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Mobile applications: A test of ap(p)titude

Published in The Express Tribune, Sunday Magazine, November 9th, 2014.

Pakistan’s mobile applications industry driven by profits but lacks innovation.

With the global mobile applications (apps) market expected to be worth $25 billion by 2015 — according to a report published by MarketsandMarkets, a global market research and consulting company — everyone, from independent developers and software houses to telecommunication (telecoms) giants, is hard at work to secure their share of the fully-baked pie.

Amid growing demand and increasing competition, many are chasing high-margin outsourcing contracts in developing countries such Pakistan. With an abundance of skilled but cheap labour to offer, the country is rapidly emerging as one of the leading IT outsourcing destinations of the world.

Although mobile apps have been around since the late 90s, the increasing penetration of smartphones in the country — nearly seven to eight million smartphones according to a recent research conducted by a local telecom for its marketing strategy — has made their presence felt more deeply. “The number of smartphones has exceeded the number of computers in the country and this change has come about in the past five years,” says Asad Memon, director operations at Creative Chaos, a high-end custom software development company in Karachi with over 14 years of experience.

It is also the burgeoning utility of smartphones — surpassing that of laptops — which has accounted for the explosive growth of mobile apps. For example, the smartphone’s additional features, such as the orientation sensor (built-in compass) and cell phone triangulation (which collects data to trace the approximate location of a cell phone), assist most apps, including Google maps, to do ingenious things. “The utility of these apps has started making a lot of sense to people,” he highlights, adding that even niche brands have capitalised on the feature to directly reach out to target audiences by advertising through mobile apps. As a result, it has attracted more developers into the technology ecosystem to meet the growing demand.

Asad Memon, director operations at Creative Chaos, traces the trajectory of the mobile apps industry. PHOTO: ARIF SOOMRO

A popular outsourcing destination

When it comes to the global market, Pakistan plays its part as a mobile app developer. “Gora sochta hai, desi karta hai,” says Memon, summarising how foreign clients conceptualise the app and leave Pakistani developers to simply follow directions. Since the average rate charged by an iPhone app developer in the US ranges between $50 and $60 per hour, or more, depending on the brand and the complexity of the app, a cheaper solution is to outsource it to countries that quote the lowest price. Despite India being a much cheaper alternative, their issues with quality-control make Pakistan the next best alternative. “What sets Pakistan apart is the costing and the relationship of trust that has been established by delivering quality apps on time, depending on the company [developing the app],” says Memon. A basic app developed by a local software house can cost anywhere between Rs400,000 to Rs10 million, while the more sophisticated ones can go up to Rs20 million, depending on the company’s profile. Time difference is an additional advantage for Pakistan. “By the time we wake up, we are ready to incorporate changes based on the feedback we get,” he says. In certain cases, a team of 140 developers is dedicated to look after a single foreign client.

Senior app developers at Creative Chaos. PHOTO: ARIF SOOMRO

Pakistan develops a wide range of apps, including everything from the most-used messaging apps to social networking, games, entertainment, business and finance, navigation and utility apps, such as budgeting and data backing. In addition to software houses, an active community of mostly self-taught freelance app developers is also bidding for projects listed on global online platforms, such as oDesk, Elance, Guru and Freelancer. Many have even made a fortune in the process, including the Karachi-based coder Muhammad Harris, who collaborated with a US designer to develop a WordPress theme called Avada after kick-starting his career as a freelancer online. The duo has today accumulated over a million US dollars through sales of their theme. “But [most] Pakistani freelancers are not as dedicated as their counterparts from other countries,” says Sikandar Saeed, an active online freelancer. “They make Rs100,000 from a single project and sit idle for a month or two… If they start planning, their earnings would multiply,” he says, adding that it takes nearly 15 to 20 days to make a ‘good’ app, which includes five days for testing. Similar to software houses, however, freelancers too must follow the client’s strict directives and deliver the app on time to be rehired for future projects.

The local landscape

Since local resources are being used to meet the demands of foreign clients, innovation at home is sparse and sporadic. In an effort to fill the void, telecom companies, such as Zong and Telenor, have stepped forward to uncover local talent and to spur app-making for the local market. After receiving an overwhelming response with 480 registrations, Telenor’s Apportunity contest is now in its fourth consecutive year. “When we went from Edge to 3G, we saw that app-making can be expanded upon and new avenues for local developers can be created,” says Farooq Niaz, former manager corporate communications for Telenor. “When you have high-speed internet, you would like to use apps,” he adds. This comes as no surprise, as better apps will automatically translate into a higher demand for their newly-acquired, costly 3G technology. At the 2014 Apportunity awards ceremony in Karachi last month, app developers converged from different cities to discuss their concepts — from a query app for cooks to a rip-off of 9GAG, where memes can be uploaded — and collect their prizes. The first prize went to Immad Imtiaz and his team for designing a utility app that acts as a hearing aid when the device is connected to a Bluetooth or headphones. “My friend (with a hearing disability) was the inspiration behind this app, and he was the basic benefactor as well. In order to create an app you need to have a test subject, so we tested the app on him and then went to a Peshawar hospital that treats hearing loss where we tested it on a 100 patients,” he says, adding that the app can save people from spending $6,000 (approximately Rs616,500) on a hearing aid in the US. But while some have taken initiative and attempted to solve a problem, many have taken the easy route and replicated existing global apps that may not necessarily resonate with local consumers.

An increasing number of women can be seen working at Creative Chaos. PHOTO: ARIF SOOMRO

Despite a few success stories, such as the EatOye and PakWheels mobile apps, the absence of innovation in the local market is painfully evident. “Originality in games is [also] dying, if not already dead… Don’t be surprised if the next big hit is The Amazing ‘Super’ Spider Man,” states Babar Ahmed, chief executive officer of Mindstorm Studios in Lahore which has designed a multitude of popular games, including Mafia Farm, War Inc. and Cricket Revolution.

With a youthful team of boys and noticeably fewer girls, the company conceptualises and develops games that are published on stores and generate revenue directly from end users across the globe. Memon elaborates further that in comparison to foreign clients, local ones expect companies to do all the thinking. He cites the example of a Faisalabad-based customer who called him to place an order for a mobile app similar to WhatsApp and Facebook. “He said he was in a hurry so I should ‘quickly’ calculate the cost and time it would take to make the two apps,” he says. But making an app, unfortunately, is not that simple. “Candy Crush was backed by research conducted by psychologists who carried out focus group sessions to study the reaction of people to situations,” he says, stressing on the importance of research before investing millions in developing an app.

Users of mobile apps worldwide by region. SOURCE: PORTIO RESEARCH (MARCH 2013) VIA MOBITHINKING

Sky ‘can’ be the limit

The mobile app industry is growing in triple digit numbers the world over and offers great promise to countries who invest in it wisely. With Pakistan’s current lack of foresight, however, its chances of being a market leader for apps seems highly unlikely. “Most of the companies that develop apps in Pakistan are operating at over 100% capacity. The issue is, therefore, supply-side. We don’t have enough quality graduates to go around,” says Zia Imran, the former managing director for Pakistan Software Export Board (PSEB) which aims to multiply Pakistan’s export of IT products and services.

He explains how the skill for the craft is mostly acquired through on-the-job training which reflects on the lack of contribution from academia. Apart from the Karachi Institute of Technology and Entrepreneurship and a few other institutes with specialised programmes, there is a lack of IT institutes that offer specialised training to prospective developers.

The young team of Mindstorm Studios in Lahore that has designed a multitude of popular games, including Mafia Farm, War Inc. and Cricket Revolution. PHOTO: MINDSTORM STUDIOS

During his tenure at the PSEB, Imran secured a $200,000 grant for Pakistan under a project named mLab. The aim was to establish a centre for mobile apps development in Pakistan that would encourage collaboration between universities, professionals, designers and programmers. “The first tranche of money was disbursed, but then I left PSEB due to the expiry of my contract. No MD was appointed till a few months back and this project never saw the light of the day,” he shares. Despite identifying a crucial hold-up in development, PSEB was unable to resolve the problem of a fragmented and pocketed local ecosystem. “There are probably people making really cool [apps] right now in Rawalpindi for all we know, but we’ll never meet them and they’ll never meet us,” says Ahmed.

Inside Mindstorm Studios a colourful ambiance stimulates creative thinking. PHOTO: MINDSTORM STUDIOS

It’s, however, not all bad news for Pakistan assures Asim Shahryar Husain, the current managing director for PSEB, adding that certain measures have been taken to promote the industry. In 2011, PSEB developed the first portal for IT companies in Pakistan (it.org.pk) — a repository of IT companies to connect local/international clients with developers. This year it plans to exhibit at relevant international IT exhibitions and organise delegations to strategically important markets such as the Middle East, North Africa, Europe and North America. “Companies have done well in emerging areas like mobile phone software, gaming and animation,” says Husain. He adds that compared to 2004, when there were only a handful of IT companies doing annual business worth $10 million, currently there are two companies that have exceeded the $30 million mark.

But while millions of dollars may be well within the reach of some developers, not all apps get space on a user’s mobile screen. To lure users to download an app and keep coming back requires more mind than money, and for Pakistani app enthusiasts the sooner they learn this lesson, the further they will go.

Dilaira Dubash is a senior subeditor on The Express Tribune magazine desk. She tweets @DilairaM

Happy New Year

Asim Shahryar Husain Interview to Business Recorder

"Exports should reflect IT Industry’s talent"

Asim Shahryar Husain is the Managing Director of the Pakistan Software Export Board. He has a BS in Engineering from Stanford University, California and an MBA from Duke University, North Carolina with 20 years of professional experience in software engineering, product management and technology marketing.

Business Recorder Research: What sells Pakistan’s IT export potential?
Asim Shahryar: Quality work at significant cost savings! Potential exists in outsourcing work for options like software development, software testing, consulting centers, even for overseas customers. During my trip with an IT delegation to United States in October, I had given a presentation to Oracle’s executives about the potential of Pakistan’s IT industry and investment options for them in Pakistan. Oracle is exploring different IT investment options in Pakistan and their director will be visiting Pakistan in near future. Microsoft has similar plans which it is exploring with its team in Pakistan.

There are well over 124,000 IT professionals in Pakistan with expertise in delivering a diverse range of IT solutions including enterprise applications, custom software development, mobile applications and games, systems integration, call centers, and data center services. Overseas IT
companies interested in developing new software, porting and testing their existing software, or updating current offerings can save between 60-70 percent on their annual development costs by establishing their own oces in Pakistan or by outsourcing IT work to Pakistani firms.

It is pertinent to note that all major IT companies such as IBM, Oracle, Cisco, Microsoft, and Dell have oces in Pakistan. Pakistan has more than 50,000 professionals who are trained in tools and technologies of these IT vendors. Foreign companies can leverage this resource base to offer consulting and technical support services to their clients in South Asia, Middle East, and Africa. We have been using government channels to plan IT delegations to different countries. I had visited Silicon Valley with an IT delegation last month (October). We are planning another IT delegation with Pakistan’s Consul General in China in December. Then, OIC is planning a conference in Pakistan next year where we plan on setting up an IT pavilion to introduce local IT expertise to foreign governments.

BRR: What is PSEB working on to increase Pakistan’s IT exports?
AS: Our mission is to multiply the exports of IT products and services from Pakistan and to attract FDI towards the local IT Industry. PSEB regularly interacts with the industry veterans to ascertain their current needs and suggestions. Based on the industry feedback, policies are devised and projects are launched in line with the objective to ensure sustainable growth of the local IT Industry.

Every possible step is being undertaken by PSEB within its available resources to project Pakistan as a viable IT destination. This includes financial subsidies to IT companies for participation in international exhibitions, establishment of new Software Technology Park (STPs), certification on international standards such as ISO and CMMi, IT internships, and IT trainings. In 2011, PSEB took the initiative to develop the first ever Portal of the IT companies in Pakistan. The portal is essentially a repository of the IT companies operating in Pakistan and hence a prospective local/international client can visit the website and browse through Pakistan-based companies, which could provide the required service.

In addition, PSEB has plans to participate in different international IT exhibitions with IT
companies and to organize IT delegations to different exports markets such as the Middle East,
Central Asia, North Africa, Europe, and North America over the next two years.

PSEB has set in motion several projects and programs which focus on improving perception of
Pakistan as an attractive destination for IT outsourcing, with enhanced push towards soliciting
business for Pakistan’s talented IT industry.

It is pertinent to note that Pakistan’s IT industry is perhaps the only industry in Pakistan that has demonstrated consistent year-on-year growth over the past 10 years and is constantly ranked among the top destinations for ICT outsourcing. That is no doubt helped by generous incentives and programs intended to extend maximum facilitation to the IT industry, which include state of the art STPs, repatriation of profits, as well as full tax exemption on exports of IT services till 2016.

As had been stated by Minister of IT in middle of November, Korea Exim Bank has agreed to do the feasibility study for a new STP on PSEB’s land in Islamabad. This park will enable IT companies to get new oce space, utilities and connectivity at subsidized rates, which will help in generating new jobs and exports.

Realising that youth comprises of well over 70 percent of our country’s population, PSEB is in the process of finalizing details for launching a technology incubator next year. The incubator project would provide both financial and technical assistance in addition to mentors from the industry.

With PSEB’s technical and financial assistance, 23 companies have attained CMMi certification
while 110 companies achieved ISO-9000 certification and 11 companies were certified to ISO-27001 standard over the past years. CMMi certifications, in particular, have more value for securing business from overseas clients.

BRR: What is the real value of IT exports at present?
AS: We are working on two fronts to ascertain the actual size of our IT exports. According to State Bank of Pakistan’s (SBP), our IT exports were $370 million (Rs37 billion) in FY14. SBP has categorized IT exports under six categories, but sometimes banks don’t properly report IT exports to SBP; so some of the IT exports may not show on the radar. We have thus requested SBP to ensure that the IT exports are recorded under the correct categories by the banks.

On the second front, we are in discussions with the IT industry to enhance the remittance of
export revenue to Pakistan. In most of the cases, companies are transferring only the cost of their operations to Pakistan and keeping the remaining earnings abroad. However, we want IT companies to remit more of their foreign earnings to Pakistan to improve our exports and reserves. We are planning new incentives such as awards for top IT exporters and tax benefits to motivate these remittances to Pakistan.

BRR: But in June 2016, tax-exemption on IT exports will expire. Is PSEB working on a legislation to continue this tax break?
AS: The government is fully focused on extending maximum facilitation to the IT Industry and would like to have the tax exemption extended beyond 2016. It is, however, reasonable to note that the government should be able to see some results in return for the incentives. This means that the industry needs to enhance export remittances to Pakistan. IT exports of $370
million are well below our real potential considering that even Sri Lanka had crossed $720 million in IT exports in 2013. Government will make a decision on extending the tax break beyond 2016 based on export levels by next year.

MoIT offers substantial incentives to the ICT Industry at huge cost to the taxpayer. The
incentives are closely monitored and regularly reviewed to ensure that maximum benefits accrue to the growth of the local ICT Industry.

BRR: Then what is your goal for software exports for the future?
AS: Our goal is to cross $500 million in SBP-reported export figures by 2016 and to increase it to $1 billion by 2020. We want to become the second largest IT exporter in South Asia. The other goal is to motivate the industry to bring more of their export revenue to Pakistan. To achieve these goals, PSEB and industry will have to work closely. It has to be a public private
partnership. It is pertinent to mention that PSEB board has representation from the industry. We interact regularly with the relevant stakeholders. We have worked together in the past and the results speak for themselves. In 2000, there were virtually no companies exceeding the $1 million mark whereas now there are more than 50 IT companies whose exports exceed that threshold. With consistent efforts of PSEB and the industry, Pakistan should be able to more than double its exports by 2020.

Catalyst for Change

December 8, 2014

Pakistan is emerging as the third most attractive country in Asia Pacific for investment funds looking for options in internet business companies in frontier markets. China and India are perceived to be in a different league altogether.

The pace of growth of internet business firms can reach double digits in the next calendar year as telecom companies receive ordered equipment to successfully streamline their systems to leverage 3/4G licences, and as smart phones become more affordable.

It takes about a year for the full impact of advanced telecom technologies to play out in the society, but it might take a little longer in Pakistan, said a government source.

“The claimant of ‘change’ — the PTI — through its confrontational politics actually delayed ‘change in the making’ by months at least. The benefits of the government’s IT communication sector initiatives is not expected to become visible before July 2015,” he quipped. The 3/4G licences were auctioned this April.

The thrust of Pakistani techies to explore new frontiers has coincided with the tight job market, nudging graduates and entrepreneurs to consider innovative business strategies as opposed to finding a place in the conventional economy.

“The introduction of 3/4G technology and the penetration of smart phones have opened up new vistas for technology companies aspiring to partake in the transformation towards a digitised lifestyle,” a technocrat currently associated with the government said.

“For us, the discovery of Pakistan has proven to be fascinating. It is by far the most attractive country in the region, excluding China and India. The difficult neighborhood and the challenging law and order situation have coloured its image and clouded the positive factors that can attract investors interested in the frontier markets,” Koen Thijssen, the young visiting co-CEO of Asia Internet Holding — a joint venture between Rocket Internet and Qatar-based Ooredoo — told Dawn.


The ecosystem for IT companies in Pakistan is the most business-friendly in the region. It has zero taxes on IT exports till 2016 and allows 100pc repatriation of profits.....


The holding company intends to divert to Pakistan a sizeable portion of the 180m euros it has dedicated for the region over the next four years.

“We invest in ideas. Our business decisions, however, are based on data and market research and our knowledge of proven internet business models around the world,” Koen said. The $5bn, seven-year-old Rocket Internet employs 25,000 people across a network of companies operating in 100 countries. In Pakistan, it supports nine start-ups — including Jovago, Clickbus, Lamudi, Daraz, Carmudi and Foodpanda — and claims that many more are on the way.

He considers the size and composition of the population, growing size of the internet market, rising smart phone penetration, absence of competition and a pool of skilled English speaking young graduates as factors that work in favour of Pakistan.

“This gives you a base to build upon a solid company. Besides, the absence of Amazon, Flipkart and eBay in Pakistan offers great opportunity to get a foothold and enjoy the benefits of early entry in this huge and growing market. We hope to become market leaders in the field,” Koen said.

Officials in relevant ministries and departments sounded confident and disclosed facts on which their optimism is based. From IT fund to virtual university, there are in all 10 federal bodies, with sometimes overlapping mandates, serving the sector with a future.

Numerous private and public mentorship and IT incubator projects are functioning in different cities, with some engaged with global leaders like Google as well.

Asim Shahryar Husain, MD of Pakistan Software Export Board, argued that the ecosystem for IT companies is the most business-friendly in the region.

“Pakistan has zero taxes on IT exports till 2016, allows 100pc repatriation of profits, has a dedicated body to provide ease of business (PSEB), and has 12 IT parks and over 125,000 English-speaking IT professionals and graduates, and this pool is growing every year,” he told this writer over phone from Islamabad.

He added that the country currently has more than 2,000 IT companies, of which 120 are certified in IT quality standards like ISO 9001 and ISO 27001, while 23 are certified with Carnegie Mellon’s CMMi standard. And the quality of these companies and their services is constantly improving.

“Many start-ups are leveraging the domestic penetration of smart phones and hoping for exponential growth of their companies, in tandem with the intensification of Android technology,” said an expert while indicating the market’s potential.

“Pakistan is peculiar in the sense that mobile-commerce here grew faster than e-commerce. The accessibility to the facility to leverage internet has been identified as the key factor. For a business model to deliver, the matching of the need and technology are necessary but not sufficient. Accessibility and affordability are decisive,” commented another IT practitioner.

Published in Dawn, Economic & Business, December 8th , 2014

i2c Helps eCarteBlanche Improve International Payroll Options for Companies

eCarteBlanche is the first to roll out the next generation of i2c's global money distribution portal, allowing companies to simplify global employee payouts

REDWOOD CITY, Calif. – Dec. 3, 2014 – i2c, Inc., a global provider of card processing and emerging financial services solutions, today announced that eCarteBlanche, an innovative international prepaid card company, has rolled out the latest version of its global money distribution portal. eCarteBlanche's clients have already begun using the system to streamline and manage international payroll and payouts.

The cloud-based portal allows companies to move money instantly via prepaid cards, no matter where in the world the recipients are located. Disbursing funds in this manner is faster than traditional money transfer services and less costly and cumbersome than bank wire transfers. i2c implemented a number of enhancements for eCarteBlanche's disbursement portal, including a sophisticated user interface design and more robust reporting options.

“We strive to make international payouts as simple and painless as possible for our clients,” says Paul Goethals, chief executive of eCarteBlanche. “By working with capable technology partners like i2c, we have set the bar for usability within our industry. Our clients love the new site's simple design, flexible reporting options and improved compliance features.”
Stephan Koukis, senior vice president, Business Advisory Group at i2c, comments, “Delivering payments to numerous recipients in multiple countries is extremely tedious for most companies, large or small. eCarteBlanche has been working to take the pain out of this process, and we are thrilled to support their efforts by providing the latest global money distribution technology.”

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