Software Roundtable: Best time to be technopreneur

Karamjit: Let's talk about core software research. This is an area Malaysian companies are weak in. The question is, should we consciously speed up the process or is it something that needs to happen on its own? Can the government accelerate this by, for example, picking the 10 or 12 software companies that are already earning millions in revenue and try to fast-track any research they are conducting? The Capability Maturity Model initiative by Multimedia Development Corp is one example of how government intervention can be a good thing.
Dinesh: I would like to rephrase your questions. It's not can or should happen, it must happen. The question is how to make it happen. Half of it is laying down the groundwork, the fundamentals, and the other half is waiting for it to happen. You can't put five guys together and say, ‘Create software'. The environment has to be set. We need to create a technical culture. Technology creators have to be respected and rewarded.
However, we are a trading nation and most of our companies are trading companies. As a result, career paths and renumeration are tied to the person who brings in the most revenue. We need a mindset and cultural change. To some extent, it is an Asian issue. But then you can't explain Japan, Taiwan, South Korea and China. They are Asian but they have companies that are technology creators.
Butt: I see it as an Asian issue. I will even categorically say that every company must do research to survive. Let me define research because research can be simple and research can be core. If you start a company and you don't even research who your competitors are, how much they sell, what your market is like, and you just say, ‘I think it's like that,' it's likely that you will fail. If you produce a product and you don't research into the material strength, the product may break.
Then there is fundamental research that is available easily and that is minimum for any small company. Also, there is reverse engineering like Japan in the early days of their automobile industry, where you look at what other people's design, what are the best-selling models.
Then there is innovation research where you do engineering. You take what is known and you engineer it close to a prototype. You can call it experimentations, and implementation, I call it engineering innovation. There is one level deeper called invention. Invention is where you take new ideas and you build stuff, and half the stuff doesn't even work. And some of the stuff, you don't even know how to market anyway so you collaborate with other people to take it to market.
The lowest level, which I believe not many people can afford to conduct research in, maybe that should be the role of government — is ideas generation. You have a bunch of people who think of something, write it down and then stop there. But the inventors will build a prototype out of that idea while the innovators will turn it into a product and competition will improve it. So you have different tiers.
As for the role of government, I don't believe it should do research for research sake unless they want to cultivate a research culture. Schools too have a big role to play. The research mindset must start from a young age so that they can transcend those different tiers I talked about. In summary, every company must do research.
Karamjit: Brian, do you agree? What are the real challenges today?
Fernandez: Companies like mine will basically do competitive research but I believe for product companies for the long term, they need to do more applied research in terms of coming out with what the market really needs. They also need to keep up with technological trends.
Chee: You have to do applied research in emerging technologies. The intrinsic strength of KarenSoft is our ability to create new products all the time based on emerging technologies.

Karamjit: Brian, you were one of those that got the Cradle Investment Programme [CIP] funding, right?
Fernandez: Yes, it was for a data logger software for the racing industry here. I saw a need for a data logger but the problem is that there is a very little usage for it in Malaysia. Basically, to develop the software and hardware, we needed to do research. We started off with the transistor but now the project is coming to fruition and the intellectual property [IP] will be sold off to another party. The CIP is a simple example of the government providing funding for ideas that may or may not work.
Ewe: When you talk about research, it comes down to the new generation we are training. So it's very important for our education system to inculcate that curiosity and passion for learning new things. Then our graduates will think of ways to improve things in their jobs. That will help Malaysia in the long term and also help software companies. If we have these people with passion, they may not even need special funding, but can start research projects on their own and later get funding when it becomes more concrete.
Fernandez: The key thing is that there should be that intellectual curiousity, the desire to do and think out of the box.
Chee: I tell my people, whatever you have, you have to keep on improving it. That's applied research. Then there are emerging technologies like SMS [short message service] and RFID [radio frequency identification]. We have people looking at integrating these technologies into our products. And we have a small group of technical people who look at emerging technologies.
My paranoia is about us becoming obsolete. So we have to do this research. Without research, the company will be dead. We've been around for 15 years. Our strategy is when there is recession, we go into research mode. So when the recession is over, we are ready to compete.

Karamjit: Let's move on to the next question. Where does open source stand in Malaysia today? Where are the opportunities and challenges?
Fernandez: I think the government's direction is clear and therein lies the opportunity. The challenge is to find the people with the skill sets or interest. A lot of the people here are Microsoft trained and there is a challenge to get people. The other challenge is getting people to understand that free is not really free and the cost may be a lot more than they thought.
Dinesh: Just to correct that — I think you are referring to free software. The definition of free software has nothing to do with price, it's more of freedom.
Fernandez: I am looking at it from the [point of view of the ] CTO [chief technology officer] and the CEO, who are revenue driven. People think they will get a lot of savings if they opt for open source but if you look at the total cost of ownership, sometimes the savings are not that clear. CTOs are now looking in this direction to see the holistic package. Other technopreneurs who are looking at this technology actually realise that they don't see that much of savings.
Dinesh: My opinion is that you can't ignore open source. Somehow or other, people expect it to be free but we can't do it for free. The challenge is that it's difficult to get people who are good at open source. But the opportunity is incredible to me. The government initiative, the growing market share, now it's all Microsoft, but it will definitely grow until it becomes viable for us, perhaps in five years. But I don't want to start five years down the road, I want to do it now.
Ewe: If you look at the history of computing, it has gone through many kinds of changes, so at our university we want to provide freedom for students to learn what they want. But sometimes, in order to explain the theories, we use a good combination of proprietary software and open-source software. Once they get a job, their company may be using Microsoft software, IBM software or open-source software. So we just want to provide the right training and exposure so that they can adapt to the situation.

Karamjit: When did you start this approach?
Ewe: We started from the beginning because we believe this is important.
Dinesh: Open source in Malaysia is small. It can definitely grow. What I want to stress about open source is that there are a number of myths. In Malaysia, free is associated with price but in Europe and America, free is associated with freedom.
The open source model is a development philosophy. For Malaysia, the opportunities are in the development philosophy because it gives you the environment where you can work with high-calibre people throughout the world to develop software. Let's say somebody wants to build a top grade operating system [OS] or ERP [entreprise resource planning] system. You can either start within your shell or you can work on open-source projects or look at other open-source projects. Somebody looking at building an OS can look at Linux or FreeBSD. It is a collaboration methodology. It allows you to upgrade your skills. You have an opportunity to expand your skills and it opens a way to move down the software stack we talked about earlier. A lot of people equate open source with Linux but open source is much larger than Linux.

Karamjit: What about the Malaysia Venture Capital Management [Mavcap] initiative?
Dinesh: I can't comment on the Mavcap initiative. With regard to Malaysia, we're at the stage where we've been users of technology for a long time. In terms of encouraging technology adoption, the government has played a good role. We need to upgrade ourselves from users to creators of technology. Open source is one way that can happen. The software capacity of a country is defined by its ability to build and maintain world-class software.
A lot of people say Malaysia can't do it. Only India, China, the US and Europe can do it. But look at Ireland. They are smaller than us but today they are a software powerhouse in products and not just outsourcing. What they realised was that you cannot depend on people using software and then becoming creators. You have to seed it. And open source really helped them.
Butt: For generations we've seen things like Betamax, PAL versus NTSC, open source, or non-open source. If any party, whether government or otherwise, picks one or the other, it is a win-lose situation. We're not against one or the other. But if you pick one or the other, you risk a 0-1 loss.
The government's stand on the Mampu [Malaysian Administrative Modernisation and Management Planning Unit] declaration is clear — you procure based on merit and all things being equal, it will purchase open source. But there is a preface to that where you have to evaluate everything based on what it is and I give credit to how it's worded. It does convey a sense of openess. The prime minister in the closing of the International Advisory Panel meeting last September did say that there needs to be both platforms — and he specifically mentioned the open source and commercial model — to promote innovation.
I think there is recognition at the highest level of government that there needs to be a balance between both. In my view, users should choose based on needs — does it meet my needs and does it fit my resource constraints? Does it have a road map to lead you into the future? Does it create wealth in the economy? Does it help create IP? If I'm a developer, which platform allows me to register my product as IP? I should choose the one that lets me get to my goals sooner. There is merit to all platforms. It seems like a half-baked view, but it is a view which I ask for no preference. Because when you have already made a preference in your mind, you have already lost the choice to make a choice.
Dinesh: The term ‘open source' only started coming into usage in 1996 with the formation of the open-source initiative. Prior to that, it was free software. When it started spreading outside American shores, everyone started taking free to mean free. But if it's free, how do companies like Red Hat survive? That's why a lot of us are pushing for the term open source.

Karamjit: Open source accounts for only 0.01% in Malaysia. Where do you see open source five years down the road?
Dinesh: I see growth. Today, open source has made the largest gains in infrastructure, as in web servers and mail servers. We're starting to see open source make inroads at the application layer — ERP, browser, office applications. It's a matter of time. I agree with Butt that it will never be a 100% open-source world. It will reach an equilibrium. The question is, what is that equilibrium?
Chee: Out of a hundred prospects currently, only one will ask for open source. So, it doesn't really justify us focusing on open source now, but we will not ignore it.
Butt: Predicting the future is always difficult so I won't. Let's use the premise of how people think of open source today — cheaper and more secure. Five years down the road, people will come to the realisation that both are not the way they seem. Products will not be cheaper, they will not be more secure or less secure and it's not because one is stronger or weaker than the other, it is the market play.
Dinesh: On the security angle, I beg to differ. In a given situation where there is a bug in open-source software, studies have shown that bugs do get fixed faster.
Butt: As the vulnerabilities increase, testing the scalability of open source to fix bugs is for time to tell. Over at Microsoft, we have thousands of people today who are focused on fixing bugs.

Karamjit: We've now come to the conclusion and we'd like to ask your advice for future and present entrepreneurs within the software space?
Ewe: For current and future entrepreneurs, it's important to have an innovative mind, because sticking to one way will not work. They must always try to find alternatives. Just to share, I am a Massachusetts Institute of Technology education councellor and one of the admission criteria to get into MIT is a passion to do something additional.
Chee: You are absolutely right on passion. I am absolutely passionate about the company. I took it from nothing to listing. So that's the first one — passion. Second is innovation. You must have the foresight to see what's coming. The third thing is the product. My advice is not to be supply driven, be demand driven. Give the consumer what they want — it may not be leading edge but that's what they need.
Dinesh: Well, I hope not all ICT graduates become entrepreneurs because then there would be nobody to write the software! We need to increase the size of the pool of people who write and create software. These people are currently few and far between. ICT graduates also need to ask themselves, what will I be doing 30 years from now? Will I still be writing software or will I be doing sales and marketing? They need to realise that there is a career path for those who are keen to remain technical.
Fernandez: From an entrepreneur's viewpoint, you have to keep evolving or perish.
Butt: If I were 15 years younger, I would be an entrepreneur. I have seen the dotcom period, I have seen the tremendous changes in the market. My advice to entrepreneurs is that the time is now. Computers are now powerful, the tools are at times free and it's a lot more respectable than it was several years back. People say there's nothing more to invent, I say there's so much more to invent and what better time than now to be an entrepreneur.
If you have solid technical skills, then go and hire someone with solid marketing background to help you build the business. What you build for IT is not just for IT consumption but for everyday general consumption, so go and do it. What better time to do it than now? Go and make multiple mistakes and partner with a venture capitalist who can help you through. Just do it!


By the netv@lue2.0 team


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