China To Be Fastest Growing Enterprise Software Market

Analysts predict that the enterprise software market in China is set to hit an annual growth rate of 14.8 percent this year, making it the fastest-growing in the world.

Although Chinese companies have focused on developing their own locally produced software in the past – citing security as well as economic reasons – analyst Gartner this week released a report stating that the country will provide a significant opportunity for international software companies in the near future.

China moving towards standardised systems

In its Market Trends: Software Market, China 2009 – 2013, the analyst group claims that 2010 will see China surpass $6 billion (£3.92bn) in software revenue. A survey by the analyst last year revealed that 46 percent of respondents in China planned to increase their software spending this year – higher than most other countries surveyed.

“Chinese organisations have historically preferred to develop applications using their own labour because it costs less,” said Hai Hong Swinehart, research analyst at Gartner. “However, this tendency has resulted in legacy and quickly obsolete software, as well as inhibiting Chinese organisations’ sustainability and business IT continuity. Growth will mainly be driven by replacing immature infrastructure with standardised systems and the large vendors stand to benefit.”

Gartner believes the fastest growing segment of the software market will be for data integration and data quality tools. “Chinese organisations are lagging behind in terms of adoption of these tools, resulting in the fast growth of this market,” the analyst stated.

Earlier this week, Google announced that it could close its Google.cn search engine within weeks, after talks with the Chinese government over censorship stalled, according to a report in the Financial Times. This latest step comes two months after the search engine in January vowed to stop censoring search results and to possibly exit business in China in total after it detected cyber-attacks from within China aimed at gaining access to the Gmail accounts of human rights activists.