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Enterprise Software: China to Dominate Asian Market
The Chinese enterprise business market is big and it is growing fast — at 18 percent compound annual growth rate. The Chinese market is expected to reach $9.4 billion in 2012 and at that point will be the largest of the Asian economies, surpassing Japan. Currently, in China, about two thirds of software investment is going towards infrastructure and the remaining third is going towards applications.
Springboard Research recently summarized and highlighted the state of the Chinese enterprise software market. Three characteristics of today’s market there are rapid growth in the area of Software as a Service, greater acceptance of open source software, and the general acceptance of software piracy.
Right now the leaders in Chinese enterprise software are actually foreign companies doing business in China and Chinese companies doing business internationally. But software sales are beginning to be broadly picked up in all sectors, particularly in banking and state-owned businesses.
The fastest growing sectors are supply chain management, content management, and collaboration. The report expects there to be large growth spurts in ERP and CRM applications in the very near term.
Working against the Chinese growth scenario is the fact that when compared globally, China is weak in IT expertise, process sophistication and technology adoption, three skills that large-scale enterprise software projects require to be successful.
Foreign companies seeking to break into the Chinese market will have high hurdles to leap. Cultural and language differences and high expectations around localized support and services will make it difficult for companies to build large indirect sales into China.
