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Pakistan's information technology industry is quite young. It is in very early stages of development compared to the much older and bigger Indian IT industry, which had a significant headstart of at least a decade over Pakistan. During the lost decade of the 1990s under Bhutto and Sharif governments, Pakistani economy stagnated and its IT industry did not make any headway. However, the industry has grown at 40% CAGR during the 2001-2007, and it is estimated at $2.8 billion as of last year, with about half of it coming from exports. This pales in comparison to over $5 billion revenue a year reported by India's Tata Consulting alone.

Here's some data on Pakistan's IT industry:

"The State Bank of Pakistan for 2007-08 reports the export figures of software and Information Technology-enabled services to be US$169 million which shows a consistent annual growth. State Bank of Pakistan adopted BPM 5 reporting system to report the IT exports revenue, which restricted the export figures to US$169 million only in 2007-08. In India, the Reserve Bank of India follows the BPM 6 (also called MSITS) Reporting System, which raises its exports to billions of US dollars. BPM 6 includes sales to multinationals, earning of overseas offices & salaries of non-immigrant overseas workers to export revenue. Using the MSITS Reporting System, Pakistan IT Industry exports are estimated at US$ 1.4 billion while the industry size is estimated at US$ 2.8 billion. It is significant to note that Pakistan IT exports growth in each of the last few years has been more than 40%."

According to a report by the Pakistan Software Export Board (PSEB), the top five companies that have contributed the most to the IT sector are Netsol Technologies(NASDAQ: NTWK), Ovex Technologies, TRG Private Ltd, Systems Private Ltd, and Elixir Technologies.

The revenue per employee for the top Indian IT firms of Wipro, Infosys and TCS ranges between $40,000 and $50,000 per employee per year...about $20 t0 $25 per hour per employee, according to Gartner. The Indian revenue per employee is quite competitive relative to the US firms IBM Global Services, EDS, ans Accenture whose revenue per employee exceeds $150,000 per year, about $75 per hour. In comparison, the average figure of $28000 per employee per year (or $14 an hour) is extremely competitive for Pakistan's IT industry average. Probably the higher-end firms make more while others make less.

Pakistani universities produce almost 1.2 million skilled graduates annually. The Musharraf government announced a $1 billion spending plan over the next decade to build 6 additional state-of-the-art science and engineering universities. If the current government follows through on it, then the scheme would be overseen by the Higher Education Commission for completion in a few years time.

About 10,000 of the current 1.2 million graduates are engineers with 4-year degrees. In addition, Pakistan also produces at least 25,000 polytechnic inst graduates with three year diplomas (according to recent news in the Nation newspaper) who have less than 4 years of college.

A number of reports inflate the number of engineering graduates in India, as these numbers includes both 4 years and 2-3 years degrees. While it is claimed that India graduates over 200, 000 engineers a year, a Duke study concluded that half of these are 2 or 3-year degrees.

So, for apples to apples comparison, the number of India's engineering graduates is closer to the US's 70,000 engineering grads. And of course, the quality of US graduates is much much higher because they graduate from some of the best schools in the world. Other than about 5000 grads from IITs , the rest of Indian grads are from second and third tier schools that bear no comparison to engineering schools in the developed world in terms of quality. The cost advantage that India offers will still favor a continuing growth based on outsourcing of business and engineering services from the developed world.

Currently, Pakistan is struggling with a powerful insurgency and a stagnant economy that is taking a heavy toll on the nation. If, however, the political and military leadership succeed in creating a semblance of peace and stability in the nation of 170 million, then there can be an expectation of a bright future ahead for the IT industry in particular, and an innovation-based knowledge economy in general.

Related Links:

Haq's Musings

Education in Pakistan

Musharraf's Legacy

Quality of Higher Education in India, Pakistan

Pakistan's IT Industry Takes Off

Pakistan Launches UAV Production Line

Pakistan's Defense Industry Going High-Tech

Pakistan's Industrial Sector

Pakistan's Financial Services Sector

Auto Sector in India and Pakistan

Pakistan Textile Industry Woes

Pakistan Software Houses Association

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Comment by Riaz Haq on April 27, 2011 at 8:42am
Here's an Express Tribune report about Pakistan's IT export potential:

KARACHI: Pakistan could play host to an extreme growth spurt in the information technology industry in the next 10 years, according to a study quoted by IBM’s Country General Manager Hamayun Bashir.

Speaking at a ceremony held to celebrate a century of IBM’s existence on Thursday, Bashir informed Pakistan may have up to one million jobs in the information technology industry by 2020.

“IBA students are working on a study with assistance from the Overseas Investors Chamber of Commerce and Industry’s IT committee. The report, to be published in a few months, underlines that by 2020, Pakistan can easily have a million jobs and exports of $10 billion in the IT industry,” he asserted.

He expressed hope that the current figure of 0.15 million jobs in the industry could easily be increased. “I see a bright future for our industry, which is producing top-quality software,” said Bashir.

“We are meeting the IT ministry on behalf of Pasha – the chamber for IT in the country – to get officials to refocus on the sector,” said Bashir.

Commenting on the resignation of former IT minister Babar Awan, he said, “The minister was an important, focal point of the industry.”

“I have heard that the United States Agency for International Development (USAID) is providing funds and a data centre will be created in Islamabad,” he said while talking about the e-government programme.

Replying to a complaint that large organisations in the country, such as banks, did not give projects to local firms, he said that there were up to 60 large companies in Pakistan which needed tried and tested software.

He, however, explained that there were at least 10,000 small companies that would not be able to afford services of large international firms and would have to adopt local software solutions, which would help the economy grow.
Comment by Riaz Haq on January 6, 2012 at 11:28am

Here's an overview Pakistan IT industry in 2011, as published in Express Tribune:

The year 2011 saw a number of positive developments in Pakistan’s Information and Technology (IT) industry, from app development to global recognition and a series of awards.

HIGHLIGHTS

Pakistan Fast Growth 25

In a first for the IT industry, the Pakistan Fast Growth 25, a ranking of fast growth companies, listed 10 IT companies on its index. The Pakistan Fast Growth 25 is a program of the AllWorld Network in partnership with Harvard Business School Professor Michael Porter, launched in collaboration with JS Bank Limited.

Official Game for ICC 2011 Cricket World Cup

Local development company, Mindstorm Studios developed the official game for the ICC 2011 Cricket World Cup.The browser-based 3D game, “Cricket Power” features all 14 official teams along with players, stadiums and kits.

Pak-India ICT Firms to enhance trade up to $5b

Pakistani and Indian IT committees held bilateral talks separately on both sides of borders in March – aimed at enhancing trade ties in the field of IT. In the talks, both countries agreed to boost mutual trade in the IT sector by $5 billion through joint-ventures, investment and exchange of expertise.

Netsol deal in India

Local ICT company Netsol engaged with Indian companies to provide applications for financial services. It signed an agreement to sell its product “Netsol Financial Suite” to a global auto leasing company operating in India.

Google grants to social innovators

In another first for Pakistan, Google has granted seed money to a local association for social causes.

Google granted $250,000 to Pakistan Software Houses Association that launched Pasha Fund for distributing the amount to talented innovators. So far four individuals were selected to receive funds.

Pepper.pk mobile apps triumph

Local app developers, Pepper.pk hit the number one spot in Blackberry App World. Their application, LED Notifier Pro, has been immensely popular since its launch and ranked among the best selling Blackberry applications in the world. Additionally, their app, Photo Editor for BlackBerry has occupied the number one rank on App World twice in the past three months.

TenPearls wins Nokia contest twice

Pakistani IT firm TenPearls marked another record, beating out 800 entrants to bag second position and received a $50,000 cash prize at ‘Nokia & AT&T Innovators 2011 Contest’.

This is the second award TenPearls has received for its mobile app named “Animal 101” within a year. Their first award was first prize for their app uTrack mobile earlier in 2011 for the same platform in Pakistan.

Pakistan Shines at APICTA

Pakistan was declared the winner of two gold and five silver awards at the 11th annual Asia Pacific ICT Awards (APICTA) 2011 in Pattaya, Thailand. Pakistani firms secured two gold awards in the e-health and e-logistics and SCM categories and five silvers in the communication, financial, security, e-inclusion and e-community and e-government categories.

Pakistan’s team comprised of 18 products which competed against 162 different products from the Asia Pacific region.

http://tribune.com.pk/story/317436/2011-pakistan-it-industrys-golde...

Comment by Riaz Haq on July 24, 2012 at 9:58pm

Here's an ET story on the man who drafted Pakistan first IT policy:

The man who drafted Pakistan’s first IT policy, Dr S M Junaid Zaidi, has been awarded an honorary Doctor of Science degree by Lancaster University in the United Kingdom, said a press release issued on Tuesday.

Dr Zaidi, awarded the prestigious Sitara-i-Imtiaz in 2007, is the founding rector of the Comsats Institute of Information Technology (CIIT), which was chartered by the government in 2000 and has grown to have campuses in seven cities, over 20,000 students and 2,500 faculty members.

Dr Zaidi’s professional experience spans 36 years, said the press release. His expertise ranges from devising Build-Operate-Transfer mechanisms to Technology Commercialization and Utilization, Project Planning & Management, Industrial Information Networking, Operations Research, System Designing, Technology Policy Analysis, Technology Monitoring & Forecasting and Technology Transfer.

He holds a doctorate in Optimisation of Algorithms on Networking from the University of Birmingham in England. Before CIIT, Dr Zaidi served in many distinguished high profile positions at the United Nations (UN) and in the Government of Pakistan, said the press release.

In his time with the UN, Dr Zaidi served as an adviser to the Malaysian government and later at the UN ESCAP Asia and Pacific Centre, where he was part of advisory missions to Fiji, Ghana, Indonesia, Malaysia, Nepal, Philippines, Sri Lanka, Tanzania, Thailand and Vietnam as a UN expert on IT and helped them establish their technology transfer and industrial technology information systems.

He also wrote two concept papers for the government and Comsats, which led to the establishment of the Virtual University and Comsats Internet Services.

http://tribune.com.pk/story/412598/for-man-who-drafted-pakistans-fi...

Comment by Riaz Haq on November 1, 2012 at 10:42am

Here's an IBM press release in Sacramento Bee on its contract for mobile banking technology in Pakistan:

KARACHI, Pakistan, Nov. 1, 2012 /PRNewswire/ -- IBM (NYSE: IBM) today announced that Monet, one of Pakistan's leading mobile-commerce providers, has selected a customized IBM cloud-based solution that will enable the company to enhance service efficiency and expand its presence across the country.

Launched in 2012, Monet provides banks, mobile network operators and branchless banking agents in Pakistan with a technology platform that offers end-users a simple interface through which they can access a wide range of financial services on their mobile phones.

Mobile banking and financial services are expected to grow significantly in Pakistan in the coming years. Increased demand for affordable banking, a lack of traditional banking infrastructure and an aggressive branchless banking mandate from the State Bank of Pakistan (SBP) has driven quick uptake of mobile banking in the country.

With a population of 180 million, a mobile phone penetration of more than 70% and a banked ratio of only 22%, Pakistan offers a large potential market for Mobile Financial Services (MFS). According to an SBP recent branchless banking newsletter, the number of mobile banking accounts was at 1.45 million, showing a growth of 37% during the second quarter of 2012, with new level zero account openings registering a jump of 370%. The existing accounts activity level also improved substantially during the quarter as the number of active accounts increased by 66%.1

To capture this opportunity, Monet chose IBM to develop a unique IT environment allowing the company to offer reliable and efficient services to a growing customer base throughout the country.

"Mobile financial services have reached an inflection point where they have moved from niche to mainstream," said Ali Abbas Sikander, CEO, Monet. "We believe mobile can potentially become the strongest channel for the delivery of financial services. IBM's cloud solution will allow us to reach our clients easily, giving us access to a wider base of customers and ultimately extending the reach of financial services in the country."

IBM will develop a specialized solution based on IBM SmartCloud technology, to deploy Monet's mobile banking applications from Fundamo, a leading mobile financial services platform provider and an IBM partner. The private cloud will allow Monet to save on initial investments in IT and help the company offer more efficient services at a reduced cost.

IBM SmartCloud infrastructure is based on IBM servers, storage and software optimized to meet growing mobile demand. In addition, Monet has outsourced the entire networking, security, cryptographic solutions, and disaster recovery to IBM, in order to focus on its core business.

"Mobile and Cloud are a powerful combination to provide sustainable and affordable banking services to millions of people in Pakistan," said Adnan Siddiqui, CGM, IBM Pakistan and Afghanistan. "IBM has global experience in the financial services sector and a thorough understanding of the local market, and our engagement with Monet is expected to benefit banking customers across the country."..

Read more here: http://www.sacbee.com/2012/11/01/4953392/leading-pakistan-mobile-ba...

http://www.monet-online.com/

Comment by Riaz Haq on November 21, 2012 at 10:36pm

Here's an ET report on tech market growth in Pakistan:

“Broadband penetration and mobile telidensity is creating a bandwidth shortage in Pakistan, which will widen manifold as third generation mobile technology rolls out. That’s where we see the opportunity, as businesses will need to optimise their hardware, storage and software,” says Oracle Corporation’s Vice President of ASEAN Systems Sales Ron Goh.

Goh, in an interview with journalists, said that current data centre operations are unsustainable and often fail to meet the needs of growing businesses. “By optimising existing data centres,” he said, “organisations can significantly increase IT efficiency along with system performance, availability and security. By doing this, they can reduce their spending on systems operations and integration that eat up around 80% of the IT budget,” he added.

Through Data Centre Optimisation (DCO), businesses can lower operation costs by 75%, according to Goh. “DCO is not a machine or software, but a combination of storage, servers, operating systems, engineered systems and software to simplify the IT infrastructure,” he explained.

“Pakistan is a fast growing country where demand for technology is increasing,” Goh observed, “even businesses that have Data Centre Optimisation technology want to upgrade the same to global standards.”

Explaining the need for upgrading database storage infrastructure, “These new challenges can’t be met with application silos [storage towers] running on aging hardware technologies,” he said.

Giving an example, Goh said organisations which have implemented more efficient technologies were not only able to lower operating costs, but also drove better productivity, which ultimately gives the organisation a quantifiable return on investment and a real competitive advantage within the industry.

Operating in Pakistan since 1997, Oracle’s clientele has grown to 1,100 customers.Through its local partners, the database giant helps businesses adopt integrated information technology infrastructures for higher work efficiency.

http://tribune.com.pk/story/469356/oracle-sees-growth-in-pakistani-...

Comment by Riaz Haq on December 30, 2012 at 9:47am

Here's a News report on Teradata business operations in Pakistan:

KARACHI: Stephen Brobst, Chief Technology Officer of Teradata, is impressed with talent base in Pakistan. In his recent visit to Pakistan, he said this was the only reason prompting the company to keep its operational base in Pakistan while extending its data warehousing services across Afghanistan, Bangladesh, and Gulf Cooperation Council. These services are essential for organisations that keep interacting with a number of customers and their queries on daily basis.

Data warehousing provides an enormous repository to not only store but also compare present and historical records to facilitate corporate decision making. A PhD from Massachusetts Institute of Technology and a member of Barack Obama’s ‘President’s Innovation and Technology Advisory Committee’, he looked quite eager to educate organisations—the targets are financial and telecom sectors—in Pakistan about the benefits of utilising data warehousing (a next step to enterprise resource planning) prior to devise pricing plan, marketing strategies, or funding decisions during an interview with The News. Following are the excerpts.

Why enterprise data warehousing is important?

All the sectors can take advantage of data warehousing. Health sector can utilise the technology to upgrade quality of services by decreasing costs. The Obama administration has asked the committee to formulate solutions to keep track on a number of patients, their diseases, health history, etc. On the basis of these data analytics, hospitals can reduce discrepancies existing in the data. Data warehousing enables, for example, hospitals to maintain health records and patients to keep away from frequent visitations to doctors

Given the low fund allocation to health sector in Pakistan, is data warehousing practical?

I can’t comment on the government’s funding. However, if the government of Pakistan asks us to work on the data, we are ready to extend our services.

Which organisations are Teradata catering to in Pakistan?

Pakistan International Airlines, Telenor Pakistan, and Nadra are few names that our company has served. Every organisation that deals with tonnes of data to perform its day-to-day jobs can benefit from our data warehousing (which transforms data into relevant information to formulate best pricing plan for instance). All top- and mid-tier companies and institutes can use our integrated data warehousing, data analytics, and business applications. ..

http://www.thenews.com.pk/Todays-News-3-151306-Teradata-to-keep-reg...

Comment by Riaz Haq on January 28, 2013 at 5:45pm

Here's an ET Op Ed on IT developments anticipated in 2012:

2013 will see the adoption of Cloud services continue to grow in Pakistan. Increasingly, customers – both individuals and companies – will seek to store their data ‘in the Cloud’ as opposed to physical data servers, as well as avail of software services on a ‘rental’ basis. Large MNCs, banks and other financial services companies have already moved into this domain some time ago. Looking forward, educational institutions are likely to take the next step, as digitisation of educational content takes place. Some progressive institutions have already adopted softwares such as Moodle and Learning Management Systems and incorporated their curriculum on them, thereby preparing their scholars for a digital future.
-------------
Pakistan has over 100 million cellular subscribers; reportedly, around 10% of these use smart phones. Data usage has grown substantially, and there are an estimated 10 million mobile data users in Pakistan. However, it is important to note that 3G has been overhyped and may actually fall short of expectations, as it has in India.

Almost a year into its launch in India, only 2% of subscribers have opted for 3G services. 3G will require ubiquitous coverage for consumers to be satisfied with the services. WiMAX can play an important role here by offering a solution for data backhauling for telecom operators. Wateen has already deployed around 250 WiFi hotspots in Karachi, Lahore and Islamabad, and is ideally positioned to fulfill the data needs for mobile operators.
---------------
Branchless banking and m-commerce services will be the biggest innovations for the year. New entrants (Zong and Askari Bank, and Mobilink and Waseela) have recently launched their offerings and promise to improve the take-up of this service. New payment solutions will also be a first in the country, as smart phones enable swipe magnetic card readers and pioneering companies such as Inov8 Ltd begin to deliver on their potential for the consumer market. Smart phone apps will also be big.
-----------
In Pakistan, some companies have already started bringing Android-based devices for as low as Rs5,000. Indians have recently announced that they will be developing the world’s cheapest tablet for $35. These devices will play an exceptional role in transforming societies. The consumerisation of IT has already started taking place in Pakistan. Companies like QMobile will play an important role in the proliferation of low-cost handheld devices. This, in turn, will impact the use of mobile internet and broadband, open WiFi and WiMAX, as well as Cloud services, as consumers look to access data and media on their handheld devices.

http://tribune.com.pk/story/499410/notes-from-the-world-of-it-2013-...

Comment by Riaz Haq on March 5, 2013 at 6:44pm

Here's ET on Freelancer.com launch in Pakistan:

KARACHI: With a self-employment boom and double-digit growth in internet subscriptions, Pakistan has become the third highest user of freelancer.com, the world’s biggest online marketplace in terms of user base, it was revealed at the launch of the website’s local version on Tuesday.

“Pakistan is the third largest country using the website [freelancer.com], closely following India and the United States,” said Adam Byrnes, International Director at freelancer who joined the ceremony through a video call from the company’s headquarters in Sydney, Australia.

“Pakistani freelancers have already earned more than $13 million from the platform,” he said.

Freelancer’s decision to launch the local website comes on the back of strong growth in subscriptions by Pakistani freelancers. The website presently has 240,000 Pakistani users.

According to a report prepared by freelancer, self-employed Pakistanis surged from 33.3% to 39.9% between 2009 and 2012. The report attributes this surge in subscriptions to the rise in internet use in Pakistan, which saw double-digit growth in the past five years. In terms of internet growth, Pakistan stands second in the Saarc region, the report said.

“I am excited about the launch of freelancer.pk because of the potential Pakistan represents for the platform,” said Byrnes who is responsible for expanding freelancer across the world. “This [Pakistan] is a high value market for employers abroad.”

With more than 30 million internet users, five million plus broadband users and a population approaching 200 million, according to Byrnes, it makes sense to have a presence in Pakistan.

“Going forward, we want to provide self-employment for a billion people, a significant portion of that is going to come from Pakistan,” he said.

Freelancer just hit seven million users globally and 4.2 million projects were facilitated by the website, Muhammad Umer Farooq, company director responsible for managing the freelancer website told The Express Tribune on the sidelines of the event.

“An amount of $150 million has been spent so far by users of freelancer.com,” he said, adding they make money by charging commission from both the employers and the freelancers who get projects.

Interestingly, Farooq pointed out, it is not only foreigners hiring Pakistani freelancers, but Pakistani companies are also giving contracts to Pakistani freelancers registered on the website. United States is the top country awarding 38% of total projects on freelancer while Pakistan stands fifth for it awards 4% of the projects.

The idea is to enable rupee transactions for Pakistani members for which the company is in talks with local banks, both Farooq and Byrnes said. “Secondly, we are soon going to have an Urdu version of the website,” Farooq said.

IT and graphic designing (logo design) are the top two categories at freelancer. Freelancers can bid for the projects posted by employers through a simple method, he said. Given that it is one of the top countries on the website, Pakistani freelancers can benefit from exposure to the international job markets – the UK, North America, Australia and Canada.

http://tribune.com.pk/story/516239/pakistan-3rd-highest-user-of-fre...

http://www.freelancer.com/work/paid-freelance-projects-pakistan/

Comment by Riaz Haq on November 19, 2013 at 4:47pm

India even violates the BPM6. BPM6 allows the salaries of first year of migrant workers to be included in a country's BOP. India continuously and cumulatively adds all the earnings of its migrants to US in its software exports. So if 50,000 Indians migrate on H1B visas each year, and they each earn $50,000 a year, thats a $2.5 billion addition to their exports each year. Cumulatively over 10 years, this would be $25 billion in exports year after year and growing...This is a clear violation of BPM rules. A 2005 US GAO study noted that US Imports of software from India were around $400 million in 2004 or so. While India at that time was reporting exports of $8 billion to US. That's a 20 times difference. I don't think following India is the way to go. India's software exports are extremely inflated. We should collect quality and factual data and consistently report what is right. The problem with us is that we don't even do that. 

http://www.gao.gov/new.items/d06116.pdf

Comment by Riaz Haq on November 28, 2013 at 10:34am

Here's Hindu BusinessLine report on cloud computing apps in Pakistan:

Emerging markets such as Pakistan, Vietnam, the Philippines and Malaysia are adopting cloud-based applications at a faster rate than India, according to Doug Hughes, Vice-President, Product Management (JAPAC), Application Development, Oracle, the $35-billion US-based IT company.

In the last few years, India has moved to a dominant market from an emerging market. However, countries such as Pakistan and Malaysia are challenging India by deploying cloud rapidly. Starting with a low base, cloud-based application gives them the flexibility not to invest in hardware or software but to rent them on a monthly basis, he told Business Line.

However, adoption of cloud-based applications in India is faster than in China, he said without giving any data.

While small- and medium-size Indian companies are embracing cloud, there is hesitancy among large companies on security concerns. Bridging the gap between conventional cloud solutions and traditional company applications is emerging as a growing trend across segments, he said.

Managing consulting company Zinnov said cloud computing market in India is expected to reach $4.5 billion by 2015 with SMEs driving the growth.

The bigger the company, the bigger the decision making team. New customers are willing to consider cloud, but not the old ones. “We need to address too many questions raised by big companies especially on security. We need to find within big businesses a few champions who truly believe on cloud. For small business I do not need as they are the champions,” said Hughes. Oracle offers applications in a public, private or hybrid cloud, he said.

“With a large customer we start the discussion with the success in Australia. They will listen to it but say show me somebody who has done here. If it is not done here, it does not exist. I cannot say why clients here do not feel ready. The challenge is how to make them comfortable with cloud,” he said.

Companies need not deploy the entire suite of cloud-based solutions but pick up a HR or supply chain management application. Oracle is not going behind customers to change the entire spectrum of customer base from the very large company to the smallest – consider cloud as a solution, he said.

http://www.thehindubusinessline.com/industry-and-economy/info-tech/...

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