Software Development The software niches that have been developped in Belgium are speech recognition, security systems and electronic payments. Yet, the world leader in speech and IA sofware might be thretened to default. The financial sector has been a key actor in the development of some of these technologies.

  SOFTWARE CONSUMPTION (1)

Main segments
- Windows-based programs and applications
- Internet, Intranet, and e-commerce software
- networking software and network security products
- development tools
- gaming software
- Windows NT and UNIX-based products
- data warehousing software
- statutory and analytical consolidation software
- marketing applications software

The market for CRM software, although currently quite small in Belgium, has been projected by some analysts to grow at high rate in the coming years.

Growth
According to the Belgian IT market research firm Heliview, the fastest growing software expenditure by Belgian companies during 2000 was network management with an increase of 49 percent compared to 1999, on the other hand, expenditures for network operating systems was declining at a rate of almost 9 percent. During 2000 custom-made software was expected to grow at a faster rate (6.5 percent) than packaged software (4.2 percent).
Market growth for 2000 was estimated at 13.2 percent, with a growth rate of over 8 percent expected for American manufacturers exporting their products to Belgium. Companies from the United States currently control an estimated 40 percent of the Belgian software market.

Distribution
Belgium has an extensive network of highly qualified packaged computer product distributors. Types of distributors range from those with large dealer networks to small, value-added resellers who focus on a specialized market. The majority of software originating in the United States is sold via this network; however, several American computer software companies have their own subsidiaries in Belgium and have established their own distribution network throughout the country. Other utilized channels of distribution are specialized computer shops and mail-order houses.

  MARKET STATISTICS
 

(US$ millions)	1998	1999	2000
Total Market Size	1,555	1,792	2,204
Total Local Production	638	735	887
Total Exports	344	405	481
Total Imports	1,261	1,462	1,798
Total Imports from U.S.	758	811	936
Exchange Rate: BEF per $	36.3	37.73	41

Source: U.S. Department of State, FY 2001 Country Commercial Guide: Belgium

  SPEECH AND IA
Belgium has the leading company in speech and language technology products: Lernout & Hauspie, located in Ypres. It was founded in 1987 and offers now products in the different following segments: Healthcare, Voice Recording Solutions, Mobile Applications, including the Automotive Market, Technology Licensing and PC Applications Software. In January 2001, L&H and its Affiliates own 172 technology patents in the United States and 181 in Europe and the rest of the world. Yet, it is currently encountering difficult financial situations and may be forced to default.

  SECURITY SOFTWARE (2)

Overview
The ICT security (ICTSEC) market in Belgium has rapidly developed since 1997 and is predicted to sustain growth of about 30 to 35 percent during the years ahead. This growth pertains especially to firewalls, intrusion detection software, Virtual Private Networks (VPN), digital certificates, and Public Key Infrastructure (PKI) market segments. Of these applications, firewalls, intrusion detection software, and VPNs are already well introduced in large companies, and the small and medium enterprises (SME) market for these products is currently expanding. This growth in the SME market was made possible by the recent countrywide implementation of Asynchronized Digital Subscriber Line (ADSL) technology in the Belgian telecom network, resulting in the availability of affordable bandwidth.

Market situation
According to a Belgian value-added distributor of security products, some 150,000 Belgian SMEs are ready to invest in ICTSEC products and services. Belgium imports these products mainly from Israel and the United States. The large Internet savvy companies, deeply immersed in e-commerce activities, are implementing all-encompassing Internet security systems with high-end security features such as digital certificates and PKI technologies. In general, about three fourths of the Belgian companies have implemented some form of security measure. The most popular form is anti-virus software with 97 percent market penetration and the second is firewalls with 67 percent. The applications of more complex PKI or VPN solutions are less popular and the market penetration is less than 10 percent.

E government secure platform
Announced in the end of 2000, the plan was supposed to become partly operational within a year. The plan included the development of a central digital platform to which national, regional, provincial, and local administrations will be seamlessly connected. In addition to the new platform, the back office and front office will be reorganized, including the introduction of a portal site and PKI functionality that offers unique personal services to citizens in the front office. This PKI-project mainly covers the creation and certification of a Belgian e-ID card. According to a press article, the Belgian Post Group, formerly the Belgian Postal Service, was being considered as a possible manager of the portal site. The BPG has currently set up four subsidiaries, two of which are involved in e-services and e-business solutions. However, another prospective manager was Intrasoft International, a Greek-Belgian IT company. (See Government Policies for details)

Competition (mainly Israeli, American, and European brands)
Market leader - Check Point, an Israeli company whose firewall software has an estimated market share of 90 percent.
Other firewall brands - Alteon (plus load balancing), Axent, Fore, Lucent, Network Associates, Nokia, Watchguard, Sonicwall, and Netscreen (plus VPN).
Check Point is currently challenged, especially in the SME, ISP, and ASP (Application Service Provider) markets. Competitors such as Netscreen offer chip-based solutions, which perform at wire-speed and are easy to install. Prevailing intrusion detection brands are ISS and Computer Associates, and content screening and anti-virus market players are Content Technologies and Trendmicro. Authentication products on the market include RSA Security, Rainbow, Aladdin, and Vasco. The leader in Internet monitoring, reporting, and managing traffic is Websense. Cisco is a major supplier in integrated security solutions, whereas Computer Associates is involved in high-end security solutions against common threads, Business to Customer (B2C) Internet defense, and Business to Business (B2B) Trust Management.

Leading distributors
AB Computers
ACAL Belgium
Comsol
DCB
Peapod Distribution in Tervuren
Switchlink (Recently partially acquired by Brussels-based Intrasoft International)

Local Players

ICTSEC producers are numerous in Belgium. These companies are principally concentrating on market niches such as security of payments, electronic signatures, biometrics, application security middleware, and value-added services such as on-line security services and security portals:

- Brussels-based GlobalSign is a international certification network and PKI solution provider.
- Keyware has pioneered the field of biometrics. Co-headquartered in Belgium and Woburn, Massachusetts.
- Ubizen is a leading e-security solutions provider in Belgium. Its principal product line is MultiSecure.
- Utimaco Safeware Group, the German producer of professional and certified IT security solutions is also in this market. It develops and sells security solutions based on established standards for the mobile/desktop, network, e-commerce, and infrastructure market segments. The Belgian Army uses a VPN solution from Utimaco for the satellite-based transfer of patient data. SafeGuard Easy and a secure triple DES process are used to encrypt this highly sensitive data and protect the patients of the Army’s medical services.
- Vasco is an American/Belgian global enabler of authentication, authorization, and administration security.

  ELECTRONIC PAYMENT

The financial sector

The use of electronic payment is very popular in Belgium. Local financial institutions have led Europe in making innovations in electronic payments. In 1999, the first fully Java based payment terminal was launched. In 2000, the authorities accepted the registration of EuropeLoan Bank (www.europeloan.com), the first Internet only mortgage lender in the EU. In the end of 2000, during a normal Saturday, reportedly 2,8 million transactions were registered. The Banksys network, for example, connects every ATM and point-of-terminal in Belgium with the operational service at Banksys. The company has developed the first JAVA-based terminal, the C-ZAM/SMASH. It plays also an important role in the discussions of international standards in cash card-technologies, such as EMV and CEPS.

In 2000, Banksys launched Banxafe™, a solution that guarantees secure e-commerce and allows payment with Proton (an electronic purse smart card, cash card, or credit card that uses the bank’s secret code).

In 1994, the 5 largest Belgian banks established Isabel, a B2B electronic banking network that is now the largest certification authority in Belgium. One of the first B2B electronic market places in Europe, Isabel connects about thirty banks (including 15 foreign institutions) with more than 45,000 client companies through one multi-bank interface. The Isabel certificate, combined with RSA and Smart Card technology, is one of the most secure systems in the world for B2B e-commerce transactions.

The Belgian market has been chosen by PSINet to launch a European pilot project for its e-scan Managed Security Services, a distributed total solution for outsourcing of e-mail security. The service e-scan is part of their “Smart Global Office” offering that also includes VPNs.  Within 3 years, PSINet hopes for 1500 e-scan clients in Europe or 200,000 users (300 clients in Belgium). The e-scan service was developed in cooperation with Activis, the European Managed Security Services specialist.