Companies get down to business at this years’s east-west high-tech forum
With the Bill Joys and Mitch Kapors of the computer industry absent from this year’s bash, Esther Dyson’s second East-West High-Tech Forum in Warsaw last month was a much more down-to-business-like affair than the glitzy showcase provided for delegates in Budapest in November a year ago, writes William Fellows. Westerners were looking for information, distribution channels and customers in the East – many Eastern and Soviet delegates were looking, mostly in vain, for a way into the Western markets that they have been tempted with by their political leaders. However, given its size – a combined population of 420m – and the most recent demonstrations of political and economic will, changes now sweeping the former Eastern Bloc nations (though one only had to gaze out of the window at the impromptu street market which surrounds Warsaw’s huge palace of culture to realise that these things will take time) may eventually generate a market which is similar in size to that of Western Europe.
Graphisoft distributes Macs in Hungary, says grey dealing will fade out
Gabor Bojar, president of Hungarian computer-aided design specialist Graphisoft began distributing Apple Computer Inc Macintoshes last year. Before the recent political changes, he estimates, 75% of Macintosh systems in Hungary were supplied by so-called grey dealers, a euphemism for the network of unaccredited traders and resellers, through which computers previously found their way into the former Eastern Bloc countries. Bojar is confident that fewer than 20% of new Macintoshes will arrive in Hungary via these back doors by next year. Sales of Macintosh systems represent a 20% and growing share of Graphisoft’s revenues, and the firm says it will spin out that business into a separate Apple division soon. By March, Graphisoft will have a roll call of 95 employees, 70 of them engaged in software development. The seven-year-old firm now has its own operations in Germany and the US to market its software, but Bojar reckons it is impossible to get profit from software alone.
Soviet market is different, can survive on software sales alone
However, the managing director of Nantucket Corp’s Belgian operation, Vanessa Wade, argues that the Soviet market is different to Eastern Europe, and that companies can make a profit out of selling software alone. Nantucket runs an East European operation out of Brussels, but has a 30-strong joint venture in Moscow, which serves the Soviet republics via a network of 40 dealers. Nantucket originally sold its Clipper database language software through its partners’ existing channels, but after a year or so realised that software represented only a very small element of those partners’ business, so struck out for itself and created its own network of dealers. Our product, along with those of Borland, Microsoft and Norton, have been the most widely copied pieces of software, so we each have a good installed base – but we’ve got no money for it yet. It is still very difficult to explain to users that its better to pay for software, she says. One way is to promote the service and support facilities that are available only to registered users; we have to explain there’s more to software than a box and a set of diskettes. More recently, Nantucket has launched an amnesty programme to encourage users of copied versions of its software to register as bona fide customers, opening up a wider sales window for the company at the same time as admitting these users to its service and support programmes. The company estimates that there are between 50,000 and 60,000 pirated copies of its Clipper software in use.
The thorny issue of copyright: Software first enshrined in Soviet law in may
In fact, software got its first ever mention in Soviet law back on May 1 – the Fundamentals of Civil Legislation, chapter four which comes into force on January 1 1992. The Fundamentals recognise copyright in law, but only copyright that pertains to an individual, and not to a company
. The law permits a user to make a back-up copy of any application. Until that time, copying software, in any form, is not illegal. Documentation – and translations – are protected: they are treated as a book. At this point, the republics are still expected to adopt the Fundamentals, and in theory no-one seems to doubt that software should be subject to copyright laws. However, most delegates believed that a specific group lobbying for software copyright protection is needed, to try and influence a Russian parliament currently beleaguered by interest groups wanting to get their voice heard. In Jugoslavia’s troubled Slovenia province, an alliance of eight software companies calling itself the Assocation for the Protection of Intellectual Rights, ARPIR has been operating since 1989, under the charge of Alenka Dolinar, in Ljubljana. Estonia says it plans to address software copying by law, education and encouragement towards introducing sensible pricing policies, says Alexander Marin of Estonian Software & Computer: if Western companies think they can transfer their software prices to the East, then they are doomed. Bulgaria has a copyright law which hasn’t made it on to the statute books yet: it’s similar to the Soviet Fundamentals, according to Stephan Nedkov of Sofia-based Infoguard; he says that people are, gradually, coming round to the idea that it is better to buy than copy; until 1989, only a single unit of any Western product could be brought into Bulgaria; the only way to get products was to copy. Ales Kout, from Czechoslovakian legal firm Aura-Pont, reports that copyright law in Czechoslovakia was amended last year: software is now treated like a painting, film or a book, including subsequent translations and modifications; paragraph 152 of the Czech criminal code carries a penalty of one year in jail or alternatively a fine of 1m Krona. Romania now has a draft law before its legislature, which is again similar to the Soviet Fundamentals.
US vendors gain advantage: new COCOM rules are still not adopted in Europe
Although the Co-ordination Committee for Multi-lateral Exports CoCom – restrictions on what can go East have officially been relaxed, only the US has so far enshrined the new guidelines in law: Germany will do so next spring, but in the UK, for example, the Department of Trade & Industry still cannot grant a licence proper for those items now deemed exportable, because those guideline are not yet law; CoCom is still a problem, says Intel Corp’s manager of USSR operations, Simone Cools.
