Original URL: http://www.theregister.co.uk/2012/02/28/china_software_outsourcing_boom/

China raked in £184bn from IT outsourcing in 2011

It was a very good year to be in software and services

By Phil Muncaster

Posted in CIO, 28th February 2012 11:38 GMT

China’s software and IT outsourcing industry is booming, rising by a third in 2011 to reach a whopping 1.84 trillion yuan (£184.33bn), according to new government figures released by the Ministry of Industry and Information Technology.

The stats, seen by state-run news agency Xinhua, represent around a 4 per cent increase on the average for the growth rate from 2006-2010.

Software exports for the year were up 18.5 per cent from 2010 to 191bn yuan (£19bn), while the outsourcing sector for software and services saw growth of 39.5 per cent to reach 383.5bn yuan (£38bn) for 2011.

The government reportedly attributed the impressive figures to the economy’s steady growth and rising demand at home and abroad.

One can never be sure with official state-sanctioned statistics whether they have been massaged slightly to give the Party a propaganda boost.

However, analysts at Ovum told The Register that the figures tally pretty much with their own for the region, although they said that 2012 would not see quite such impressive growth.

“The growth appears to be coming from a maturing of the IT industry as a whole both in terms of software acquisition and the increasing embracing of outsourcing options, the continuing governmental investment in modernising its underlying infrastructure and the ongoing impressive export successes,” said principal analyst Jens Butler.

“We need to separate out software and services globally as they are relatively distinct markets still. Within services at least we are still seeing growth, but predictably more in the growth regions such as Asia Pacific, LATAM and MEA. Within the software space it is more difficult to say, but the relative recent success of the likes of Oracle and SAP points to a still healthy market.”

Aside from the usual suspects such as IBM, HP, Microsoft, Oracle, IBM and SAP cashing in on this growth there are a few regional specific vendors of note including Digital China, ChinaSoft UFIDA and Kingdee, Butler added. ®