Due to geographical and cultural proximity, China's software outsourcing market was first started in Japan, and the Government's policy is also the first Japanese-oriented market-oriented. But the United States is the world's largest software contracting market, accounting for 65% of the global software market share contracting. In comparison, Japan accounted for only occupy the global software market contracted by 10%. Since 2005, domestic software companies on the European software outsourcing market expected to rapidly increase up.
"The next few years is the European market, Chinese software companies to develop the most critical moment, the development of the situation is excellent and full of opportunities, but if you fail to seize this opportunity, the possibility of the industry-wide collapse is very big, so the situation remains serious. "China Software Industry Association Chairman Chen, obviously worried about the future of the software industry.
From 2003 to UFIDA Software Engineering, Beyondsoft Worksoft and represented the main European and American markets do Chinese software outsourcing enterprises began to grow rapidly, which, UFIDA Software Engineering in 2004 and 2005 revenues of up to 278% annual growth and 489 percent in 2005, export 5.6 million U.S. dollars. UF Software Engineering is the outsourcing market in Europe and America to do one of the model has begun to contact customers from Europe and the United States the fourth order. In view of customers in the U.S. has been strictly adhering to the "price according to quality as" principle, strictly for selection in each project suppliers, so UF can get the trust, it is not easy.
CCW Research Analyst Fan Yuxiong analysis that the United States is the world's largest software contracting market, accounting for 65% of the global software market share contracting. In contrast, the Japanese occupied the world's only 10% of software contracting market, but also business projects in Europe and America than the Japanese business profits, Europe and the United States the average profit margin of 20%, while the Japanese software services outsourcing industry average only 10% of profits.
The temptation to large U.S. and European markets
Due to geographical and cultural proximity, China's software outsourcing market was first started in Japan, and the Government's earlier policy, also for the Japanese market-oriented, domestic software outsourcing enterprises rank among the top scale, and are outsourcing to Japan enterprise.
But another situation can not be ignored, the United States as the world's largest software contracting market, accounting for 65% of the global software market share of contracting, contracting market, the Japanese software only 10% of the world. IDC has to statistics, U.S. companies to foreign companies contracted volume from 5.5 billion in 2000 rose to 17.6 billion U.S. dollars in 2005, the United States the size of each software Order 1400 billion U.S. dollars, about 20% of the software need to send orders commission processing abroad, probably more than 70% of U.S. software companies have chosen to software outsourcing.
CCW Research survey software outsourcing company in Beijing, business income, on software outsourcing services business accounted for 49.8%, 45.5% of the European business from India and other parts of China and Hong Kong accounted for 4.7%. According to founder Chris Chen Worksoft observation, Chinese companies outsourcing business to Japan's growth rate is slowing. Through investigation, CCW Research Analyst Fan Yuxiong found business very fast growth in Europe and America, nearly 2 / 3 of the medium and large enterprises are reflected on software outsourcing services company to maintain steady business growth, while Europe and the United States growing more rapidly the software outsourcing business higher than the beginning of the year.
Although the outsourcing market in China, more than half of the business comes from Japan, but China has received only of Japan's total business volume of external contracting in 1 to 2%, so it was said that the Japanese outsourcing market is still very much open space great. But Chris Chen told reporters, "I have not heard of outsourcing in Japan is much room for this argument, the size depends on how specific companies, many Japanese companies IT systems are completed in China, though outsourcing is a kind of trend, but for Japan it would not be a national policy. "
The Chinese company is concerned, more long-term stability of the Japanese outsourcing market, Japanese companies tend to set up joint venture in China, on the one hand is easy to enhance control, the other joint venture share profits from the project. In the Fan Yuxiong view, the level of Japan's software in the world is not strong, the overall software development level is relatively backward, with the world's second largest economy in the identity of the subject can not meet; but the Japanese total number of software outsourcing business, mainly is because the Japanese electronics industry is well developed, and matched with the demand of embedded software is very large, some joint venture in Japan shares the company's outsourcing business has done more, mainly because Japanese companies tend to these enterprises contracting a number of large projects.
In Chris Chen seems to do Europe and the United States outsourcing business has made tens of thousands of people can scale enterprises, while outsourcing to Japan is very difficult to do. From now, China has just set up a software outsourcing company is basically the main European and American business, and all appeared from 2004 to 2005. If you choose to outsource to Japan, the first slow pace of development, the second limited profit margins. "If you can seize market opportunities in Europe and America, got a big list, companies immediately got up." Fan Yuxiong that Europe and the United States market is the best help a software company to achieve rapid growth.
Japan's software outsourcing market to do a business owner complained to reporters: the company 10 years ago we had four or five individuals, 10 years later, our company is still only four or five individuals. Ten years ago, what we are doing in 10 years we basically had to do similar. Make room for growth in outsourcing business in Japan is limited, but very stable, the profits of a few million dollars a year to accept it.
UFIDA Gong Cheng Shao Kai, president of the reporters said: Japanese companies often will Xiangmufenge De Bijiaoqingxi Xi Zhi, Chinese enterprises can directly Xiebianmajiu, Zhe Ji Hu Chenglehangye market Dingshi. But this does not mean that we should let go of the Japanese market to UFIDA Software Engineering, for example, nearly three years, outsourcing of its profits to Japan also continued to grow rapidly. Shao Kai reminded reporters that the software outsourcing business model must be improved to attract more high-end business.
European and American markets with high barriers
General trend, the United States is biased in favor of the large projects to India, a small project to China. India, Israel, Ireland, the software outsourcing market in Europe and the United States position is still important.
Japan's software outsourcing projects are usually contracted by the Japanese companies, and then through the decomposition will be followed by one low-tech, artificial demand for higher processing business to Chinese software enterprises, staff size and project complexity is relatively small; the U.S. software Outsourcing the outsourcing of general holistic approach, put forth requirements outsourcer, then Wrapped need to complete the Jitongsheji, detail She Ji, Fen Jie module, the module works Shi Xian, needs amendment, the implementation of Geng Zheng, Ce Shi, systems integration, onsite installation and Shouhoufuwu such a series, called for outsourcing service providers large staff, the project development cycle is relatively long and that the supplier has a certain scale and the experience of developing large projects. Shao Kai think that the Chinese enterprises is still very difficult.
The veterans, a software company asked a U.S. customer: China to do business in software outsourcing to Japan you know? That know each other; and then he asked, you know Chinese people do want to give U.S. companies outsourcing it? That know each other; the boss asked, letting go if you have items that you give the Chinese people? Thought that U.S. customers: We will consider the Chinese people. But the end result, he handed over to Indian companies to do the project.
Shao Kai analyzed that the whole of China software enterprises received U.S. and European markets combined software projects, about 60% of the volume of business is done in the Chinese mainland, rather than in the United States. Enterprises, for Europe and the United States, and India's cooperation has been very much at home, have great confidence in each other, cooperation is also smooth; If they want to replace a Chinese software company as a partner, they have to be considered again, which implies that the cost of risk and control risk .
"Americans still do not understand Chinese enterprises, Chinese enterprises do outsourcing, then the Vietnamese and Filipinos are the Russians doing outsourcing, and cost are relatively low, why give the Chinese people do?" Said Shao Kai, China brand enterprises have not yet formed, and when it can form a brand, said that was not clear that China is in many places in this area blank. China's software outsourcing development in Europe and America have not yet reached a very fast start-up phase.
If U.S. customers simply rated according to quality, shop around, the Chinese enterprises and Indian companies basically the game is compared to China's labor costs, especially in Beijing and Shanghai are not lower than the others. And only the price advantage does not work, but also has ability to deliver. Now to China to explore business customers in the U.S., are expected to have on the Chinese market through outsourcing such cooperation, to feel the pulse of the Chinese market, for future strategic cooperation in China, laying the foundation.
Chris Chen said: "The overall U.S. outsourcing to India is concerned, for China, this project is not over." Shao Kay also believes that the present situation, not really Chinese enterprises to expand the formation of such a major trend in European and American markets This situation has not yet opened.
Fan Yuxiong that the European software outsourcing market to open up the cost is very high, an enterprise to form a certain brand, you must participate in various exhibitions, many of the costs required; addition, the Chinese enterprises to set up offices abroad, and locally recruited staff spend more. The average salary for the U.S. operator, each employee's annual salary of nearly 10 million, nearly one million Renminbi, which for weak profits for the software industry is a big burden. And even called a few local staff to the offices of this size may not be able to quickly achieve results. Domestic software enterprises now common practice strokes returnees and expatriates, 500,000 yuan for each four can be coped with. However, to go abroad or be the subject of a very high cost, which is placed in front of a difficult enterprise in China is also going to have to step out.
To forge ahead with difficult
Infosys is India's largest software outsourcing companies, back in 2000 started to work with TIBCO. "Recently, TIBCO recognizes the strength of Worksoft and development prospects, decided to develop such products from Infosys to Worksoft." Appears in Chris Chen, Infosys is big brother to learn Chinese software companies, from big brother grabbed the hands of business is definitely a landmark event. 2006 Spring Festival, Chris Chen led Evans to dozens of employees took over the TIBCO Business India Infosys, Chris Chen lament that it is a good start.
Joan Chen on China's software outsourcing market to develop business in Europe and America affirmed, he told reporters that China's slightly larger and foreign companies are basically well-known software companies, consulting firms have business contacts, which have achieved market to Europe and the United States a first step across. "A few years ago, Europe and the United States market, Chinese enterprises get in, and this years European and American customers have come to understand the capacity of China's software enterprises, previously to study the venture capital firm in China is very much cast down, but really very few large projects . but since last year, venture capital investment company began to cast down, which is the ability of software enterprises in China was recognized as a proof. "appears in Joan Chen, Microsoft China, in the soft, Mandarin, and better explain the wave of funding in China corporate brand image and be recognized.
From now, Chinese companies doing outsourcing business with Japan to a certain extent, the attention began to tilt to the U.S. and European markets, and some major companies do U.S. and European markets also began to reach the Japanese market. UFIDA software engineering strategy is the first step to achieve success in the Japanese market; second step is to turn China's domestic market; the third step in the establishment of Europe and the United States Division in early 2005, the official opening European markets.
Shao Kai analysis said that the Chinese market and the demand is very similar to the U.S. market, in addition to cultural and language differences, the technical and management are similar.
Project from the European and American markets a variety of forms, some of our customers IT information technology project due to cost considerations no longer purchase the products of large international companies, but directly to the development of Chinese companies, which is often a high-end business , profit margins are very high, but also great difficulty. Fan Yuxiong told reporters that this type of outsourcing more than 50% profit margin.
Joan Chen said that the larger the domestic software enterprises have been equipped to accept the scale of 500 to 1000 list, U.S. and European markets and Japan's, various forms of list, it depends on how much energy you have.
"U.S. and European companies are now looking to the business or home more, they will be because of the geopolitical, or do not want too much development in India, or the Chinese and the vast Chinese market." Chris Chen thinks that this is a very good time. According to Fan Yuxiong predicted that China's software outsourcing business in Europe and America market, the business growth of up to 50% per year, and this growth continued in 2035 is not a problem.
Software industry has recently emerged is not a revolutionary product, has been in a state of steady development, the international division of labor has been relatively stable, such as Ireland and India, the service characteristics of localization also has been formed a few years ago, but for China Now is a good opportunity. International software technology is not much innovation on, China has been consistent rapid economic Fa Zhan, and internationally are called first-class infrastructure, coupled with China's domestic demand has a huge Xu Qiu, Joan appears in the Chuangxinliliang China better than India's software .
There are still problems to be solved
An anonymous industry sources, the "credibility of Chinese enterprises is also very worthy of attention, European and American clients on the Chinese software enterprises were inspected often to consider the most honest on the front, while Chinese enterprises some of the practices of some lack of good faith, has led to U.S. and European companies in China produce an overall lack of business integrity of misunderstanding. "
"Deal with the U.S. and European companies, must not pit him." Joan Chen believes that the first important principle is integrity, "U.S. and European companies against Chinese companies always stressed the protection of intellectual property, in fact, I am sorry people say that you do not faith, engage in piracy . Credibility is the foundation, no integrity, the rest of discussion, but smashed a brand, people will not give you list. "
In addition, Joan Chen also believes that China's software enterprises is too weak and small, so more Chinese software companies the ability to own, industry environment and market for scientific analysis. The cultivation of various enterprises can not across the board, to different levels, to their own strengths, in order to form a complete industrial chain. Second, the domestic software enterprises to truly Union up to strict self-discipline necessary to win as a starting point.
Shao Kai said China, a software outsourcing any of the existing enterprises are not capable of a powerful enemy like India confrontation. The success of Indian companies rely heavily on "India's software" is a unified brand. China's software industry and Indian companies in the U.S. and European markets, as well as United States at war, they also need the "China Software" such a unified brand and unified phalanx, unified force. The owner of a domestic software enterprises have adopted the relationship between a friend to San Francisco to visit an American customer, while the customer's door on the day before the Indians had just been struck. "Chinese people can think of almost all U.S. clients in the door was knocked all over India, and China in Europe and the United States is India's biggest rival." The boss told reporters: "The United States came to China is not a simple client software outsourcing business , are hidden behind big market in China with focus on strategic attempt to truly large-scale procurement of services for IT customers do not how to enter China, the main business or to India. "The boss do not want to be named a A simple comparison of the data: Europe and the United States arrived in China the number of volume of business or company less than 5%, 95% of software companies have not been to China.
Fan Yuxiong pointed out that Japanese companies are a strong strategic intent of outsourcing is cost savings, and Japanese companies on the Chinese market to understand fully, they must project outsourcing to Chinese companies often will not be too much profit. Meanwhile, the Japanese business partners in China is very careful study, often the first to come up with a few million for small projects as a stepping stone, if done well, then the amount to upgrade the project. In order to get this piece of brick between the Chinese enterprises are often lower prices, or even lose money bid for future price increases caused difficulty.
Joan Chen also warned the domestic software enterprises will not be too impetuous, not to see the great potential of European and American markets, they want to eat a fat one, the Chinese enterprises the ability to know their location where they where innovation.
"Do not think I was offered money to vote, then I can find my list of people who pull these two problem-solving everything will be fine, it is not right, Indian companies would not do so. Joan Chen stressed that the more the situation is good, people's minds, the easier fever, loss of reason, speaking for the software industry, the Government should also take into account all aspects of the point to consider, it might drag on the overall situation.
IDC's data also noted that U.S. companies bidding to foreign companies, from 5.5 billion in 2000 rose to 17.6 billion U.S. dollars in 2005. The size of annual software orders the United States has 140 billion U.S. dollars, about 20% of the software sent to foreign orders need to delegate processing. Probably more than 70% of U.S. software companies have chosen to software outsourcing.
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