Issuu

3Special

BBJ

SPECIAL REPORT:

Market overview

with company interview

Report

12-17

NNG goes from

SOFTWARE AND ERP is a digital hub. of engineers, Hungary abroad, With its wealth for programmers of higher salaries Despite the lure innovation. In this the scene of exciting highlight some Budapest is still and the local market section we survey ents. interesting developm

success to success

SOFTWARE AND ERP SEPTEMBER 05, 2014 – SEPTEMBER 18, 2014

VOL. 22. NUMBER 16

BUDAPEST

BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

NEWS

Cap on loans won’t pinch borrowers

More skill, less state ownership

The new regulations to prevent excessive debt should not do much harm to the lackluster level of loans being taken out in Hungary. In fact, commercial loans may be turning the corner, but personal loans are still sluggishly hewing to low post− crisis levels. 03 SPECIAL REPORT

Upstream is game, Twitch.tv is gamer Hard as it may be to believe, the contract for allowing people to watch other people play games on the internet is worth close to $1 billion. While an American−Hungarian company leads the market with the biggest streaming audience, an upstart startup was able to beat them at the gaming game and get the big payoff from Amazon. 21 SPECIAL REPORT

Not quite brain drain, but still a pain Even though Hungarian programmers have no problem finding work – pretty much wherever they want to go – many are opting to stay here at home. Still, the country could benefit greatly if it did more to nurture its best, brightest, and geekiest. 18

One of the CEOs of Videoton, the largest Hungarian industrial group in local private hands, talks about his firm’s success and his thoughts on policy: ‘Easing labor market tensions is an important task of the government. Buying private companies and trying to manage them is not.’ 8

SOCIALITE <html> <head> <head>

The IT Recruitment Specialist

</html>

Wines of the younger generation

<title>IT positions in every sector</title> <body> More than 10.000 IT Specialist in our social network Placing over 80 IT experts annually International placements of candidates </body>

(+36-1 ) 323-3500

info.hr@adecco.com

w w w.a d e c c o. h u

A festival in the center of town puts the spotlight on the creative crop of under−40 vintners and their amazing creations. Even if you weren’t there, you can still sample their excellent vintages all around town. 30

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

BBJ

3Special

SPECIAL REPORT:

Market overview

with company interviews

Report

12-17

NNG goes from

success to success

SOFTWARE AND ERP

SEPTEMBER 05, 2014 – SEPTEMBER 18, 2014

VOL. 22. NUMBER 16

BUDAPEST B

BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

NEWS

Cap on loans won’t pinch borrowers

More skill, less state ownership

SUBSCRIPTIONS Call +36 1 398-0344, or email circulation@bbj.hu BUDAPEST BUSINESS JOURNAL 1 year HUF 27,500+VAT 6 months HUF 13,750+VAT 3 months HUF 6,875+VAT

SPECIAL REPORT

SOCIALITE <html> <head> <head>

The IT Recruitment Specialist

</html>

Wines of the younger generation

<title>IT positions in every sector</title> <body> More than 10.000 IT Specialist in our social network Placing over 80 IT experts annually International placements of candidates </body>

(+36-1 ) 323-3500

info.hr@adecco.com

w w w.a d e c c o. h u

Newsletters HUNGARY A.M., ENERGY TODAY, REGIONAL TODAY 1 year HUF 179,000+VAT 6 months HUF 104,900+VAT 3 months HUF 58,900+VAT BOOK OF LISTS 2012-2013

HUF 19,120+VAT

DIGIBOL Subscription fee: HUF 49,900 + VAT

EDITOR-IN-CHIEF: Tom Popper ASSOCIATE EDITOR: Robin Marshall EDITORIAL STAFF:

Florence De Bruyere, Gergely Herpai, Levente Hörömpöli-Tóth, Christian Keszthelyi, Gabriella Lovas, Robin Marshall, Tom Popper, András Zsámboki LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu DESIGN:

Absolut Design Stúdió (production@bbj.hu) LAYOUT:

Norbert Balázs ADVERTISING:

Absolut Media Zrt (hirdetes@amedia.hu) SALES: sales@bbj.hu CEO:

Balázs Román PUBLISHER:

THE EDITOR SAYS

Back to school, with some trepidation As the school year begins, it’s heartening to see officials taking up educational policy. Unfortunately, we worry that some of their efforts involve the government overstepping its role, with poor results. Even more disconcerting is the fact that the worst marks would go to the head of the central bank. We might give a barely passing grade to the August 28 announcement by Economics Minister Mihály Varga that his ministry will be taking over direct administration of vocational schools. As industrial production grows in importance for the Hungarian economy, the government has tried to entice manufacturing. One thing producers have repeatedly said is that they need a workforce that is well trained in real work, real world skills. An effort to improve vocational training helps young school leavers join the work force, and by providing better−equipped workers, it adds a vital incentive to attract producers to Hungary. Still, we question whether increased government involvement will improve schools or simply add a layer of bureaucracy that makes the system less efficient and effective. Another instance of government involvement in education seems more dubious: This year schools will be required to use the new national textbooks. Because teachers cannot assign any texts aside from the government−subsidized ones, officials say, students will not be forced to buy expensive books. When the law was passed last year, private textbook makers complained that the government monopoly destroys a legitimate business. Even more disconcerting is the way central supply of textbooks gives the government extensive control over the curriculum, a situation that opens the door to potential abuse. Through its new media law, the current government has already shown a strong desire to control what people read, and it fought hard to erect a Szabadság tér statue that critics say is an attempt to whitewash past crimes of Hungary’s home−grown fascists. In this situation, it is not unreasonable to worry that the government’s idea of a good textbook might contain some revisionist history. It’s hard to give a passing grade here. Again, the question is whether the government’s involvement will actually make things better. One man who believes he knows the answer to this question is György Matolcsy, governor of the central bank. He announced on

August 28 that the Hungarian National Bank is contributing HUF 200 billion to four foundations established to support instruction in economics and finance, because he sees the need to replace the “obsolete doctrines and mistakes of the neoliberal economics school”. Since then, Matolcsy has explained what doctrines we need to replace them: his own. Matolcsy frequently boasts that, in his previous job as economics minister, he used “unorthodox” policy – including special taxes on certain sectors of the economy and nationalization of formerly private firms. He seems convinced that these measures are a raging success, though we’re not so sure. In announcing the endowment, which is one−and−a− half times the state’s annual expenditure on higher education, Matolcsy said that it would not cost the taxpayers anything. He explained that the money is taken from the profits the MNB realized while cutting the base−lending rate over the last two years – and also from the central bank’s “money creation”. In recent weeks, the National Bank has reportedly spent HUF 415 million for the Chateau Borbély in Tiszaröf (to be used as a vacation home for bank employees), HUF 12.56 bln for the Eiffel Palace office building downtown and about HUF 450 mln for a building in District V. The bank has justified all these purchases as being good business decisions. Pardon our neoliberal economic ignorance, but the idea of the central bank producing money without any costs to the state or its citizens seems, well, unorthodox. And the real estate purchases appear to exceed the bank’s remit. Neoliberally speaking, a central bank’s job should be to oversee monetary policy, protect the country’s currency, set interest rates and act as the government’s lender of last resort. We are ready to be proven wrong, though that seems unlikely. While Matolcsy has been shopping, the country’s currency is hitting new lows. Much of this may be due to the crisis in Ukraine, but widespread concern about the country’s unorthodox economic policy does not help. Now is a time for the central bank’s governor to be worrying more about the forint and less about what he can buy with it. Until his performance improves, it is hard to give the man a passing grade.

Tamás Botka CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu PRINTING:

Absolut Print Kft

Then and now

MEDIA REPRESENTATION: Absolut Media Zrt Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu BBJ-PARTNERS

What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential. The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2011 BUSINESS MEDIA SERVICES LLC with all rights reserved. The Budapest Business Journal’s print run is audited by MATESZ, 1034 Budapest, Bécsi út 122-124, a member of IFABC.

Students stand outside the Erzsébet girl’s school in 1905, just three years after the building was constructed according to the plans of Sándor Baumgarten and Zsigmond Herczeg.

BBJ.HU YOUR DAILY DOSE OF INFORMATION IN BBJ QUALITY

At left is the school today. Now known as Teleki Blanka Gimnázium, it is a co−ed secondary school.

BBJ

1 News

NEWS

Ukraine crisis hurts here

NEWS

ATM gives out Bitcoins

macroscope

Debt cap not likely to stifle lending

MACRO

Rules to prevent homeowners and other borrowers from getting in over their heads are seen as less restrictive than the rules set by the banks themselves, but the trend in credit is still sluggish.

Speaking X of ﬁgures The Budapest Business Journal presents some of the most important macro data of the past fortnight.

FORINT HANGING AROUND FOR A WHILE A new, harder−to−counterfeit HUF 10,000 note was unveiled by the Hungarian National Bank (MNB) on September 1. The bank’s announcement that redesigns all of the bank notes would be released between the end of this year and 2018 stirred criticism from the Socialist Party, who said that this is a clear admission that there are no near−term plans to convert to the euro in Hungary. The Socialists blamed inept administration by the MNB and the ruling Fidesz party. Prime Minister Viktor Orban has said that a decision on joining the euro zone should wait until per−capita GDP reaches 90% of that of the euro zone – even if that means waiting 10 years. Hungary’s per−capita GDP is 67% of the EU 28 average in 2013, Eurostat data shows.

€584.1mln Hungary’s trade surplus in June, according to KSH. The number represented a 9.3% increase in imports from a year earlier, while the volume of exports rose 9.5% y.o.y.

7.9% Unemployment rate in May−July, which is an improvement over the same period a year ago, when unemployment

will be stricter, at 25% and 10% respectively. For high−income earners they will reach 30% (euro) and 15% (other currencies). As for the LTV ratio, the rules currently in force have been used to ensure continuity of the regulation, according to the MNB. The ratio is 80% for HUF mortgage loans and 75% for car loans. In the case of EUR loans, LTV is set at 50% and 45% respectively. TRENDS IN LENDING While corporate lending has turned the corner, consumer credit hopefully finally hit the bottom in the second quarter of 2014, said Vonnák when he presented the results of the MNB’s latest “Trends in Lending” survey. In business lending, the previous 4−6% declines came to a halt. While lending standards continue to be strict, interest rates have been significantly lowered due to the base rate cuts. He pointed out that long− term business loans in particular exhibited a strongly improving trend, largely driven by the central bank’s Funding for Growth Scheme (FGS). In Q2 2014 the corporate loan portfolio increased by HUF 43 billion based on transactional data, the survey shows. Disbursements exceeded repayments in the case of both forint and foreign currency loans. SME loans increased by 1.2%, while the overall corporate loan portfolio expanded by just over 0%.

Household lending shows some signs of recovery, but there is still a long way to go to see a real turnaround, said Vonnák. Households are still trying to get rid of their debt, although lending standards have eased for both mortgages and unsecured consumer loans. The survey shows that household loans continued to shrink by HUF 61 bln in Q2 as a result of a contraction in the foreign currency loan portfolio. The HUF loan portfolio increased on a transactional basis, due to the significant rise in the volume of new lending. Based on transactions, the annual rate of decline in the stock of household lending was 4.9% at the end of the quarter, reflecting an almost 10% decline in foreign currency lending and a 1.3% increase in forint lending. As of August 22, credit institutions had concluded contracts with more than 13,000 SMEs worth a total of more than HUF 1 trillion in the first and the second phase of the FGS, said Vonnák. Of the HUF 325 bln granted during the second phase, new loans accounted for 98%. Within that, the share of investment loans and working capital loans were 61% and 23%, respectively. The share of micro−enterprise loans increased from 33% in the first phase to 40% in the second. Average loan size shrank across all enterprise sizes compared to the first phase.

was at 10.1%, according to the Central Statistics Office (KSH).

1,102 Number of special government bonds giving foreign holders an opportunity for permanent residency in Hungary that were sold by the end of August. The bonds cost €250,000.

2.3% Increase in Hungary’s retail sales, y.o.y. in July. The number represented a slowing of sales growth as compared to June, when the increase was 4.1% .

Source: KSH, MTI

Hungary’s central bank will introduce a debt−cap regulation as of January 2015 to prevent excessive household indebtedness and a renewed build−up of foreign currency loans, the bank said on August 27. The announcement by the National Bank of Hungary (MNB) did not come a surprise, as the regulation had already been trailed earlier this year. The European Central Bank positively assessed the draft decree and its expected impact on financial stability in June. The new provisions must be applied to all new loan agreements in Hungary as of 2015. The package introduces two new ratios to regulate households’ borrowing. The payment−to−income ratio (PTI) will limit the maximum initial debt−servicing burden as a percentage of customers’ monthly legal income. The loan−to−value ratio (LTV) will cap the maximum amount of the retail loan as a percentage of the value of the collateral. In the case of mortgage loans, this is the value of the property. Analysts agree that the new regulation will not result in an excessive tightening of access to forint loans. Erste analysts pointed out that as Hungarian banks’ own internal rules are currently tighter than the MNB’s new regulation, lending activity is not expected to decline. MNB director Balázs Vonnák told reporters that the new caps, which have been determined after lengthy preparations and research, are not effective limits, as current corporate and retail ratios are much higher. He also stressed that, due to the more lax limits, the new regulation will presumably not lead to a cutback on lending, at least not in the short run. However, the PTI ratio might have a restrictive impact as only proven net income, such as wages, pensions, and family allowances, can be included in disposable income. In doing so, the MNB aims to whiten households’ income, he added. Banks will have to calculate the PTI ratio for all new borrowing including consumption loans, mortgage loans and car loans in excess of HUF 200,000, the MNB said. The PTI for all new forint loans cannot exceed 50%. For high−income borrowers with a net salary of more than HUF 400,000, the limit is no higher than 60%. The PTI limits on euro and other foreign currency loans

Photo: MTI: Zoltán Máthé

GABRIELLA LOVAS

WWW.BBJ.HU

04 News

IN BRIEF ANALYSTS: HUNGARY’S GROWTH MAY SUFFER FROM UKRAINE CRISIS Hungary’s economy is set to struggle in the headwind stemming from the Ukraine crisis combined with a slowing eurozone, London−based emerging markets economists said September 2. In its daily emerging markets report released to investors in London, BofA Merrill Lynch Global Research – the research unit of Bank of America− Merrill Lynch – said its forecast of 3% growth this year already assumes a sharp slowdown in the second half. Protracted tensions surrounding the Russia−Ukraine dispute may extend the negative drag into 2015, “shaving around 1 percentage point off our 3% growth estimate, due to lower exports and less investment”. In such an event, inflation may not return to the 3% target by the end of 2015 as currently expected, but only in 2016, Bank of America−Merrill Lynch said. BP COUNCIL VOTES TO BORROW FOR METRO 3 UPGRADE The Municipal Council of Budapest yesterday voted on August 25 to move ahead on the financing of renovations on the city’s Metro Line 3, including making preparations for a loan to fund the project, according to reports. The proposal passed with 28 in favour and two against, with only representatives of the opposition E−PM party opposing the motion. They also moved to declare the project a priority investment, and asked Budapest Transport Company BKV to call a tender for the refurbishment of carriages on the metro line in close cooperation with the City and Budapest Transport Center BKK. The decision means the mayor of Budapest is authorized to start talks on a loan to finance the Metro 3 upgrade, and to seek necessary guarantees after consulting with the minister of development. TABLET USAGE BOOMING IN HUNGARY Some 20% of adult Hungarian internet users have tablets, with half of them using their devices for watching videos – mainly via online streaming – eNet Telekom’s report revealed September 2. Though the number of tablet users is on the increase, they tend to keep free applications installed on their devices, and avoid paid apps, the report said. Among adult Hungarian Internet users, one in five persons has a tablet, according to the research. Most of the devices are based on the Android operating system. Even though the ADVERTISEMENT

general willingness to pay for apps is low, now there is a group of Hungarians who are willing to spend money for that purpose. Of those who do not already have tablets, many do not own such devices yet but are planning to buy them in the future. One in five adult Internet users has a tablet, and one in four would be willing to buy one. Another 35% claim to have no intention to purchase such a gadget but are open to the idea of trying one. Only 18% of the interviewed adult Internet users are not interested in these devices. UTILITY FIRMS TO MERGE; LÁZÁR WILL TAKE CHARGE The government plans to roll the state−owned electricity, gas and district−heating companies into a single, non−profit holding company, Hungarian news portal origo.hu reported. The head of the Prime Minister’s Office, a position currently held by János Lázár, will exercise ownership rights and regulatory powers over the utility company. The government has tasked a working group with preparing the merger. The justice, development, and interior ministers as well as the president of the Hungarian Energy and Utilities Regulation Office (MEKH) will participate in the working group, which must submit a proposal for the necessary legal changes by September 15, according to a decree, origo.hu said. The government set up the working group to prepare for non−profit public services through an earlier resolution published on August 15. According to that decree, the government seeks to ensure cheap and sustainable public utility services. This is the latest stage in government streamlining of the utilities sector. Recently, the state−owned energy company MVM bought a minority stake in gas distributor Főgáz from German utilities company RWE. GYURCSÁNY: LEFT FACES EXTINCTION WITHOUT COOPERATION Hungary’s left−of−centre democratic parties have the choice of either uniting and forming a single Democratic Party or “political death”, Ferenc Gyurcsány, leader of the leftist Democratic Coalition (DK), was reported as saying. The current election system forces a situation whereby the democratic parties must unite or face extinction, the one−time prime minister told the daily Népszabadság. “The optimal ultimate goal is clear: establishing a uniform Democratic Party. But in view of the stumbling preparatory negotiations for the municipal elections and the alarmingly low degree of willingness to compromise, I think we are still very far from this,” he said ahead of the October local ballot. If the election system stays the same, the left− of−centre parties will have to join forces for the 2018 general election, too, Gyurcsány said. As intermediate solutions, he mentioned a party

Photo: Lajos Soós / MTI

NEWS

Budapest Business Journal | September 05 – September 18, 2014

ATM IN BUDAPEST DISPENSES BITCOINS Hungary’s first Bitcoin ATM started operation at the Anker Klub on Anker köz in the heart of Budapest, the machine’s owner Aug. 25. Users can deposit forint bills in the machine and receive Bitcoins, the digital currency that is gaining traction around the world. If the user has a Bitcoin wallet, the QR code can be read on the device. Anyone who does not have the Bitcoin wallet mobile application can print out a sheet of paper with a QR code representing the purchased units. Bitcoins were invented for trade on the internet. They are not issued by a central bank, but are valued based on demand. They are currently valued at around $508, but their value has fluctuated widely, reaching $1,147 last December. This Bitcoin ATM was created by a firm called Lamassu and is locally owned and operated by Barnabás Debreczen, shown here in Budapest’s Heroes’ Square. union, a joint board, or looser forms of cooperation, such as permanent inter−party consultations as possible options. “Make alliances, resist, develop programmes and primarily take care of one another – this is the task,” he said. MNB FUNDS SCHOOLS TO REPLACE ‘NEOLIBERAL ECONOMICS’ In an effort to create a new generation of Hungarian economists who do not hew to “obsolete doctrines and mistakes of the neoliberal economics school”, the Hungarian National Bank (MNB) is contributing HUF 200 bln to four foundations established to support instruction in economics and finance, central bank governor György Matolcsy was reported as saying on August 28. Matolcsy, who has boasted of the success of his “unorthodox economics” when he was Hungary’s minister of economics in 2010−2013, said the endowment will not cost taxpayers anything, because it is taken from the profits that the MNB realized while cutting the base rate over the last two years – and also from the central bank’s “money creation”, according to reports. Matolcsy was reported as saying that the money would go to a faculty of economics and finances in Kecskemét; a faculty of finances in Targu Mures, in the section of Romania with a large ethnic Hungarian population; a doctorate school in the Buda Castle and a training center in Pest. Weekly HVG notes that the HUF 200 bln endowment for the schools is one−and− a−half times the annual amount that the state spends on all higher education.

PURCHASING MANAGERS INDEX DOWN IN AUGUST 2014 Hungary’s seasonally−adjusted Purchasing Managers Index (PMI) fell to 51.0 points in August, dropping from 56.6 points in July, the Hungarian Association of Logistics, Purchasing and Inventory Management (Halpim) announced on September 1. An index value above 50 shows expansion of the manufacturing sector, while a value under 50 signals contraction. The index in Hungary has been above the growth threshold for more than a year, as industrial production has been booming. Among the sub−indices that comprise the PMI, the new orders index “fell sharply”, according to the association, which compiles the index. Despite the decrease seen in August, the production volume index rose and showed higher output for the tenth month in a row. Compared to July, delivery times were longer, while purchased stocks were down. BOOM IN ‘BABY BONDS’ FOR NEWBORNS So far this year, more than HUF 1 billion has been placed in Hungarian “baby bonds”, the head−start savings accounts opened by the state for newborns, according to business daily Világgazdaság. Out of 53,283 babies registered with the state treasury in January−July this year, 21,377 had a head− start account. This compares with only 5,000 accounts opened for more than 50,000 babies in the ﬁ rst seven months of 2013.

Innovation, security and comfort. Drive with pleasure. Titanium edition: 2.0 TDCi diesel engine (140 PS), Alcantara trim, Full colour 7” touch screen navigation system, Parking radar, Heated windshield and heated front seats, 16” 10 spoke alloy wheels

FORD MONDEO from HUF

The offer is valid with the purchase of a 5-door Ford Mondeo 2.0l TDCi (140 PS) M6 Titanium model, with Ford Credit Bonus Financing. The depicted model is an illustration. Combined fuel consumption: 4.5-4.9 l/100 km; combined CO2 emission: 119-129 g/km. Ford Credit Bonus Financing is available only in finance lease format in Hungarian Forint. The smallest amount to finance is HUF 800,000 and the minimum duration is 24 months. Reference APR on HUF base is 18.17%-35.15%, which is calculated for the amount of HUF 2,000,000 due over 60 months. APR is determined by official terms and conditions and the operative legal measures therefore it is subject to change. Value of APR does not reflect the exchange and interest risks of financing. This advertisement is not an official proposal. The services of Ford Credit are provided by Lombard Lízing Zrt., the official partner of Ford in Hungary. The depicted car is an illustration and does not necessarily represent the offer. Beside the 2-year basic warranty we offer a +3 year Ford Extra Warranty with all new car purchases for Your convenience. Further details are available at Your Ford dealership and on ford.hu.

6 150 000

BBJ

2Business

BUSINESS

Norbi on the BSE

Private is best

Invitel partners in video remote service for hearing impaired Interest in the video remote interpreting service of the National Association of the Deaf and Hearing Disabled (SINOSZ) is running much higher than expected, according to Invitel, the local service provider that Imre Mártha, is playing a key role in the Chief Operative project. Director at Invitel The service allows someone with a hearing impairment to communicate with others using an interpreter who is located somewhere else but is connected via a video camera. The video interpreter facilitates communication between the hearing disabled person and their conversation partner. The current project, aimed at Hungarian speakers, is unique in Central Europe.

In developing and implementing the service, Invitel is providing the necessary telecommunications, network and software development, as well as hardware components. The system has been tested in everyday situations since March, and it is currently used by approximately 780 deaf and hearingimpaired persons. “Today there are approximately 60,000 deaf and 300,000 hearing-impaired people living in Hungary. To allow as many of them to use the video remote interpreting (VRI) service as possible, we lent out close to 1,250 tablets for testing purposes,” said Róbert Ormódi, Executive Director at SINOSZ. The info-communications components of the KONTAKT Interpreting Service were developed on Invitel’s nation-wide telecommunication network, in the company’s data center, while its

COMPANY NEWS

ELECTROLUX ASSEMBLES 10 MILLIONTH ERGORAPIDO Swedish household appliance maker Electrolux assembled the 10 millionth Ergorapido vacuum cleaner at its plant in Jászberény. The machine was assembled by Electrolux’s man in charge of developing small household appliances Carl Nyberg and his deputy Attila Vass. The Ergorapido is sold in more than 70 countries around the world. TELENOR PLANS 1,000 NEW BASE STATIONS IN 2014 Mobile telecommunications company Telenor Magyarország is erecting 1,000 base stations this year, according to deputy−CEO Zsolt Sepsi, ma.hu/itmania reported. The company set up almost 650 new base stations, the antennae that carry their communications network, in the ﬁrst half of the year, Sepsi said. Telenor Magyarország has spent more than HUF 30 bln on network developments over the past four years, and it expects to spend another HUF 10 bln in the coming years, he said. AUDI ALREADY PLANNING TO EXPAND NEW FACILITY German carmaker Audi plans to expand its recently inaugurated logistics base in Győr, northwest Hungary, regional daily Kisalföld reported. Audi opened the 75,000 square meters base, built at a cost of HUF 10 bln (€31.92 mln), last fall. Mónika Czechmeister, a spokesperson for Audi Hungária, told the paper that the unit would like to build a second warehouse in Győr.

Audi makes engines and cars in Győr. LIDL MAGYARORSZÁG EXPORTS MORE HUNGARIAN VEGETABLES AND FRUIT Lidl Magyarország, the Hungarian subsidiary of the German discount chain, exported 22,500 tons of fresh fruit and vegetable worth HUF 3.5 bln in H1 this year, the company informed Hungarian news agency MTI. Calculated in forint terms, exports rose by 75% year−on−year. The majority of the exported goods went to Germany, Romania and Slovakia. Green pepper, apricot, fresh mushroom and water melon were bestsellers. Lidl Magyarország exported 11,000 tons of watermelon in H1, 38% more than last year over the same period. The company expects to export 6,000 tons of fast−frozen vegetables at HUF 2 bln this year, more than the 4,200 delivered last year and than the 5,300 tons sold annually on the domestic market. Frozen vegetables come from Hungarian suppliers. FOREIGN PAYPAL TURNOVER OF WEBSHOPS RISES 21% The foreign PayPal turnover of Webshops in Hungary rose by 21% y.o.y. in the ﬁrst half of 2014, PayPal told MTI. PayPal said that foreign shoppers showed a particular interest in computer games, entertainment electronics, car parts, fashion items and travel services at Hungarian webshops in H1. Most of the costumers of Hungarian online shops are from Europe, PayPal said. 17% of the payments come from the UK, 11% from Germany and 34% from North America.

software technology background was put in place by E-Group ICT Software Zrt. This successful development achieved ﬁrst place in the large corporate category of this year’s InnoMax Award. “As a local ICT operator, Invitel considers it especially important to participate in the implementation of projects that, beyond the complexity of technical solutions, also support good causes,” said Imre Mártha, Chief Operative Director at Invitel.

MASTERPLAST PROFITS DROP ON BIGGER FINANCIAL LOSS Hungarian building materials company Masterplast’s net income fell by 50% in H1 as compared to last year, due to the swell of fi nancial losses in the company, an earnings report revealed. The revenue of the company dropped by 7% to €35.91 mln, however material and payroll costs fell at an ever faster pace, lifting the operating profit of the company by 28% to approximately €1 mln. The company’s fi nancial loss reached €847,000, more than double the €307,000 loss in the base period. Masterplast had total assets of €55.44 mln at the end of June, which was down by 14% on a year−on−year comparison. Net assets were down by 6% at €21.70 mln year−on−year. GROWING WIZZ AIR ADDS DESTINATIONS, FLIGHTS, PLANES Hungarian low−cost airline Wizz Air announced it would be adding commercial flights to Lisbon and Maastricht in a Budapest press conference, in line with growing passenger numbers. Passenger numbers reached 15 million in the 12 months to the end of August, a new record, the company announced today. Passenger numbers were up by 17% from a year earlier. Load factor during the period reached 86%. Boosted by its growing trend the airlines announced that it would begin the new routes by spring of next year, and that it will be adding additional flights to its existing destinations, so that it will have a total of 17 new flights by spring of 2015. Wizz Air also announced yesterday that it would buy its ninth new Airbus A320 planes by spring, and that it is projecting 15% growth year−on−year in 2015. GEDEON RICHTER AND US PALATIN TO MARKET NEW DRUG IN EUROPE Hungarian drug producer Gedeon Richter has concluded an agreement with U.S.

Palatin biopharmaceutical company Technologies to develop and commercialize bremelanotide, an active ingredient in a drug designed to treat female sexual dysfunction (FSD), the Hungarian company announced. The drug will be marketed in the European Union and in a few other countries. FSD is a medical condintion suffered by some women that interferes with their sexual pleasure and can reduce sexual desire. Certain drugs have shown potential in treating the condition. Under the terms of the agreement, Palatin will receive total upfront payments of €7.5 mln. It will also receive €2.5 mln upon initiation of its clinical trial program in the United States and a further €20 mln related to regulatory milestones. Palatin is expected to receive up to €60 mln on sales and double−digit royalties on net sales in the licensed territories, Richter added. Palatin and Richter will cooperate to obtain regulatory approval in Europe. However sales, marketing and commercial activities in the licensed territories will be the sole responsibility of Richter. ELMŰ−EMÁSZ REVENUE FALLS IN H1 Electricity distributors EMÁSZ and ELMŰ had decreased revenue in y.o.y. terms in the first half of 2014, while EMASZ’s net profit rose y.o.y. and ELMŰ’s declined, according to the companies’ consolidated IFRS reports for the period, published August 29. EMASZ had net profit of HUF 1.8 bln and revenue of HUF 45.5 bln in H1, up 11.1% and down 7.06%, respectively. ELMŰ had net profit of HUF 4.6 bln on revenue of HUF 112 bln in H1, down 2.4% and 1.1%, respectively. Germany’s RWE−EnBW have a majority stake in both ELMŰ and EMÁSZ, while the state−owned Hungarian Electricity Works (MVM) owns a minority of the companies. EMÁSZ and ELMŰ are both Equities Standard−category issuers on the Budapest Stock Exchange.

WWW.BBJ.HU

2 Business

Budapest Business Journal | September 05 – September 18, 2014

Fitness-guru to Added value enter the bourse EXPERT OPINION

Experts say companies’ export financing provide significant business opportunities. In this interview, István Fetter, head of CIB’s Trade Finance Division, talks about his bank’s offerings in this area.

Helping people burn fat has helped ‘Norbi’ kindle a fitness empire.

BBJ STAFF

Hungarian fitness−guru and businessman Norbert Schobert has decided to enter the Budapest Stock Exchange with his Norbi Update Lowcarb Plc. business, in line with previous rumors. From September 8−26, interested buyers can subscribe to shares of the business for a cost of HUF 920−990 through the Buda Cash brokerage. After losing 40 kilos in weight, Schobert established a career in television fitness, recording more than 20 fitness movies and 420 short films. As his reputation began to grow he launched a system entitled “Norbi Update” and published three books with the aim of helping people who wanted to lose weight. The Norbi Update franchise currently consists of 85 stores in Hungary and 30 in Slovakia, with planned further expansion into Austria, Czech Republic, Germany, and Romania. The stores sell food specially prepared according to recipes by Schobert, known to most Hungarians as “Norbi’. According to the company, if you stick to the Norbi Update diet and follow an exercise regimen, you will lose weight. The business is continuously expanding with the opening of stores and the introduction of new products. Schobert and his wife, Réka Rubint, established a new TV show and magazine this year and, according to Norbi’s declared financial position, he has a fortune of an approximately HUF 10 billion. Schobert and his wife decided to boost the capital of their business from HUF 5 million to HUF 52 mln, and thus transformed the company into Norbi Update Lowcarb Plc. in order to make it ready for the Budapest bourse. The Schoberts are 50%−50% owners of the business and each own 2.6 million HUF 10 shares. Last year their business had one registered employee, which was

Norbert Schobert.

boosted to 16 this year. Since March the company has had an executive board of five, but as the couple do all the work, the other three members receive no salary. From April to December in 2013 the business had revenue of HUF 425.6 mln and the owners were paid a dividend of HUF 47.3 mln. Waters for the fitness−guru have not always been calm, however. In 2008 the Hungarian Competition Authority fined his former businesses (Development Service Consulting Ltd. and Norbi Update Worldwide Zrt.) for misleading consumers. The National Institute for Food and Nutrition Science reported that between 2009 and 2012 Norbi products contained a higher amount of trans fats than expected. Still, according to media reports, the business has remained largely unaffected by the economic crisis of the last few years. Norbi’s companies have gone through many transformations. Two years ago he was planning to enter the Budapest Stock Exchange through his then cross−border franchise Norbi Update International, before he and his wife abandoned the company and instead established Norbi Update Europe, later rechristened Norbi Update Lowcarb Ltd.

Noerr is BP advisor on investment in BalaBit Noerr, the international law firm, announced that it advised English private equity investor C5 Capital Limited on its investment in Hungarian IT start− up company BalaBit, which provides innovative solutions in the field of cyber security. A team of our Noerr’s Hungarian lawyers advised C5 with regard to the Hungarian legal aspects of the transaction, including advice on state aid law,

employment law and IT law, and also drafted some of the software license agreements for the IT start−up company, the law firm said. The value of C5 Capital Limited’s investment was put at $8 million.

BBJ: What do you expect concerning companies’ export financing, what opportunities do you wish to highlight? István Fetter: CIB Bank’s fixed interest rate EUR or USD denominated loans that are refinanced by EXIM are extremely important for us, since those are granted at one of the most favorable prices of the market. These loans can be taken out by companies that export directly, supply items or goods to exporters or plan to start exporting in the future. This financing alternative can be attractive for companies that have been operating for several years on a reliable basis, that have a successful background on Hungarian or export markets and offer products or services that have been in consistent demand. Regarding Hungary’s export-oriented economic structure and the gradually improving business outlook in Hungary and abroad, we are optimistic that longterm cooperation can be established with many of our current and future partners and we can further develop the already existing relationships. CIB Bank, which is a market leader in corporate lending, pays special attention not only to general corporate finance, but also to providing excellent solutions in the areas of export and trade financing, which require special knowledge, to companies that have a sustainable and realistic business model. BBJ: What do clients expect, how can they use the emerging opportunities? István Fetter: We provide tangible help for companies that are already present in the export markets, but see points of development in relation to banking solutions such as the preferential loan – with fixed rate throughout its term – provided by CIB Bank. If our clients take these financing opportunities, they can get a competitive advantage on the market. In addition, those companies that have not been properly financed so far and thus could not realize their goals may be interested, too. CIB is ready to become a partner to create the most suitable, tailor-made financing scheme for clients – one that also takes into account the specifics of the given industry and market, and incorporates the owner’s requirements. In addition to financing by loans, CIB Group can create further added value for a company in the area of factoring, leasing, documentary operations or cash management services. BBJ: What should companies consider, before they decide to go for the loan? István Fetter: Prior to the establishment of a new long-term partnership, CIB Bank always gets to know each client thoroughly. This is a mutual process where the enterprise can also get a real idea of what and how we can help. A single-window service model is applied,

István Fetter, head of CIB’s Trade Finance Division.

where each company has its own relationship manager who is not only responsible for ensuring the conditions of a long-term trusted partnership, but will also devote special attention to the involvement of the highest skilled banking experts of a special field, when necessary. This model together with CIB Bank’s trade finance knowledge center and fostered by an extensive international network enables us to finance even those companies – in a closed, tightly monitored way – that would not get funding in the framework of classical corporate financing. BBJ: How does export financing and especially the new financing programs contribute to Hungary’ s economy? István Fetter: CIB receives mainly EUR-denominated financing through EXIM’s Export Boosting Credit Program, which can be offered to both SMEs and large corporations serving as an excellent supplement of the National Bank of Hungary (MNB) loans in HUF that are especially meant for SMEs. Besides the availability of preferential and fixed rate financing, risks can also be reduced by taking out an EXIM guarantee or insurance, which may also lead to the reduction of our capital reserve liability in certain cases. My experience shows that companies exporting directly or indirectly usually have a diverse scope of clients and may earn superior profits by being part of the global supply chain and providing higher added value meaning that they are less exposed to the rapid changes of the market environment.

www.cib.hu

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

CHRISTIAN KESZTHELYI

WWW.BBJ.HU

08 2Business

Budapest Business Journal | September 05 – September 18, 2014

Private business is best Although privately owned by its management, Videoton is a giant among electronic manufacturers in Hungary. Ottó Sinkó, one of its two CEOs, talks with the Budapest Business Journal about his company’s growth, future plans, and his concerns about the government’s policies of looking eastwards and renationalizing private businesses. GABRIELLA LOVAS

The largest Hungarian industrial group in local private ownership, Videoton is ranked 27th globally and fourth in Europe on Manufacturing Market Insider magazine’s list of “Top 50 Electronic Manufacturing Services”. Ottó Sinkó and Péter Lakatos have shared the chief executive position of the group since 1996. Each owns roughly one quarter of the company, and the remaining 47.05% is owned by Gábor Széles, president of the board at Videoton. Although they have very different personalities, the two CEOs have been working together successfully for 25 years. They seem to have at least one thing in common: They are highly risk sensitive. Both are in charge of the day−to−day and strategic management at Videoton. Sinko’s main responsibilities are finance, investment and treasury decisions, asset management and investments, including operational control of Videoton subsidiaries. We spoke to Sinkó about his company and the Hungarian economy.

What are your expectations for 2014? A: The Videoton group has seen more than 10% growth each year since the 2008 crisis. Barring an extraordinary event in the remaining few months, such as further escalation of the crisis in Ukraine, our growth will continue to exceed 10% in 2014, driven primarily by electronics manufacturing in the automotive segment. Luckily, the other segments of Videoton’s highly diversified operations have also contributed to the growth of the group.

Videoton has a subsidiary in Ukraine. How is it affected by the conflict? A: The crisis in Ukraine does not have a direct effect on Videoton, as we

currently don’t have markets in Ukraine or in Russia, and they are not our target markets either. Our Ukrainian subsidiary is marginalized; it has been in a “hibernating state” for years, so we have no investments to worry about. The Bulgarian subsidiary, just like our entire holding, has European rather than Russian or Ukrainian customers. The Ukrainian crisis could have an indirect effect on our orders, especially from our German partners.

Speaking of eastern markets, what does the government’s “Opening to the East” policy mean to you? A: For Videoton, it means nothing. The conflict in Ukraine exposed already existing tensions between the EU and Russia. The potential success of a EU member state, in this case Hungary, pursuing an economic policy that diverges so much from that of the EU is, frankly, limited. As for the Asian countries, they are our competitors because they are an alternative supplier base. However, the current geopolitical tensions may come in handy for regional suppliers, including Hungarian manufacturers. Who would order important products from China when Russia is considering an airspace ban? As these tensions could significantly raise logistics costs and supply chain risks, this might lead to changing production allocation decisions to the benefit of the relatively low−cost CEE countries. We don’t yet know how close top managers of multinational companies are to the decision to put up with somewhat higher costs in exchange for lower risks. What I can say for sure is that more than half of our potential customers intend

Ottó Sinkó, Co−CEO of Videoton, has been a shareholder, executive leader and a member of the Board at the company since it was privatized in 1991. He took his current position of joint CEO at the firm in 1996. Before working for Videoton, Sinkó worked for Műszertechnika, the largest private computer firm in Hungary, where he started as a development engineer and rose to the position of resident director of the company’s U.S. affiliate. He remains a shareholder and supervisory board member of Műszertechnika to this day. Sinkó completed an executive training program at Harvard University in 1996. He earned an MBA in 1994 and has an earlier degree in electrical engineering, obtained at the Technical University of Budapest.

WWW.BBJ.HU

2 Business

Photo: Sándor Farkas

Budapest Business Journal | September 05 – September 18, 2014

Videton’s facilities in Hungary, here and on the facing page bottom.

to relocate manufacturing related to European markets to Europe. Health and natural catastrophe related risks have been high in the Far Eastern countries for years. Just think of the tsunamis or the Fukushima disaster. In addition, in China, the yuan has been getting stronger and rise of labor costs in yuan terms has accelerated.

Manufacturers seem to be frequently complaining about the shortage of skilled labor in Hungary. Is it a problem for Videoton, too? A: Yes, of course. This is a main concern for Hungarian producers all over the country. And rather than other local manufacturers, emigration is the main competitor for us in the labor market. More than half of those skilled workers, who left Videoton resigned because they got a job somewhere in Western Europe. There are approximately 600,000 Hungarians abroad, which equals the number of employees in Hungary’s entire processing industry sector. Within that, about 200,000 are probably employed in the industrial sector. The intention of the government to close the gap between labor supply and demand is welcomed. Mechanical engineering education will reportedly be launched in a couple of big cities in the country, such as in Szombathely and Székesfehérvár. Easing labor market tensions is an important task of the government. Buying private companies and trying to manage them is not.

Now that you mention it, is government takeover a potential concern for you?

A: For Videoton, not at all. The demons were released first with the so−called Lex Mol in 2011, which gives the government the right to take over companies with exceptional strategic significance. Those who ignore what it means are simply not careful enough.

After the implementation of the first phase of a new production program in July, what’s next? A: The second phase is very similar to the first in that the new technological developments are based on the actual market demand, which is basically unchanged – though the investment value might be slightly higher in the second phase. The problem is that the special incentives that multinational firms enjoy in Hungary are not available for Videoton. A strategic alliance was not an option for us either, everyone knows that Videoton is eager to grow and will not leave the country anyhow. Our only option is a development tax allowance, which is available for every business that invests a certain amount and meets certain requirements. We have already launched the second program, and we will start to utilize the first allowance from this year. I would like to stress that we finance our projects from our own equity. We were considering a stock exchange entry in 2000, but we realized that the bourse is not for us. Our decision−making process would be a lot less seamless than now. As we (CEOs) both are very risk sensitive, our own sources cover the costs of all the investments we are willing to make. So why would we go public? The company has a healthy cash flow, and

we could always get bank financing, if we needed it. But we don’t.

What are the management’s main strategic objectives? A: In my opinion the key issues now are ensuring a skilled labor force and IT development. Reaching 10% growth for the fifth consecutive year means that our procedures are becoming more complex. As a result, each employee, as well as the IT system, has to deal with more difficult tasks. Our operations are not only diversified, but also under strict control. Due to our size, global IT systems, both hardware and software, are relatively too expensive for us and do not really meet our demands.

Therefore, we have used our own systems for the most part. Examples include the finance, accounting, and controlling systems – as well as treasury functions. These systems can, of course, cooperate with one another. We continuously develop these systems, but it would be hard to estimate the level of the annual IT expenditure. All I can say is that outside experts agreed that the quality of our systems exceeds the average of our Hungarian peers. We have about 40−50 IT employees, including the system’s operators. We have never had difficulties in finding skilled employees in this segment, maybe because IT education has traditionally been strong in Székesfehérvár.

ABOUT VIDEOTON With revenue of HUF 113 billion and a pre−tax profit of more than HUF 10 bln in 2013, Videoton is the largest Hungarian industrial group in local private ownership. The company, headquartered in Székesfehérvár, has nine locations in Hungary, one site in Bulgaria and one site in Ukraine. Videoton’s main activities include electronic production, mechanical part manufacturing, plastic injection molding and assembly of complete products. Its main markets are the automotive industry, industrial applications and household appliances. Founded in 1938, and a state company from 1948 (producing consumer electronics, computer and defense products) the company was privatized in 1991, when it was purchased by a private bank and the present shareholders: Gábor Széles, current company president and Ottó Sinkó and Péter Lakatos, the current chief executive officers.

WWW.BBJ.HU

2 Business

Budapest Business Journal | September 05 – September 18, 2014

Regional News PRIVATIZATION OF SLOVENIA’S TELEKOM SEEN DELAYED The privatization of Slovenia’s largest telecoms provider Telekom will probably be delayed until the new government, which is likely to take over later in September, endorses the sale, daily paper Finance reported. “All possible buyers are waiting for the new government to say whether the privatization will continue as planned,” said Finance, citing an unofficial source. Miro Cerar, who became Slovenia’s prime minister last week after his Party of Miro Cerar (SMC) won a snap general election in July, will take over after Parliament approves his cabinet, which is expected within two weeks. Cerar had said he was against the privatization of strategically−important firms like Telekom but would not stop the sale if that would hurt Slovenia’s credibility. EU DECISION ON RUSSIA SANCTIONS BY FRIDAY European Union nations will decide on new sanctions against Moscow by Friday, with Russian aggression towards Ukraine requiring the strongest possible response, incoming EU foreign affairs chief Federica Mogherini said. Mogherini, currently the Italian foreign minister, said Russia could no longer be considered a “strategic partner” for the West and urged NATO to reassure eastern European nations

that they would be protected from attack. Leaders of the 28−member EU decided at a summit on Saturday to impose new sanctions against Russia, after alleging that Moscow had deployed troops and weapons to back a rebel counter−offensive in southeast Ukraine. The European Commission, the bloc’s executive, would present a package of new tougher measures to ambassadors in Brussels soon, Mogherini said. IMF APPROVES LOAN TRANCHE FOR UKRAINE, WARNS OF RISKS The International Monetary Fund agreed to disburse $1.4 bln to Ukraine under a loan program whose success is threatened by the country’s intensifying conflict against separatists tied to Russia. The fund said the total amount of the loan remains unchanged at $17 bln and the program is progressing despite the volatile political situation. The money released will bring total disbursements under the arrangement to about $4.51 bln, the fund said in a statement after completing the first review of the deal. “Downside risks to the program remain very high,” IMF Managing Director Christine Lagarde said. The IMF praised the government’s commitment to economic reforms despite the ongoing conflict. But it said Kiev was still not able to meet some of the program targets, including for the state budget, the

SWISS BUSINESS DAY 2014 I N N O VAT I O N

AND

C R E AT I V I T Y

23rd of SEPTEMBER 2014. - SYMA CONGRESS CENTER The event, this year held for the third time is the meeting point for Swiss and Swiss-interested companies and businessmen – a platform that serves as an excellent opportunity to build business relationships and get a line in the topic.

t The motto of the 3rd Swiss Business Day is Innovation and Creativity, in which terms you can get to know the exhibiting companies’ newest developments and innovative products; t The interested visitors can meet the Swiss companies present in Hungary – large and small as well: for example Neslé Hungária Kft., ABB Kft., Roche Magyarország Kft., Stadler Trains Magyarország Kft., Phoenix Mecano Kft., Emil Frey, Eisberg Hungary Kft. will also be present alongside with Swiss-linked SMEs, just as Swiss Selection Kft., GreenLab Kft., ABT Hungária Consulting Kft., Btech Magyarország and a lot of others; t The visitors can listen to presentations from Swiss and Hungarian governmental-level presenters in the topic of the Swiss-Hungarian economic relations and innovative projects, as well as Supporting export activities in Hungary; t You can get to know the Swiss success stories achieved in Hungary and the “best practices”; t On the thematic forums you can also hear about the domestic adaptation and application of the dual training, the experiences of higher education institutions and companies, t As well as the questions on Swiss taxation and law, the Swiss investment environment, where you can ask your questions from experienced legal experts. Along with the broad professional programmes, we are waiting our guests with Swiss-related cultural and gastronomic treats and tombola! The event is free for visitors, but registration is needed. Registration: info@swisscham.hu | Further information: www.swisscham.hu Organizers:

Rendezvény és Kongresszusi Központ

Sponsors:

Media partners:

level of net international reserves at the central bank, and the deficit of Naftogaz, the state−run oil and gas company. The IMF also agreed to Ukraine’s request to combine the next two reviews of the program, which would likely total around $2.2 bln, since the recent disbursement was somewhat delayed. SLOVENIA ECONOMY EXPANDS FASTER IN Q2 Slovenia’s gross domestic product grew an unadjusted 2.9% year−on−year, after a revised 2.1% expansion in the first quarter of this year, the Ljubljana− based Statistics Office reported. It was third consecutive quarter of growth. Gross capital formation climbed 8.0% in the current quarter, much faster than a 2.5% growth in the preceding three− month period. Imports grew at a stable rate, by 3.3%, while exports rose 5.2% in the second quarter. After seasonal adjustments, GDP grew 2.8% year− on−year in the Q2, following a 1.9% gain in the first quarter of this year. On a quarterly basis, gross domestic product advanced 1.0%, after remaining unchanged in the previous quarter. RYANAIR TO SUBMIT BID FOR CYPRUS AIRWAYS Ryanair Holdings Plc will submit a non− binding offer for Cyprus Airways as Europe’s No. 1 discount carrier seeks to extend its footprint eastward to an island increasingly popular with Russian and Israeli visitors, Greek news site Ekathimerini reported. Ryanair has

emerged as one of a “handful” of interested bidders for the state−owned business after CEO Michael O’Leary met with Cyprus’s transport minister last week, Chief Marketing Officer Kenny Jacobs said. A takeover would be only the second in Ryanair’s 29−year history following the 2003 purchase of low−cost carrier Buzz, with O’Leary preferring to enter markets after the demise of local airlines rather than bail them out. Some 382,000 people visited Cyprus in July, up 5.7% from 2013, according to the Mediterranean island’s statistical authority. Tourism accounts for more than a fifth of the economy, according to the World Travel & Tourism Council. POLAND FACTORY ACTIVITY DECLINES FURTHER IN AUGUST Poland’s manufacturing sector contracted for the second consecutive month in August as output dropped and new orders continued to fall, survey data from Markit Economics revealed. The HSBC Poland manufacturing Purchasing Managers’ Index (PMI) dropped to 49 from July’s 49.4. A PMI score below 50 suggests contraction in the manufacturing sector. Manufacturing output fell for the first time since June 2013 as new orders decreased for the third straight month and at the fastest rate since April 2013. Employment growth continued, but was modest. Input prices rose for the second straight month, but the rate of inflation remained weak. Output prices fell for the twenty−first month as firms offered discounts owing to competitive pressures.

BBJ

3Special Report Market overview with company interviews

12-17

NNG goes from success to success

SOFTWARE AND ERP With its wealth of engineers, Hungary is a digital hub. Despite the lure of higher salaries for programmers abroad, Budapest is still the scene of exciting innovation. In this section we survey the local market and highlight some interesting developments.

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

MARKET OVERVIEW:

Software and ERP firms We asked Hungary’s top 10 software developers and top 10 ERP companies to tell us what makes them special. These are the answers we received. For a full list of market players, ranked according to revenue, please see the lists on pages 23−25. BBJ STAFF

BalaBit

Zoltán Györkő CEO How would you describe your products and services? What does the software you are developing do? BalaBit operates its R&D centers in Budapest and Veszprém in Hungary, developing innovative IT security software solutions for enterprises. The company is widely known for syslog−ng, its open source log management solution, used by more than a million companies worldwide. The syslog−ng Premium Edition enables organizations to improve operations, gain visibility of security threats, and meet compliance requirements. This significant user base provides a solid ground for business expansion, which is fueled by Shell Control Box, a pioneering development for the rapidly growing niche market of privileged activity monitoring. Shell Control Box helps customers to answer the question of who did what in the IT system, which is a basic requirement in most of the compliance regulations. Zorp Gateway, which has a strong and loyal customer base in Hungary, is a robust perimeter−defense tool, developed for companies with extensive networks, and other organizations with high security requirements. During Zorp’s design, we abandoned the traditional firewall architecture and designed a tool that can answer the security challenges of today and tomorrow. Has your company made any innovations of which you are particularly proud? BalaBit’s flagship product, the Shell Control Box activity monitoring

tool, received the 2012 “Industrial Innovation Grand Prize” from the Hungarian Association for Innovation for achieving significant economic growth and resulting in social utility globally. Shell Control Box is a quickly deployable enterprise tool with the widest protocol coverage on the market. Compared to other, similar solutions, it is an agentless solution, completely independent from clients and servers – integrating seamlessly into existing infrastructures. Its session recording functionality makes it a perfect complement to password management tools, and it can be easily integrated with the most popular such tools. Last, but not least, our syslog−ng log management tool became the de−facto log management solution in the UNIX and Linux era in the past decade, and has more than a million organizations who benefit from its advantages today. Who are your major clients? Our larger customers include 23% of the Fortune 100. Examples from our public references include Facebook, Air France, Swedish Handelsbanken, Orange, Telenor, MTS Ukraine, CEZ Group the nuclear powerplant in Czech and Leibniz Supercomputer Center, the biggest European datacenter. In Hungary we can mention Credigen Bank Zrt., the Hungarian Intellectual Property Office, UPC, and the Central Administration of National Pension Insurance. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face− to−face? In 2006, which was the year of the international breakthrough for BalaBit, we already had customers in every inhabited continent. However, our business also depends on local contacts. We have sales offices in focus markets, such as in France, Germany, Hungary, Russia, the UK and the United States – and partners in 40+ countries. We need to work very closely together with our clients, to understand their needs and real security issues and have a deep knowledge of the operation of their network, but this does not necessarily require a personal meeting. On the other hand, we are ready to serve customers face−to−face when there is a need for that. Why is Hungary a good environment for software developers? Since its foundation in 2000, BalaBit

has been developing security software solutions in Hungary for the international market. The founders of BalaBit, including myself, graduated in computer engineering in Hungary, so we know what we can expect from our developers. Hungarian engineers are talented, good at math, creative and resourceful. Two months ago we received $8 million in capital from a London− based investor, and we still plan to keep the development centers in Hungary (Budapest and Veszprem) and double the number of employees within five years. Why should customers choose you? We are committed to continuous innovation. As an active member of the open−source community, we provide a uniquely wide range of solutions for both proprietary and open−source platforms. Our solutions are developed for rapidly growing, but niche, enterprise markets. Quite often we receive feedback from our customers, who say that, before implementing our solution, they would not even think that such a targeted solution exists on the market. Our products use cutting−edge technologies, and solve real problems, helping our customers to be more secure and more effective, to lower the cost of IT system maintenance and troubleshooting and to meet compliance regulations. We are a right−size company to cooperate with, as we are big enough to be flexible in development, but the atmosphere is still familiar enough to have dedicated, direct contacts to our 7/24 support services, for instance. Anything else to add? Recently BalaBit raised an $8 mln Series A round of funding to speed up the development and expansion of its pioneering IT security platforms. The new investment will be used to fuel BalaBit’s international expansion in North America and additional European markets, including the UK and Scandinavia. Using the strong financial backing of C5 Capital, BalaBit aims to aggressively establish its revolutionary new security concept called Contextual Security Intelligence™ on an international scale. We believe that adopting new information technologies is the key to being competitive today, and IT security is often complex for any company or organization. Security control can hinder IT projects and other business processes. In the last decade, companies invested significant amounts of money into monitoring technologies – mainly for IT management and compliance reasons, but not for IT security. It seems that for companies

today security means control, and this is what Contextual Security Intelligence aims to change, by providing solutions for more business−friendly IT security.

HostLogic

Dr. Attila Molnár Business Unit Director How would you describe your products and services? What does the software you are developing do? HostLogic is a business IT company: We offer all kinds of business support for SAP technology. Our services range from classical enterprise resource planning (ERP) through business analytics activities (reporting, planning, business simulation) and customer relationship management (CRM) to IT systems customized for special business processes. We can deliver all these applications with the newest technologies. Lately it has been our key objective to increase the use of mobile solutions. There are two fundamental features characterizing HostLogic that enable it to deliver these business services. Firstly, it can provide the business services listed above in many versions for all possible contexts, extending from a completely in−house model to a cloud−based service. Secondly, HostLogic can offer its applications within the framework of HANA, SAP’s unique and revolutionary development, a technological solution based on so−called “in−memory computing,” which makes business applications exceptionally effective. HANA combines improved hardware speed with radically new software data management. SAP has long been a market leader in business applications, and now these products also work at an extraordinary speed. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customized solution for everything?

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

companies that should be credited for such achievements, but we would like to think that our services have played a part in their success. We provide SAP guarantees with our solutions, and we also offer a number of various operation models. Our prices are competitive, we can relate to the needs of the different industries, we have very good references, and we possess HANA, the technology of the future. HostLogic is the perfect size – a company that has stabilized its position both in terms of experience and capital, but remains small enough to avoid inducing a sense of loss and insignificance in its customers. Our clients and their satisfaction are our priority, so we give them all the attention they need and deserve.

ITware

Since HostLogic works with SAP technology, we can cover the full range of enterprise resource planning, which now includes not only the classical tripartite structure of finance, logistics, and production, but, according to the latest concept of ERP, the SAP support of full business collaboration, as well. Our company can provide a unique service of scaled SAP software solutions for both small− and medium− sized enterprises (SMEs) as well as companies, regardless of whether they are local or multinational businesses. In the past 15 years, HostLogic has made it a priority to provide tailor−made solutions that cater to the specific needs and productive processes of the industry in question. As a result, HostLogic now has more than 15 industry−specific solutions, and develops customized solutions as well. Has your company made any innovations of which you are particularly proud? In the past few months, we have developed several HANA−based applications for local and international companies that we are particularly proud of, since they are pioneering solutions on a global scale. One of these products is a business intelligence solution based on HANA (in−memory computing), developed for the biggest multinational producer of energy appliances. The solution is unique not only in its extraordinary speed but also in that it retrieves data from a large number of heterogeneous business systems that work with different code sets, and turns these data into unified logistics performance indexes for each EMEA company within the whole business group, while it also presents them with the help of a set of cutting−edge visualization tools.

Apart from that, we are also very proud of our solutions developed for the various industries, especially our solutions for cheese and dairy producers, which have even attracted the attention of a US cheese firm, much like our solution developed for mechanical engineering and processing companies. Who are your major clients? HostLogic offers services in various segments. As such, the customers of our small business solutions are predominantly Hungarian SMEs looking for generic software. Our medium−sized business solutions are commonly provided for companies that would like to control their increasingly complicated business processes, or plan to improve their business volume by involving new customers, new markets, or new products. Most of our big company clients typically use a previously implemented SAP system, and they look for ways to utilize its potential more effectively. They also wish to develop their business performance by way of increasing the efficiency of their SAP. At the same time, we have a number of larger clients who want customized software, since they struggle with problems related to processing capacity. For them, HANA is the perfect solution. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face−to−face? Our small business clients are typically Hungarian; a number of our medium− sized clients are based in Hungary but carry out business in the CEE region, and some of them are subsidiaries of

multinational companies. Several of our larger clients hire us for international projects involving a number of countries. HostLogic’s hosting and cloud services are provided in 13 countries. As a rule, HostLogic makes long− term contracts with its clients, both for services of SAP implementation based on HostLogic’s project methodology, and for various outsourcing solutions. These processes must entail daily contact with the client, since they involve not only IT support but the support of business processes. We build a relationship of trust with our clients, so face−to−face meetings are vital for both parties. Why is Hungary a good environment for software developers? In Hungary there are a lot of good developers, education is good, and, as the example of HostLogic shows, a company founded in Hungary can also be awarded with worldwide SAP− qualification, because it can meet international standards. We have very motivated IT professionals in Hungary who have the same qualifications as their Western colleagues, but at the same time, Hungarian prices are cheaper than in Western Europe, so our services are more competitive. The Hungarian market also remains competitive in comparison with services with offshore prices, since Hungarian developers are much more productive. Why should customers choose you? Because we can provide a solution for each and every business process, and instead of an IT approach we follow a business approach. This also contributes to making our clients not only satisfied but successful and able to achieve their goals. We have seen our clients fulfill their business objectives – and very often exceed them. Of course, it is always the

Sándor Dankó Managing Director How would you describe your products and services? What does the software you are developing do? Our core business is mainly customized software development, so it would be very difficult to describe our so−called “products”, as they are always very unique and customized to distinct customer needs. In general, we can say that our company is motivated to lead long− term business relationships with partners, so quality and reliability are the main aspects in our work, and we can also say that software made by ITware usually does what the customer wants. As mobile application demand has been developing aggressively since 2008, a big portion of our assignments come from this field, so we have managed to build deep and sophisticated experience in developing various mobile solutions and applications. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customized solution for everything? Though we do not have a complete ERP system developed as an end− product, we solve such a need with customized solutions based on actual customer demand. So at the end of the day, we can say that ITware is able to provide customized solutions for everything. Has your company made innovations of which you particularly proud? Yes, of course we have. Here are some examples:

any are

➜

WWW.BBJ.HU

APPaware (www.CreateSmartApp. com ): We know well, from our own experience, the many difficulties a mobile app developer has to face day− by−day in order to write software for the numerous types of smartphones. This challenge motivated us to create a perfect and easy−to−use solution in order to support mobile developers all over the world. APPaware is a web− based SmartPhone app editor that lets you create your own mobile App by Yourself. You do not need any coding knowledge, you just need to drag and drop the elements. It’s as easy as making a presentation. Kojimori: Kojimori is an innovative, cloud−based automated data acquisition (DAQ) system. Its main service is to store and display the data collected by different types of measurement instruments and sensors, regardless of their location. The system provides a reliable solution to various areas – including agriculture, the food industry and tourism – where environmental factors, like temperature, humidity, oxygen content, etc., affect the activities. The system collects and systematizes the measured values collected by the various sensors and makes the data available in the formats desired by each customer and user. It provides all these in a very cost−effective and highly reliable way, as Kojimori meets the highest standards and requirements of these industries. Moromikun: The M2M smart application monitors sake brewing, simulating and controlling the temperature levels of each cycle. The application is made for Android tablets, and users can set different thresholds, as well as alarm levels in case a parameter differs from a specified value. Happy Wedding: You can be a high−style movie maker with “Happy Wedding“, which is simple to use. All you need to do is select the effect and shoot the movie. Happy Wedding will create a composite movie. There are a wide variety of effects you can select. You can make a gorgeous wedding movie, an “oriental” wedding movie, or even make a wedding movie with black humor. Who are your major clients? Fifteen years ago, our colleagues developed the CRM and billing systems of Magyar Telekom, and thanks to the fast and continuous development of telecommunication needs and services, ITware still continues to support and develop these systems and to cover the regular needs and requirements of Magyar Telekom, as one of their top five software suppliers. For this reason, Magyar Telekom is our major client, with whom we have been cooperating on a daily basis from the beginning. Because much of our experience and knowledge is in the telecommunication business, we have other main accounts from the sector, like Antenna Hungária and Invitel, But we also have big clients from other industries, like logistics (Waberer, Magyar Posta), the financial sector (Erste, Generali, Raiffeisen, K&H) and even production and agriculture (Antal, Bio−Fungi). Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face−to−face?

Budapest Business Journal | September 05 – September 18, 2014

As ITware is situated in Hungary, our main business activities naturally focus on domestic customers. On the other hand, we lead a smaller business unit in Japan, run by a dedicated colleague who lives there, and we also have clients in Germany. Though we find face−to− face communication very important, if a direct meeting is not possible, there are several available solutions to bridge such a problem. Furthermore, in order to develop our international trade activities, we usually visit foreign expositions as an exhibitor (MWC − Barcelona, IT Week – Japan, GITEX – Dubai, CommunicAsia − Singapore).

has become one of the pioneers and experts of the Hungarian IT market. Last but not least, ITware is also very active in innovation and R&D activities. As a result, we have managed to collect prominent knowledge and experience in several areas, and have developed a unique technology for mobile application design (APPaware) with which we are able to simultaneously create native mobile applications for all three platforms (Android, iOS, Windows).

Every time we start a new project, the goal is to satisfy all needs. We offer solutions mainly for SMEs. Our product−line includes solutions for car manufacturers and their dealers; food−industrial enterprises; asset registering and renting; accounting; tax, customs and excise duty handling; financial controlling; petty cash; CRM connection; billing; and so on. While we can’t say that we have solution for everything, I think we cover almost every field of business.

MultiSoft

Has your company made any innovations of which you are particularly proud? Our main innovative success is the MobileNAV application for Microsoft Dynamics NAV. It is the first native add−on on the market that is not using web−browser platforms. This year, the MobileNAV earned the Certified for Microsoft Dynamics award, and one of the Microsoft Dynamics Executives said at the Worldwide Partner Conference, that “Your NAV mobile solution rocks!” I think it’s a great compliment.

Why is Hungary a good environment for software developers? Hungary is full of well−prepared, creative and experienced, English speaking developers. If we provide them an appropriate environment, infrastructure and support, they can make an extremely effective, high−quality and competitive development team. Why should customers choose you? We always aim to build strong partnerships with our customers and we believe that the best way to achieve long−term, successful cooperation is through quality, reliability and the provision of cost−effective solutions. Our resource pool contains world− class software engineers and certified project managers, who are well− versed in Agile development and have participated in several successful development and integration projects. Through such projects, ITware has managed to collect outstanding know−how on enterprise Java development (for Magyar Posta), including understanding and covering CRM and billing demands for telecommunication companies. Thanks to regular training and development of our workforce, ITware

Gábor Kelemen CEO How would you describe your products and services? What does the software you are developing do? We sell solutions, not just software. Every project is different; every solution is unique and personalized. Our software helps the company to save time, do their work more efficiently, and also earn more profit. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customised solution for everything?

Who are your major clients? Herlitz, Alois Dallmayr, Studio Moderna, BMW Hungary (every dealer in Hungary), Profirent, Gfk Hungary, Adecco, Fujifilm. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face− to−face? In the case of NAV, it is necessary to meet every time with our customers, and we sell directly to them. However, in the case of MobileNAV, we have partners all around the world, and we sell our products through them, so we don’t meet the end−users. Why should customers choose you? • We assign a personal consultant to

WWW.BBJ.HU

• comprehensive solution in the entire area of payroll and HR management including software, consultancy and outsourcing solutions.

However ERP is a strategic initiative, and in most organizations the face−to− face interaction and local presence is still important. That is why Oracle is supporting its partners to develop the local market.

Budapest Business Journal | September 05 – September 18, 2014

employee life cycle. In functionality and performance, it is comparable to major international HRM systems, with the clear advantage that it is always fully compliant with the Hungarian legal environment. NEXON offers customized solutions for both commercial and public sector organizations. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customized solution for everything? Human resources management is a unique part of ERP services, with very special and frequently changing legal regulations. NEXONhrm® is a complex HR system that has modules covering the entire area of HR management and supporting every process, from management tasks through daily administration to employee self service (payroll, benefit, workforce management recruitment−selection, training−development and performance management). NEXONhrm® has a modular structure, so it can be purchased element by element. It can flexibly meet the variable needs of companies: Administration will be supported by involving further modules in the system, should HR−functions be extended in the organization. The web− based user interfaces are easy to use and understand. every customer from the start of the project. • We have an outstanding support system, which ensures a smooth workflow. • If it is needed, we can help our clients to apply for subsidies. • At our firm, every project is unique and the solutions are customized. • We have a wide range of experienced specialists and a well−qualified implementation team. They are available for overseas projects, too.

NEXON

Has your company made any innovations of which you are particularly proud? NEXON has just announced a new generation of business HR solutions, the NEXON PORT employee self services system. Involving employees in HR administration can result in cost and work reduction as well as in administration and data quality improvement. The NEXON PORT self− service system enables HR to improve the efficiency of administration and to strengthen the appreciation of HR in the company. Who are your major clients? NEXON has 3,000 companies as clients and that in turn serve 1,000,000 employees in Hungary. Nearly one−third of the top 200 companies in Hungary use NEXON’s solutions in all sectors of the economy, including accounting and the public sector.

Szilárd Ocskay CEO How would you describe your products and services? What does the software you are developing do? NEXON is Hungary’s leading payroll and human resources software developer and service provider. Nearly one−third of the top 200 companies in the Hungarian economy use NEXON’s services – and payroll−related tasks for more than one million employees are performed using NEXON applications. NEXONhrm® provides integrated IT solutions for all areas of human resource management, from recruitment to the end of the

Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face− to−face? NEXON today has become an attractive alternative in its area for both smaller Hungarian companies and large multinational businesses. Face−to−face consultancy is, however, indispensable to finding out our clients’ requirements and processes, so that we can offer the best solution to implement. Why should customers choose you? Because of our • 25 years’ experience in payroll and HR management; • own team of software developers with special legal and HR knowledge; • state−of−the−art IT infrastructure audited by ISO 27001; • 3,000 clients in all sizes and all industry segments;

Oracle

Why should customers choose you? Oracle has the richest product portfolio among the major software vendors. Our solutions include industry specific modules, which can support wide− ranging business requirements. Our technology allows customer to tightly integrate with other systems. Also Oracle has the most flexible delivery method: the customer can host their solution on their hardware environment, can use Oracle cloud or can mix Oracle cloud and their internal environments.

R&R Software Attila Biber Regional HCM Sales at Oracle How would you describe your products and services? What does the software you are developing do? Oracle provides business application products covering all business processes for finance, supply chain and manufacturing processes. Our solution portfolio has multiple product lines to support medium− to large−sized organizations. Oracle can provide solutions on−premise or in the cloud, using a Software as a Service delivery method. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customised solution for everything? Our portfolio includes many specialized best−of−class elements supporting special areas, such as supply chain planning, transportation or project portfolio management. Our products can be customized for customers, however this is done as part of the implementation of the project. Has your company made any innovations of which you are particularly proud? Oracle has multiple products that are among the leaders according to Gartner Magic Quadrant ratings. Oracle is tightly integrated with Oracle technology, so every innovation in technology is also utilized in our ERP portfolio. The recent developments focus on mobile and cloud products. Our products incorporate state−of−the art modeling and calculation capabilities. With Oracle’s in−memory database, we can provide extreme calculation power for resource intensive business processes, such as MRP, supply chain planning and retail planning. Who are your major clients? Our client base extends from large multinationals to local medium−sized organizations. Oracle installations in Hungary can be counted in the hundreds. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face−to−face? The cloud and modern social media has changed the selection process.

Zsolt Rozenberszki Sales Director, owner and founding member How would you describe your products and services? What does the software you are developing do? R&R Software’s products and services are comprehensive, integrated, and customized for industry−specific requirements. Our business applications all share the ultimate aim of controlling, supporting and monitoring enterprise operations with state−of−the−art information technology solutions. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customised solution for everything? In our opinion, nowadays the borders between business software categories are gradually being washed away. For example: ERP systems must provide some CRM or BI−EPM functionality to compete on the market. R&R Software has constantly been focusing on its customers’ needs for the past 23 years, so we can proudly say that we can supply our target industries with all the business software they need. We can provide complex, “industry best practice bundled” solutions for wholesalers, distributors, manufacturers, car dealers, and also for telecommunication, infocommunication, financial and public utility service providers. Has your company made any innovations of which you are particularly proud? We are very proud of the “SMART ENERGY VISION” Cloud based, real− time energy management system, which utilizes IoT and M2M devices to monitor and control energy usage for medium and large businesses and organizations, created in cooperation with Future Energy Ltd. Our research cooperation with the University of Szeged also resulted

➜

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

in many successful software technology research and development projects. Who are your major clients? HEINEKEN Hungária Co. Ltd., HÉTFORRÁS Co. Ltd., Central−Drinks Ltd. and BUSZESZ Co. Ltd. from the FMCG manufacturing industry. Euler Hermes Ltd., Garantiqa Co. Ltd, Raiffeisen Bank, GIRO Co. Ltd. from the financial service provider industry. Invitel Co. Ltd. and NISZ National Infocommunications Services Co. Ltd. from the infocommunication service provider industry. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face−to−face? More than 90% of our customers are local, Hungarian organizations – but we have also succeeded in delivering solutions and services to the Central European region. We are committing a significant amount of our resources to expand our export opportunities. During our efforts, we have found that while personal introductions and meetings do play a critical part in building trust, modern telecommunication methods like Skype, webinars and video meetings also prove useful for facilitating business. Why is Hungary a good environment for software developers? For software development companies: well− educated, hardworking competency is available in the center of Europe, for a lower− than−EU−average cost. Why should customers choose you? Our internal quality management system places customer satisfaction above all else – we are committed to establishing mutually beneficial, long−term business relationships with our projects. Based on a very strong and experienced human resource base with more than 150 experts, we can pay more attention to the specific requirements and business processes of our customers, and deliver ”well− tailored”, leading edge technology solutions.

SAP

Balázs Ablonczy Managing director How would you describe your products and services? What does the software you are developing do? SAP makes enterprise application software, and in this area the company is a market leader. To put it simply, this softwares helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more

effectively to stay ahead of the competition. SAP applications and services enable more than 261,000 customers to operate profitably, adapt continuously, and grow sustainably. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customised solution for everything? SAP offers end−to−end solutions, so it covers all the needs a company has. Additionally, this software can be tailor−made, and specifically implemented for the unique needs of a company – whether it is the largest international company, or a small, local enterprise with four employees. The partner network ensures that these solutions have a real impact and return on investments for small− and mid−sized companies. Has your company made any innovations of which you are particularly proud? Yes, firstly I’d mention the HANA technology, which SAP has introduced to the market. This is an answer to the big data challenge that ensures companies can work with huge amounts of data at unbelievable speed. Just as an example: if you work with HANA technology, a DNA analysis can be processed in less than two minutes. Without HANA it would take three weeks. This technology will be the foundation for SAP products. Hungarian experts have also contributed, and are continuing to contribute, to the success of HANA technology in the local development center – and there are also Hungarian companies, that are using HANA technology. This is not only an on−premise solution, but can also be accessed from the cloud. Who are your major clients? SAP has more than 1,000 customers in Hungary, wordwide around 261,000. The Hungarian customers include SMEs, large, multinational companies, governmental organizations, universitiess, hospitals, etc. The clients appreciate the security and confidence that only SAP can offer. SAP is the leading vendor in Hungary, with more than 40% of the market share. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face−to−face?

Yes, SAP is a global company, with German roots. It is deeply embedded in the world of companies and international commerce. Without SAP, that world would definitely stop. SAP has a dual approach for the customers. In the small− to medium−sized enterprises, the partner network is in direct contact with the customers, and takes care of different needs. The bigger organizations have direct contact with SAP. Why is Hungary a good environment for software developers? Based on the nine years of experiences with our Hungarian development center, Hungarian developers represent world− class talent. Thanks to their ability, the development center here has moved from component−development to more value−add activities, and now we are working on whole solutions. The center now deals primarly with logistical, mobile, HANA and localization developments. Why should customers choose you? SAP has more than 40 years experience in developing IT that can help businesses run better. Our solutions represent not only this knowledge – and the international and local best practices, gained at small−, mid−, and large−sized organizations in virtually all segments of life – but also innovations that simplify the IT landscape. Simplifying also means providing our customers with easy− to−consume solutions – so they can keep every aspect of their business simple. Anything else to add? For many years, SAP was known – worldwide and in Hungary – mainly for its ERP systems. In the recent years, SAP has transformed itself, and become a significant player in technology−database, mobile and analytic areas as well. SAP is also taking the lead in cloud soltuions, where it is the market leader in the segment: Some 36 million people are using SAP cloud services. SAP not only has a field office in Hungary, but also a development center that is part of SAP’s R&D network. Europe’s most significant mobile development team is also based here, as is the so−called Global Support Center, which mostly helps German− speaking countries’ customers. These are very value−add activities, which are widely acknowledged in the international SAP world, and also represent value for Hungary.

XAPT

Dr. Zoltán Schvarcz President, XAPT Group How would you describe your products and services? What does the software you are developing do? For over a decade, XAPT has been the market leading provider of Microsoft Dynamics ERP and CRM solutions; and today XAPT is the largest in the Central and Eastern European region and its footprint continues to grow worldwide. Its core activity consists of the launching, training, customization and development of the Microsoft Dynamics ERP and CRM systems. XAPT applies its industry knowledge and best practices to provide Microsoft Dynamics ERP and CRM as well as technology solutions; providing effective support to customers in customizing and implementing integrated business solutions according to their unique business demands. In addition, XAPT provides consulting, software development, project management, training, system integration and support services to domestic, regional and international companies. If you offer ERP services, do you attempt to provide all the software a company needs? Can you provide a customised solution for everything? XAPT’s business portfolio contains solutions that support the efficient and transparent management, analysis and control of business and workflow processes of different− sized companies. These solutions are offered to companies that are striving to exploit their market and business opportunities and increase their competitive advantage.

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

and Asia Pacific. XAPT has strong experience in developing special industry solutions that meet the unique needs of customers operating in the area of wholesale, distribution, logistics, heavy equipment dealership, manufacturing, retail and professional services. Are your customers spread around the world, or does your business depend on contacts with locals? How important is it that you meet with your clients face− to−face? XAPT has built an understanding of international perspectives and local needs while completing numerous projects worldwide. XAPT Group currently has offices in Hungary, Romania, Bulgaria, Czech Republic, Slovakia, the USA, Canada and Australia.

Has your company made any innovations of which you are particularly proud? Yes, we are very proud of our own developments. Amongst many, I would highlight our “Microsoft Dynamics AX for Equipment Dealers” solution, which is an integrated Dealer Management application developed especially for the heavy equipment industry.

It has been designed to satisfy all dealer business requirements, and because it is based on multi−company, multi−site, multicurrency and multi− language technology, it also represents a standard solution that is flexible and applicable to dealers worldwide. Microsoft Dynamics AX for Equipment Dealers represents an “end−to−end” business solution for equipment dealers

and is unmatched in the equipment distribution industry. The solution offers an outstanding combination of functionality, flexibility, integration, affordability, scalability and ROI. Who are your major clients? XAPT’s clientele includes hundreds of mid−sized and larger enterprises throughout CEE, the Americas, EMEA,

Why should customers choose you? XAPT has a high level of professional expertise, continuously adopting technological innovation and maintaining the flexibility to adjust to market needs. Our team is Microsoft−certified, multi− lingual and experienced with crossborder projects. We have a deep understanding of how to match localization with corporate requirements to meet local needs while maintaining and reinforcing core system integrity. XAPT’s market growth can be attributed to its extensive professional experience, its worldwide resources and its expertise in solving its client’s most challenging business and technology issues

WE HAVE CANDIDATES for

JAVA developer positions

and iOS developers and Front End developers

and Project Manager and Android developers

and C++

and ASP.NET and Software testers and Solution Architecht and Back End developers

and C#

CALL this number NOW for more information +36-1-279-0707 TESK Tanácsadó Kft • 1132 Budapest, Váci út 18. (West Point) • T (1) 279 0707 • F (1) 466 0549 • C (30) 580 9332 www.tesk.hu • mail: info@tesk.hu

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

Wealth of programmers under threat

LEVENTE HÖRÖMPÖLI-TÓTH

Upload a C.V. as a software developer and no bonus−related wish of yours shall remain unfulfilled. Now Hungarian experts are strongly tempted from abroad too. Ever more developers are giving into temptation and signing up for a foreign adventure, but their breed is unlikely to go extinct around here any time soon – thanks to widely available lucrative packages. “If you are a software developer and seeking a job, you will be flooded by offers. Those with good knowledge will succeed at finding nice work if they really want it,” Luca Csipler−Turmezey IT/telco branch manager with Randstad Recruitment told the Budapest Business Journal. And it is not only the Holy Trinity of the Hungarian cyber age – LogMeIn, Ustream and Prezi – that are out there offering outstanding conditions. Alerant Zrt., an IT firm employing 80 specialists, is committed to magnetize talent. “We strive to provide a long−term perspective for our employees by offering professional development and an attractive package,” CEO Tamás Szabó said. He admits that if somebody leaves their ranks it’s almost exclusively because they are going abroad. In

2010 around 10% of the staff actually did so. Political, economic and professional reasons all play a role in pushing IT expertise onto foreign soil. Some may feel uncomfortable due to the political climate, but money still rules at the end of the day. “Western European salaries are still 1.5 to 3 times higher than those here and this is the most important factor when deciding about leaving the country,” Bence Bak, a senior IT consultant with Randstad Recruitment told the BBJ. Relocation is also strongly facilitated, including the family of the job seeker. In addition, the really large IT centers generally assign only secondary tasks of a support nature to the local experts stationed in Hungary, which is demoralizing to many. “At many work places the most cutting− edge technologies are not used or employers are not willing to pay for relevant training; therefore, there are more opportunities for development abroad,” Bak added. Recent statistics on the migration of IT professionals may sound a brain− drain alarm. According to a survey by NetAcademica Education Center, 58% of those questioned have considered looking for a job abroad and 12% have already taken concrete steps to find one. The most favored destinations are the UK, Ireland, Germany, Switzerland and the United States. In Germany only 39,000 vacancies are unfilled at the moment according to Bitkom, a sector− specific association. “Among candidates recruited by our firm to work abroad, the ratio of IT specialists amounts to 22%, the largest group among white−collar workers,” recruitment firm Adecco stated. Not all companies are equally affected by the desire to seek a new life in other countries. It is primarily the smaller enterprises that have difficulties in keeping their talent. They cannot compete with Western European salaries; therefore specialists there can be tempted more easily for an adventure beyond the borders.

Average gross annual starting salaries for IT positions (in euros)

Source: graduates.co.uk, HIS survey, data from PersonalMarkt, WirtschaftsWoche; Educatio Survey, averagesalarysurvey.com

Many IT specialists are up for working abroad. While no mass exodus is in sight, doing more to meet the labor market’s demand for professionals would help to prevent future brain drain and boost Hungarian GDP enormously.

FEARS OVERESTIMATED However, the danger of losing talent in hopeless numbers and for good would seem to be overestimated. It is common that people simply need inspiration and they want to improve professionally. That’s why they sign up for a period of 3−5 years in another country and then return. Equally, though, not everybody wants the challenge of facing a new environment, and in many cases family ties are strong. Typically it is the young and the single who move, whereas people with families are rather immune to mobility. Another hindering factor is that Hungarians don’t tend to be adventurous enough. They really want to make sure they know every tiny detail of the job offered in the far unknown. And for those that want to have it all just like their Western peers, yet still prefer to stay, teleworking schemes can provide an unbeatable opportunity to strike a balance. What does give rise for concern is that higher education cannot keep pace with market demand. This year only 12,000 decided to study engineering, a slump of 6,000 compared to 2013. The declining popularity might be rooted in the elite training methods applied, which results in producing a few geniuses and many poorly performing graduates.

“In the West, technical education is structured to have median level graduates and thus give priority to the GDP,” Attila Kiss, Marketing Leader at BalaBit IT Security, a top software development firm, told the BBJ. “In Hungary we are after the number of Nobel prizes.” The potential of the IT industry is enormous already as it makes up 12% of Hungarian GDP. “Since supply of IT specialists is greatly inferior to demand, there is a great deal less skilled labor available even without immigration. The scarcity will go up, but we would not project any dramatic increase,” Bak highlighted. In 2013 some 10,000 IT jobs were vacant in Hungary according to the data of the Association for ITC Enterprises. Adding another 5,000 and filling them all would push GDP up by 1%. It is of little comfort that keeping enough professionals in the short− or long−term is a global problem. Therefore, more and more companies are tackling the problem by taking the initiative. “You mustn’t expect everything from the government,” Kiss said. His firm, BalaBit IT Security, has a relationship with universities and offers good practice to entice talent to return. He says: “If someone whines that workers are leaving, they should become an employer for whom one moves back home.”

EXPERT OPINION

ENGINEERING EDUCATION TRADITIONALLY STRONG IN HUNGARY Institutions of technical higher education in Hungary have traditionally given a high-level knowledge base to their graduates. Nonetheless, specialized extension and intensification of the acquired general knowledge is the duty of employers, such as evosoft Hungary Kft.

vosoft group’s single owner is Siemens, and evosoft only participates in the design and development of Siemens products, e.g. in the fields of industrial automation technology, drive technology, medical diagnostics and mobility – products that are of key importance on the world market. evosoft takes part in the entire software product development lifecycle, from design through development to the testing of ready systems. We are proud to work on technical products that shape the world. As important employers of the IT market, we get the impression that universities do not always emphasize education covering the most recent technologies. Although it has to be added that this is not always necessary, a stable basic knowledge that companies

can rely on may be much more essential. Students can now choose from more and more practice-oriented education courses and they can now study at universities that had no real IT education a decade ago. It makes us happy to see so many educational opportunities emerge, but we regret that the number of students who start their curriculum without eventually finishing it is increasing. Generally speaking, there is a large demand for IT experts and engineers, but there are not enough graduates with proper skills as employees. The majority of evosoft staff starts working for the company with a BSc or MSc diploma, but a fair number of students can get work practice with us too. New positions open continuously, currently new employment is offered for 50 people. The fact that you

Dr. Péter VÁRADY MANAGING DIRECTOR

evosoft Hungary Kft. have earned a BSc or MSc diploma will not determine your career. Instead, motivation, dedication and a willingness to learn become a lot more important. Perhaps I could say that those with an MSc degree can move faster in their career in the beginning, but there are some exceptions, of course. Learning continues here when you start working for evosoft, with various forms of professional, soft skill and language trainings. evosoft spends almost twice as much as the average salary in Hungary on training each worker every year. A good engineer must have excellent technical knowledge, but must also be

NOTE: ALL ARTICLES MARKED E XPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILIT Y

able to cooperate as a communicative team player, working with others creatively and constructively. This is actually just as important as professional expertise. Furthermore, the work has to be carried out in a foreign language (English or German). That is why it is one of our expectations of staff that each engineer in the company should know one of these languages at an advanced level. Unfortunately, engineers who have just graduated do not speak these languages at an adequate level, which is why we assist them with language training. We wish they would bring this knowledge with themselves when they finish school. I think young engineers should seriously consider that a high level knowledge of a foreign language is one of the basic conditions of employment almost everywhere today.

www.evosoft.hu

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

Designing a future built on innovation Budapest’s Design Terminal seeks to promote tech startups and the overall creative sector in Hungary by supporting young talent. BBJ STAFF

With its trendy bars and restaurants, and belowground music venue, the pocket of greenery in the middle of the city at Erzsébet tér is always bustling with a young, lively crowd. At one edge of the square the Design Terminal, a converted 1949 modernist− style bus station that added a terrace bar− restaurant during renovations completed this spring, also caters to a youthful clientele, though not all of them come to party. Many of the visitors to the Design Terminal come to get help in turning their innovative ideas into careers. Opened in 2011, Design Terminal is a state−funded agency tasked with encouraging innovation and creativity. Its focus is on the fields of urbanism, design, fashion, and of course technology – especially innovative startups. According to Gergely Böszörményi−Nagy, director general of Design Terminal, there is a huge pool of underused creativity in Hungary that could provide tremendous economic potential for the country. “Plentiful resources, when it comes to product development talent, are indeed a valuable asset for Budapest and for Hungary. It is, however, vital to keep in mind that this talent is often paired with a lack of cutting−edge marketing, sales and business−development skills,” Böszörményi−Nagy says. “Design Terminal’s aim is to give the creative and innovative industries the boost they need to become a driving force behind the Hungarian economy and a defining factor of the nation’s cultural climate.” Böszörményi−Nagy notes that Hungary is home to a number of successful, innovative startups. “Companies such as Prezi, Ustream, Logmein, NNG (iGo), and IND (recently acquired by Mysis) have high valuations, a strong global market share, top class investors, and boast headquarters in San Fransisco, Boston and other leading innovation hubs,” he says. “I would also mention Balabit, focused on IT security; Tresorit, offering end−to−end encrypted and secure cloud storage; and Secret Sauce Partners, whose product Fit Predictor for Apparel, offers purchases tailored to shoppers at e−commerce shops, using big data.” The capital’s “booming nightlife and flourishing cultural milieu” make Budapest an attractive location for creative young minds, according to Böszörményi−Nagy. “Remember, American counterculture, along with its center, San Francisco, were essential to the emergence of today’s Silicon Valley. The bohemian and diverse culture of Hungary’s capital is itself conducive to innovation – and there are so many other advantages. A relatively large,

The Design Terminal. At right is Gergely Böszörményi-Nagy.

affordable pool of talent exists to recruit from: Local universities offer world−class training in both engineering and design fields,” he says. “Approximately 8−10,000 well−educated engineers receive degrees from Hungarian universities each year.” Furthermore, the Design Terminal director notes, “Local engineers cost less than half of what their counterparts do in California – or even in Berlin.” SUPPORTING CREATIVITY For Böszörményi−Nagy, the challenge facing Budapest, and the country in general, is not so much finding creative minds, but rather finding meaningful, creative work for those minds. That’s the goal of the Design Terminal. “We extend support to individual entrepreneurs directly, channeling local startups to international trade shows, conferences and study tours. On an annual level, we provide assistance to more than 120 creative enterprises, arranging consultations regarding multifaceted issues, including intellectual property protection and brand building,” he explains. In addition, the agency holds hundreds of conferences, workshops and other events every year, with the goal “of improving the business environment the nation’s creatives inhabit”. A key part of the work is helping creative people to market themselves and their ideas, especially when it comes to tech− oriented startups. “Most of the success stories we have witnessed in the past years have involved international co−founders and a strong U.S. presence from the very beginning. I am convinced that allowing early stage startups to experience the global market and the international startup scene will be crucial in fostering the future’s successful tech ventures,” Böszörményi−Nagy says. “As an example: We recently arranged for seven tech startups, including Synetiq, Robophone, Gravitalent, Play. io, and opp.io, to exhibit at the Northside Festival for Music, Innovation and Film in Brooklyn, offering them a unique opportunity to explore the NYC tech scene and get to know the East Coast startup community.” The payoff for this networking should be growth in Hungary’s creative industries, according to Böszörményi−

Nagy. He says that, in 2003, creative industries accounted for 2.3% of the European Union’s GDP, but by 2010, that contribution had grown to 4.5%. “In Hungary, the creative sector’s current contribution to GDP is 3.7%, with the industry expanding at fives times, its exports at twice the rate of overall economic growth. With targeted improvements to the underlying ecosystem, business environment and

operations, we consider it realistic to see the industry’s contribution to gross domestic product reaching 5%, its exports doubling and employment in the industry rising by 33% – all in the next decade.” It’s an ambitious target, but Böszörményi−Nagy says that level of growth is possible, and he believes much of it will be nurtured in the little patch of greenery in the middle of the city.

PROMOTIONAL

How employers manage the increasing skill gap on the Hungarian IT Job Market? IT/engineer experts have many job offers to choose from, which challenges employers to use new solutions in finding the best talents. The current hiring picture is all about the hype around cloud computing, mobile technology, automotive development, SAP consultancy, not to mention the new investors entering the Hungarian market this year, with a hiring need of more than 2,000 employees, says Zsuzsa Gárdus, Managing Director, and Katalin Blazsovszky, Head of IT Division from ITJOBS. “Most of our large accounts are facing a hot autumn to find IT talents. According to our research, the most wanted areas include Java, C#, C/C++, Web, Mobile technology, and SAP, with the most difficult to find experts are those with, among other things, Python, Datawarehouse, Sharepoint, Matlab, Embedded, and Avaya technologies experience. Mobility among the best talents is still very popular, as the number of attractive vacancies from the EU and the United States has been increasing: more than 10% of experts have already left Hungary. That is pushing salaries up by 15-20% on average. But the need in the job market goes beyond just cutting-edge technology experts; employers want IT/engineer pros who understand their business and industry, who can tie IT strategy to corporate business goals, and who have excellent communication skills. Katalin Blazsovszky confirms after interviewing 30 IT managers that the majority of organizations are planning to increase training efforts in 2014, especially around hot skills areas such as Java, .NET, C#, Scrum, Microsoft, Cisco, SQL, ISTQB, Prince, and PMP Certificates, not to mention training on soft skills. The above mentioned conditions are pushing ITJOBS to apply new solutions to identify and connect professionals with clients. At many of our clients we have fully outsourced the IT Recruitment (RPO) and also make an advantage of the Eastern European Candidates’ mobility. Thanks to the new recruitment approaches and our dedicated and professional team, we could significantly increase the number of successfully placed talents for our partners in the last 12 months. If you need more information, please, contact www.itjobs.hu, office@itjobs.hu, call +36 1 439 29 40

WWW.BBJ.HU

20 3

Budapest Business Journal | September 05 – September 18, 2014

NNG: massive expansion ‘right step at the right time’ Budapest−based Hungarian navigation software developer NNG, maker of iGO primo, has entered a period of ‘massive expansion’ to keep pace with growth according to company co−founder and president, David Wiernik. ROBIN MARSHALL

On August 19, it was announced that NNG had bought Georgia−based American peer nFuzion – an HMI (Human−Machine Interface) prototyping company – with the aim of expanding its profile. The U.S. company, founded in 2000, works with international auto makers, as well as tier one and tier two automotive suppliers. The purchase announcement was followed on August 27 by the news that NNG was opening a development center in ADVERTISEMENT

STORY HIGHLIGHTS ■

NNG development center in Szeged will employ 200 software engineers. ■ Maker of iGO buys American peer nFuzion to enter HMI market.

the picturesque southern Hungarian university city of Szeged. NNG first came to prominence as a developer of navigation software for handheld devices. Market saturation and the financial crisis almost brought it to its knees, but it switched focus to automotive navigation systems in 2008 and currently seven of the world’s top ten carmakers use its products. The company is now moving from navigation alone to complete automotive infotainment systems. “In the U.S. we are expanding extremely fast and moving into the new area of HMI, and so we are right now short of resources, as we do not yet have the people to do that,” co−founder and president David Wiernik told the Budapest Business Journal while en route to a flight to Israel. “The U.S. acquisition is basically a specialist in HMI, very well known to the automotive manufacturers, and very highly respected.” Similarly, the move to Szeged is driven by a need for more people to meet the demands of annual growth of 40−50%.

David Wiernik: ‘We will spend as much as we need.’

“We are going through a period of massive expansion because we need more software engineers and Budapest is almost dried out. We need the best engineers, we know Szeged has a great university – many of our people in Budapest come from there – we have a very good deal with the university, the city is amazing and very supportvie. It seemed the obvious choice.” Szeged has one other advantage: NNG has always been proud of being Hungarian based and using Hungarian expertise, but in a recent, exclusive interview with the BBJ, co−founder and CEO Péter Balogh said he believed that, from a cultural, mental and educational perspective, many of the same skill sets could be found across the region (see “Big in Japan” in the June 6 issue of the newspaper). Szeged is close to the border with Romania and most especially Serbia. At the press conference announcing the Szeged development, Balogh said, “We have never considered outsourcing our work or moving our activities abroad. We have ambitious goals in this town, and we need the best professionals in order to achieve them. Szeged has a large pool of talented IT specialists, but we also expect talented experts from neighboring regions and countries to apply for the available positions.” Wiernik said the recruitment process has already begun, with a prime office facility identified, although at that time the contract was still to be signed. Initially, 50 software engineers will be taken on, but the aim is to have 200 within a year, on top of the current total of almost 650 staff. “We want to do it as soon as possible, but we will probably open in November,” Wiernik said. He wouldn’t be drawn on the cost of the investment, but said it would be “insignificant” compared to the ROI. “We will spend as much as we need. We have the budget, of course. In Budapest we have won best employer ratings in IT because of our offices, and

We need more software engineers and Budapest is almost dried out. we will meet exactly the same standards in Szeged. We do not care about how much it costs, we care very much about how much we get back from our happy engineers, working in an amazing, supportive, creative environment.” He insists the company is in the fortunate position of controlling its own finances, and therefore its future. “We have our own finances, we do not owe the banks anything and we do not have to report to investors or shareholders. That means we can take a decision because it is the best decision for the company. We are in the very nice position of being able to say ‘No’ to whatever we do not like or do not think is in the best interests of the company.” He doesn’t view the current growth path as being either particularly organic or acquisition based. “We are not a public company, so we do not need to think in those terms. It is natural, the logical next step. We need more resources; we need to be able to do even more things than we can with only 650 people at the moment. There are probably going to be more acquisitions in the future, but for now this is the right step, taken at the right time.” NNG had after−tax profit of HUF 4.8 bln on revenue of HUF 16.9 bln last year, public records show.

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

All in the game: Ustream snubbed in streaming deal Seeking someone to broadcast online gaming action, Amazon bought upstart startup Twitch.tv for $970 million at the end of August. So why didn’t the market leader, the Hungarian−American firm Ustream, get in on this lucrative deal? GERGELY HERPAI

The fact that the video gaming market is extremely profitable is common knowledge now: according to gartner. com, the sector had total sales worldwide of $93 billion. What might be a bit startling, however, is that just watching other people play games is profitable as well: Twitch.tv, which is a free live video streaming online service specialized in video games was just purchased by Amazon for $970 million. Since its rival, the Hungarian startup success story Ustream, is much older and has a lot more viewers, one may wonder why Amazon didn’t buy Ustream instead? Ustream, a video streaming service was founded in 2007 and has a staggering 77 million monthly viewers; the 50.8 million monthly viewers of Twitch.tv (also known simply as Twitch) are none less incredible since those people are “only” watching other people playing video games and nothing else. One might wonder what’s so exciting about watching the live streaming of other’s game play that it can gather such a large audience, but what matters here are the numbers and the market position – that is apparently why Amazon bought the service on August 25. BET ON GAMES PAYS OFF “Do you have a little bit of envy there with that close to $1 bln extra?” a Fox News host asked one of Ustream’s founders, CEO Brad Hunstable. After a chuckle, Hunstable answered: “The Twitch guys have done a really amazing job. Taking it from a generic live broadcasting platform they have seen the power of the future of online gaming. They have very smartly focused their company in that direction.” Watching other people playing videogames may sound like a boring occupation, but it’s actually a blooming service, mainly due to the e−sports business. Watching competitive online gaming is the modern equivalent of watching sport on television and it has a huge popularity, hence the success of Twitch.tv. Broadcasting a new and much awaited game gathers a lot of new viewers. “It’s nothing new either: YouTube’s two main most successful content areas are music and games,” according to Gyula Fehér, founder and CTO of Ustream. “While Twitch.tv is only focusing on game broadcasting, we at Ustream are well known for having mainly serious

Ustream founders Brad Hunstable, left, and Gyula Fehér, above.

business partners. We are talking about huge companies who are using Ustream to make their important announcements through our media streaming service,” Fehér told the Budapest Business Journal. “Some of these companies include Facebook, LinkedIn, Sony, NASA and Cisco.” DIFFERENT ADVERTISING MODELS There’s a big difference between the advertisement models of Twitch.tv and Ustream as well. If you want to stream online video content on your new website, you will probably choose between Ustream or Twitch.tv. When you start to broadcast, each online streaming service will put its advertisements in your broadcast videos. You may want the advertisements to disappear, or you might want to take your share of the revenues. That’s where the big difference lies: while in the case of Ustream you have the pay at least $99 monthly for the advertisements to disappear, Twitch.tv instead offers to pay you a share of its advert revenues – provided you generate content with more than 500 viewers at a given frequency. Sounds familiar? Yes, YouTube uses the same kind of business model: generating content is free and if there are enough people to watch your “show” Google offers to put YouTube advertisements in it and pay you a percentage afterwards. Using this very same advertisement system, Google could have been the “king of online video services” should it have chosen to buy Twitch.tv, but it was worried about antitrust issues, and that’s why it finally ruled against it. Still it begs the question: don’t big companies also want to advertise? And why didn’t Ustream focus on online gaming as well, since it became so popular? “You have to understand one big difference between the business model of Ustream and Twitch.tv (and

also YouTube for that matter). We at Ustream are an online video streaming platform that has premium services that we offer to companies. On the other hand Twitch.tv and YouTube are “content aggregators” which means that they gather the most viewers possible and they are monetizing through advertisements,” explains Fehér. He adds that the kind of monetization his firm uses brings it a better profit. “It’s safe to say that our margins are lot better than those of other companies who are making a profit through other advertisements systems.” USTREAM READY TO PLAY, TOO Of course, Ustream doesn’t avoid streaming gaming. Sony incorporated both Twitch.tv and Ustream for game streaming in its PlayStation 4 console, which was released last December. When players decides to share their gaming sessions, they are taken to a screen where

they can decide whether to do so via Twitch.tv or Ustream. The Japanese company has a history of good relations with Ustream. “During our Ustream broadcast of the Sony PlayStation 4 announcement – which was about two hours long – more than eight million people tuned in to watch it, which is almost the size a prime TV audience,” Hunstable told Fox News. Does this also mean that in online streaming we may have found a strong contender of traditional television? Perhaps not in the sense of “every day television”, but the fact that such a big company as Sony had to rely on a video stream service like Ustream for global, uninterrupted airtime for its PlayStation 4 presentation – because there simply wasn’t any television company which could offer that – is a sign of a new era in “television” as well, Fehér thinks. “The boundaries between television and Internet broadcasting content are strongly blurred nowadays.”

REBORN RENO awaits new tenants Autumn opening offer at Reno Udvar on Váci út, just an arm’s length from downtown Budapest You will find the right size that fits your needs at Reno Udvar. Warehouses from 10 m2 to 1,500 m2 available at significantly discounted prices. Low rent, favourable utility costs, configuration and renovation per your wishes, custom-tailored offices. Choose the largest office corridor of Budapest five minutes away from downtown and rent a B+ category office at the price of the B- category. Sizes per your needs: offices ranging from 140 m2 to 600 m2. Stores to rent from 200 m2 to 1,500 m2 available at seriously cheap rates. Join the stores of REGIO toy store, Brendon children’s store, Cardo furniture store, Eleven Park Playhouse – the largest indoor playground of Hungary –, and many others. Easy access by public transportation or by passenger cars, plenty of parking spots and storage opportunities. Convenient loading, separate truck gate, reception service. Close proximity of Megyeri bridge, thus quick reach of motorways M2, M0 M3 and M5. For further information about our offices, warehouses and stores please send an inquiry to iroda@ari.hu or call us at (+36) 30 601-1000.

WWW.BBJ.HU

22 3

Budapest Business Journal | September 05 – September 18, 2014

Trying to translate new software into success MetaMorpho does better than Google Translate when it comes to Hungarian and other CEE languages, but that has not yet made the firm’s owners rich. ANDRÁS ZSÁMBOKI

Put the English phrase “the fan booked the ticket” into Google Translator and the Hungarian translation will be “a bíró sárga lapot adott” (“the referee booked (him) a yellow card”). Google Translator (GT) needs improvement. The MorphoMouse software of major Hungarian language technology company MorphoLogic is much better than Google Translator if Hungarian is the target language. Proof of that is that MorphoMouse was the absolute winner in the English−Hungarian translation category at the Berlin Machine Translation Marathon in 2008. “The problem is that only the profession knows about that achievement; average lay users tend to get their information from elsewhere,” Gábor Prószéky, managing director of MorphoLogic tells the Budapest Business Journal. “Google is a cutting−edge company in language technology. If that is all their translator is capable of, lay people think, then what can one expect of smaller companies? The translation products of MorhoLogic are significantly better when it comes to Central European languages. Still, they do not approach live interpreters’ quality,” Prószéky admits. A potential MorphoLogic customer is faced with the dilemma that while he or she will have to pay more than for Google Translator, which is free, and the service will be better, it will not be perfect. “As the emblematic motto of the worldwide web goes: it does not matter how bad a service is, the main thing is that it is for free.” THE FIRST SIN: THE DAMAGING OF BUSINESS That was not the case in the 1990s, Prószéky recalls. “At that time, in the heyday of language technology, we used to write spell−check and hyphenation programs for Microsoft, IBM, and Adobe, and from that income we were able to finance our research projects for ten years. Google, with its web translator, ruined not only that business model, but the whole profession as well.” GT belongs to a big family of so−called statistical machine translation programs, which use neither dictionaries nor grammatical rules: they try to guess what a word or word sequence means in another language on the basis of an immense database of texts. “The training of statistical translating programs takes place on the basis of parallel corpora of source languages and target languages,” Attila Novák, the machine−learning expert of MorphoLogic explains. For example, to translate from Hungarian into English, the makers of statistical

Gábor Prószéky.

As the emblematic motto of the worldwide web goes: it does not matter how bad a service is, the main thing is that it is for free. translation programs look for pairs of texts that have been prepared specifically as translations of each other, such as books, or foreign−language versions of legal documents. The program first breaks up the text into sentences, and then orders the matching sentences into pairs. Then comes the matching of words. “The program then arranges the matching pairs of words and strings of words into a so−called phrase table. This table will show what the most likely translation of a given word will be,” Novák says. THE SECOND SIN: A FACTORY OF COMMONPLACES A long sentence in one language could be translated into two separate sentences in another. Within the parallel sentences, the matching of words is usually even more problematic; it is often the case that something expressed by more words in one language is expressed by fewer words in the other. A small−corpus statistical translator will find the translation of ‘I love you’ a hopelessly difficult task, as the thing expressed by one word in Hungarian is expressed by three in English. “Google Translator, as a matter of fact, translates the above example faultlessly, but only because the above phrase occurs in an extremely high number of cases in both English and Hungarian. ‘I love you’ is the most commonplace sentence in the world,” Prószéky explains. “A rarer sentence, however, will easily outfox even Google Translator.”

The big virtue of Google Translator is that it has been trained on a very large number of examples. “It always provides translations which are based on existing examples; it mirrors what the real world is like. The experts of MorphoLogic, for example, have never managed to convince Google Translator to translate the sentence ‘A postás megharapta a kutyát’ (‘The mailman has bitten the dog’) adhering to grammatical rules. The only solution Google Translator is willing to provide is ‘The dog has bitten the mailman’. We have tried all sorts of Hungarian word orders, but GT always produced the same result,” Prószéky explained. The problem is that GT always checks its own translation results on the basis of the likeliest solution. Of course the dog bites far more often than the mailman does. “In other words, what GT does is adjust the translation results to the stereotypical sentences that occur most often in the world.” THE THIRD SIN: UNIVERSAL SOFTWARE “Statistical machine translators have a big advantage over traditional, rule− based translator software programs: they are universal. If they need to be applied to a new language, all that is needed is to provide a new parallel corpus. The heart of the program remains the same,” Prószéky points out. Rule−based translators, in comparison, are always language−specific. If a new language needs to be included among the target languages, that requires a

great deal of work by linguists as well as programmers. “This substantial linguistic input has a great advantage over statistical translation: namely that translation mistakes can easily be spotted and corrected.” The developers of statistical machine translators, of course, believe in the improvability of their programs: all one needs to do, they say, is to increase the size of the parallel corpora. “However, improvement based on sample enlargement only works in machine learning if the sentence that needs to be corrected resembles the existing examples,” Prószéky says. When we want a program to recognize a variant of a word that differs significantly from the basic form, the result will be chaotic. This is exactly the type of problem that rule−based translators can handle very well. The result of their translating work, however, sounds much drier and clumsier, albeit it is more grammatically precise than those prepared by statistical machine translators. MorphoLogic’s own program in this category is called MetaMorpho. “The virtues of statistical machine translators and rule−based translators can be united by so−called hybrid machine translating programs. They provide grammatically accurate but at the same time pleasing results.” THE FOURTH SIN: OPPRESSING SMALL LANGUAGES Small languages will have a smaller corpora; that inevitably means that there are fewer examples available for the statistical translation program, thus it will produce poorer−quality translations. “It is a cumulative problem for GT if it has to translate from one small language to another. It is hard to find texts that exist in parallel in, say, Maltese and Latvian; it is an open secret that GT routinely handles the problem by inserting English as a mediating tool between the two. The end result will predictably be gross mistranslation,” Novák says. “The hybridization of rule− based translation with statistical machine translation will largely solve this problem: there will always be a word category ordered to each word; so adjectives will not get mixed up with verbs, verbs will not get confused with nouns spelt the same way etc.” THE FIFTH SIN: GT IS “ISOLATIONIST” GT has been optimized for languages in which there are almost no conjugations and inflections, but which have strict word order. In linguistics, these languages are called isolating languages; two major examples are English and Chinese. While in English examples of the word ‘dog’ (and no other forms of it) can be collected from diverse texts, in Hungarian not only the basic word (‘kutya’) but each and every suffixed form of it needs to be featured in the database. Prószéky boasts that his hybrid translation program features a built−in morphological analyzer that puts the suffixed and unsuffixed forms of ‘kutya’ into the phrase table as the same morpheme.

WWW.BBJ.HU

Budapest Business Journal | September 05 â€“ September 18, 2014

ERP Companies

1,484

Âť

www.hostlogic.hu

YEAR ESTABLISHED

HOSTLOGIC KFT.

NO. OF FULL-TIME EMPLOYEES ON JULY 1, 2014

TOTAL NET REVENUE (HUF MLN) IN 2013 IN H1, 2014

COMPANY WEBSITE

NET REVENUE FROM ERP SOFTWARE SALES IN 2013 (HUF MLN)

RANK

Ranked by net revenue from ERP software sales

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

2012

(100) â€“

PĂŠter FĂĄrizs, ZoltĂĄn GĂśrbics Csaba Angelmayer Attila MolnĂĄr

1134 Budapest, VĂĄci Ăşt 35. (1) 237-1730 (1) 350-4113 info@hostlogic.hu

2000

)ĹƒQL[ ,7 &RQVXOWLQJ .IW AndrĂĄs Kohajda (30.35), TamĂĄs TĂłth (8.95) â€“

GyĂśrgy SzajbĂŠly IstvĂĄn Bokor KrisztiĂĄn Walter

6723 Szeged, )HOVĹƒÂ˛7LV]D SDUW Â˛ (1) 450-2200 (1) 239-0056 info@griffsoft.hu

1992

Progen Holding Zrt. (100) â€“

SĂĄndor KomĂĄromi Gizella Koncz SzabĂłnĂŠ Ă‰va Wernitzer

1118 Budapest, Homonna utca 8/A (1) 481-9000 (1) 481-9001 info@progen.hu

2002

Lajos Beck (50), IstvĂĄn Kucsera (50) â€“

Lajos Beck, IstvĂĄn Kucsera ZoltĂĄn HorvĂĄth â€“

1134 Budapest, KassĂĄk Lajos utca 19â€“25. (1) 555-7270 (1) 555-7271 info@isys-on.hu

Zsolt Weiszbart â€“ GĂĄbor HalĂĄsz

1132 Budapest, VĂĄci Ăşt 22â€“24. (1) 236-3700 (1) 236-3701 infohu@ifsworld.com

SOFTWARE TYPES DISTRIBUTED IN 2013

MAJOR CLIENTS IN 2013

SAP

Vincotech HungĂĄria Kft., SOLE-MiZo ZRt., CHEMARK Kft.

137

1,433

2,570 1,136

ForrĂĄs-SQL, ForrĂĄs. NET

BelĂźgyminisztĂŠrium, KĂźlĂźgyminisztĂŠrium, Emberi (UĹƒIRUUiV 0LQLV]WpULXP IgazsĂĄgĂźgyi MinisztĂŠrium, Nemzeti MĂŠdia- ĂŠs HĂrkĂśzlĂŠsi HatĂłsĂĄg, OrszĂĄgos EgĂŠszsĂŠgbiztosĂtĂĄsi PĂŠnztĂĄr

945

945 391

sERPa, Nagy MachinĂĄtor

Young B.T.S. Kft., RĂłnatabak .IW +XQJXHVW 9DJ\RQNH]HOĹƒ =UW :HLQEHUJ eStWĹƒ .IW 0DJ\DU Turizmus Zrt., Semilab Zrt

847

847 533

QAD Enterprise Applications

PSI EurĂłpa Kft., SĂĄga Foods Zrt., Szarvasi Mozzarella Kft.

800

800 400

IFS Applications ERP

Budapest Airport Zrt., SzentkirĂĄlyi Ă svĂĄnyvĂz Kft., HAJDU Csoport, ANY BiztonsĂĄgi Nyomda Nyrt., FĂ‰MALK FĂŠmĂśntĂŠszeti ĂŠs AlkatrĂŠszgyĂĄrtĂł Zrt., LAKICS GĂŠpgyĂĄrtĂł Kft.

2000

â€“ IFS WORLD AB, IFS CEE (100)

733

1,595 792

ERP, BSS, CRM, BI-EPM

Invitel, Heineken, NISZ, Pannon-VĂz, Central-Drinks, Bricostore Romania

1997

Individuals (100) â€“

Csaba Rozenberszki Ilona RĂŠtai RĂłnyainĂŠ Zsolt Rozenberszki

1038 Budapest, RĂĄby MĂĄtyĂĄs utca 7. (1) 436-7850 (1) 436-7851 info@rrsoftware.hu

590

6,987 3,093

SAP, Infor

Magyar Telekom, T-Csoport, Deloitte, VOCH, Vodafone, K&H Bank, Euronet Services, NISZ

1999

â€“ S&T AG (100)

3pWHU 'H]VĹƒ 6]DEy SĂĄndor KulcsĂĄr â€“

2040 BudaĂśrs, PuskĂĄs Tivadar Ăşt 14. (1) 371-8000 (1) 371-8001 info@snt.hu

472

500 344

Infor SunSystems, Infor10 BI, systems@ work, LLP Bank Payment System, Microsoft Dynamics CRM, Pivotal

*OD[R6PLWK.OLQH .IW +%2 +ROGing Zrt., KPMG Central&Eastern Europe, Johnson & Johnson

1996

â€“ LLP Praha s.r.o (100)

Barbara Dreska Alinka VĂĄrhegyi Ă gnes Csizmadia

1138 Budapest, RĂŠvĂŠsz utca 27â€“29. (1) 412-2400 (1) 412-2401 contact@hu.llpgroup.com

250

9,018

1989

4iG Nyrt. (78.20), HS Board Kft. (16), BĂŠla Zsolt TĂłth (5.70) â€“

GĂĄbor Somlyai, AndrĂĄs Mezey TamĂĄs KoppĂĄny Ferenc TurcsĂĄn

1037 Budapest, Montevideo utca 8. (1) 270-7600 (1) 270-7679 humansoft@humansoft.hu

SAP HUNGARY KFT. NR

Âť

17,500

Âť

SAP

1997

â€“ SAP AG (100)

BalĂĄzs Ablonczy GyĂśrgy Simon Gergely Karkiss

1031 Budapest, ZĂĄhony utca 7. (1) 885-7300 (1) 457-8344 info.hungary@sap.com

ORACLE HUNGARY KFT. NR

Âť

13,279(1)

ERP, CRM, EPM, BI, HCM

1993

â€“ Oracle Corporation (Âť), Oracle Nederland B.V. (Âť)

Csaba RemĂŠnyi â€“ â€“

1095 Budapest, Lechner Ă–dĂśn fasor 7. (1) 224-1700 (1) 214-0070 gen-recepcionist_hu@ oracle.com

SYNERGON NR INTEGRATOR KFT.

Âť

7,834

1994

Synergon Informatika Nyrt. (100) â€“

0LNOyV &VLOODJ ,PUH 5iF] â€“ â€“

1191 Budapest, Vak BottyĂĄn utca 75/Aâ€“C (1) 399-5500 (1) 399-5599 info@synergon.hu

GRIFFSOFT INFORMATIKAI ZRT. www.griffsoft.hu

PROGEN MĂ‰RNĂ–KI )(-/(6=7Ĺ‚ e6 SZOLGĂ LTATĂ“ KFT. www.progen.hu

ISYS-ON INFORMATIKAI TANĂ CSADĂ“ KFT. www.isys-on.hu

IFS HUNGARY KFT.

R&R SOFTWARE ZRT.

S&T CONSULTING HUNGARY KFT.

www.ifsworld.com

www.rrsoftware.hu

www.snt.hu

LLP HUNGARY KFT. www.llpgroup.com/hu

HUMANSOFT KFT. www.humansoft.hu 9

www.sap.hu

www.oracle.hu

Âť

www.sri.hu

(1) Data of business year June 1, 2012-May 31, 2013

Âť

Microsoft AX Dynamics, AgromAX, 2SWLP$; )RRGPD[

Âť

NISZ, NAV, Egis, ITSH, NBSZ

Âť

220

520

235

WWW.BBJ.HU

24 3

Budapest Business Journal | September 05 – September 18, 2014

Software developers

Germany

–

Siemens

NO. OF FULL-TIME EMPLOYEES ON JULY 1, 2014 OF THESE, FULL TIME SOFTWARE DEVELOPERS

DISTRIBUTION OF OWN PRODUCTS

SOFTWARE PRODUCTS

12,350(1)

RESALE

MAIN EXPORT DESTINATIONS

14,025(1) 6,595(2)

CONSULTING

SOFTWARE EXPORT IN 2013 AS A PERCENTAGE OF TOTAL REVENUE (%)

MAJOR CLIENTS IN 2013 INSTALLATION

TOTAL NET REVENUE FROM SOFTWARE DEVELOPMENT (HUF MLN) IN 2013

COMPANY WEBSITE

SOFTWARE RELATED ACTIVITIES

TOTAL NET REVENUE (HUF MLN) IN 2013 IN H1, 2014

RANK

Ranked by total net revenue

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

726 646

– evosoft GmbH (100)

Péter Várady Ede Schuszter, Head of BA Business Controlling Zoltán Gönye

1117 Budapest, Kaposvár utca 14–18. (1) 381-6400 (1) 381-6101 sales@evosoft.com

183

– Microsoft Corp. (100)

István Papp – –

1031 Budapest, Graphisoft park 3. (1) 437-2800 (1) 437-2899 –

4iG Nyrt. (78.20), HS Board Kft. (16), Béla Zsolt Tóth (5.70) –

Gábor Somlyai, András Mezey Tamás Koppány Ferenc Turcsán

1037 Budapest, Montevideo utca 8. (1) 270-7600 (1) 270-7679 humansoft@humansoft.hu

EVOSOFT HUNGARY KFT. www.evosoft.hu 1

MICROSOFT HUNGARY KFT. www.microsoft.hu

11,140

» » » »

» »

Synergon Informatika Nyrt. (100) –

Miklós Csillag, Imre Rácz – –

1191 Budapest, Vak Bottyán utca 75/A–C (1) 399-5500 (1) 399-5599 info@synergon.hu

» »

– Nemetschek AG (100)

Viktor Várkonyi Attila Seres Ákos Pfemeter

1031 Budapest, Záhony utca 7. (1) 437-3000 (1) 437-3099 mail@graphisoft.hu

– Logmein Ireland Holding Company Ltd. (100)

Tamás Kovács – –

1061 Budapest, Andrássy út 9. (1) 413-3780 (1) 413-6996 –

160 70

Individuals (100) –

=ROWiQ *\|UNŃ Attila Rácz Attila Kiss

1117 Budapest, Alíz utca 2. (1) 398-6700 (1) 208-0875 info@balabit.hu

236 15

Individuals (100) –

Szilárd Ocskay -XGLW 1ŃWH Gábor Varga

1138 Budapest, Váci út 186. (1) 465-5100 (1) 465-5101 nexon@nexon.hu

128

– Qualysoft Holding Ltd. (100)

Attila Simon Tamás Zimányi –

1118 Budapest, Rétköz utca 5. (1) 889-9800 (1) 889-9810 RIÀ FH#TXDO\VRIW KX

– Siemens AG Österreich (100)

Ákos Szekendy – –

1143 Budapest, Gizella út 51–57. (1) 471-3000 (1) 471-3002 marietta.hanto@siemens. com

AMCS Kft. (100) –

Tamás Szabó – –

1117 Budapest, Infopark sétány 1. (1) 205-0055 (1) 205-0056 info@alerant.hu

HUMANSOFT KFT. www.humansoft.hu 9,018

SYNERGON INTEGRATOR KFT. www.sri.hu

GRAPHISOFT SE ZRT

LOGMEIN KFT.

www.graphisoft.com

www.logmein.com

7,834

7,669

5,002

3,284

BALABIT IT KFT. www.balabit.hu

NEXON KFT. www.nexon.hu

3,186 1,717

QUALYSOFT ZRT.

3,173

www.qualysoft.hu

SIEMENS PSE KFT. www.pse.siemens.hu

ALERANT ZRT. 11 www.alerant.hu

2,183

1,693

250

–

AgromAX, DoQ, MindTheGapp, ASIR/ PÁIR

EU, Russia

SYNERGON Smart Building, SYNERGON Smart Grid

ArchiCAD, BIMx, BIMcloud, MEP Modeler, EcoDesigner Star

3,284

USA, France, UK, Russia, Germany

Zorp Gateway, Shell Control Box, syslog-ng

Telenor Norge, MTS Ukraine, France Telecom - Orange, Dubai Islamic Bank, Handelsbanken, Skolkovo, Riksgalden, Coop, Air France

1,357

–

NEXONhrm

–

» »

274

108

WWW.BBJ.HU

Âť

InfovadĂĄsz, LEXPERT, NaprakĂŠsz, MonDoc, MonFlow

Âť

59 28

VolĂĄn Elektronika Zrt. (100) â€“

KĂĄlmĂĄn Faur jr. â€“ â€“

1113 Budapest, Karolina Ăşt 65. (1) 372-3300 (1) 209-1477 info@mve.hu

â€“

80 20

(100) â€“

PĂĄl Bokor GĂĄbor Imre JĂĄnos Tancz

1135 Budapest, MĂłr utca 2â€“4. (1) 237-9800 (1) 237-9811 info@saldo.hu

â€“

70 22

GĂĄbor Kelemen (73), Judit Gyenes KelemennĂŠ (27) â€“

GĂĄbor Kelemen TamĂĄs Kelemen DĂłra Bertalan

1112 Budapest, .ĹƒpUEHUNL ~W (1) 310-1492 (1) 310-1497 sales@multisoft.hu

Tibor KulcsĂĄr (97.49), shareholders (2.51) â€“

Tibor KulcsĂĄr â€“ â€“

1022 Budapest, TĂśrĂśkvĂŠsz Ăşt 30/A (1) 336-5300 (1) 336-5309 info@kulcs-soft.hu

â€“ IFS WORLD AB, IFS CEE (100)

Zsolt Weiszbart â€“ GĂĄbor HalĂĄsz

1132 Budapest, VĂĄci Ăşt 22â€“24. (1) 236-3700 (1) 236-3701 infohu@ifsworld.com

Individuals (100) â€“

SĂĄndor DankĂł â€“ â€“

1117 Budapest, Budafoki Ăşt 209. (1) 463-0610 (1) 463-0621 infomail@itware.hu

Zsolt JĂłzsef Koltai (90), Piroska Koltai BĂŠkei (10) â€“

Zsolt Koltai â€“ DiĂĄna WĂĄgner

1149 Budapest, Nagy Lajos kirĂĄly Ăştja 117. (1) 220-6458 (1) 469-0899 sales@trilobita.hu

Âť Âť

â€“ â€“ â€“

1117 Budapest, Hauszmann Alajos utca 2. (1) 279-3970 (1) 279-3971 sales@evopro-group.com

â€“ IBM Ireland Product Distribution Limited (99.93), IBM World Trade Corp (0.07)

Ferenc PongrĂĄcz â€“ â€“

1117 Budapest, Neumann JĂĄnos utca 1. (1) 382-5500 (1) 382-5501 info@hu.ibm.com

â€“ SAP AG (100)

BalĂĄzs Ablonczy GyĂśrgy Simon Gergely Karkiss

1031 Budapest, ZĂĄhony utca 7. (1) 885-7300 (1) 457-8344 info.hungary@sap.com

Âť

www.montana.hu

LIBRA SOFTWARE ZRT. 14 www.mve.hu

SALDO ZRT. www.saldo.hu

MULTISOFT KFT. 16 www.multisoft.hu

KULCS-SOFT SZĂ MĂ?TĂ STECHNIKA 17 NYRT.

1,285 614

1,142

Slovakia

Libra3s, Libra6i

Forestries, MVM Partner, FKF, PĂ‰TĂ V, VolĂĄn companies, water companies

1,100 600

Âť

Saldo Creator

Âť

1,045 520

1,003 269

503

1,001

0.20

IFS HUNGARY KFT. www.ifsworld.com

800 400

ITWARE KFT.

545

www.itware.hu

Âť

512

Âť

â€“ Yes Investment S.a.r.l. (100)

PĂĄl VadĂĄsz Csaba Orosz â€“

1118 Budapest, RĂŠtkĂśz utca 5. (1) 327-9800 (1) 327-9801 info@montana.hu

Âť

â€“

30 6

â€“

IFS Applications

Âť

TriDoc standLinamar ard document Hungary Zrt., management MTM-SBS system, TriDoc Zrt., TriGrĂĄnit enterprise )HMOHV]WĹƒ =UW document manSanoma Media agement sysBudapest, HVG tem, TriProject, KiadĂł Zrt., TriCommission, Lapcom mediachannel, csoport MiBio

www.evopro-group.com

IBM HUNGARY KFT. NR

Âť Âť

Âť

Âť Âť Âť Âť

SAP HUNGARY KFT.

Âť Âť

Âť

www.sap.hu

Âť Âť

1038 Budapest, RĂĄby MĂĄtyĂĄs utca 7. (1) 436-7850 (1) 436-7851 info@rrsoftware.hu

EVOPRO GROUP NR

www.ibm.com/hu

Csaba Rozenberszki Ilona RĂŠtai RĂłnyainĂŠ Zsolt Rozenberszki

Âť

â€“

Âť

Individuals (100) â€“

83 18

â€“

Âť

73 49

Romania, Slovakia, USA

400

Âť

ADDRESS PHONE FAX EMAIL

Kulcs-Ăœgyvitel, Kulcs-SzĂĄmla, SzĂĄmlĂĄzni JĂł, Kulcs-KĂŠszlet, Kulcs-SzĂĄmla ĂŠs kĂŠszlet, Kulcs-BĂŠr, Kulcs-Egyszeres, KulcsKĂśnyvelĂŠs, Kulcs-TĂĄrgyi, Kulcs-AutĂł

Philips

Budapest Airport Zrt., SzentkirĂĄlyi Ă svĂĄnyvĂz Kft., HAJDU Csoport, ANY BiztonsĂĄgi Nyomda Nyrt., FĂ‰MALK FĂŠmĂśntĂŠszeti ĂŠs AlkatrĂŠszgyĂĄrtĂł Zrt., Lakics GĂŠpgyĂĄrtĂł Kft.

512

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

Âť

TRILOBITA INFORMATIKAI ZRT. www.trilobita.hu

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

Austria

www.kulcs-soft.hu

NO. OF FULL-TIME EMPLOYEES ON JULY 1, 2014 OF THESE, FULL TIME SOFTWARE DEVELOPERS

Invitel, MNKH, Heineken, NISZ, Pannon-VĂz, Central-Drinks, Bricostore Romania

DISTRIBUTION OF OWN PRODUCTS

FusionR ERP, FusionR BSS, FusionR Utility, FusionR SFA, VERK/400, cDMS

RESALE

2.45

Romania, Croatia, UK, Austria, USA, Angola, France

CONSULTING

TOTAL NET REVENUE FROM SOFTWARE DEVELOPMENT (HUF MLN) IN 2013

Âť

MAJOR CLIENTS IN 2013 INSTALLATION

1,309 677

SOFTWARE PRODUCTS

MONTANA KNOWLEDGE 13 MANAGEMENT KFT.

1,496

MAIN EXPORT DESTINATIONS

www.rrsoftware.hu

1,595 792

SOFTWARE RELATED ACTIVITIES

SOFTWARE EXPORT IN 2013 AS A PERCENTAGE OF TOTAL REVENUE (%)

R&R SOFTWARE ZRT.

TOTAL NET REVENUE (HUF MLN) IN 2013 IN H1, 2014

RANK

COMPANY WEBSITE

Budapest Business Journal | September 05 â€“ September 18, 2014

Âť

(1) Data of business year October 1, 2012-September 30, 2013. (2) Data of business year October 1, 2013-March 31, 2014.

Âť Âť Âť Âť

Âť

Âť Âť

313

Âť

Âť Âť

QR6242 BBJMag W280xH360 indd 1

9/1/14 10:48 AM

BBJ

4 Socialite

SOCIALITE

The national cake

SOCIALITE

Who’s News

WINE & YOUTH

Photo: Imre Barnabás

Young vintners serve up their best

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | September 05 – September 18, 2014

A sweet slice of Hungary Every year, one cake dazzles the local pastry industry, with tradition and innovation mixed into a winning recipe. ZSÓFIA VÉGH

St. Stephen’s Day is one of Hungary’s most−liked public holidays. This is not only because it is the only one that is not linked to some historic event involving bloodshed, like the 1956 or 1848 revolutions, but also because it offers some real entertainment. Fireworks, to begin with, coupled with programs like some air shows every now and then. The new bread is blessed on this day and, since 2007, Hungary’s Cake is also presented on August 20. Every year, the honored desert is chosen after fierce competition. This year’s winner is Somlói Revolution Cake, a new take on the nation’s favorite trifle, Somlói Galuska. “Having seen how far the Somlói sold in malls and café’s has gotten from the original dessert, we wanted to resurrect it, but with a twist,” Gyula Damniczki, the cake’s creator told the Budapest Business Journal. His confectionary, Damniczki Cukrászda, based at Székesfehérvár, already had a chocolate mousse cake on the menu, and this gave them the idea to convert a trifle into a cake. It took Damniczki and his team 25 attempts to make get the recipe right. Somlói Revolution is not the first non− cake dessert that has been altered for the competition. Three years ago, plum dumplings served as the basis to another winning cake. “It is in fact among the competition criteria to prepare a cake that relates to traditional Hungarian flavors; tropical fruits and hard−to− access ingredients are out question,” says László Selmeczi, managing director of the Cukrásziparosok Országos Szövetsége (National Association for Confectionary). The cake also has to be of ADVERTISEMENT

Gyula Damniczki, center, with cake and crew.

multiple flavors in line with international trends, and made of ingredients that are available all year long. “Though we received many, it is not fine dinning restaurants’ complex cakes we are looking for in this contest,” Selmeczi said. This year a little more than 20 applicants entered the cake contest, somewhat less than in the previous years. Selmeczi attributes this to the fact that former multiple winners (such as Zilah Cukrászda) and losers stayed away from the contest. Even so, the selection was wide, and most matched the criteria, just like runners−up Müvész Kávézó’s Aranyló tokaji és Eper furmint (Gleaming Tokaj and Strawberry furmint cakes). Selecting a cake for the country’s birthday – the date celebrates the

foundation of the Hungarian state some 1,000 years ago – is a pretty smart idea for many reasons. It adds to the show of the festival: despite bad weather

and a HUF 600/slice price, hundreds were queuing for hours in the Street of Hungarian Flavors, just to get a taste of this year’s cake. Its marketing value is also something not to be undermined: hardly has a week passed since August 20; the winning confectionary has already reported skyrocketing sales. “We sell 6−700 pieces of Somlói Revolution Cake per day,” Damnicki said. “We had to introduce a night shift to be able to meet the demand”. Of the country’s 2,000 confectionary manufacturers, approximately 500−600 sell Hungary’s cake. The recipe is public from August 20; before that only member confectionaries have access to it. This way the association is trying to encourage Hungarian pastry shops to become members, Selmeczi noted, and become more active at developing new products. In this department, there is room to grow, he says. Not that Hungarian pastry doesn’t meet American cookie standards, or beat some sweet German riffs, but it should work on and enhance its own distinct style and strength. A handful of pastry chefs are already taking the lead, yet there are still many shops that are too slow to change. To get them innovating, the association organizes study trips to the leading pastry shops abroad, and invites acclaimed international masters to hold workshops here. These are really popular, and attended not only by locals but chefs from Slovakia and Romania, who come to Hungary to learn something of the sweet industry.

THE NATIONAL SUGAR-FREE CAKE Along with the main national dessert, a sugar−free cake has also been made since 2012. The winning pastry shop this year (and in 2013, too) was Nándori Cukrászda, which has been preparing cakes for people suffering from various food allergies and intolerance for five or six years. The sugar−free winner cannot build on an existing dessert, and the ingredients used are, naturally, more restricted. The pastry cannot contain any white flour, confectionary sugar, preservatives, or the like. Chocolate dream, the 2014 winner, is made with almond flour, dark Belgian chocolate, cherries and marzipan, and made by László Nándori, owner of the eponymous Nándori Cukrászda.

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | September 05 – September 18, 2014

BOOK REVIEW

WHO'S NEWS

Scrum

Do you know someone on the move? Send information to research@bbj.hu

Jeff Sutherland, CEO of Scrum, Inc., explains his popular working strategy.

As of August, Simone Dulies has been appointed General Manager of Le Meridien Budapest. She started her career in 1999 within Starwood Hotels & Resorts. After having taken different responsibilities at the front desk first at the Westin South Coast Plaza in California, then at the W New York and the Westin Turnberry Hotel in Scotland, in 2011 she was appointed GM of the Sheraton Bratislava. Born in Germany, Ms Dulies succeeds Adrian Gray as General Manager.

CARA CHAPMAN

There’s a revolutionary methodology that is already changing the way businesses operate. It’s called “Scrum”. Scrum is an approach to project management and team building that has helped to transform many of the world’s biggest organisations – from software companies to healthcare to the U.S. military. Now its originator, Jeff Sutherland, shows how it can be made to work for anyone, anywhere. The reason for Scrum’s success is simple: it’s based on how people really work, and not on how they think they work. Scrum is an adaptive, self−correcting system. It employs an incremental approach, breaking a project down into individual short−term goals that allow for constant assessment of progress. This is in contrast to traditional approaches such as the classic ‘Waterfall’ method, where a project is completed in distinct stages, moving step by step (but slowly and unpredictably) towards an immovable end goal. Take the FBI’s attempt to digitize its records, for example. As with so many software projects, the first attempt failed following four years of work and an investment of more than $400 million. Then the FBI turned to Scrum, and just over a year later unveiled a functioning system that cost less than a tenth of the first project and employed a tenth of the staff. Already adopted by world−leading organizations such as Google, Amazon, the FBI, Deutsche Bank and The Economist, Scrum transforms the standard approach to project planning and implementation. By reducing team sizes and offering a new approach to problem−solving, costs and working hours are drastically cut, and both

Name SIMONE DULIES Current company/ new position LE MERIDIEN BUDAPEST/ GENERAL MANAGER

Name STEPHAN INTERTHAL Current company/ new position KEMPINSKI HOTEL CORVINUS BUDAPEST/ GENERAL MANAGER

speed and quality of work are rapidly improved. Filled with practical examples drawn from a wide range of organisations, “Scrum” is a detailed “how−to” guide that will make you rethink the fundamentals of successful management and show you how to get things done. In the words of the author, “Scrum is not wishing for a better world, or surrendering to the one that exists. Rather, it is a practical, actionable way to implement change. ... Don’t listen to cynics who tell you what can’t be done. Amaze them with what can.”

Stephan Interthal has been appointed General Manager of Kempinski Hotel Corvinus Budapest. Before his appointment, Interthal was in charge of Hotel Baltschug Kempinski Moscow, from July 2013, where he oversaw the final stages of a 20-million-euro renovation project as well as the repositioning of the hotel. Prior to Moscow, he spent three-and-a-half years managing Kempinski Hotel Beijing Lufthansa, the Kempinski’s flagship property in China. Interthal now returns to Budapest, where he held the position of General Manager from 1997 to 2004. During those years, like his predecessor, Emile Bootsma, Interthal implemented a comprehensive refurbishment project at the Corvinus. Interthal is a graduate of the Cornell University and the recipient of a European Business MBA from Reims Management School in 2000.

A közösségi közlekedés új formája molbubi.bkk.hu

SCRUM by Jeff Sutherland Published by Random House Business Books ISBN 9781847941091 Available to order through www.hungaropress.hu

50% jókedv 50% pontosság 100% MOL Bubi

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | September 05 – September 18, 2014

WINE REVIEW

Junibor fest spreads wine gospel to the young

ROBERT SMYTH

As part of the four−day Junibor Borünnep festival held on Szent István tér at the end of August, the Junibor association of young winemakers held a special tasting at the original DiVino wine bar in which the 29 members each revealed their favorite wines. There sure were some stunners on show. Marcell Bukolyi’s Viognier 2013 from Eger knocked my socks off when I first tasted it in spring with its pure varietal character, by virtue of the pronounced peaches and cream nose, followed by juicy peach and pear on the full−bodied, oily and spicy palate. Its rich early promise was confirmed this time round. The alcohol may burn a touch as it often does with this relatively low acid varietal, but it doesn’t spoil the delicious ride and there’s enough acidity to keep the wine sufficiently fresh and not flabby. It was aged in the proportion of one third each in tank, new oak and used oak and the balance is just right. The French Viognier grape is now fairly widespread internationally, but almost became extinct in the 1980s when it was down to just 32 hectares, most of which was in the Condrieu appellation on the right bank of the northern Rhône in France, according to the “Madonna of Wine” Jancis Robinson MW. Zöldveltelini comes from much closer to home; being the Hungarian name for Austria’s über−trendy Grüner Veltliner grape, which is capable of supreme quality. Tami Hernyák’s Zöldveltelini 2013 was kept for a whopping two weeks on its skins, which certainly managed to bring out the variety’s trademark pepper and lime zest notes, with a floral touch of white flowers and a good bit of spice, without any bitterness coming from the

extended skin contact. Zöldveltelini is starting to make some very good wines in Hungary now that vintners are taking it seriously and strictly limiting yields, and this is one of the best of them. OLASZRIZLING GETTING SERIOUS Pan Central European grape Olaszrizling is still considered more of a journeyman variety in Austria where it is known as Welschriesling, but it has been making increasingly serious wines in Hungary for a while now. Badacsony’s Laposa Borbirtok’s 4 Hegy Olaszrizling 2013 is a case in point. Made and served by the much−travelled Zsófia Laposa who has come home to carry out the family’s winemaking duties, it is however the brainchild of her brother Bence. It’s made from Olaszrizling coming from four different hills with different aspects in Badacsony, Szent György−hegy and Csobánc from the Badacsony region, and Somló hill from the region of that name. Aged partly in barrels and partly in stainless steel, it’s got good fruit, such as green and baked apple, as well as pineapple to complement the salty, nutty and oily character that comes from both regions volcanic basalt soil. From Mád in the Tokaj region, Délceg 2012 sees Endre Demeter blend Furmint (70%) and Hárslevelű (30%) to make the estate wine. It was made by manually pressing the grapes, which gives a cleaner base material in the winemaker’s opinion. The must was then fermented in the tank spontaneously from natural yeast. The six months of ageing on the lees gives it a buttery feel that rendered fruit−masking oak unnecessary but still adds weight and depth to the abundant and zesty green fruit. This is pleasantly full for an estate wine, which also goes to show the quality of the fruit on offer at Demetervin. Another fine dry wine from Mád was the soft, fruity and inviting but also vibrant and floral Nyulászó Hárslevelű 2012 from the Szent Tamás’ winery, which is run by István Szepsy junior. ONLY FOR THE YOUNG Members of Junibor have to be less than 35 years of age when they join and they basically either make wine or sell it for the

Photo: Imre Barnabás

‘Junior’ wine makers take over Szent István tér to offer a pleasing taste of the next generation of vintages.

Young winemakers on the square that they made their own for a few days.

family business. They can stay members until they hit that classic middle age barrier of 40, although nobody is quite there yet. Szekszárd’s Csaba Vesztergombi is apparently the most senior member of the group. He appears to have delivered yet another terrific Turul Cuvée from the 2012 vintage, to follow up on the success of the 2011, which scooped the best possible five−star rating in the Hungarian Wines of Excellence 2014 yearbook. It’s 60% Cabernet Franc and 40% Merlot with exciting and lively notes of blueberries, eucalyptus and chocolate. It’s full body and rich fruit means that the alcohol is quite integrated despite the 15% of alcohol. Other delicious Szekszárd blends included Zoltán Heimman’s smooth and polished Birtokbor and Csaba Sebestyén’s medium−bodied but very

lively Iván−volgy Bikavér 2011, with its crispy acidity and strawberry jelly flavors, which includes a relatively high 10% of Kadarka. Meanwhile, Balatonboglár’s Dani Konyári and Villány’s Gábor Kiss showed that Merlot is anything but a boring grape when in the right hands, with their Sessio and Enigma bottlings, respectively. Junibor works in exclusive cooperation with the DiVino wine bars and the tasting was held at the first of these to open, at Szent István tér 3. The bar soon came to be not just the most popular wine bar in town, but also one of the most popular in any category of bar in the city, with revelers regularly spilling out onto the square. The Junibor−DiVino partnership has proven so popular that a second Budapest DiVino was then opened in Gozdu udvar, which has in turn been followed by one in Debrecen.

Kanpai Izakaya, the first Japanese bistro in Hungary, opens at the beginning of September 2014. The owners of the bistro are those of Fuji Japanese Restaurant, also the first to have opened in 1991. We are trying to make this, in Hungary not yet well-known, Izakaya unit work and also to make it more and more popular with our experience and enthuiasm. The word Kampai means ‘Cheers’ while Izakaya is a very popular place of entertainment in Japan, created from the mixture of pubs,restaurants and bistros. We have created both a place and menu to be enjoyed by not only Japanese but also European taste. The atmosphere is cosy and cheerful, bringing the feeling of the Japanese pub-bistro to Hungary with the help of Japanese motives and decor. We offer specialities such as traditional Japanese snacks, Schochu spirits, sake, beers, coctails etc. Of course, we also offer sushi and sashimi in Izakaya. We open at 11 am with different types of fast and affordable lunch menus. After work you can enjoy a beer or a light coctail until 12pm. Naturally,we have a wide range of a la carte dishes including sea foods, vegetarian dishes and snacks like sushi... From March to the end of Octobre our seasonal terrace is also available for guests. High quality service, original fresh foods and ingredients are our trade mark together with the well-known Fuji and its personnel especially its Japanese chef and its management. We are looking forward to seeing You in Izakaya.

1015 Szent István körút 17., Phone: +36 (1) 301 0373, www.kanpaiizakaya.hu

WWW.BBJ.HU

Budapest Business Journal | September 05 – September 18, 2014

Restaurants FINE

4 Socialite

This is an extract from Fine Restaurants, the Budapest Business Journal’s Restaurant Guide 2014 (www.facebook.com/fine. restaurants). To order your copy of the publication, which costs HUF 2,990, send an email including contact details to Andrea Bognár, bognar.a@amedia.hu

MÚZEUM CAFÉ AND RESTAURANT Múzeum Café and Restaurant is among the best traditional restaurants in Hungary, and has been operating in Pest’s historical downtown since 1885. Due to its history and traditions, it represents the lasting values of Hungarian gastronomy, facilitated through the latest technology. Our menu offers subtly modernized delicacies from Hungarian and international cuisines, with a professional selection of national wines and pálinkas. Our interior space is decorated with ceiling frescos by Károly Lotz and with the porcelain tiles of the world−famous Zsolnay factory in Pécs. The atmosphere of dinners is augmented by the music of piano artist Dániel Albert. Parking is free for our guests for the time of the meal. Address of restaurant: 1088 Budapest, Múzeum körút 12. · Telephone number: +36 (1) 267−0375 · Telephone number for reservations: +36 (1) 267−0375 E−mail address: info@muzeumkavehaz.hu · Website address: www.muzeumkavehaz.hu · Name of manager: Zoltán Budai · Name of chef: Gábor Müncz · Opening hours: Monday−Sunday: 18:00–24:00 · Number of seating places: 120 ADVERTISEMENT

BUSINESS WITHOUT BOUNDARIES CIB EXPORT AND TRADE FINANCING Open up new horizons for your business. Choose the favourably priced, ﬁxed rate export loans of Hungary’s market-leading corporate lender CIB Bank.

Bank of