September 30, 2011 13:26
Samsung Electronics has decided to pay Microsoft a royalty for each smartphone and tablet PC it sells using Google's Android operating system. Microsoft says Android infringes on its patents, but Google provides Android as a free download for worldwide mobile phone makers, leaving it to the manufacturers to deal with any patent disputes. At the same time, Samsung and Microsoft have agreed to cross-license each other's patent portfolios and cooperate in developing a Windows Phone and in marketing activities.
Samsung is also pursuing the development of other software programs in joint projects with the Linux Foundation and Intel aimed at maintaining the upper hand in the patent battle with Apple, as well as avoiding over-dependence on Google.
At the crux of these complicated tie-ups, partnerships and rivalries between global IT companies is the fusion between hardware and software. The reason why Microsoft, Samsung and Nokia joined hands and Google acquired Motorola is because it is becoming ever more difficult to survive by being good at only hardware or software.
But in the Korean IT industry, the balance between hardware and software broke down a long time ago. After Korean firms neglected software development for decades, it has now become tough to find talented programmers in the country. The biggest reason was the way government and big businesses bought software, namely by pressuring subcontracted software companies to cut their prices and paying them only considering the labor costs of the programmers based on their academic degrees and experience. No consideration was given to the function and value of the software they supplied. If Steve Jobs and Bill Gates had set up their software companies in Korea, they would have earned a mere W80,000 (US$1=W1,175) a day, which is the rate applied to programmers without an advanced university degree.
In Korea, the company that places orders for software programs gain the ownership and patent rights, and software companies are prohibited from selling the same program to other companies. As a result, software companies became quasi-indentured subcontractors for particular buyers and barely made a living. Under such conditions, they could not dream of developing software programs to global standards.
Now KT has vowed to move on, saying it will pay software developers not only based on labor costs but for their expertise and the future value of their programs. Developers will also be allowed to retain ownership of their programs.
Korea's IT industry needs to bolster software developers to remain competitive. KT's decision to properly compensate software developers is a step in the right direction. The government and other businesses must follow suit.
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