CCID Consulting Analyzes China's Software Industry

Published: 19 January, 2008
CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its analysis on China's software industry.

Growth of management software slowed down in 2007 and SaaS became a driver for new round of growth.

According to CCID Consulting, the total volume of China's management software market reached RMB8.5 billion at the end of 2007. The growth rate slowed down and the market was maturing. Management was refined and informatization requirements of clients were more rational. The Small and Medium-sized Businesses (SMBs) sector saw new growth in the management software market driven by the SaaS model.

Development of China's management software market showed the following features in 2007: The management software market has already entered the industrialization stage; Driven by IT application demands of SMBs, SaaS model products won the favor of mass SMBs; Market competition to contend for SMBs will be fierce. According to CCID Consulting, in the upcoming years, the trend of development of China's management software market can be summarized as follows: Demands of clients for total solutions will be on the increase and vendors will integrate their resources to meet the specific demands of clients for total solutions; The increasing importance of IT services will result in the emerging of a great number of specialized IT service providers.

Soft landing of SOA international standard and better opportunities for the development of China's middleware market

The total size of China's middleware products market reached RMB1.28 billion in 2007 with a year-on-year growth rate of 19.7%. The market is in a stage of rapid development. More and more middleware vendors are adopting SOA as part of their future strategy. The release of SOA development standard this year will usher in unprecedented opportunities for the development of China's middleware market.

China's middleware market is still in a start-off stage and it promises enormous market opportunities and room for development. In the year of 2007, China's middleware market showed the following features: Demand became increasingly diversified; Application models were more integrated; and the soft landing of SOA international standards. CCID Consulting projects that in the next five years, China's middleware market will grow at an annual composite growth rate of 16.4%, and size of the market will reach RMB2.74 billion by 2012. China's middleware market will show the following features in the upcoming years: Dominance of SOA and the surfacing importance of EDA; Improving channel architecture and expanding demands on system integrators.

Extensive activation of IT service in China, but poor service-rendering capability in some regions

CCID Consulting's statistics have shown that China's IT service market has already entered the maturity stage and its value has basically been recognized by clients. However, nearly 41% clients say they are not clear about the value of IT service. To a certain extent, this reveals that clients are perplexed about the criteria for the value of IT service.

The role of the IT departments in some leading enterprises in China has already evolved from a pure technical service organ to a technology-based business partner. Such clients demand planning and implementation service from IT service suppliers to meet their specific requirements, but only a small number of IT service suppliers in China can meet such demands at the moment.

CCID Consulting forecasts that the IT service market will be more integrated in the near future. The percentage of key industries such as finance and transnational IT services investment will increase. The market shall witness segmentation. Some IT service suppliers will enter other service fields through business development while some will increase their share in the market through mergers and acquisitions.

The proportion of software in China's network security products will increase and network security service will see dynamic growth

The total sales revenue of China's network security products market is expected to reach RMB6.687 billion in 2007, growing by 20.3% over that of 2006. The market has maintained a strong moment of stable growth.