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COMPUTERWORLD | Articles | Market Analysis
15 Apr

Bulgaria's software industry is a reliable and innovative partner hungry for talents

Bulgarian software firms have changed a lot during the past ten years – from outsourcing contractors into developers of own products and value-added services, and they need more good employees and leaders than ever


Did you know that the website of BBC media group dedicated to the 2012 European Football Championship is based on semantic software developed in Bulgaria? Or that SAP has chosen Bulgaria’s capital Sofia for one of its global development centers – SAP Labs? In the recent years, the Bulgarian software industry has managed to prove itself as a reliable supplier of complex solutions and products in some of the most innovative areas of IT. In addition, more and more local companies are becoming global players with offices in Europe, USA and Asia, even Australia.

Becoming a destination for independent products development and complex IT solutions is already yielding results. According to the latest issue of the Bulgarian IT industry barometer report by the Bulgarian Association of Software Companies (BASSCOM) in partnership with GOPA Consultants and the Bulgarian Web Association (BWA), the sector generated a 12% increase of product and service sales in 2010. And this happened in a year that was very hard for many other sectors. The growth trend continued in 2011 with 6% up and is expected to have continued in 2012.

Export was the main generator of this sustainable uptrend with its share of 56% of all 2011 sales by the companies in the survey. In 2009, this indicator was 53% and in 2010 – 52%. It is indicative that Bulgarian software firm's main export destinations in 2011 included the EU, which accounted for 60% of the entire export, and the USA with over 30%. This is where Bulgarian software companies are well recognized as trusted partners, says BASSCOM.

The association, which has over 50 members, including many leading companies, has become a key partner for foreign players looking for a software capacity in Bulgaria and the region. A lot of those members, which used to be outsourcing companies in the past, have turned into developers of quality end products and services with high added value. Some of them are already world leaders in their technology segments and are well recognized worldwide as trusted partners in software development. Among them are companies like Telerik – a global manufacturer of products for project management, collaboration and increased productivity with offices in the USA, Canada, the UK, Germany, India and Australia; Bianor – a leading mobile applications developer; Ontotext – creator of semantic web solutions used by the National Archives of the UK and by major pharmaceutical, defense and media corporations; CenterMine – developer of innovative solutions for business process management, real estate and customer relationships; Musala Soft – an international software developer whose clients are some of the world’s largest technology companies.

Through BASSCOM, international businesses can find reliable partners and expert capacity in the areas of business software, e-governance solutions, security systems and access control, mobile applications, RFID integration, hotel and restaurant solutions, banking and insurance software, content management systems, UI controls and other specific software areas.

Bulgarian software companies are also currently one of the best employers in Bulgaria. They keep on creating new jobs and the average monthly salary in the sector is above 2,300 Bulgarian levs (1,176 euro). According to the Bulgarian IT Industry Barometer, each of these companies has an average of eight vacancies. Moreover, the average monthly wage in the sector in 2011 went up by 9% year-on-year. Half of the respondents in the survey expect it to increase by 10% in 2012, and according to one fifth of the participants the growth will be between 10% and 25%.

The ever-increasing recognition of the sector puts forward the question about an educational reform in Bulgaria, which would help to generate more high-quality professionals needed for meeting the increasing market demand. BASSCOM has prepared a set of proposals aiming at the improvement of the educational system and is actively discussing the possibilities for achieving the reform through active communication with representatives of the state administration, academia and business.

“During the last few years, the Bulgarian software industry has proven its maturity and sustainability by generating sales growth and by the creation of new jobs in a very difficult economic environment,” said George Brashnarov, Chairman of the Board at BASSCOM. “I believe that the root of this positive trend is the transformation of companies in the sector, which has already happened in the years before the crisis – from a cheap outsourcing destination Bulgaria turned into a recognizable manufacturer of products and services with high added value. This very change contributed to the country’s recognition as a global player in the development of complex IT solutions and independent products which does not rely on competitive prices only but on high quality as well.

I’m expecting this positive trend to continue during the coming years, which means the sector will suffer not from a lack of customers but from the ever-increasing shortage of professionals needed to meet the growing demand. According to our estimates, without proper educational reform, within 10 years the volume of the Bulgarian software market will be twice smaller than the possible scenario if our reform proposals are accepted and the educational system succeeds to generate the experts needed by the industry. BASSCOM is recognizing the lack of quality recruits as the major problem for the industry and we are confident that whether the software industry will become a structural determining sector for the Bulgarian economy in the future depends on the solution of this problem.”

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