Taiwan aims to increase its NT$120 million software industry by a factor of 100 within five years by developing open-source or free products such as the Linux operating system, government officials said yesterday.
However, industry analysts are skeptical about the plans.
"The Taiwanese software market has only been a few million NT to date," said Ministry of Economic Affairs' Industrial Development Bureau Director-General Chen Chao-yi (
"Only 10 percent of servers use open-source software and hardly any computers. We aim to have 30 percent of servers and at least 5 percent of computers using open-source software within five years," he said.
By 2007, Taiwan's software market will top NT$10 billion from NT$120 million last year, and the number of companies developing new software will grow from 20 to 50 in the same period, according to Victor Tsan (
Tsan and Chen were speaking at a press conference yesterday to launch a government-sponsored Web site to promote open-source software development.
The site -- www.oss.org.tw -- aims to publish software code for Internet browser, e-mail, office, and database functions that companies can use freely to develop their own unique software programs which are then included with hardware products such as personal digital assistants (PDAs) and home entertainment computers.
"Open-source software is not just a market in its own right, it also feeds into many different hardware products, creating huge opportunities for Taiwanese companies," Chen said.
Most of those opportunities will be in China, due to the common language the two countries share, he added.
The world's largest software company, Microsoft Corp, does not publish the source code for its software, forcing companies to buy its products. In Asia, more than 90 percent of computers have Microsoft operating systems, according to International Data Corp (IDC) figures.
Open-source software aims to break Microsoft's virtual monopoly.
"We hope open-source software can grow because more competition is better for the industry," Democratic Progressive Party (Legislator Mark Chen (陳唐山) said at yesterday's launch.
But the Taiwanese may be underestimating the cost of developing open-source software, one expert said.
"A large investment has to be made to turn open-source software into an industrial-grade product," said Hiro Kataoki, a vice president at US-based chip designer NetSilicon Inc.
"It sounds great -- you get free stuff, but then you spend two years fitting the software into an embedded device," he said.
NetSilicon sells embedded devices -- chips with software already integrated -- to the manufacturers of printers, fax machines, digital cameras, office entry systems and similar products. The company specializes in open-source software to connect products to the Internet without the need for computers, and software engineers do not come cheap, Kataoki said.
Other analysts agreed.
"Taiwanese companies definitely have to spend more money than they expect on open-source software," said Nathan Lin (林宗賢), an analyst at SinoPac Securities Corp (建華證券) in Taipei.
"But there are many opportunities for smaller companies that concentrate on embedded solutions," Lin said, adding that Taiwan should concentrate on simple products and not full systems.
The open-software initiative rang even hollower with another analyst.
"I'm concerned about the government putting money into open-source software, because it will be a waste of time and seems more like a marketing strategy," said George Wu (
"People like the idea that something is free, but nothing is free," Wu said.
"Taiwan should concentrate on semiconductors and chip design," he said.
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