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Study of the Software Industry Problems in Iran

Erfan Khaksar*, Alireza Khaksar

Iran University of Science and Technology, Student of Computer Engineering Department, Hengam Street, Resalat Square, Narmak, Tehran, Iran

Abstract: The aim of this paper is introduction software as an industry and study of its position in the country. Then examines the current state of software industry in Iran and finally suggested ways to improve its position. The global market for software without having new technology, new methods and software, trained workforce and innovation is not possible. The current problems of the software industry in Iran are studied in four section: demand, capital, human resources and technology. The use of free and open source software has been the venom for the software industry in Iran. In Iran it is wrongly thought that the idea of open source is equal to unexposed the code of program.

Keywords: software, industry, problems, Iran

Received November 23, 2014; Revised February 04, 2015; Accepted February 09, 2015

Citation: Erfan Khaksar, Alireza Khaksar, Study of the Software Industry Problems in Iran. American Journal of Systems and Software, 3 (1). 20-23. January 2015. doi:10.12691/ajss-3-1-3

1. Introduction

Industry and non-oil exports are among the countries’ strategies for developing and globalization. Nowadays, software is one of the industries that is paid special attention, and today it is considered as an important source of income in some countries, but this requires a compiled planning and clear vision to exploit this possibility.

In the past few years many countries in the world have stabilized their position in the global markets with a complied planning and different applications for their software production and export in different platforms.

For example, Ireland with a 10-year planning, was introduced as the first exporter of software in the world in 2012. India and Russia are the leading countries in the field of software export.

2. Material and Methods

All of the components and the factors of knowledge, business which support and facilitate the process of the production of computer software and services economically and based on market and customer needs, is called software industry.

The software is classified from different point of view. In this article we have two views of the ' complexity ' and ' the software layers [1,2].

2.1. The Classification of Softwares in aspect of Complexity

The software complexity factors are two groups:

a) Quantity

1-The number of persons necessary for the design and manufacture

2- The time required

3-Cost

4-The number of instruction necessary for program

b) Quality

1- High coefficient of confidence

2- Facility of use

3-Program features

2.2. The Classification of Softwares in aspect of Software Layers

In aspect of computer software, the software layers are divided into five groups:

1- Operating system softwares

2- Development of system capabilities softwares

3- Database softwares/data communications softwares

4- Interpreter/translator software

5- Application softwares /facilities softwares

The first, four layer, is called fundamental softwares that applications and a facilities softwares can be written by using them.

2.3. Methods

This article has studied the problems of the software industry in Iran in the quality way. In the first step, the review of article in this field has been done, then the stakeholders and key people involved in this category, including the Vice Chairman of the Union of exporters of software, the Research Center of parliament expert, the University professors and software experts were interviewed. After writing down the remarks, statements has been classified and the results of them were extracted. It should be noted in order to study the problems of software industry, the Microsoft company model was used.

3. Discussion and Results

The software as a software industry has features like:

•Large and dynamic market

•Free of the cost of mass production

•Tele collaboration (global team)

The Microsoft Company models for the software industry according to the Microsoft Company, the spinning of the wheel of the software industry needs four factors (Figure 1):

4 – Technology

The production of software is impossible if each of these four items are not available.

Figure 1. model of the software industry, according to the Microsoft company report

3.1. Study of the Current Problems of the Software Industry of Iran in the Framework of the Microsoft Company Model

The current problems of the software industry in Iran are studied in four section: demand, capital, human resources and technology. Software companies in Iran, are often formed in the category of small companies with a limited number of technical human resources and then the projects will change to a product and sell it to the public. It's often done without the need assessment on the market, so the product is produced without necessary standards. Now the exports in this field are done in two parts.

One part is purely software such as: textile industry, content management, accounting, and specific areas of training... and the other part is the combination of software and hardware, such as automatic embroidery system, time of absence and attendance... and these products are mainly issued. To several countries including Latin America, Europe, India, Pakistan, China, Ethiopia and Arab States of the Persian Gulf.

3.1.1. Demand

In order to the volume of the market (demand) and the amount of production (supply), the present software in the market are classified into six groups (Table 1):

-Production and support systemic software and internal software tools include: operating system, programming languages, databases, and tools for native and Persian maker tools produced inside of Iran.

-Provide and support softwares and foreign software packages

-Production and support applicable, industrial and telecommunicable softwares for internal customer

-Production and support internal applicable software packages

-Production and support applicable, industrial and telecommunicable softwares for foreign customers

This is a statistical sample of about 25 companies. One of the problems in field of making statistic in the soft-ware market is variety of price and investment needed for the products produced.

Table 1. supply and demand in the Iranian market of softwares [3]

In the second column of the table, the potential supply means the potential power of productive units, for implement of different projects based on existing human resources and manpower required for the project to be carried out. In the last column as well as the actual market demand is simply the number of classified projects that informatics companies have possessed. In consider to the given table. It can be said that active units have used just 50% of their potential.

3.1.2. Capital

One of the reasons that caused the active Informatics companies do not used their potential for production and less thinking of expanding their production units, is lack of the capital resource. Lack of support of domestic banks, the financial status of the companies, not being known the Iranian export software market for international markets and lack of the exporting of the domestic companies are the problems of this factor [8]. Lack of support the copyright law is another problem that Iranian software export market is facing. In fact, not observing this rule in the country caused a lot of original software duplicated quickly, and thus they are soled lower than the original price on the market. In the following of this action, the domestic software manufacturers have to sell their products with a very low price in order to presence in the market. Obviously this situation is not at all in the benefit of domestic producers.

3.1.3. Human Resources

University can provide the major part of manpower staffing software industry, but it is not feasible due to being this industry far from the University. The common Educational practices in many training centers and universities, do not meet the today needs of software production centers. In other words, the software industry specialists should have a vast field of professional knowledge, but being expert in a specific field of this industry. This is why the number of programmers who are available inside the country are more than the capacity of the country's software industry, but this industry has always been suffering the absence of the experienced human resource [6].

The total number of Informatics and related branches graduated individuals to 2014 has been approximately 25,000.

Figure 2. Policy proposals for improving the software industry in Iran [4,5] (The proposed model for Iran)

3.1.4. Technology

The problems in this field:

Some areas of achievement of the industry are in microelectronics, network security and telecommunications. However, the technology levels are limited primarily to business applications that are quite particular to the needs of domestic Iranian business. Applications in some cases are still running in DOS, reflecting the state of technological maturity. There is a widespread weakness in the management of software projects. Even though technical skills are high, the weakness of project management skills has led to the failure of large projects. The use of un-licensed (pirated) software provides the capability for the industry due to zero cost and widespread availability of the tools. Software companies may not be able to afford to buy these tools and applications legitimately. On the other hand, without legitimate purchase, there is then lack of technical support. An example was given to us of how two months were spent rectifying a problem on a pirated version of MySQL which could have been solved much quicker with access to the expertise which a software license would provide [7].

-The lack of participation in international exhibitions, the lack of deployment of commercial staffs to create a market outside the country and the lack of acceptance of external staff and familiarizing them with the domestic production of software company

-The Existence of 80% of software companies in Tehran. Most of the software companies are based in Tehran (IT Park) and one on the free zone on Kish Island [8].

- About 70% of software companies are run as private joint stock.

- Non-observance of the country's software market external intellectual is one of the serious problems of the software industry in Iran.

- The level of innovation in the software industry in Iran is lower than the global medium. There is at present very little direct collaboration between the software companies who operate independently and thus there are weak interfirm competitive pressure and very little pressure to innovate or differentiate [9].

- Lack of existence of Technical support for software platform in Iran

- Access to a variety of software tech and tools is easily and cheaply possible.

- The move towards open source software in the country are being feasible

-Being heterogeneous and disproportionate growth of the software market and based on the government demand

- The software market of Iran has a little variety. Taking a Look at the process of market shows that in some regions, there are purely production (such as financial software package) whereas in many other cases, there is not absolutely a specific software product.

- Lack of standards and software confirming licenses. Investigations of the licenses of practical software products, such as Windows, indicate that the usage of this software in the sanctioned countries is forbidden and the user does not receive any security and practical support [10].

- The weakness of attendance in global markets that leads to limitation in competition with foreign products,

Some of the modern technology and the key procedures regulating the software industry as following can be outlined:

• Business Process Management (BPM)

• Business Activity Monitoring (BAM)

• Complex Event Processing (CEP)

• Service Oriented Architecture (SOA)

• Event Driven Architecture (EDA)

• Software as a service (Saas)

• Component-based Development

• Open-source movement

The proposed strategies to improve demand based on the software industry in Iran

About how government policies to improve the situation of software industry in Iran has been the proposal. This proposed policy is shown in Figure 2.

At last there are another factors besides of Microsoft company models that influence on those four factors like cultural, political challenges and the dominance of the clergy in all political decision. One of these decisions led to lack of sufficient infrastructures such as internet network for offering network-based software.

Additionally, skepticism and mistrust may hamper cross fertilization of ideas and there is some evidence for this in the lack of collaboration between indigenous software companies which may impede joint ventures with foreign companies. The other factor is sanction and its challenges.

The sanctions against Iran can be addressed from different aspects in relation to software industry. Seizing supports of the software, especially in the case of key and infrastructural software, such as operating system, can lead to systems breakdown in the country. Limitations in accessing specialized software in the area of modern technologies can pose problems for the advancement of technology [9].

Finally we can consider to management of these challenges including lack of a single administrator in software industry and presence of several managers with different and sometime opposing views.

4. Conclusion

Supply of the software without the existence of the world market for it is not economical. The global market for software without having new technology, new methods and software, trained workforce and innovation is not possible. The world market affect even local markets. When the external software is cheaper and more efficient than the internal one, there will not be any place for presenting internal product.

The only hope of internal companies was the Persian language, But it now are also gradually being captured by a standardizing Persian language and entering it in Unicode. A clear example of this claiming is the superiority of software Editor (word) Persian of Macrosoft Company than the Persian ones. Offering to join the Iranian individuals and communities in, open source software movements and the intellectual and financial support of the government can solve a lot of the current problems of this industries. It can be identified a number of short and medium term tactics involving state intervention that could be relevant to Iran. These are currently very limited but some pertinent examples are:

• Subsidized marketing and market research

• Providing grants for overseas expansion

• Founding and effective trade association

• Access to cheap capital

• Training

• Research and development improvement

• Encouraging cooperation between the software companies especially by opening up positive export experiences to the industry

• Linking up with expatriates.

References

[1]   | High Council of Informatics, Investigation of the software's, book, 1994.
[2]   | High Council of Informatics, Forum Software Problems, book, 1997.
[3]   | www.sanaray.com.
[4]   | www.iranict.com.
[5]   | www.irica.com.
[6]   | www.softestan.com.
[7]   | Nicholson, N. & Sahay, S., 2003, Building Iran's Software Industry: An Assessment of Plans and Prospects Using the Software Export Success Model, Institute for Development Policy and Management, University of Manchester, Precinct Centre, Manchester, M13 9GH, UK.
[8]   | Nicholson, B., 2003, building Iran's Software Industry: An Assessment of Plans and Prospects, EJISDC, 13, 6, 1-9.
[9]   | The Role of Open Source Software in Development of Software Industry in developing Countries with Weak Intellectual property rights: the Case Study of Iran local Operating System.
[10]   | Research Institute for ICT, 2011, Analysis of internal and external issues and risks associated with the local operating system (In Persian).