Published at: Dhaka Tribune, August 05, 2019
Bangladeshi software products are beginning to become brand names, as the industry after having grabbed the lion’s share of the domestic market is increasingly focusing on the huge global market opening liaison offices in different countries, including the USA and the UK.
“There are more than 25-30 Bangladeshi companies including REVE Systems, Tiger IT, DataSoft, Dohatec, eGeneration and Southtech which have already set up offices in India, Nepal, Bhutan, Malaysia, Japan, the UK, the US and various African countries,” BASIS President Syed Almas Kabir has told Dhaka Tribune.
Local software firms export to around 40 countries across the globe, making Bangladesh a major source of quality software products.
Around 250-300 local top software companies are trying their best to grab the whole of the country’s software market while they have also put their footprints in foreign markets, like the USA, Japan, India etc, informs Farhana A Rahman, vice-president of Bangladesh Association of Software and Information Services (BASIS).
According to BASIS, local software firms are growing fast with yearly export earnings hitting around $1billion through its IT services. It holds about 75% of Bangladesh’s software market and the rest 25% is held by foreign firms.
The country has nearly 3,000 IT and software firms catering to an estimated market size of Tk9,000 crore per annum, as per BASIS leaders. Of them, 1,200 companies who are members of association cater to around two-thirds of the market.
Highlighting the quality and expertise in the software sector, the BASIS president hopes that the local software firms will be dominating the whole of the local software market by the next five years.
Syed Almas Kabir claims that if the government brings the entire country under fibre optic cable coverage, internet will be available everywhere in the country, which will be a big boost to the software business.
“Many firms are getting involved in the business with new technologies like the Internet of Things (IoT), Artificial Intelligence and Block-chain. Demands for more services will increase day by day,” says Kabir.
“If the local universities modify their subjects and curriculum considering the importance of the 4th industrial revolution, they will be able to cater to new demands. Besides, private sector and other companies should involve and collaborate in this regard,” Kabir adds.
The government set a target of $5billion export from IT services and software and creating two million jobs in the sector by 2021.
The association is now looking to expand its outreach in potential markets, including Japan, the USA, the UK, Denmark and in African countries.
“We have already submitted a proposal to the government on market expansion for Bangladeshi software products. We want to create a Bangladesh desk in Japan. We will recruit some local people in this endeavour to promote our companies,” Kabir tells Dhaka Tribune.
Current scenario of software market
Bangladeshi software and IT-enabled services firms have been serving clients in more than forty countries in four continents.
The domestic market is also set for a robust growth due to rapid expansion of ICT-based citizen services and enhanced awareness for ICT-led productivity and efficiency growth in the private sector.
According to the ICT industry white paper, nearly half (47%) of the market is shared by software development firms, 34% by multi functional and ITES (Information Technology Enabled Services) companies, firms of BPO (Business Process Outsourcing) and e-commerce hold the rest 19% of the market share.
Locally about 50,00 IT experts are operating in the industry, mainly catering to the customized software development and maintenance segment of the market.
Sector people say that currently 57% software companies are involved in IT projects in garment sector. The rest are involved in hospitals, customer relationship management, banks and the government’s e-governance projects.
Currently local E-governance Solution software, which used to be imported, is dominating the local software market.
HR and payroll software is on high demand in the garment sector, says Monjurul Alam Mamun, CEO and managing director of Aplectrum Solutions Ltd.
“A total of 20 companies are using our products in the country while we are also trying to export the software to Egypt and Vietnam,” says Mamun.
Currently, government institutions and private institutions like hospitals, including Labaid and Square, are using the products of Aplectrum and their firm is also exporting abroad, he adds.
Chief technology officer of ATL Limited Md Kamruzzaman Murshed says: “We are now exporting our products to Pakistan, Thailand, Saudi Arabia and Dubai.”
“Besides, we supply our software products to nine local institutions including Sheikh Hasina National Institute of Burn and Plastic Surgery, Central Police Hospital and BSMMU (Bangabandhu Sheikh Mujib Medical University),” he adds.
Chief information officer of ATL Sayeed Ahmed Ali says prices of software products range between Tk 30 lakh and Tk5 crore.
A total of 22 software companies are now developing integrated business application and enterprise resources planning (ERP) software which used to be imported earlier, according to BASIS.
Government initiatives for software industry
The government in the current budget extended the tax holiday facility for software development and information technology-enabled services (ITES) up to 2024 to encourage investment in line with the government’s Digital Bangladesh vision.
“The current 10% cash incentive will attract investment from foreign investors,” says BASIS President Syed Almas Kabir.
Moreover, the government is also providing project equity facility for ICT start-ups, and also financial support to the mid and top level industries in the sector.
Global presence of Bangladeshi software
Bangladeshi software products are hugely popular in Japan, India and Europe, according to BASIS.
The BASIS president calls upon the software entrepreneurs for leading the transformation of Bangladesh from an importing nation to an exporting country.
Data Soft now exports IT services to countries like the Netherlands, Norway, Finland, England, Democratic Republic of Congo (DRC), the EU, the USA, and Saudi Arabia.
Business Analyst of Data Soft Systems Bangladesh Limited Muntasir Rahman says: “We are now working with partners from overseas markets (India, Nepal, Malaysia, Indonesia, Myanmar, Japan, Democratic Republic of the Congo, Saudi Arabia, Mozambique, Netherlands, Burkina Faso, Ghana, South Africa, EU Region, USA) for different products and services.
“We are in the process of extending our products to various South Asian markets,” he adds.
Another IT firm Reve Systems marketed its first antivirus software in 2017. Now it has started exporting to India and plans to reach Nepal, Tanzania, Kenya, Ukraine, Belarus and Moldova.
Other indigenous companies like Tiger IT has developed a voter registration system for Nepal.
Recently, Pathao, a start-up, launched ride-sharing services in the Nepalese capital of Kathmandu.
Moreover, the government agencies are the major client of the local software followed by public and private universities.
Software quality
Department of Computer Science and Engineering of Dhaka University Professor Md Mamun-or-Rashid says: “It was very hard to ensure the quality of the locally developed software because many of the products are faulty or infected with bugs.”
“Software quality typically depends on software domain, product type including effectiveness, satisfaction, safety and usability. But our entrepreneurs are doing good in this sector. We should support them technically and financially,” he states.
A modern software testing centre is being set up at IDB Bhaban in Dhaka. The testing centre aims to verify and validate software systems in government offices, to create awareness and elevate the software testing industry in the country and build resources to support desired growth in the software testing arena.
“It will help boost our software exports and will pave the way for the digital economy, although it does not yet work officially,” says Bangladesh Computer Samity President Shahid-ul-Munir.
Infrastructure and other challenges
While the software sector is growing explosively, there remains a number of challenges. BASIS President Syed Almas Kabir thinks that internet availability, lack of skilled human resources and infrastructure, country branding are some of the major challenges facing the sector.
The government is taking steps to set up a number of hi-tech parks across the country. In addition, it should focus on building multi-storey building in the capital.
BASIS Secretary Hasim Ahmed has told Dhaka Tribune: “When a graduate student initiates a start-up, they get 2% entrepreneur supper fund loan, but there is a problem like when they apply for the loan, the authorities want to see Tk10 lakh transaction. It is really impossible for a new entrepreneur. In other countries, governments extend financial and infrastructure supports to new entrepreneurs.”
“Moreover, we need country branding to represent the country in the international platform and sell products to global clients,” suggests BASIS President Syed Almas Kabir.
Local Clients of IT/ITES
The government is the largest client of local software products with 37% of the total software business coming from the public sector, followed by 14% from education, 9% from e-commerce, BPO and online services, 8% from financial institution, 7% point of sale, 6% from health services, and 5% coming from apparel sector, according to the data of BASIS.
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