No soft landing
MacroSoft's financial performance could serve as a barometer for the country's economy.
The information technology company serves a cross section of some 3,000 small and medium-sized enterprises, the country's key economic drivers. MacroSoft sells enterprise resource planning software - applications for supply-chain management - and knowledge management software for customer service operations. Last year it reported a zł. 65,000 net loss and was forced to cut staff. It's clear for MacroSoft that unforgiving economic realities govern the IT market.
Yet, company executives refuse to let their cautious optimism be dampened, as they embark on a strategy of snapping up market share as insolvent competitors drop out, and developing deeper relationships with existing cash-starved clients.
This, according to Sławomir Kosz, MacroSoft's president, is necessary for the company to remain "stable."
In the anaemic IT market for SMEs, more and more companies are going under, leaving room for MacroSoft, Kosz said. Besides working more closely with existing clients, a shrinking competitor roster is a key part of the firm's strategy to maintain stable revenue streams while its SME customers cut their IT budgets.
"At present our condition is stable, but it's really strongly connected with the situation of our customers," Kosz said. "SMEs decide to freeze investments, and they don't change software, and they don't make any improvements (in their software) even if they can. They simply don't have enough money to start. And this is a problem."
Kosz said that MacroSoft is thus becoming more aggressive in devising new products and strategies for its ailing clients. In October, for example, it will introduce new software for operating wide area networks.
"What we do is make special programmes for customers," he said. "For example, one-year software licences. Also, we lease our software. But we see that they just think about each złoty, not to spend any."
But, he said, his clients are not alone.
"This is the same problem in our company," Kosz said. "We also think about costs. Our situation is quite stable at present ... (due to) cost reductions in 2001 and 2002."
MacroSoft has had to let go of roughly 70 employees over the past two years, he said. The firm now has a staff of 108 in Warsaw.
The dire state of the global economy aside, Janusz Kurowski, a MacroSoft board member, blames politicians for the country's financial status, as it affects his company.
"This is the responsibility of the ruling class in Poland," he said. "It is a great responsibility."
And so far, where MacroSoft clients are concerned, politicians have come up short.
"SMEs have no money to make rational investments, so they are limited," he said. "This is the main reason this market is difficult and will be more difficult unless the political situation changes; unless the ruling class realises this, it is going to be a very difficult and dangerous situation."
Kurowski said to ensure a healthier future for MacroSoft, first and foremost the country needs a new labour law.
"The labour market should be freed, and to do that you have to rewrite and dismiss the labour code that is in operation now," he said. "It cannot be amended; it has to be rewritten from scratch."
The executives argue that a lack of political will to make necessary changes has contributed to MacroSoft's unspectacular - though improving - performance.
For 2002, the company posted a €15,600 consolidated net loss on €6.2 million in revenue. As a result of its cost-cutting last year, MacroSoft saw an improvement on its €479,900 loss in 2001. At the end of last month the company reported a €168,000 net profit for the fourth quarter of 2002, news of which subsequently sent the stock up 8.48% to zł. 4.99 a share on the Warsaw Stock Exchange.
Kosz added a note of confidence to his colleague's more dismal picture of the market.
"We also see some good changes in our customers, maybe not the financial situation, but what they feel about the situation in Poland and the market," he said. "It is much better than a year ago. This is important because it could be some kind of a sign that the situation will change."
What is more, Kosz said, in future more of the market will be open for MacroSoft.
"It will be better in future because in this part of the IT market there are only two other main players, Teta and Softlab, and what we have seen in the last few years is that many small software producers have collapsed."
The information technology company serves a cross section of some 3,000 small and medium-sized enterprises, the country's key economic drivers. MacroSoft sells enterprise resource planning software - applications for supply-chain management - and knowledge management software for customer service operations. Last year it reported a zł. 65,000 net loss and was forced to cut staff. It's clear for MacroSoft that unforgiving economic realities govern the IT market.
Yet, company executives refuse to let their cautious optimism be dampened, as they embark on a strategy of snapping up market share as insolvent competitors drop out, and developing deeper relationships with existing cash-starved clients.
This, according to Sławomir Kosz, MacroSoft's president, is necessary for the company to remain "stable."
In the anaemic IT market for SMEs, more and more companies are going under, leaving room for MacroSoft, Kosz said. Besides working more closely with existing clients, a shrinking competitor roster is a key part of the firm's strategy to maintain stable revenue streams while its SME customers cut their IT budgets.
"At present our condition is stable, but it's really strongly connected with the situation of our customers," Kosz said. "SMEs decide to freeze investments, and they don't change software, and they don't make any improvements (in their software) even if they can. They simply don't have enough money to start. And this is a problem."
Kosz said that MacroSoft is thus becoming more aggressive in devising new products and strategies for its ailing clients. In October, for example, it will introduce new software for operating wide area networks.
"What we do is make special programmes for customers," he said. "For example, one-year software licences. Also, we lease our software. But we see that they just think about each złoty, not to spend any."
But, he said, his clients are not alone.
"This is the same problem in our company," Kosz said. "We also think about costs. Our situation is quite stable at present ... (due to) cost reductions in 2001 and 2002."
MacroSoft has had to let go of roughly 70 employees over the past two years, he said. The firm now has a staff of 108 in Warsaw.
The dire state of the global economy aside, Janusz Kurowski, a MacroSoft board member, blames politicians for the country's financial status, as it affects his company.
"This is the responsibility of the ruling class in Poland," he said. "It is a great responsibility."
And so far, where MacroSoft clients are concerned, politicians have come up short.
"SMEs have no money to make rational investments, so they are limited," he said. "This is the main reason this market is difficult and will be more difficult unless the political situation changes; unless the ruling class realises this, it is going to be a very difficult and dangerous situation."
Kurowski said to ensure a healthier future for MacroSoft, first and foremost the country needs a new labour law.
"The labour market should be freed, and to do that you have to rewrite and dismiss the labour code that is in operation now," he said. "It cannot be amended; it has to be rewritten from scratch."
The executives argue that a lack of political will to make necessary changes has contributed to MacroSoft's unspectacular - though improving - performance.
For 2002, the company posted a €15,600 consolidated net loss on €6.2 million in revenue. As a result of its cost-cutting last year, MacroSoft saw an improvement on its €479,900 loss in 2001. At the end of last month the company reported a €168,000 net profit for the fourth quarter of 2002, news of which subsequently sent the stock up 8.48% to zł. 4.99 a share on the Warsaw Stock Exchange.
Kosz added a note of confidence to his colleague's more dismal picture of the market.
"We also see some good changes in our customers, maybe not the financial situation, but what they feel about the situation in Poland and the market," he said. "It is much better than a year ago. This is important because it could be some kind of a sign that the situation will change."
What is more, Kosz said, in future more of the market will be open for MacroSoft.
"It will be better in future because in this part of the IT market there are only two other main players, Teta and Softlab, and what we have seen in the last few years is that many small software producers have collapsed."
