I gave this presentation in the end of 2008, giving an overview of Software Industry of Pakistan from 1995 to 2008. Therefore, the recent ups and downs of the industry are not visible in the presentation.

1. Software Industry of Pakistan 1995-2008 M. Nadeem Jahangir 21 April 2009 Institute of Science & Technology Development, Mehran University of Engineering & Technology, Jamshoro-Pakistan.

6. Pre 1999 condition Source: Experts Advisory Cell, Ministry of Industries and Production May 2004 Showing the registered number of Software Houses (1995-1998) 88 Grand Total 35 6 20 5 4 1998 20 - 12 5 3 1997 15 1 13 1 - 1996 18 7 4 1 6 1995 Nos. Nos. Nos. Nos. Total OTHERS PSEB SBP PASHA Name of Organizations Year of Registration

7. Developments in 1999 IT infrastructure in 1999 PTCL, PTA, PSEB 72 No. of Cities (Fiber Optic) PTCL, PTA, PSEB 68 No. ISPs PTCL, PTA, PSEB 250,000 Internet Users MoIP US $18.2 Million Software Export MoIP 49 Software Houses (total) Source Potential (1999) Area Business Software Alliance Source US $18,913 Million 83% 1999 Revenue Loss Piracy Rates Year

8. Developments in 1999 Software House/ IT Companies (1995-1999) Source: PSEB, PASHA, SBP

11. Post 1999 developments MoIP: Ministry of Industries & Production PSEB: Pakistan software Export Board Software Houses/ IT Companies in Major Cities (2000-2006) Source: PSEB Foreign Companies IT Business in Pakistan by City (2002-2006) PSEB 1105 69 394 - 357 285 2006-07 PSEB 737 - 265 - 231 241 2005-06 PSEB 454 - 170 - 121 163 2004-05 PSEB 248 - 81 - 66 101 2003-04 PSEB 134 - 39 - 36 59 2002-03 - - - - - - - 2001-02 MoIP 223 16 82 14 64 47 2000-01 Source Total Others Karachi Rawalpindi Lahore Islamabad Year 23 15 22 60 2006-07 12 21 15 48 2005-06 15 11 11 37 2004-05 8 6 4 18 2003-04 3 2 1 6 2002-03 Karachi Lahore Islamabad Number in City Foreign Companies Year

12. Post 1999 developments Software Houses / IT & Foreign Companies Source: MoIP: Ministry of Industries & Production PSEB: Pakistan software Export Board

13. Impact on Economy Software/BPO revenues

14. Impact on Economy FDI in economic group (2001-2008) Million US Dollar Source: State Bank of Pakistan FDI (2001-09) Million US Dollar 160.5 62.15 24.19 9.56 6.15 4.24 2.43 IT Services 6.6 4.57 1.08 3.87 1.28 1.21 0.41 Hardware Development 13.7 5.18 4.96 8.77 6.26 4.44 3.50 Software Development 180.7 71.90 30.23 22.19 13.68 9.90 6.34 Information Technology 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 ECONOMIC GROUPS

15. Impact on Economy Source: P@SHA and BSA Growth in Software & Services Sector in 2007-08 39% $2 Billion 2007-08 Revenue of High piracy rate 84%

16. PRE 1999 VS POST 1999 Trend of registration of Software Houses/ IT Companies (1995-2006) Source: PSEB, SBP, P@SHA PSEB 1105 2006 PSEB 737 2005 PSEB 454 2004 PSEB 248 2003 PSEB 134 2002 PASHA, SBP, PSEB, Others 118 2001 PASHA, SBP, PSEB, Others 111 2000 Post 1999 PASHA, SBP, PSEB, Others 49 1999 PASHA, SBP, PSEB, Others 35 1998 PASHA, SBP, PSEB, Others 20 1997 PASHA, SBP, PSEB, Others 15 1996 PASHA, SBP, PSEB, Others 18 1995 Source No. of SWHs/ IT Comps Year of Registration Pre 1999

17. PRE 1999 VS POST 1999 Pre 1999 Post 1999 Source: SBP, PSEB, PASHA Chart showing trend of Software Houses / IT Companies (1995-2006)

18. Software piracy rate (Pre 1999 vs Post 1999) Software Piracy Rate (1996-2007) Source: Business Software Alliance www.bsa.org Pre 1999 Post 1999 Showing yearly revenue loss in US Million Dollars On 17 January 2007, Federal Cabinet approved Cyber Crime Bill 2007 $ 125,000 84% 2007 $ 143,000 86% 2006 $ 48,000 86% 2005 $ 26,000 82% 2004 $ 16,000 83% 2003 $ 11,429 83% 2001 $ 31,379 83% 2000 $ 18,913 83% 1999 $ 22,667 86% 1998 $ 20,395 88% 1997 $ 23,144 92% 1996 Revenue Loss Piracy Rates Year

19. Innovation in Industry Source: Experts advisory cell Report 2004 Ministry of Industries and Production Source: PSEB Product Innovation IT Exports : US $ 46.3 Million ISP Services and Others. ASP Programming service. Hardware/ Software/ Networking Vendor. IT Training Institutions. Transaction Services. Call Center Services. IT Consultancy. Areas of business in 2004 IT Exports : US $ 116.60 Million $ 10.36 Others $ 9.19 Computer Services $ 73.21 Computer Software (Legal) $ 0.04 Maintenance & Repair Services $ 22.27 Software Consultancy Services $ 1.43 Hardware Consultancy Services Areas of business in 2006-07

20. Innovation in Industry IT Exports (million US $)

23. Innovation in Industry Software/BPO Revenues Employment Growth (Full Time) Source: Annual Review of Pakistan’s Software/BPO Industry 2007, P@SHA Process Innovation

24. Operating Costs in US, India & Pakistan *G&A (General and Administration) Pakistan Pakistani labor is cheaper than India. Total Price in Market 42,927 6,179 4,500 8,571 1,000 800 1,500 2,328 2,000 2,600 847 700 3,000 1,500 1,000 58,598 11,854 9,000 0% 100-200% 100-200% Personnel *G&A Expense Telecom Property Rentals Depreciation Total Expenses Markup USA India 58,598 23,708 to 35,562 18,000 to 27,000 Source: The Buying Triangle, LLC, 2006 US$ Cost per FTE (Full Time Employee)

26. Future Forecasting IT industry growth forecating Trillion US Dollars Source: Pakistan Software Export Board 6.3 1.481 2010 6.3 1.394 2009 6.3 1.312 2008 6.3 1.238 2007 5.6 1.165 2006 5.6 1.103 2005 5.6 1.045 2004 Rate Growth (US $ Tril.) Year