FOCUS

Logging On

Defined as a key growth sector, ICT is set to not only contribute to the overall sophistication of the Azerbaijani economy, but also create a significant amount of jobs across the country.

With consistent growth in Azerbaijan’s ICT sector and a concerted effort from the government to turn the fledgling market into a regional leader, significant further progress will almost certainly be reliant on expansion of the current small pool of ICT trained human resources. The ICT sector is currently comprised of SMEs that are heavily reliant on government support. With the resulting market liberalization that is hoped will occur once planned privatization is undertaken, skilled ICT entrepreneurs will be more essential than ever.

Companies such as Ultra, which have now begun distributing computers, have moved into software solutions, repair, and assistance—thus expanding their business potential. Growth in this industry is predominantly homegrown. IT distributors gain specialized knowledge from the ground up as well as through educational programs. With such a healthy domestic IT sector, there is good ground for foreign investment. Ultra’s General Director, Zaur Mammadzade, told TBY, “We started off in 1999, mainly distributing PCs… [now] we’re no longer just a distribution company… we are system integrators and we provide software solutions.”

There are presently a very small number of ICT professionals working in Azerbaijan with the up-to-date skills necessary to drive development in the market. The country has an educated and entrepreneurial population, ripe for transformation into an information-based e-society. Such an e-society would invariably be rooted firmly in high-quality technical education, ICT infrastructure, and computer literacy. With general private sector growth taking place in the country on a large scale, there will be a corresponding demand for accessible sophisticated software systems, not currently capable of being produced in Azerbaijan. A prime example is Business Critical Software (BCS), which is an integrated suite of software applications that form an enterprise framework including administrative, manufacturing, and human resources planning processes. BCS suites integrate all major enterprise business processes and are used worldwide in numerous industries to streamline business processes. BCS suites are very costly and complex to design, develop, market, and support, and there are no companies in Azerbaijan producing this software. Currently there are simply no adequately qualified professionals that possess the necessary software development skills. Companies have to look abroad for such systems, but with in-house training often required directly from the software companies, it would be far more cost effective to use nationally based providers.

If Azerbaijan can effect real development of the ICT market through privatization and an increase in FDI it seems logical that it can follow in the footsteps of countries such as India and Egypt, which have seen huge growth in their ICT job markets.

The emergence of new technologies such as cloud computing and web 2.0 applications and services in the market will create new opportunities and jobs, although in turn will require investment in research, innovation, and skills. There is a huge potential for growth in broadband services in Azerbaijan, with numerous companies investing in new infrastructure that will provide connections for both individuals and businesses. Demand for mobile broadband is also starting to grow and more customers are requesting high-bandwidth data connections for new multimedia internet access devices. There is currently very little local content available, however, and developments need to be made in that respect. Future high-capacity services including user-generated content and cloud computing will also provide job opportunities for skilled workers. While only one company currently supplies 3G services, there are requests for licenses from a number of other companies currently being processed. Equally, new companies entering the market need more skilled local engineers and staff for the implementation, maintenance, and planning of network infrastructure.

Microsoft estimates that pirated software stands at approximately 88% of the market in 2011, despite a 6% reduction over the past four years. An anti-piracy program led by USAID, which is partnered with major international companies such as Microsoft, employs auditors to help it reduce the prevalence of illegal piracy in the country. The alliance is aimed at reducing the use of pirated software and boosting innovation, sales, and jobs in Azerbaijan’s developing information technology sector. Currently, the prevalence of illegal software puts Azerbaijani businesses and consumers at risk. The PC Anti-Piracy Alliance began with the training of commercial bank auditors from the Central Bank of Azerbaijan to detect the usage of unlicensed software in banks and businesses nationwide. In later stages, the project will expand to focus on the risks that large and medium-sized enterprises face by using pirated software. Country Manager for Microsoft Azerbaijan, Teymur Akhundov, said, “We are glad to support this Anti-Piracy initiative that we believe is a timely project for Azerbaijan. Currently we observe positive trends in the market and sincerely hope that success of the project will facilitate correct framework for appropriate business trends.” The goal of the alliance is to decrease the use of pirated software by 10%. Secondary effects are estimated to increase the sales of licensed software by $10 million, stimulate nearly $20 million of economic turnover, generate $3.6 million in additional tax revenue, and create at least 900 new jobs.