Software technology is the mechanical engineering of the 21st century

25 March 2014

Burton H. Lee, lecturer in “European Entrepreneurship and Innovation” at the prestigious “Stanford School of Engineering” in the Californian Silicon Valley was recently invited to visit Vienna by Bank Austria. The innovation expert confirmed in several media publications (cf. format.at and futurezone.at) that Europe has a “software problem” that will further hinder the continent’s competitive disadvantage if not quickly countered by unified political will.

Unfortunately, we have to admit that Burton Lee’s overall assessment is fairly accurate. Europe, with its growing industrial strengths in the production of technical goods and facilities has overstayed its attachment to the concept of a “hardware economy” developed in the 19th century and has only partly recognised the importance of software.

But because experts like Burton Lee are opinion multipliers, I would like to point out a few examples to him that show that the necessary rethinking process has already started in Europe. Not least because the significance of software and software-based services at the interfaces of big digital knowledge economy megatrends – mobility, cloud computing, social collaboration and big data – has once again dramatically intensified.

The European automobile industry is a good example of how in high-tech industries the hardware elements of the traditional vehicle construction can be combined with embedded software systems to achieve a new quality level for intelligent, autonomous transport systems. The European automobile industry is therefore stronger than ever before.

Moreover, there is movement in the market analysis industry, in the development of industrial objectives for software development and in the economic implementation of software. For example, a research study on the German software and ICT service industry, undertaken by the Fraunhofer Institute for Systems and Innovation Research (ISI), screened the entire market and proposed several recommendations for the industry. A software-focused location and industry policy is recommended. Further recommendations effect the points of criticism expressed by Burton Lee: According to the research study, these include the support of national and international clusters, the development of growing markets at software and IT, the use of the potential of government demand, creating incentives for venture capital investments, the expansion of R&D funding and even the adaptation of the education system to the knowledge-based society.

And with the “European Software Strategy” a baseline scenario by 2020 has been developed for Europe as a software location. Firstly, the technological core enablers for the software industry have been identified for the coming years. These include artificial intelligence, the semantic web, information management, digital identity, interoperability, radio frequency identification (RFID), ubiquitous networks, security, data centres and broadband technologies. Based on these, emerging market segments have been designated as mobile applications, web 2.0, “Internet of Things”, Service Oriented Architectures (SOA), Open Source Software (OSS) and cloud computing.

In order to position Europe as a software and IT location, the technical, economic, social and legal barriers must be overcome in all of these sub-markets.

From a technical point of view, the lack of interoperability and standardisation, safety deficiencies, the lack of comprehensive cloud infrastructures and limited internet governance block effective software prioritisation in European industry policy. The unlimited availability of broadband technologies and the support of software engineering should finally be given the attention it warrants.

From an economic standpoint, the strengthening of the European software industry is hampered by national sub-markets, the insufficient level of expenditure for research and development, low IT margins as general commodity (commodisation), turnover losses caused by copyright infringements and the lack of venture capital support given to start-ups and SMEs.

From a social perspective, the lack of e-skills and the resulting shortage of skilled professionals in software engineering and the lack of management knowledge concerning software and IT need to be overcome.

In regard to legal obstacles, harmonisation efforts should be employed more intensively and the legal frameworks for boundless IT service offers and for the corporate use of software solutions should be outlined for the entire EU area.

For a number of years the Fabasoft AG, as a medium-sized IT-company, has been pursuing a strategy that anticipates these now publicly discussed guidelines on strengthening the European software industry. Right from the beginning we have concentrated our business strategy and our product portfolio on document management and electronic collaboration across national borders and on the quick finding of digital business information. This concept made our company, in the two-and-a-half decades since its foundation, an extremely successful B2B collaboration solution provider. Fabasoft also anticipated at a very early stage the irreversible paradigm shift from licensed software products to a software, platform and infrastructure provision based on cloud computing.

In all our market activities we have always emphasised the meaning of “Made in Europe” and promoted it with a comprehensive trust concept for secure cloud locations, fair and uniform contract conditions and the benefits of the early adopter effects by using our portfolio in the public sector. This attempt to establish our “United Cloud of Europe” concept finally made our voice heard on the European stage. Fabasoft is strongly involved in the harmonisation of service contracts.

Our company can be seen as an example as to how to bring the European economy into the cloud boat via the promotion of a European cloud infrastructure, the linking of cloud players to establish European knowledge pools and the advocacy for optimised data protection.

Some may say that all this sounds very much like self-praise. Maybe it does. But if an expert and opinion multiplier like Burton Lee does not observe the efforts of individual European players then it is high time to stand up and make people take notice. One thing is for sure: Software technology is the mechanical engineering of the 21st century.

Helmut Fallmann
Member of the Managing Board

Almost 30 years ago, Helmut Fallmann founded the software group Fabasoft together with Leopold Bauernfeind. Today he is a member of the Managing Board of Fabasoft AG. Fabasoft has developed into a leading European software manufacturer and Cloud provider headquartered in Linz, Austria.

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