The Korean software industry grew by 6.6 percent in 1998. However, this represents a levelling-off of demand when compared with the growth rates of more than 40 percent on average witness in the years before 1997. In fact, the increase is the lowest since 1992. The relatively low rate of expansion is mainly due to the economic downturn and the strictures of the International Monetary Fund's (IMF) restructuring program. Budget cuts in the public sector and the curtailment of information investment in the private sector have also eroded industry growth. In order to cope with the drastically changed business environment, software makers have heightened their marketing activities, in particular, exploring new markets overseas. Most software companies are optimistic about the market this year, but are cautious about whether their output will increase. Industry-wide, they forecast output will increase 10.9 percent this year. Despite the economic debacle which befell Asia and Latin America in 1998, the world software industry maintained steady growth throughout, boosted by the spread of informatization. The need to address the Y2K problem has also leant buoyancy to the software industry. In the United States, the information technology (IT) industry has spurred software output in the wake of productivity-driven corporate informatization programs.
The contribution of the software industry to gross domestic product (GNP) increased in 1998 to 1.34 percent. This was not because of rise in production in software industry but because of decline in GDP which began a year earlier. The same trend is expected to continue this year. The share of software industry in GDP is certain to increase further in coming years as it has a far-reaching effect upon other industries. The proportion of output by medium-sized companies in the software industry began to decrease from 1996 while the same trend in regard to small-sized operations was apparent from 1997. The ratio of output by medium- and small-sized companies to the industry total began to dwindle during 1998. In other words, output by the larger-scale enterprises in the industry has increased while the economy has been under IMF stewardship. This is because an increasing number of consumers preferred to deal with larger companies, wary of disruptions in supply caused by an increasing wave of bankruptcies and closures among small-to-medium sized enterprises as a result of the impact of the IMF restructuring program. The larger companies have increasingly been the subject of client preference for their superior performance in terms of stability of supply, management, repair and maintenance services. This industry shift has been in evidence from 1997, prompting the need for small-to-medium companies to achieve financial stability and enhance their marketing activities.
Package Software and computer-related Services The entire output of the software industry grew 6.6 percent on a Korean currency basis during 1998 to 5.337 trillion won. Within the industry, package software makers recorded a relatively lower growth rate of 5.2 percent while computer-related service industry marked a 7.1 percent increase from 1997, impacted by reduced information technology investment in the private and public sectors. The package software sector has experienced no discernible market-impacting developments.
At the start of the second half of 1998, the software industry recovered somewhat, boosted by the resumption of government procurement in the information sector, a rise in orders for Y2K-related projects, and renewed demand for information systems prompted by massive corporate restructuring in the financial sector. Of particular note is the fact a growing number of domestic producers have begun to switch their interest from the domestic to overseas markets. Computer-related Services IMF economic control has served to dampen investment sentiment and put an end to the high industry growth rates of more than 40 percent on average over the past several years. The systems integration (SI) market, however, grew to 2.147 trillion won last year, up 13.5 percent from a year earlier, significantly higher than growth in the package and unit system service sectors. Most large companies experienced an increase in their SI business while that in small and medium enterprises contracted. In SI and unit system service areas, consulting and personnel outsourcing businesses, respectively, led market growth. Multimedia development businesses grew 55 percent, boosted by growth in Internet-related projects in education and game programs. E-Commerce Market The world's electronic commerce market has increased by more than 60 percent on average every year, reaching $40 billion in 1998. The total volume of commerce through cyber space is expected to amount to $600 billion by 2002. The nation's fledgling cyber commerce market, however, lags that of the Western industrialized nations by about five years but it is expected to receive a boost following the passage of industry-related legislation in January this year. The domestic E-commerce market, worth some 17 billion won last year, is projected to increase to 35 billion won this year and expand to 270 billion won in 2002, registering annual increases of more than 200 percent. To capitalize on the opportunity this explosive development represents, domestic companies specializing in hardware, database-management and ERP (Enterprise Resources Planning) have responded by establishing E-commerce dedicated task force teams and forging business ties with other industry leaders. Solution developments in terms of secret access codes and certificates are expected to be big business for industry players. In particular, the standardization of code algorhythm now being formulated by KISA (Korea Information Security Agency), KECRI (Korea Electronics and Communications Research Institute, and the Agency for Defence Development is expected to be completed sometime during the half of this year, speeding the industry-wide development of code technology. Multimedia Contents Market Korea's multimedia market is projected to grow to 680 billion won this year and 2.248 trillion won in 2002, or an average annual increase of 46 percent. This is three-fold the 18 percent growth expected for the entire software industry over the same period. The world multimedia industry is forecast to increase to $55.2 billion this year and $123.7 billion in 2002, at an annual average growth rate of 33 percent Multimedia contents may be divided into the following categories - educational contents, games, computer animation and contents providers. The domestic market for educational contents is likely to increase to 205 billion won this year and surge to 666 billion won by 2002, growing by 48 percent per year on average. The game market is expected to grow by 57 percent on average, amounting to 203 billion won in 1999 and 795 billion won in 2002. Rapid development of personal computer-related products such as CPUs, graphic accelerators plus new network technology has served to boost the multimedia contents market. However, the industry has yet to domestically develop fundamental software technology.
System Integration Market The Korean SI market fell to 4.7 trillion won in 1998, down 11.3 percent from a year earlier, due mainly to depressed investment in the private and public sectors. Projections for this year, though, point to a 12.5 percent upswing to 5.3 trillion, thanks to an expansion of information system outsourcing, plus the government's stimulus packages and a recovery in information system investment. The size of the market size is expected to amount to 6 trillion won by 2000. Public Sector The public sector SI market is expected to grow 18 percent to 2 trillion won this year. State-funded projects are likely to dominate IT demand in the public sector this year, the government having earmarked 1.37 trillion won in 1999 for information infrastructuring, up 29 percent from 1998. Major stimuli to the Korean IT market in 1999 will include the government's expanded investment in informatization, a rise in IT market demand in the aftermath of public sector corporate restructuring, the need to resolve Y2K problem, and an expansion of outsourcing in the public sector. The Korean government has begun to formalize its outsourcing procedures in regard to public sector informatization, with the establishment of the National Informatization Center under the aegis of the NCA (National Computerization Agency). Financial Sector The financial sector SI market, worth 1 trillion won last year, is forecast to grow 20 percent to 1.2 trillion won this year and 1.4 trillion won in 2000. The growth is expected to come from the corporate restructuring drive in the financial sector. The expansion of E-commerce and the specialized demand which has developed to confront the Y2K problem, are also expected to intensify demand in the SI market. Manufacturing Sector The manufacturing sector SI market is forecast to climb to 1.1 trillion won this year, up by 10 percent from a year earlier. The market is also expected to grow by a further 10 percent in 2000 to 1.2 trillion won. Domestic companies will establish their own E-commerce information systems and will seek ERP solutions to enhance their competitiveness. Specialized Solutions Specialized solutions such as GW (Groupware), ERP and KM (Knowledge Management Systems) are expected to emerge as mainstay industry items in the future. A growing number of companies have begun to increase investment in the area with a view to enhancing their productivity after restructuring corporately. Industry observers predict demand from this market will increase further, boosted by the trend toward integration between package software and solution software. Enterprise Resources Planning Market ERP (Enterprise Resources Planning) system development involves the comprehensive and systematic management of human, groupware and software resources within a company to ensure their optimal use at lowest cost. The world ERP market is forecast to continue its 30 percent annual growth through to the early part of 2000 at which point the market will be worth $32.3 billion and some 40 percent of enterprises will have introduced ERP systems. The nation's nascent ERP market is forecast to grow by 50 percent to reach 135 billion won by the end of 1999 and maintain the same rate of growth until the early 2000. Groupware Market Groupware (GW) systems are designed to raise productivity and enhance information exchange. The GW market is forecast to grow by 50 percent this year to 120 billion won and to 170 billion won in 2000. The groupware market will be vitalized by the growth of Intranet and Extranet markets and the introduction of the "front office concept" covering ERP, Knowledge Management Systems, Production Data Management and Supply Chain Management. Knowledge Management Systems Market KMS (Knowledge Management Systems) is a comprehensive system for the effective utilization of all information available to an enterprise through information sharing and exchange. The KMS market which amounted to 40 billion won in 1998 will increase by 75 percent to reach 70 billion won in 1999 and surge to 90 billion won in 2000. Domestic companies such as LG-EDS, Daewoo Information & Communication, and Samsung SDS have been continually developing their own solution programs to cope with the rapidly expanding market. Geographic Information System Market The GIS (Geographic Information System Market) market, worth 150 billion won in 1998 is forecast to increase by 53 percent to 230 billion won this year and 260 billion won in 2000. The Ministry of Construction and Transportation has recently begun to undertake GIS-related projects jointly with provincial governments, earmarking 40 billion won budget to this end.
DR. AHN'S ANTI-VIRUS LABORATORIES, INC.
The company is now looking for new markets and business partners worldwide for its V3 anti-virus software and V3 product series. Total V3 Anti-Virus Solutions
Ahn's Lab offers the following products
Dr. Ahn's Anti-Virus Laboratories, Inc.
CCR Technology
By this simple fact, CCR is proud to claim their products are totally safe and convenient to use. Another excellent feature of CCR Internet's product is that users can receive technical support, service, and upgrades regardless of where they are in the world. Purchases can be effected securely through the CCR web site (www.ccrint.com, www.x2web.com). CCR is committed to putting the user first in developing its solutions and to continually improving its software products with the aim of making them the finest in the world. CCR Internet Inc.
ZIO Interactive Entertainment Inc. Offering a total entertainment concept through multimedia, ZIO Interactive Entertainment Inc. is organization of experts in multimedia entertainment and software development. ZIO's expertise covers new computing technologies such as Windows CE and Java. The company's record of achievement began with Puppy 006, the world's first Java-based digital pet-raising game. Then ZIO introduced another world-first, the Windows CE-based game, Palm Golf, which is already earning rave reviews worldwide. ZIO also developed the first multi-user online game in Korea called BumpingCar. ZIO also publishes a top-tier entertainment webzine called Club ZIO, which features Korean versions of Hollywood Reporter and Billboard, and much more. ZIO is ready to cooperate with other content providers on CD-ROMs, web programming, game software, and online services. From multimedia contents to electronic commerce, ZIO offers a total solution service. Major Achievements
ZIO Interactive Entertainment Inc. is willing to work as your business partner and adviser in all areas related to multimedia contents.
Hangul & Computer Co., Ltd.
Hancom's main product, Hangul Word Processor, has been continually recognized as a leading word processing software package since 1988. Hangul has a user base of approximately four million, and has received many accolades by both the public and press. It was voted by the press as the Hit Product of the Year for 1995, 1996, and 1998, won the 13th Venture Society Grand Prize of 1995 and the New Software Product Grand Award by the Association of Korean IT Industries. Hancom has also launched its Haansoft Internet service for its Hangul users in August, 1998. A nationwide campaign to promote Haansoft and its E-Commerce mall succeeded in attracting over 500,000 subscribers. Through 1999, additional services such as an Internet back-up service, internet/intranet hosting, a business-to-business procurement service, and Web-based computer education service will be added. Currently, Hangul's only major competitor in the word processing marketplace is Microsoft. However, Hancom's market share is 83 percent against Microsoft's mere 11 percent (Daily Hanguk, July 23rd 1998). In the government sector, Hangul firmly holds a market share of approximately 90 percent. Hangul's dominant market share in both the institutional and retail market can be attributed to the package's comprehensive features which include small size, fast speed, ease of use, wide support of Korean and Chinese characters, and its multilingual (English, Chinese, and Japanese) capabilities.
by Samuel Bae
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On a U.S. dollar basis, Korea's
software industry recorded growth
in excess of 30 percent annually
since 1992. However, as output
continued to expand the industry
grew by only 14.6 percent in 1997 in
dollar terms and actually declined
20.6 percent in 1998 as the Korean
won tumbled in value against the
greenback. Against this background,
Korea's share of world markets
contracted from 1.53 percent in
1997 to 1.12 percent in 1998.
Market observers, however, foresee
domestic producers increasing their
market share this year, as a result
of currency stabilization and a
return to economic growth. The IMF
has upgraded its economic forecast
for Korea and is now predicting
growth in the order of 2 to 3 percent
this year.
Client areas contributing to industry
growth included restructuring in the
financial sector, Internet-related
business, company management S/W
programs geared for small- and
medium-sized businesses,
ERP-related businesses, geographic
information system, Windows
98-related operating systems and
utilities, and various Internet-related
solutions. The computer-related
service market slumped during the
first half of last year, due to
contracted private investment,
budget freezes in the public sector,
and delays in order issuance.
Corporate investment in the
information area dried up while
businesses scrambled to maintain
liquidity amid the growing danger of
bankruptcy.
Dr. Ahn's Lab was established in 1995 to develop and supply its Total V3
Anti-Virus Solutions for all virus pathways such as desktop PCs, servers,
and the Internet. The V3 series of vaccine software accurately detects and
eradicates all viruses through its anti-virus WARP (World-class
Accelerated Recovery Processor) engine. Dr. Ahn's Lab provides prompt
protection solutions against computer-related crimes which are on the
increase in the information age. 
CCR Internet is a specialized Internet software specialist company that
has already produced, supplied and successfully installed more than 30
Internet products and solutions. CCR was established March 10th
1995 with the technical support and experience gained by working with
some of the world's best technical partners. "I think that if it isn't the
world's best, whatever it is, then it can't succeed, especially in the area
of software. It's meaningless to develop something if its not the best,"
said CCR Inc. chief director, Seok Ho Yoon. CCR shares its expertise industry-wide,
from major ISPs to small companies in need of good quality and economical solutions.
CCR solutions are being used by more than 200,000 people around the world. 
Hangul & Computer Co., Ltd. (Hancom, or HNC) is a Korean
corporation founded in October 1990. Hancom went public on
KOSDAQ in September 1996 and currently has 95 employees.
Hancom specializes in developing and marketing office
productivity software in the Korean market. Hancom Hangul word
processing software is the dominant software package in all
segments of the Korean market: government and educational
institutions, corporate clients, and the retail market. 