in the sector. This will result in the
total IT export revenue crossing US$ 10 billion in the next five years.

Pakistan is emerging as the destination of choice for IT outsourcing in Pakistan for the
following reasons:

• An IT workforce of 90,000 with good English language and people skills growing
at a phenomenal rate of almost 20,000 a year.
• A hundred ISO-certified IT companies, with over 25 undergoing CMMI rating.
• A reliable digital telecommunications infrastructure with backup and reliable
energy and transport networks.
• An ambitious program of world-class IT Parks, with a rental rate of approx. US$1
per sq ft /month.
• A prosperous economy that offers lucrative domestic opportunities and is
attracting increasing amounts of international investment.
• A steadily improving risk rating and a tightening environment for intellectual
property protection.
• A streamlined government regulatory process of one of the most attractive
incentive programs anywhere, which includes tax exemptions, 100% foreign
equity and earnings repatriation.
• International leaders such as BearingPoint, NCR Teradata, Mentor Graphics and
ZTE have chosen to locate their development and consultancy center in Pakistan.

Government incentives:

• Information Technology Parks with low rent, fiber optic connectivity, libraries
and conference rooms
• Provision of funds for software companies to get ISO-9000 and CMM-level
certifications
• Foreign investors allowed 100% ownership of equity in "IT/ITeS companies"
• Tax exemption for IT companies till 2016
• 100% repatriation of profits allowed to IT companies
• Seven years' tax holiday for Venture Capital funds
• The rate of depreciation on computer equipment is 30%
• The State Bank of Pakistan (SBP) has allowed the opening of Internet Merchant
Accounts by banks
• Instant, reliable and high-speed connectivity available
• Over 85% of telecommunications infrastructure is on fiber optic cables
 • Internet access is available in over 1862 cities/towns across Pakistan
• Pakistan is the first country in this region to establish DWDM
telecommunications infrastructure
• Several cellular companies are using digital transmission (GSM and TDMA)
• The cost of 2 Mbps connection has been lowered to US$ 1000/month
• Redundant backup connectivity is available through PTCL for call centers.

Business Model of a Leader: The NetSoL Case

NetSol is an enterprise software products firm that develops and sells financial services
software to banks, lease finance firms, leasing agencies and consumer financing firms.
Information for this case study was gathered over the last 10 days at their new 270-seat
development facility in Lahore, Pakistan.

'Bank in a Box'

NetSol has extended its market reach into nine countries. China and the U.K. are the
newest locations. Their newest product is a "bank in a box" suite called inBanking that is
being launched in a phased manner. It is built with Microsoft's .NET technology and is
designed to provide all software and transaction management tools needed to operate
single and multi-location banks.

NetSol's original product suite is LeaseSoft, a client-server software system built with the
PowerBuilder, LeaseSoft is used by vehicle-leasing companies and wholesale lenders in
that industry. Its baseline clients are Daimler Chrysler's lease-financing subsidiaries in
East Asia. In Australia, NetSol's software is used to manage more than 1 billion
Australian dollars in assets.

Three Business Models To Choose From

One of the distinguishing characteristics of any software firm is the choice of business
models.The three business models that software firms can choose from are:

Software Product Firms. Software product firms earn at least 60 to 80 percent (depending
on which definition you prefer) of their revenues from developing software, licensing it
for sale and receiving maintenance fees for updating that software. Seventy-five percent
of NetSol's revenue comes from product development and from customizing its own
software products for users.

Services Firms. Services firms provide customization, installation, integration and

maintenance of other firms' products, along with consulting and other services. They
might also develop customized software applications. Under the service firm business
model, such customized software is owned by the clients. Twenty-five percent of
NetSol's revenues come from customized development work where clients own the
software outright. This is a small percentage by industry standards, since most software
companies are service firms. Service firms might experience dramatic revenue
fluctuations. Revenue per employee and profit per employee are usually lower at service
firms than at successful software product firms.

Hybrid Firms. Hybrid firms develop products and perform some services work. This
model is attractive because it enables hybrid firms to leverage their core technologies to
distinguish themselves from their competitors. Almost all software product firms
eventually provide some services and drift towards the hybrid business model.

Business Models Compared

The attraction of the business model used by software product firms stems from the fact
that software is often easy and cheap to reproduce, once it has initially been developed.
Profitability from each employee can be very high once sales begin to take off. The risk
is that an economic downturn or other factors outside of the control of a product firm will
cause clients to suddenly stop purchasing software.

Software firms that are in the best position are often those that produce their own
software and have a solid base of clients willing to provide it with a recurring revenue
stream from maintenance fees, updates, customization and other services.

Unless there are extreme price pressures within a product field, enterprise software
product firms (those selling business software) can often charge high prices for each
license. With NetSol's products, for example, software prices of US$1 million or more
per client are their target.

By producing multiple copies of the same software product at little more than it costs to
produce a single copy, software product firms can gain an economy of scale that enables
them to increase revenues without substantially increasing their costs, thereby becoming
very profitable within a short period of time. Service firms, in comparison, find it harder
to scale up rapidly because their revenues are based on the amount of personnel resources
utilized to implement each service contract.

Economies of scale are harder for service firms to achieve. The profit margin for each
dollar of revenue received by services firms is much lower than the gross profit margin
for product firms. In 2002, for example, PeopleSoft reportedly spent only 10 percent of
its software revenues on developing and distributing that software.

Maintenance Fees

Recurring revenues are available to product firms from maintenance fees. The terms of
maintenance fees differ, but they often allow customers access to newly developed
features and patches for bugs.
Maintenance fees are largely profit, once the product is stable. A feature developed for
one client (and paid for by that client) can be made available to all customers who pay the
maintenance fee for that product.

Since not everyone in the installed base might want or need a new feature, version
controls and feature switches might be needed to enable users to opt in or out of new
features. The ability of users to set parameters regarding new features is also important in
the implementation of maintenance agreements. This is often the case when the installed
base spans different countries and where different business processes are used from one
location or client to the next.

Back in the 1980s and early 1990s, maintenance fees of 10 to 15 percent were common.
Maintenance fees today usually range from 15 to 22 percent of the original purchase
price. PeopleSoft was charging 20 percent until January, when its new owner, Oracle,
raised it to 22 percent to match the rate that Oracle charges for its own products. Some
PeopleSoft customers were considering going off maintenance contracts after that fee
hike.

NetSol's sales contracts authorize it to charge up to 22 percent, but it is currently charging

18 percent. Over the life of each product sold, NetSol will earn more revenue from
maintenance fees than revenues received from the initial product sale.

Software Licenses

In common with other software product firms, there are four price components to
NetSol's license agreements:

• Core software product.

• Customization.
• Implementation, which includes migration of data from legacy systems.
• Support and maintenance fees.

Market Strategies

Once a software firm has chosen a business model that involves the development of a
software product, it needs to decide whether to build products for mass markets or niche
markets. In the enterprise software field, the safest strategy is generally to target a niche
market first.

NetSol initially targeted the front end of automobile leasing software, where lease
applications are completed and sent for approval by a finance company. Then it moved
up that vertical until it had built up a complete suite of complementary products. Mastery
of one market vertical served as a jumping off point for NetSol to enter the banking
industry using the same verticalization strategy.

Piracy Issues

According to a Business Software Alliance study of global trends in software piracy, in

2005 the worldwide rate of personal computer software piracy stood at 35 percent, a
onepercentage point decrease on the 2003 global rate. The rate of software piracy in each
country was calculated by subtracting the units of legitimate packaged software paid for
during the year from total units of packaged software put to use during that year. The
resulting number was then divided by total units of packaged software to produce a
percentage rate. In 2003, 2004 and 2005 the highest rates of software piracy were
recorded in Vietnam, Zimbabwe, Indonesia, Ukraine and China. In these countries
between 85 and 93 percent of the software put to use each year was thought to be pirated.
Other countries with high rates of software piracy in 2005 included Pakistan (86%),
Kazakhstan (85%), Russia (83%), and Venezuela (82%). Countries with low piracy rates
in 2005 included the United States (21%), New Zealand (23%), the UK (27%), Japan
(28%), Australia (31%) and Canada (33%). The highest estimated monetary losses (in
$US) due to software piracy in 2005 were experienced by the United States ($6,895
million), China ($3,884million) and France ($3,191 million). Globally, it is estimated that
$34,297 million was lost due to software piracy in 2005, up from $32,711 million in 2004
and $28,794 million in 2003.
_The Global Picture
Piracy in Pakistan
There are a few legal copies of Windows floating around in the market
which have come in with laptops and branded computers, but it’s
illegal to buy them according to the Microsoft license. Somewhere in
the End-User License Agreement legalese it says you may not sell or
rent your copy of Windows. While a Californian court ruled you can sell
purchased software no matter what the License says, I doubt that
applies outside California. Most geek lawyers in America/Europe think
that most EULA’s cannot hold up in court, but this theory hasn’t been
tested yet. It makes sense though, as current EULA’s basically make
you sign away your first child and just about everything else too.

So when it’s impossible to buy a legal copy, what is a computer user in

this country to do? Regardless of the extreme price differential, there
are people in this country who want to own a licensed legal copy of the
software they use. This is mostly due to a common misconception that
the original version will somehow run better than the pirated version.
In the case of small business, they don’t want to go through the hassle
of fighting with the local Microsoft dogs about ‘pirated’ software, so
they want to acquire legal versions.

The problems of windows licenses are quite interesting. Many people in

this country have second-hand machines which have been disposed of
in the west. Most of these machines come with Windows already
installed, along with a sticker of the original product key. They
sometimes even have the cubicle number and the company they were
in. So when the machine running a pirated version of a operating
system already has a license, the piracy issue is no longer so clear cut.
We have tons of licenses sitting there in the form of old computers
rotting away in containers and dumps. Most of them should still be
valid, as the operating system along with the computer was thrown
away. Shoot, some of these computers haven’t even been formatted,
and all sorts of interesting information can be pulled out from them.
Legally, it’s an interesting issue. Maybe an enterprising shopkeeper
can buy a thousand of these pc’s, and claim to have acquired valid
licenses for Windows 98 (which most of these old pcs have). We
recycle a whole lot of junk from the West, why not software also?
Microsoft can claim that these licenses have ‘expired’, and cannot be
transferred, again this would have to go though the courts. By the
time a decision is reached in the Pakistani courts, this entire decision
will be moot as by then (after a decade or so) we will all be running
Linux.

Sadly, no computer shop in Pakistan seems to comprehend that there

is such a thing as free software which they can sell with impunity. On
the other hand, I doubt that the Microsoft and the BSA representatives
understand either. They are completely capable of hauling up someone
on charges of selling ‘pirated’ versions of RedHat Linux and
OpenOffice! Currently up-to-date Linux distros are harder to find than
just about anything else in the world. And no, its almost impossible to
download ISO’s over a modem connection which keeps disconnecting
coupled with electricity which fluctuates and dies every so often.
Broadband is slowly creeping into the country, so it would be nice if
one of the broadband companies could mirror one of the linux ftp
servers.

Microsoft Windows and Office together are available for 40 dollars in

Thailand. However, the Pakistan government shows no sign or
realization that they can bargain with Microsoft. So sooner or later,
things are going to come to a head. Nobody here is going to buy
software for a hundred dollars a pop here.

As Pakistan cracks down on software piracy, free software is going to

become more and more important. Excepting the larger corporations
and multinationals, every single computer in Pakistan runs pirated
software. It will be interesting to see whether people will end up
buying software, or switching to free alternatives. Even if the
government starts jailing people, my guess is that about 2-4 percent
of home users will pay western prices for software. There are ongoing
efforts to convert to Linux by the government. While techies/geeks are
switching, the normal user is going to avoid it like the plague. See
LinuxPakistan.net for more about Linux usage in Pakistan.

How to Reduce Software Piracy

Lowering piracy around the world will take work and investment — but it
is work and investment that can pay off for the countries involved. As IDC
has shown, a strong local software industry can be an incredible
economic engine.
In order to unlock the vast new jobs, business opportunities, revenues and
economic growth that the IT sector can produce, tangible steps need to be
taken to protect intellectual property and reduce software piracy.
The key to stemming piracy comes from education and proactive,
government-led efforts.
Five Concrete Steps for Reducing Software Piracy
• Implement the WIPO Copyright Treaty
In 1996, in direct response to the growing threat of Internet piracy, the
World Intellectual Property Organization (WIPO) adopted new
copyright treaties to enable better and more effective enforcement
against digital and online piracy. An estimated one billion people around
the globe will have Internet access by the end of this year — increasing
the power and potential of software but also opening new doors for pirates
to distribute their wares. In order to ensure protection of copyrighted
works in the digital age, countries need to update
national copyright laws to implement the obligations of the WIPO
copyright treaties. Among other things, these measures make sure that
copyrighted software cannot be pirated by ensuring that protected works
are not made available online without the author’s permission, and that
copy protection tools are not hacked or circumvented.
Many countries have already taken steps to improve and enforce their
laws. However, there is still more progress that can be made.
• Create Strong and Workable Enforcement Mechanisms as
Required by TRIPS
Strong copyright laws are essential, but meaningless without effective
mechanisms to enforce them. Governments must fulfill their obligations
under the World Trade Organization’s (WTO) Trade-Related Aspects of
Intellectual Property Rights Agreement (TRIPs) by adopting and implementing
laws that meet international norms for IP rights protection
and enforcement.
• Step Up Enforcement With Dedicated Resources
Too often, software thieves are not treated as seriously as other
criminals, and the punishment is too insignificant to be an effective
deterrent. Countries can elevate their enforcement of intellectual
property by:
a) creating specialized intellectual property enforcement units at the
national and local levels, and providing dedicated resources to
investigate and prosecute intellectual property theft,
b) increasing cross-border mutual cooperation among police and other
enforcement agencies to improve coordination among law enforcement
in various countries, and
c) supporting training of law enforcement and judiciary officials and
providing better technical assistance to ensure that the people on the
front lines of piracy enforcement are equipped with the tools they need
to deal with the changing nature of intellectual property theft.
• Increase Public Education and Awareness
Reducing software piracy often requires a fundamental shift in the
public’s attitude toward software piracy. Public education is a critical
component of any successful effort. Governments can increase public
awareness of the importance of respecting creative works by informing
the public about the consequences of disobeying the law, expressing
their intent to strictly enforce those laws and encouraging the use of
legitimate software. Some of the most successful efforts stem from
comprehensive public education campaigns launched jointly by
government and industry.
• Lead by Example
Because governments are the largest users of software in the world, one of the
most effective mechanisms for public persuasion stems from governments
themselves sending a strong and clear message that the government will not
tolerate piracy, and is actively managing its own software assets. This can be
achieved by implementing software management policies to set an example the
private sector should follow. For a government to demonstrate its commitment
to enforcing intellectual property protections in the private sector, it must
demonstrate that it is willing to do so in the public sector as well.