Software Manufacturers can no longer limit themselves to just providing a Product

As President of the Swiss Internet Industry Association (Simsa) and CEO of the software company Netcetera, Andrej Vckovski is paying close attention to developments in the ICT industry. He explains in the Swiss ICT Yearbook interview how to help start-ups, why the cloud requires a change in thinking in the industry and what goals he has as an entrepreneur.

Mr. Vckovkski, what development did you like the most as the President of Simsa in 2013?

This year at Simsa we were able to the focus on the next generation and get more people interested in the Association. Entrepreneurs that have been in the business longer recognize as a general rule that it makes sense to organize collectively and address certain topics. Younger people that are currently trying to get a company up and running see these topics as less of a priority. That's surprising actually because many current topics such as net neutrality are quite important for internet start-ups. Even though new businesses are not necessarily members of associations, they organize themselves just the same. Our goal then was to address these people at special events and to integrate them as much as possible.

Were you able to register some new members?

Yes. We won over a couple of members, thanks in no small part to our new Start-up Member Category that we created last year. We also aimed for active cooperation with other mixed start-up groups. We now work a lot with the people from the "Internet Rockstars" Initiative. This isn't about convincing younger people. But rather we would just like to offer them an institutional setting if they need one. Of course, it's also about ensuring that the Association has successors.

In your opinion, what do start-ups need in order to thrive?

I think new companies need customers more than anything else. The sooner a business can get a lot of customers, the better it will develop. In contrast to Biotechnology, new ICT companies don't have to purchase any expensive equipment or laboratories. Basically, a notebook and a place to work are enough. In this respect, money is not as important in the start-up phase. It is much more important to find a way to get their own solutions and services to customers. In this regard, the Swiss market for B2C has the disadvantage of not being extraordinarily large. For that reason, many companies try to find their feet in the B2B sector. I'd like more customer support in this area. Many large companies fear taking on solutions that are not yet proven. As a result, larger companies would have to support medium-sized start-ups The state, an important client in the ICT sector, is reserved in this respect. I see many cases of tendering that explicitly request modern as well as proven solutions. That's nonsense. If a solution is proven, it's hardly modern any longer. If it's innovative, it hasn't had enough time yet to be proven.

What specific measures would help start-ups find customers?

One solution would be something like a risk guarantee for start-ups. The export industry has been familiar with warranties for a long time, which compensate for damages when a client doesn't keep up with their payment obligations. The United States has a different approach. By allowing for relatively flexible use of the term "research", they don't face the same funding problems that we do. In this way, the Defense Advanced Research Projects Agency, or DARPA, is already promoting many start-ups. That's how contracts also make their way to small companies, which otherwise end up empty handed for a lack of references.

Your own company, Netcetera, went without foreign capital. Would you suggest that new companies do the same?

Yes, without a doubt. Young companies should only use foreign capital if there is really no way around it. I regularly get business plans from people who want to get something up and running. Then I always look at what they need money for. If the money is only to pay loans for a year, I suggest that it would be better for them to live off friends and family and only later raise money, for a marketing campaign, for example. The later you decide on an injection of capital and the smaller the portion of foreign capital in the company, the more flexibly the company can be run. Many investors, however, are out there more to capitalize on short-term success.

What measures should be taken in order to promote the ICT industry?

An important topic is the lack of skilled labor. Considering the developments of recent years, I assume that importance of digital will increase more than decrease. As a consequence, the need for skilled labor will also increase. Looking back on this development, it is important for us as an association to not limit existing personal freedom. Another reason for the lack of skilled labor is the fact that we still have not been able to make the image of the IT specialists' profession pensionable. Very few IT specialists remain in the profession until 65. Usually, they disappear from the pool of skilled IT labor at the age of 50 because they switch over to management. In addition to the fact that trade associations are currently more focused on training than on further education. The question about maintaining the labor market's competitiveness will be left to the individual.

What technological development of recent years do you see as the most important?

When I think about the past years, there are two big keywords for me when looking back at IT innovations. Mobile and cloud. At first I didn't like the word cloud at all because I was of the opinion that this term was like using new wrapping paper for old gifts. Then I noticed that the topic of clouds made a change in thought necessary and had to first assert the idea with users and suppliers that you didn't need to own everything to use it. Looking at it this way, the cloud is rather similar to the emergence of electricity in the 19th century. At first, companies owned small, private electric power plants. With time, they recognized that it would make more sense to make one large electric power plant for them all. And that's also how it is with all the “IT things” in your own basement.

What does this change mean for you as a software developer?

The cloud is changing software developers' business model. Where data storage devices like CDs were used, customers can now get the desired software directly from the cloud. This, however, brought about new risks for companies as well. That's how a software manufacturer's competitors can now see fairly easily what competitor solutions can do. In addition, software manufacturers today can't limit themselves to just providing a solution. They have to carry on working on their products and make sure that they always run perfectly. Finally, the cloud model is changing the type and way in which software is made. At the moment, many solutions are not yet able to keep pace with cloud operators' elastic range of resources. That means customers get a scalable service from their provider but their software can't keep up in terms of scalability. In the coming years it will also be about solving such problems.

What are the changes you see for customers?

It always surprises me how many problems authorities have with the cloud. Many still feel that their data is safer holed up in the basement of an administrative building than in a modern data center. Private companies, small as well, in comparison, are much more ready to move to the cloud. Heavily regulated companies, in contrast, are very reserved about things dealing with the cloud. Exactly in this area is where state could play an important roll and move forward by firmly promoting innovation with corresponding regulative leeway. It makes a big difference, whether, for example, a financial market regulator says: “As long as we have no strategy developed, you can't use the cloud,” or whether the regulators says: "Go ahead, we'll watch and adjust the basic framework somewhat afterwards if necessary."

Where is the journey going to in the coming years?

We are aiming in the direction of "Mission Critical Systems" and innovation with our business strategy. Meaning that, in the future, we would like to use our abilities increasingly for supporting processes that are important for the survival of our customers' business. Innovation plays a key role in achieving this goal. If we want to replace systems that are supposed to work the next 25 years, we have to be cutting edge in terms of technology with our solutions as well.


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