Ministry of the Interior and Safety takes first step in 'revising the notice'
Commercial software in developed countries at a level of 25-30%
Positive signs of growth for domestic SW companies

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In the public software (SW) business, the realization of commercial software maintenance rates is a long sought-after dream for software companies, along with separate orders and expanding development of remote sites. It is an important factor in establishing the correct SW price, but it has stayed around 11% for several years due to lack of budget and awareness. The central government's plan to raise commercial software maintenance rates by about 2% in next year's National IT Plan is enough to give important meaning not only to commercial software companies but also to the software market. SW companies hope that the central government's aims will be realized in the year-end budget review.

◇First step in changing perception

The commercial SW maintenance rate is the ratio between maintenance cost and SW supply price. It is an important factor for commercial software developers with low delivery prices to secure profits and invest in new R&D. The maintenance rate for commercial software in the public sector has been standing at around 11% for several years. There are reportedly many projects with the maintenance rate that are less than 10%. On the other hand, commercial SW maintenance rates in developed countries are around 25-30%. The maintenance rate for global companies' products supplied to South Korea also exceeds 20%. Appropriate maintenance costs are an essential factor for the growth of domestic software companies and industries. This is why central government's plan to raise the maintenance rate of commercial software by 2% is so important.

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◇Results of tireless cooperation and effort

The Ministry of Science and ICT and the Ministry of the Interior and Safety have been working with the Ministry of Economy and Finance and SW companies to change the perception of commercial software maintenance rates. The first step was to revise the 'Guidelines for Establishing and Operating Information Systems for Administrative and Public Institutions (Notice)' by the Ministry of the Interior and Safety through inter-ministerial discussions. In the case of calculating the software maintenance cost, in accordance with Article 10 of the Software Promotion Act, the software business price calculation standard announced by the President of the Korea Software Industry Association shall be applied and rates will be specified. The Ministry of Science and ICT also revised the 'Guidelines for Writing an Action Plan for an Intelligent Information Society' to specify the maintenance rate. The central government was expected to check and raise the commercial software maintenance rates. The results are reflected in the 2023 National IT Plan.

◇Securing a budget is a challenge

It is essential for the National IT Plan to secure an appropriate budget in order to actually increase the commercial software maintenance rate. There are challenges to securing and executing a budget for a 2% maintenance rate increase since additional budget expenditures have been high for the past two years due to the COVID-19 pandemic.

However, there are growing expecations for the results of this year's budget review, as Do-geol Ahn, Vice Minister of Economy and Finance, announced in April that he would review the rate increase for each software product during the budgeting process for 2023. SW companies believe that it is a big change just because government departments and authoratative figures have different views on commercial SW maintenance rates. Positive changes are expected to continue starting with this.

By Staff Reporter Ho-cheon Ahn