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Irish software sector looks vibrant
Wednesday, May 09 2001
by Tony O'Brien


While Ireland's home-grown software sector looks set to take off, it is still
going to need an investment of IEP1 billion over the next two years, a new report
has shown.

While there may be some gloom in the global tech industry, the report says there
is positive news in Ireland. The report found that half of new Irish software
ventures set up in recent years had come out of software firms or university
campuses.



The study, carried out by HotOrigin, the software and corporate venture company,
identified key challenges, including the ability to internationalise and the
human resources issue.



The report, entitled "Ireland's Emerging Software Cluster: A Hothouse of Future
Stars," is the outcome of extensive research over the last six months. It
involved talking to over 120 software company chief executive officers, venture
capital firms and other experts.



One of the main findings was that early-stage software sector in Ireland will be
seeking an additional IEP1 billion in external funding over the next two years.



The sector had previously raised nearly IEP600 million in external funding over
the last number of years.



The report positions the Irish indigenous software sector as both vibrant and
well placed in emerging high-growth areas. Domestic firms concentrated
particularly in the areas of wireless, e-learning, eCRM (customer relationship
management) and enterprise application integration, including middleware.



HotOrigin found that 50 percent of Irish software firms have only been set up in
the last three years. Surprisingly the majority of these new firms have come out
of more established Irish software firms or universities rather than staff
leaving multinational companies in Ireland.



The report found Ireland scored well overall against other software clusters
around the world, including Silicon Valley, Israel and the Nordic countries.



However, additional difficulties of which Ireland must deal with relate to a low
level of venture funding, slow pace of deregulation of the telecoms
infrastructure and poor levels of primary research and development.



It points out that government policy and support plays a critical role as a major
differentiator between international software locations.



"While the current technology slump will impact the growth rates and increase
the level of casualties, there is positive news in terms of positioning of the
early stage software sector," said David Dalton, chief executive officer of
HotOrigin.