China Software Outsourcing Market Status and Trends

Author:ANROSOFT_market survey report Company,market survey report services.( http://anrosoft.com )

Outsourcing is the so-called software companies in some developed countries to some of their non-core outsourcing of software projects through the form to the relatively low cost of human resources of developed countries so as to minimize software development costs. As we all know, the cost of software development in 70% of the cost of human resources, therefore, reduce the cost of human resources to effectively reduce the cost of software development.
Software outsourcing has become a software company developed countries to reduce the cost of an important means. At present, the global software sales for the 600 billion U.S. dollars, of which sales of software outsourcing reaches 500 ~ 60 billion U.S. dollars. Expected 2005 sales of software outsourcing will reach 100 billion U.S. dollars. Substantial growth in software outsourcing human resources for the relatively low cost of India and China has brought new opportunities for development.

China has already begun to have a lot of companies involved in software outsourcing in this area. At present, the software outsourcing industry has more developed regions like Shanghai, Beijing, Dalian and Shenzhen and other cities. In Beijing, for example, has 40% of the software outsourcing enterprises to participate in the project, the software industry 60% to 70% of their turnover derived from outsourcing. In Shanghai and Beijing, a software engineer’s monthly salary of outsourcing to achieve 7000 ~ 10000 yuan, while the same capacity at Wuhan, the software engineers need only three ~ 4000 yuan. Capital is characterized by a lower cost place to flow, therefore, has recently has been the eastern part of many software companies ready to move to the central region, is currently the preferred region of Wuhan and Xian.

Chinese software outsourcing will bring about what the software industry? Not only opportunities for economic development, as well as advanced software development management processes, as well as strict quality control system software. Through the development of software outsourcing industry, China’s software industry will gradually hand to bid farewell to the development of time-based workshops into the project, the scale of development.

To seize this historic opportunity, our government is making every effort for the software outsourcing company to create a better investment environment, the Government has set up a number of key cities development zone, a number of new software development park, and for software enterprises to join in a very preferential policies given the conditions. However, only the policy conditions and environmental conditions is not enough, the greatest impact on software companies is the cost of human resources, the availability of many more quantity, lower cost and at the quality of the software to meet the needs of our country whether outsourcing is the Engineer seize the historical opportunity of the essential conditions.

The status quo of China’s software outsourcing market

Scale of global software outsourcing market reached 100 billion U.S. dollars. Contract market, mainly in North America, Western Europe and Japan, and then package the market is India, Ireland and other countries. Among them, the monopoly of the United States market in India, Ireland, the European market was a monopoly. Now, the Philippines, Brazil, Russia, Australia and other countries also joined the world’s software outsourcing competition.

IT Outsourcing Services is a division of society continue to refine and develop IT technology product of the combination. Compared with the outsourcing of hardware, software outsourcing to its late start, but developing rapidly. At present, India is the largest market for software outsourcing. In addition, Ireland, Israel and China is also a major market for software outsourcing.

IDG Statistical data show that the scale of global software outsourcing market has reached 100 billion U.S. dollars. Global software outsourcing market, the contract focused on North America, Western Europe and Japan, which accounted for 40% of the United States, Japan accounted for 10%. Outsourcing is the key market access package in India, Ireland and other countries. Among them, the monopoly of the United States market in India, the Indian software industry, 80% of income to rely on the software outsourcing business, India has become the largest software outsourcing. Ireland and the European market was a monopoly. Now, the Philippines, Brazil, Russia, Australia and other countries also joined the world’s software outsourcing competition.

Although the Chinese IT outsourcing services market has been growing rapidly, but so far, IT outsourcing services to the user base is still quite small. On IT outsourcing services in terms of content and services, and architecture are mainly restricted to basic dimensions of network infrastructure and desktop support and maintenance of equipment. IT Outsourcing Services in 2003 the market size of only 4.26 billion yuan. One of IT outsourcing services, operation and management of 21.6 million scale, application management outsourcing services to 1.5 million, software outsourcing 1950000000.

CCW Research’s “2003 to 2004 China IT Market Research Service annual report” shows that in 2003 China’s IT outsourcing market reached 3.52 billion yuan, an increase of 42.5%. China’s software outsourcing market is the main goal of Japan and the United States.

Trend and prediction

Outsourcing BPO has become the development trend of the future.

Co-operation and seamless integration model will become the main form of outsourcing

Outsourcing market concentration higher

Outsourcing market matures, the formation of the outsourcing market norms

IT Outsourcing Industry at depth

Domestic outsourcing market trend as follows:

Immature by the market highly fragmented market ripe to focus on

Package at home and abroad to maintain a rapid growth market.

China will become India’s new outsourcing hub

Structural transformation of IT outsourcing services, services to high-end development

Emergence of large enterprise software outsourcing
Catch up with China’s software outsourcing industry in India, leaving a shortfall of what?

Enormous success of China’s economy so that people can not help but speculate: China’s software outsourcing industry and India will soon be the same. However, a recent McKinsey & Company research department of China’s software found to be in the Chinese software outsourcing industry is also a threat to India required a lot of years. First, China must consolidate its highly fragmented software industry, access to large-scale international project to cultivate the necessary scale and technology.

At present, China has made in this direction to the efforts of many do not.

Gap

To be sure, China’s IT industry is a healthy expansion. In recent years, the Chinese IT industry growth in the number of specialized personnel quickly. Since 1997, software and IT industry, the average annual income of 42 percent annual growth rate in 2003 reached 6.8 billion U.S. dollars. In particular, the industry in 2000 to the present, English-speaking graduates (in the software outsourcing industry is very important) has doubled, has more than 24 million. However, the Chinese IT industry, much less than its own, with the result that these changes can not be completely utilized. Even though the income of China’s IT industry is increasing, but only half of the Indian (Indian IT industry is the annual income of 12.7 billion U.S. dollars). China’s IT industry growth driven by domestic demand, the majority of customers are small and medium-sized Chinese enterprises and their needs are based on their needs for their custom software. New-born Chinese software outsourcing business to the IT industry is only at 10% of total revenue, while the Indian figure is as high as 70%. Despite the relatively low cost, but China’s software services company operating margins of only 7%, while the kind in the world’s average level of operating margins can reach 11%, because they tend to take over the scale of the project, but also relatively low quotation .

Scale

To be in the global outsourcing industry in the formation of strong competition, the Chinese software industry must consolidate. China’s top ten IT services company in the market share of only 20%, while the top ten Indian IT companies occupy the market share up to 45%. China has around 8000 software service providers, one of fewer than 50 employees accounted for three fourths of the people, only five have more than 2000 employees. Indian software service providers less than 3000, there is at least 15 have more than 2000 employees, one of the advisory services company, Tata (TCS), Wipro company (Wipro), Infosys Technologies Ltd. (Infosys) have has received international recognition, at customers worldwide. NOT appropriate scale, Chinese businesses can not attract top international clients. Since it was generally acknowledged that the risk of small firms is relatively large, relatively low reliability of partners. McKinsey’s research found that only 12% of China’s software service companies consider mergers, acquisitions and alliances is a priority should be given to the Service. Chinese software services company manager who has little experience in mergers and acquisitions, even though their culture has

Conducive to the development of the organization, but to rely on such a culture to counter the new competitor is not very satisfactory. In contrast, several Indian companies are considering mergers and acquisitions of Chinese companies to expand their businesses.

Quality

Decentralized industry status of the Chinese software industry appears to some other more prominent problem, such as process control and product management is not sufficiently rigorous. 30 major Chinese software companies to achieve CMM is only 6 or 4 5, and 30 major Indian software company to achieve the professional standards of all. The survey found a quarter of Chinese companies trying to implement CMM quality standards, but there is more than half of the companies in the survey said that all efforts to do this is not necessary, feasible, or consider not worth it.

Talent

Chinese software service providers should also strengthen the management of human resources. Do not attach importance to the vast majority of Chinese companies to help employees grow, very few of them will know how to share training programs or other incentive mechanisms for introduction of talent management. McKinsey’s survey found that Chinese software companies to update the rate of staff up to 20% per year, and although the United States has a highly mobile IT labor market, but its only 14% of this figure.

Other

With a larger scale and better talent base, Chinese software services companies will have to solve the problem of other conditions, such as the establishment of credibility in the international market brands, the development of specific sectors, industries such as financial and technical constraints. In addition, customers have to pay attention to the protection of intellectual property rights, to overcome the short-term project-based psychological effect, it is necessary to provide long-term commitment to customer service.

• China’s express delivery industry market research analysis
• Express delivery giants in China market status and trends
• 53% of the cardholders are not satisfied with the credit card security
• ICBC Fu Galaxy credit card issuers happy pig stock will exceed 200,000
• Bank of China amounted to 1.3 billion cards
• Interbank payment online credit card business to open
• Print the status of market development and investment risk analysis
• Supply and competitive parity pharmacy storm-like
• China Business International Development to investigate the problems faced
• Market Analysis of Chinese students
• China’s private bodyguards development of market
• China’s information industry development
• Intelligent Recognition of the Chinese market research analysis
• China’s microwave oven market survey analysis
• China’s large-capacity MP3 player market analysis
• Supporting low-voltage electrical products market situation and competition strategy
• The status quo of China’s Internet industry and the development of video analysis
• Mobile applications industry analysis of investment opportunities
• The development of mobile applications and the industry outlook
• GPS Market Investigation and Analysis
• Network video market survey of industry
• The future development of automotive industry analysis
• Mobile applications market survey of industry
• Analysis of market competition in China Inverter
• China DVR market conditions and development opportunities

Contact us,I’m
Online!