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8/14/2019 Media Presentation Summary

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PRESENTED BY

PAKISTAN SOFTWARE EXPORT BOARD (PSEB)

PAKI ST AN’S I TINDUS TRY

PROFILE & STRATEGY



3

GLOBAL IT INDUSTRY OVERVIEW IT INDUSTRY GROWTH

6.31.4812010

6.31.3942009

6.31.31220086.31.2382007

5.61.1652006

5.61.1032005

5.61.0452004

RateGrowth

(US $ Tril.)

Year

IT INDUSTRY GROWTHIT INDUSTRY GROWTH

00.2

0.4

0.6

0.8

1

1.21.4

1.6

2004 2005 2006 2007 2008 2009 2010

T r i l l i o n s

Source: “IDC Press Release” 10 th Jan.2007



4

GLOBAL IT INDUSTRY OVERVIEWGLOBAL IT OUTSOURCING

0

20

40

60

80

100

120

140

2004 2005 2006 2007 2008 2009 2010

Billions

Source: “IDC-Global IT Economic Outlook” 2004



5

ITPS GLOBAL MARKETSIZE

BPO 43%

IT Services & Software 57%

IT Services &

Software 27%

BPO 27%IT Services & Software

5%

BPO 3%

Total Global Spending Total Outsource able Actually being 0ffshored

US $ 1.045 Trillion US$ 280 Billion US$ 40 Billion

Source: “Strategy for Increasing Exports of BPO” Bearing Point Report



6

GLOBAL IT INDUSTRY OVERVIEWUS IT OUTSOURCING SPENDING

Source: “Worldwide and US IT Outsourcing Services” IDC Report 2004

Construction16

Industries15

Education14

Wholesale13

Insurance12

Transport11

Healthcare10

Utilities9

Services8

Retail7

Media6

Processes5

Finance4

Government3

Banking2

Manufacturing1

U.S. IS Outsourcing Spending Share by Vertical Industry

0

2

4

6

8

10

12

14

16

18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

% age



8

GLOBAL IT INDUSTRY OVERVIEWBPO MARKET SHARE

60%22%

18%

USA

W. Europe

Asia Pacific

Source: “Gartner- Press Release” 2006



9

GLOBAL IT INDUSTRY OVERVIEWIT OUTSOURCING SUPPLIERS (USDBILLION)

0.9

0.5

1.8

1.9

4.7

12.6

17.2

India

Canada

China

Eastern Europe

Philippines

Mexico

Others

Source: “Strategy for Increasing Exports of BPO” Bearing Point Report 2005



10

PAKISTAN IT INDUSTRY

PROFILE

“ Starting from a relatively low base in 2003, the Pakistan IT Industry hasexperienced rapid growth over the last three years … but sustaining this

growth will require some targeted measures”



11

PAKISTAN IT INDUSTRY PROF

OVERVIEW

Over 950 active IT companiesOver 125 ISO & CMM certified companies – a world leader

Seven MNC Development Centers and many more projectsThree Public Companies; Several World Class Product

CompaniesTwo billion dollar industry, including one billion dollars of

exportsIDC: “Surprising new home of offshore outsourcing in South

Asia.”Lehman Brothers: “Best IT fundamentals of any offshoreoutsourcing country.”

PSEB re-engineered website (www.pseb.org.pk) receiving 1million hits a month, 70% from overseas

http://www.pseb.org.pk/

http://www.pseb.org.pk/



12

IT COMPANIES BY LOCATION


Source: “PSEB National Census of IT Companies”, 2006

954TOTAL

113Others4

38344Karachi3

28290Lahore2

33307Islamabad/Rawalpindi1

Percentage (%)FigureCityS.No.

Karachi38%

Other Cities

1%

Lahore28%

Islamabad/Rawalpindi33%



14

PAKISTAN IT INDUSTRY PROFILE IT EXPORTS BY REGIONS

Source: “SBP” Jul-Dec 2006

USA

UK

THAILAND

UAE

CANADA

CHINA

JAPAN

HONGKONG

GERMANY

AUSTRALIA

SINGAPOREOTHER

USA 58%

UK 9%

Others 16%

Thailand 4%

UAE 3%

Canada 2%China 2%

Japan 2%

Hong Kong 1%

Germany 1%

Australia 1%

Singapore 1%



15

PAKISTAN IT INDUSTRY PROFILE GROWTH OF KEY COMPANIES

0

10000

20000

30000

40000

50000

60000

70000

80000

NCR IBM ZTE NetSol TouchStone TRG LMKR

Office Space (sq ft) 2003 Office Space (Sq ft) 2006

Between 2003-06 these seven sample IT companies grew by over 400 %

Source: “PSEB Survey”



16

PAKISTAN IT INDUSTRY PROFILE TOP 10 EXPORTERS FY 05-06

0.75Xavor Pakistan Pvt Ltd10

0.85Enterprise DB9

0.99Geopaq Tech. (Pvt.)8

1.2Trivor Software71.4Descon IT24 Pvt Ltd6

1.51Elixir Technologies5

1.94 (*)System Pvt Ltd4

2.23TRG Pvt Ltd3

2.93Ovex Technologies2

5.26 (*)Netsol Technologies1

Rank Companies US$ Million

Pakistan (State Bank Figures)

Source: “SBP”, “PSEB”, “Bearing Point Study” September 20, 2005



17

PAKISTAN IT INDUSTRY PROFILE

MULTINATIONAL DEVELOPMENT CENTERS & PROJECTS



18


MULTINATIONAL DEVELOPMENT CENTERS & PROJECTS



20

PAKISTAN IT INDUSTRY PROFILE WORLD CLASS COMPANIES

PERSONAL PRODUCTIVITYScrybe: Leading Web based email and calendaring

solution

RETAILITIM: Fast growing retail solution with over 50 UK customers

SOCIAL NETWORKINGNaseeb.com: Muslim social networking portal



21


FINANCEMixit: Stock Market Order Management, NYSE, USD 0.5 Bil per year

NetSol: Car Leasing and Services. Daimler Chrysler,Toyota, BMWAutosoft: Retail banking Solution running in three countriesMetalbid.com: world leading metal exchangeTPS: e-payment and e-banking (Customers: Al Bilad KSA, CBK, BoK,ESB, UBL Kuwait, 1Link, Allied Bank)



22


WORLD CLASS COMPANIES

ENTERPRISE COMPUTING

Ultimus: Business Process Management. 160 international customersincluding Microsoft & White HouseFive Rivers Technologies: Clear Cube Partner and world leader in fastgrowing field of centralized computing.



23


SOFTWARE SERVICESVisualsoft: Hardware and software system integrationKalsoft: Advanced infrastructure design and implementation (*)Averox: Enterprise client/server based solutionSi3: System Integration solution providersTechlogix: Business process improvement solutionsTechaccess: Enterprise management solutions (*)Systems Ltd: IT and BPO servicesPi Sigma Group: Consulting and software development

Comcept: Innovative telecom solution provider



24


IT ENABLED SERVICESPost Amazers: Animation. “Son of Mask” and “Exorcist : The Sequel”

LMKR: Seismological and Geological Data Management. BP, CALTEX,TEXACO.iEngineering: Platform Management. Most comprehensive database inthe worldTouchstone BPO, Ovex, Infospan, TRG, IT24: IT enabled services/CallCenters



25


EXPORT OF IT SERVICES

Source: “Pakistan’s IT Revenue grossly understated” V1.4, PSEB, 31/08/2006

USD 1,050 millionGrand Total

USD 250 million (At

least 5000 workersearning at least USD50,000 per year onaverage)

4. Temporary Movement

USD 450 million3. Commercial Presence Abroad

USD 200 million(Average USD 250,000expenditure by over 800 entities)

2. Consumption Abroad

USD 150 million1. Cross Border

IT ExportsMode



26


LOCAL INDUSTRY REVENUE

USD 200 millionIT Services Software and services, IT enabled services,

(Other than sales to Multinationals,

Multilaterals, and Foreign Missions)

USD 150 millionInternational Software Vendors

USD 1,150 millionTotal Domestic IT Revenue

USD 200 millionPeripherals – 1/3 of Computer Sales

USD 600 millionPC/Laptops/Servers

1,000,000 new and used CPU@ USD 600per CPU

Revenue FY 05-06Area

Source: “PSEB” and “Bearing Point” 2005-2006



27

TOTAL INDUSTRY SIZE


USD 2.2 BillionUSD 1,150 MillionUSD 1,050 Million

Total Industry

Size

Local IT Industry

Revenue

Export of IT Services

Source: “Pakistan’s IT Revenue grossly understated” V1.4, PSEB, 31/08/2006



28


COMPARISON WITH INDIA, 30th June

2005

1:10.351:12.871:18Ratio

6.21 GBS5965,2504USD 36 billion3India

600 MBS275,0001USD 2 billionPakistan

InternetBandwidth

Usage

IT PersonnelEstimatedGlobal IT

Revenue

Country

Source: 1. PSEB Study “Assessment of IT Professionals in Pakistan” – 2005

2. “PSEB Domestic Business Department” 3. “NASSCOM” 2006

4. “NASSCOM 2006” 5. “NASSCOM Strategic Review”, 2004, p 207



29

STRATEGIC FRAMEWORK

“While the Pakistan IT Industry has made impressive strides over the last three years, sustaining the growth will require a strong measures that are

part of an integrated strategic framework and vision …”



30

STRATEGICFRAMEWORK

INTERNATIONAL BEST PRACTICES & LESSONSLEARNT

1950

MANPOWERMARKETING

1990 DEVELOPMENT AND

COMMUNICATION COSTS FALL BY

SEVERAL ORDERS OF MAGNITUDE

MAKING LARGE SCALE OFFSHORE IT

ECONOMICALLY FEASABLE AND

CAUSING DEMAND TO SURGE

1980 FUNDING

MANAGEMENT2000

MANPOWER

2003

MANAGEMENT

2000

SIZE, DOMAIN,

TECHNOLOGY,

COUNTRY IMAGE



31

IT and

Intellectual Property Protection,Convergence, and Taxes &Tariff equal challenge

Deregulation policy major challenge and success

Public Policy

Only VCMultiple sourcesFinance

Quality major problem. Cost

also problem

n.a.Telecom Bandwidth

High rents not affordableHigh rents affordableOffice Space

Small, Manpower intensivecompanies that cannot affordhigh priced manpower

High Margin, Capital intensivebusiness that can affordexpensive manpower

Human Capital

International, HighlyCompetitive

Controlled, Domestic,Oligopolistic

Market

IT industryTelecom IndustryArea



32

STRATEGIC FRAMEWORK Direct Drivers:

Office Space HR MarketingTelecommunications

Bandwidth

Research on the IT IndustryStrategy & Research

Strategy, Systems, CultureInternal

Grease the wheels of private enterpriseFacilitation

Legislation that promotes and protects the IT industryPolicy

Employ certifications as a “rite of passage”Company Capability Development

Promote innovation, rapid growth and support the StrategyFinance

Indirect Drivers:

ProvideReliablebandwidth of sufficient

capacityin quick time

ProvideQuality IT-OrientedOffice Spaceat affordable

rates insufficientquantities andin quick time

Provideadequate qualitymanpower insufficientquantities with

acceptableattrition, inquick time

Sustaineddominance of niches; Bringdevelopmenthouse or callcentre of large

technology orother MNC toPakistan



33

STRATEGICFRAMEWORK

STRATEGY & RESEARCH

Current Profile

• PSEB In-house Pakistan IT Industry Size Study

• PSEB National Census of IT Companies

• PSEB Strategic Framework for IT Industry Development

• Committee formed (SBP, MoIT, Statistics, EAD, PSEB) to gather statistics

• Other Studies: BPO, Best Practices



34

STRATEGICFRAMEWORK

Current Profile

• PSEB has developed methodology for launch of VC Fund based oninteraction with several international VC, domestic financiers, and

Grant Thornton study

• VC Benefits: VC funded companies have x2 sales, x3 tax payments,

faster growth and innovation. In USA 11% of GNP and jobs by VC backed

companies. In India USD 1.3 billion disbursed in 2003 alone. Similar

successes in Israel, China and now Malaysia.

• Private VC Ventures unsuccessful in Pakistan: KASB Ventures, Pak

Libya Holding Company VC, Pakistan Ventures Limited, ABAMCO, EMP

Fund, TRG & AMZ operating as acquisition vehicles, TMT as incubator

VENTURE CAPITAL FUND & ENTREPRENEURSHIPDEVELOPMENT



36

STRATEGICFRAMEWORK

•Over one hundred and fifty PR Events including domestic and

international TV interviews, radio interviews (including NPR), Magazine

articles/interviews, promotion campaigns, advertisements and press

releases.

•Tradeshows: Last year PSEB sponsored fifty one companies in nine

international tradeshows and delegations and four domestic events.

• Joint Action Plans (JAC)/MOU : Signed with Malaysia, China, and

Turkey. Singapore and Mauritius in pipeline. Projects/leads as

outcomes.

MARKETING & PR

Target – 2010

Pakistan to be positioned in key international markets as Tier One IT

destination; Create awareness of IT industry growth and potential in the

country, and awareness of PSEB programs in the IT industry.



37

STRATEGICFRAMEWORK PUBLIC POLICY

Current Profile

• Removal of GST on computers

• Facilitation of Cogilent CEO release

• Working Papers on reducing Telecom BW cost and improving quality.

• Data Protection Act

Target – 2010

IPR, Electronic Transactions, Electronic Crimes, Data Protection, and Convergence

Regulation to keep abreast of technological and market advancement

Convergence, Intellectual Property, Taxes & Tariffs



38

STRATEGICFRAMEWORK HUMAN RESOURCE DEVELOPMENT

Current Profile

• Currently 90,000 IT graduates in the economy. 35,000 in IT

industry including 10,000 in export companies. Studies on employment and compensation.

• PSEB strategy is to increase the enrollment and output of Tier One

Academic Institutions (Outreach Program), while improving the quality

of select Tier Two institutions (Professional Development Centers,

Soft Skill Development Program).

• To further improve quality and international competitiveness, PSEB

undertakes Internship Programs (3000 interns placed), Apprenticeship

and Company Training Support Programs (Over 700 trained).



39

STRATEGICFRAMEWORK

Current Profile

• In the current year Visa processing facilitated for over 100 individuals,

Foreign Exchange Remittance NOC for SW costing over USD 100,000

to fifty four companies, and corporate advisory to numerous companies.

• New memberships 283 /renewals 223, Call centers newly registered

195 and renewal of 16 call centers occurred in calendar year 2006.

• OSRC : 11 migrations saving PKR 35 million;700 LAMP trainees from

38 workshops; OSRC Web Portal (700 per day); I000 instruction kits;international open source organization interaction

• ERP : APTPMA (Textile Processing), PRGMEA (Ready Made Garments)

/PHMA (Hosiery), PAAPAM (Auto Parts), SIMAP (Surgical Instruments)

• Interaction with industry associations (PASHA, OPEN, APSENA, TIE,

ACCO, CSP, PCA, and ISPAK)

FACILITATION



40

STRATEGICFRAMEWORK

INTERNAL

Next Steps

• ISO Certification, ERP, ECM

• Have requested 280% Funding Increase amounting to USD 1.63 million

Target – 2010

Best management practices, automated, ISO 9001 and ISO 27001 certified.Market competitive salaries and 45 Additional positions



41

48%

55%59%

66% 67% 67% 67%

33% 33% 33% 33% 33% 33% 33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Year

P e r c e n t a g e G r o w t h

IT Export Revenue Growth Rate (%) IT Domestic Revenue Growth Rate (%)


GROWTH PERCENTAGE 2003-2010



42

IT REVENUE GROWTH

Domestic Revenue

Global Export Sales

Export Revenue (Estimated)

Export Revenue (State Bank)

Source: “Strategy for Increasing Exports of BPO” Bearing Point Report 2005

1,000

2,0003,000

4,000

5,000

6,000

7,0008,000

9,000

U S D

i n M i l l i o n s

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Fiscal Year



43

IT INDUSTRY PROJECTIONS

9,9244,9372,4561,222608Bandwidth in Mbps

78,22558,81644,22333,25025,000IT Graduates working in Domestic IT Firms

76,70946,02527,61516,56910,000IT Graduates working in the Export IT Firms

250,000177,262127,75674,72952,500Total HR working in IT industry

235,459178,046138,388110,31990,000

IT Graduates working in theEconomy

8,7815,9344,0603,1122,000Total IT Revenue in USD Millions

4,3813,2942,4761,8621,000Domestic Revenue in USD Millions

4,4002,6401,5841,2501,000Export Revenue Global in USD Millions

1,100660396239150Export Revenue in USD Millions

55033019812075Export Revenue (SBP) in USD Millions

09-1008-0907-0806-0705-06Categories



STRATEGICFRAMEWORK

VISION 2010

• Over ten billion dollars in annual turnover from several hundred million dollar services

companies, leading product companies, and ten additional FORTUNE 500 and GLOBAL 2000

development centers. • Internationally recognized as a leading IT destination• 800 IT companies in the country• 10 IT/Technology Parks nationwide providing 20 million square feet

• 230,000 IT graduates in the country• 250,000 IT and non-IT graduates employed by the IT Industry• USD 200 mil annual disbursement by VC Funds to the IT Industry• 10 GBS International Internet Traffic with 99.99% uptime• Over 300 ISO, CMM, ISO 27001, Six Sigma, OPM3, ITIL and certified companies• Effective regulation for Convergence Facilitation, IPR protection, data protection,• and prevention of electronic crimes and smooth regulatory approvals.

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