Munich, Germany -- At the opening address of a conference on April 15 where
a new Bavarian software plan was presented, the Bavarian Minister of Science
and Research, Hans Zehetmair, expressed optimism about parallel and
supercomputing developments in his country. The biggest news, however, was
announcement of formation of a venture capital fund to help Bavarian software
development.

  According to Zehetmair, the Bavarian Government is actively bolstering its
technological capacity with money it has received from private firms. As an
example he mentioned the Bavarian on-line concept, currently funding data
networks. Sixteen pilot projects are now being funded with DM 100 million
($US 65.3 million) till 1998; another DM 200 million ($US 130.6 million)
comes directly from partners involved in the projects.

  In Landshut, near Munich, the Bavarian State has itself founded a venture
capital company that will fund new start up companies in innovative
technological fields. Such start-ups need a second venture capital partner to
provide matching funds and support in marketing, financial and other areas.
About DM 150 million ($US 97.95 million) is available, but only DM 60 million
($US 39.2 million) can be invested in the first step. After gaining
experiences in funding companies, part of the rest will be invested in
different steps in the future.

ANOTHER LARGE GERMAN SUPERCOMPUTER CENTER

  Zehetmair explicitly addressed some HPC topics, expressing optimism that
another large German Supercomputer Centre, like HWW in Stuttgart, will soon
be installed in Bavaria. Furthermore, he foresees investments in parallel
computer installations at Bavarian Technical Universities (Fachhochschulen).
The colleges should assist and support small and medium enterprises in the
usage of this technology. This illustrates a new trend, also manifesting in
Bavaria, that industry and research should cooperate closely for efficient
transfer-of-knowledge.

  The conference was organized to present the results of the report
Softwaretechnik on software development from the Wissenschaftlich-Technischen
Beirat (WTB), the Scientific-Technical Advisory Board of the Bavarian
Government. Professor Heinz Schwaerzel presented the findings. He noted that
in the years 1993-1995, the Software part of the IT market showed growth of
7.2 percent and software-oriented services 6.1 percent compared to 4.7
percent total growth.

  Similar results have been noted for the US market. Schwaerzel commented
that although software and software-related services can be counted on for
production of new jobs, low-wage countries like India are becoming
increasingly important as software producers.

  Software as a component of other technical products is another vital area
receiving attention. In the report, the authors focus on telecommunication
systems, traffic and automotive technology as areas of significant impact for
Bavaria. In telecommunications, software accounts for 75 percent of
development costs, often becoming the key factor for growth.

  Automobile electronics has grown from 8 percent in 1980 to a projected 30
percent by 2000. The population's increasing mobility requires new traffic
control systems that are, in reality, information systems. Two Bavarian
companies, Audi and BMW, are well-known for their cars, so it is important to
be actively involved in software technology to improve overall
competitiveness.

  According to the WTB report, the European market in software and software
services totaled 60 billion ECU in 1994 and is shared between Germany (26
percent), France (18 percent), UK (17 percent), Italy (11 percent) and
others (28 percent).

  Schwaerzel noted that if we count the number of software developers in
different countries in 1992, America was leading with nearly 2 million,
followed by India (1.4 million), China (1.1 million), Japan (1 million),
Russia (0.7 million) and Germany (0.6 million).

THE FAST SOCIETY

  A key role in strengthening the Bavarian software industry will be
played by the FAST Society: the Forschungsinstitut fuer Angewandte
Software-Technologien (Research Institute for Applied Software Technologies).
This Society seeks to become the main information transfer vehicle between
industry and the political and scientific sectors. It is slated to be
funded for 10 years with a stable budget (after 3 years) of about DM 12 to 15
million ($US 7.84 to 9.8 million) per year, one third of which will come from
public funding.

  Professor Rudolf Haggenmueller, general manager of FAST, commented:
"Bavarian politics have recognized the importance of software technology and
will invest in it. But actually the amount of money is not known. FAST will
play the role of the independent program manager in that game."

  It is acknowledged that infrastructure at Bavarian universities and
technical universities (Fachhochschulen) must be improved. Research and
development projects with a total funding of DM 9 to 12 million ($US 5.88 to
7.8 million) per year will be initiated to accomplish this.

BAVARIAN VENTURE CAPITAL COMPANY

  A new initiative in the industrial area has emerged for funding the
foundation of new companies; it will take the form of a Bavarian Venture
Capital company. Zehetmair observed that legal, financial and infrastructure
conditions should be improved drastically as a result.

  Other steps to be taken toward these goals include: information for new
managers, advice on infrastructure and on financial constraints. The start of
a new secondary stock market, comparable to the American NASDAQ will be
considered. This would be help attract more venture capital for innovative
start-up companies.

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  Material in this report was reprinted courtesy of the author and the
Primeur Magazine Web site.