BEIJING, June 19 /Xinhua-PRNewswire/ -- 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), analyses the development of China as a service provider for the international outsourcing market in a recent report published through its Software Industry Research Center, written by analyst Zhang Xi.
Outsourcing Market - Grows Rapidly
China software outsourcing service market reaches 1.43 billion USD under the overall rapid growth of global market in 2006 with year-on-year growth of 55.4%, which is 10% more than last year. Global recognition in China's ability as service provider became a driving force behind the increasing demand, with Japanese outsourcers in long-term cooperation with their Chinese partners, as well as some European and US outsourcers who are enlarging their cooperation with China.
For a graphical analysis of "2003-2006 Global SOS Market Size & Growth", and "2002-2006 China's SOS Market Size & Growth", please refer to http://www.ccidconsulting.com/upload/11610.jpg . (Source: CCID Consulting, Jan. 2007)
Outsourcer Market -- Lead by Japan and Followed by Europe & US
Japan has always been the largest outsourcer market for China's SOS with 872 million USD as NO.1 in 2006. However, with efforts from Chinese government in fields of policy, training, international & national communication and overall branding promotion for Chinese outsourcing service in Europe and US markets from 2005, projects and revenue come from these markets have increase in recent years. The business from US and Europe increases with 79.3% and 71.8% respectively in 2006, and US & European outsourcers take more shares in China's SOS Market with 2.9% and 0.5% more respectively in 2006.
For a graphical analysis of "Global SOS Market Structure in 2006", and "China's SOS Outsourcer Market Structure in 2006", please refer to http://www.ccidconsulting.com/upload/11611.jpg. (Source: CCID Consulting, Jan. 2007)
Compared with general market, Neusoft takes Japan as the principle software outsourcing client. CCID Consulting forecasts that it will have considerable cooperation growth rate on mobile phones with Sony and Panasonic as the partnership is still in a beginning stage.
For a graphical analysis of "The Constitution of Neusoft Group's Software Outsourcing Client in 2006", please refer to http://www.ccidconsulting.com/upload/11614.jpg. (Source: CCID Consulting, May 2007)
Business Type -Concentrated at the Low-end
China's SOS Market is still in the bottom of the industrial chain in the world. Chinese outsourcing SP is adjusting their business structure to enhance its business to a higher end. Some service providers expand their business coverage or target market coverage by merging or financing, such as upgrading from localized business from the Japanese market to Europe & US market; and some cooperate more with foreign outsourcer on the other hand to increase project depth, size, cycle or cooperation level to concentrate limited resources for a new market base to maintain good client relationship.
For a graphical analysis of "2005-2006 Different Business Size & Growth of SOS in China", please refer to http://www.ccidconsulting.com/upload/11615.jpg. (Source: CCID Consulting, Jan. 2007)
For more on "The Principle Business Development Forecast of Major Software Outsourcing Firms in China", please refer to http://www.ccidconsulting.com/upload/11616.jpg. (Source: CCID Consulting, May 2007)
Bottleneck for Development - Short of Experts
Software outsourcing manufacturers could only rapidly develop in scale operation. Yet there are only five companies with a size of over 2,000 employees within more than 10,000 software service suppliers in China. On the contrary, at least 15 firms have more than 2,000 employees in India within less than 3,000 software service companies. Only 7 Chinese firms passed international CMM5 authentication and as requirements of US outsourcers are higher than of Japan, China providers have to upgrade their technical solution capability and firm scale in order to win business.
Take Neusoft for instance, employee internal transfer could be an important technical staff supply for experienced technical employees, while the company recruits a large number of fresh graduates, and provide internal training to them. However, a target growth rate of 50% and 25,000 USD revenue per capita will mean a staff size of 6,000 in software outsourcing in 2007, an estimated addition of 2,000 professionals, which is difficult for the company to depend solely on its own training system.
2003-2007 Neusoft Software Outsourcing Market Size and Output per Capita
2003A 2004A 2005A 2006A 2007E
Market Size(10,000 USD) -- 3317 6270 10000 15000
Outsourcing NO. 1100 1900 2700 4000 6000
Outsourcing NO. GR 72.7% 42.1% 48.1% 50.0% 72.7%
Production Value/capita -- 1.75 2.32 2.50 2.5
(10,000 USD)
(Source: CCID Consulting Settled from Annual Report)
Mechanism Adjustment -- Outsourcing as a Principle Orientation
INSIGMA has peeled off real estate and part of wireless value-added business after a steady and rapid progress in the past six years, and put focus on consulting service with software outsourcing as its core business and breakthrough in construction contract and project management. The company succeeds in exploring two new clients, NTT-DATA and JIP with the SAS strategic investment from Hitachi and realizes a big growth in operation performance. Hengtian has finish its reform and INSIGMA has set up its largest platform for business with US.
CCID Consulting considers that China software should expand international business and take SOS as an important breakthrough for internationalization development strategy while enforcing national business. The industry keeps a fast growth in 2006 with good turnover and sustainable development capability. Current SO business are mainly fulfilled via Chinasoft International, a listed company in Hong Kong Exchanges & Clearing Ltd. The company extends its SO business scale in very short time by series of merging and integration and consolidates its strategic partnership with Microsoft simultaneously. Chinasoft International focuses on business to US with some to Japan as well, well Beijing Chinasoft Fujitsu and Dalian Chinasoft that locates in Dalian Software Park focuses on business to Japan.
About CCID Consulting
CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
Based on four major competitive areas of powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.
CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://en.ccidconsulting.com/ .
