Monday, August 04, 2008

The Agony of Software Business for Malaysian Market

I had work for 2 software companies before, and even try freelancing for 2 more years, and I would say the future of software business in Malaysia is quite bleak in general, but you could still do it with a few strategies in place. There are a lot of opportunities, but the problem is with the expectation and price (market problem).

I first worked in a R&D company, got some funding and developed a few cool technologies, but just couldn’t sell it. I blame it on the weak sales and marketing team, but even a resourceful man from England also fail to help us. I know of another R&D company now doing almost the same thing, and I seriously have my doubt that will they ever make it as well.

My second company is sort of a software business consulting company, from a large group of companies. She didn’t do very well targeting private corporations, just break even and making losses at later stage. Too many demos and unclosed deal, and non-profitable deals in place due to poor pricing. At the end, they focused on overseas projects and government agencies mostly to keep afloat.

Even during my freelance years, SMB customer are probably willing to pay between RM 2-5K per small projects which aren’t really small, where everyone is a feature creep. RM 10K rarely happens in SMB, unless it is something big or long term. It’s something to do with awareness and “education”. A full-fledged accounting software, or Windows XP/Vista/Office only cost me around RM 1K, how to justify to pay you so much for a simple piece of software which does much less? “But we customized it for it, and you can’t get it out there.” Is it cheaper if I employ someone to build this for me? You charge me RM 8K for a 1 month job, while I can hire someone for 3 months with RM 8K. The price and expectation kill it all. Freelancing for SMB used to be feasible when I was much younger (or for parttime), but I can no longer afford such cheap rates nowadays.

So what is the real problem here? I think there is basically one main issue: Typical Malaysian thinks software development should be cheap and easy, like UBS accounting software. The fact is: it is neither both for most cases. Software development is a complicating process, it is not just about coding. It's understanding the business need better than the owner, control the owner from over-blowing his own budget to build a white elephant, coding with tons of testing (the easy part), tweak it to suite the onwer's personal taste while trying to satisfy the needs of dozen of users, entertain everyone request for changes which leads to more issues, more testing take place, more changes take place again, standy for support, repetitive explanation to everyone as if you are the business onwer who come up with this project, and maintain "professionalism" and deliver high-quality "almost bug-free" software, come up with something not only fully functional but look pretty as well (beauty lies in the eye of beholder), and attend more meetings to brief everyone and understand the business better, and continue to be on standby as well.

So how does other Malaysian software company make it then? Yes, there are ways:
  • You could build generic and cheap software like UBS accounting and trying to sell to 1000 people or more
  • You could target overseas market: though it’s still a 2000 dollar job, SGD 2000 or USD 2000 is much better than RM 2000.
  • You could be the vendors of big IT budget companies, like the Government Agencies, Financial Companies, and Oil & Gas Companies
Basically, work with people who needs you and can afford to pay you well.

1 comment:

Hamzah said...

rightly said bro, smb biz in malaysia sucks :-)

but if you're still interested in doing smb, pm me.