Growing SW Industry
The Korea Software Industry Association (KOSA) announced that it held a meeting for the 2017 SW 100 Billion Won Club at the BIT Computer headquarters in Seoul on July 17. It said the number of Software (SW) 100 Billion Won Club member companies, which run business in South Korea, increased by 17.6 percent, or 33, from 187 last year to 220 this year.
The KOSA divides SW companies into different groups according to their sales – 1 trillion won (US$900 million), 500 billion (US$450 million), 100 billion (US$90 million), 50 billion (US$45 million) and 30 billion (US$27 million). The SW 100 Billion Club includes firms with over 30 billion won (US$26.58 million) turnover. This is because sales of 30 billion won (US$26.58 million) in SW business are equivalent to 100 billion won (US$88.61 million) in other industries due to the nature of business, according to the KOSA. So, the association has selected and announced the list of the SW 100 Billion Club since 2013.
The study included eight out a total of 11 SW businesses, such as system integration, IT solution, game, outsourcing and embedded, based on annual sales in 2016. The three excluded businesses were IT solution distribution, information communication and network and HW. The combined sales of 220 SW 100 Billion Club member companies this year are 51.06 trillion won (US$45.25 billion), up 17.7 percent from 43.37 trillion won (US$38.43 billion) last year. This is largely due to the increase in sales of mobile platform-based content providers and new online-to-offline (O2O) companies.
The number of companies which turned over more than 1 trillion won (US$886.13 million) grew from 6 to 8 this year. Netmarble Games and Kakao were newly added to the list. Samsung SDS ranks top in terms of sales with 8.18 trillion won (US$7.24 billion), followed by Naver with 4.02 trillion won (US$3.56 billion), LG CNS with 3.04 trillion won (US$2.69 billion), Netmarble Games with 1.5 trillion won (US$1.33 billion) and Kakao with 1.46 trillion won (US$1.3 billion), Hyundai AutoEver with 1.34 trillion won (US$1.18 billion), SK Planet with 1.17 trillion won (US$1.04 billion) and DAOU Tech with 1.15 trillion won (US$1.02 billion).
There are 12 companies with sales of more than 500 billion won (US$442.87 million) including NCSOFT, NEXON Korea, POSCO ICT, NHN Entertainment, IBM Korea, Lotte Data Communication Company and KEPCO KDN. The number of companies with sales of more than 100 billion won (US$88.55 million) stood at 70, while that of companies with sales of over 50 billion won (US$44.27 million) and 30 billion won (US$26.56 million) reached 51 and 79.
These companies employed a total of 105,500 people, up 5.6 percent from 99,900 at the previous year, contributing to creating job. However, SK Holdings C&C, which makes non-SW sales after the merger, and Oracle Korea and MS Korea, which don’t officially announce their performance as a limited liability company, are excluded in the study. An official from the KOSA said, “This year, content providers, including Netmarble Games and Woowa Bros., and O2O companies are newly added in the club. We will try to include Oracle Korea and MS Korea, which are limited liability companies, in the statistics in the future.
Cho Hyun-jung, chairman at the KOSA, said, “Despite the global recession, the SW industry addressed concerns and achieved more than expected. This is because SW firms are continuously seeking measures to survive amid recent rapid changes in the industrial environment and the government has also supported with policy in order to promote the SW industry as a new growth engine.”