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Thunder from the Calm: 2006-2007 Annual Report on the Development of Global Software Industry

BEIJING, April 19 /Xinhua-PRNewswire/ -- The 2007 Forum on Development Trends of the Global Information Industry sponsored by CCID Consulting Co., Ltd., China's leading research, consulting and IT outsourcing service provider and the first Chinese consulting firm listed in Hong Kong (stock code: HK08235), was successfully held on April 17, 2007. With a theme of "Grasping global trends, seizing first opportunities," the forum analyzed and discussed issues such as the current status of today's market, development hotspots and development trends of the global information industry. CCID Consulting also released its "2006-2007 Annual Report on the Development of the Global Software Industry" at the forum.

BEIJING, April 19 /Xinhua-PRNewswire/ — The 2007 Forum on Development Trends of the Global Information Industry sponsored by CCID Consulting Co., Ltd., China's leading research, consulting and IT outsourcing service provider and the first Chinese consulting firm listed in Hong Kong (stock code: HK08235), was successfully held on April 17, 2007. With a theme of "Grasping global trends, seizing first opportunities," the forum analyzed and discussed issues such as the current status of today's market, development hotspots and development trends of the global information industry. CCID Consulting also released its "2006-2007 Annual Report on the Development of the Global Software Industry" at the forum.

The report points out that though software technology had been smooth sailing in 2006, without the emergence of any next-generation technology, thunders nevertheless sounded in the calm. Component technology, services- oriented architecture (SOA) thinking, software as a service (SaaS) and Web 2.0 all received great attention from industry circles. All these items are gradually maturing and gaining greater market penetration. In the corresponding fields, new products were continuously being introduced. Particularly with changes in the global economy and demand from consumers, the global information industry saw greater structural adjustment and gradually changed from being hardware-dominated to being software- and services- dominated. Software was gaining a more important position in the information industry and became a huge global industry. As economic globalization continued to deepen, economic structural adjustments occurred worldwide. Industry transfer and the integration between new technologies and new services gathered pace. This created greater demand and a broader market for the world software industry. Driven by these favorable factors, the global software industry reached a size of $875.4 billion, up by 6.3% year-on-year, faster than the 5.27% recorded in 2005. Of this, the software production value reached $227.7 billion, while the information services production value stood at $647.7 billion, up by 6.7% and 6.1% over 2005, respectively.

Fig. Size and Growth Rate of the Global Software Industry, 2001-2006 http://www.ccidconsulting.com/upload/11440.gif Overall Size and Growth of Global Software Product and Information Services, 2004-2006 2004 2005 2006 Category Production Production Growth Production Growth Value Value Rate Value Rate ($100 million) ($100 million) ($100 million) Software Product 2082 2134 2.5 % 2277 6.7 % Information Services 5744 6105 6.3 % 6477 6.1 % Total 7826 8239 5.3 % 8754 6.3 % Source: CCID Consulting, Jan. 07

The features of the software industry are quite distinctive. In the international system of labor division, the United States, Japan, Europe and India have formed 3 major blocks. As the industry is diversified and dispersed, innovations have become the main driving force for industry development. Standards become the high ground for industry competition. Affected by software services development, software trading modes have become more flexible. Software and information services outsourcing have grown rapidly and adapted to the new round of international industry outsourcing. Trustworthy, high-quality software receives worldwide attention. How to develop trustworthy, high-quality software has become a common challenge and research hotspot of software technology development for all countries. In the world software industry in 2006, open-source software, embedded software and systems, network security software, enterprise application management software, software outsourcing, network information services and digital contents have all become hotspots for industry development.

Meanwhile, the software industry has taken on international characteristics. In other words, there is now a growing trend of global R&D as well as global sales. The United States, the European Union and Japan are the top 3 spots in the world for the software industry. Meanwhile, India remains unique in the software outsourcing field, while South Korea and China have each formed their own software industry development models.

A preliminary global software industry chain has been formed, showing different features and structures as it continues to develop. The software industry chain has several main growth characteristics, summarized in this paragraph. Horizontal radiation and extension are the main form of expansion and services account for a higher percentage of revenues in the software market. Technology innovations push forward the development of upstream enterprises on the industry chain, while hardware equipment manufacturers have gradually become the main source in the high-end software technology development outsourcing market. There is significant momentum towards cooperation between different links of the industry chain and the software alliances. Specializations in the industry chain are more solidified and market competition is more concentrated. M&As and alliances creating industry chain integration as the core have become an important trend in the global software industry. This last trend is most notable in the embedded the software industry chain. There is a close relationship between embedded software enterprises and related hardware enterprises. Finally, the formation of alliances promotes exchanges and cooperation between embedded software enterprises and their peripheral enterprises.

Fig. Diagram of the Global Software Industry Chain

http://www.ccidconsulting.com/upload/11441.gif

In 2006, the world software industry continued its recovery growth started in 2004. There was a stronger demand in the software market. While growing in size, the market showed several overarching features. Global resources integration once again staged a tide of M&As, and market competitions intensified further. Software services became a strong trend, and both dominating industry standards and grasping core technologies gradually became the way of winning out against competition. The open-source software market was continuously active, and further affected the competition pattern in the global software market. Demand from small- and medium-sized enterprises was strong and became an important factor that pushed forward the fast growth of the software market. In the field of operating systems, the 3 major systems continued to remain the main competitors in the industry, with Windows and Linux facing their respective opportunities and challenges. In the field of software support, database competitors upped their game a notch. Open-source databases became a new hotspot. Competition in the services-centered midware market further intensified. In the field of application software, enterprise management application software grew fast, while market competition became more intense and complicated.

Global resources integration once again staged a tide of M&As, and market competition further intensified. Software services became a strong trend, while dominating industry standards and grasping core technologies gradually became the way of succeeding in the marketplace. The open-source software market was continuously active, affecting the pattern in the competitive global software market. Demand from small- and medium-sized enterprises was strong and became an important factor that pushed forward the fast growth of the software market.

In the next 5 years, the global software industry is expected to continue to maintain steady growth. There will be diversified industry growth. M&As will continue to be active. Software services and outsourcing will grow fast. High-end personalized services will become a flashing point in the industry. Networked and professional software will become a notable trend. Platform-like software will gradually mature, while high-end technology will continue to receive attention. The United States, the European Union and Japan will continue to dominate the global software industry. M&As and restructuring will intensify, while market competition will become more intense. Software services, BI, SOA, virtualization, open-source software, next-generation database technology will all become hotspots for development and investment in the industry.

Fig. Forecast for Size of the Global Software Industry, 2007-2011 http://www.ccidconsulting.com/upload/11442.gif Fig. Forecast for Size and Growth Rate of the World Software Product Market, 2007-2011 http://www.ccidconsulting.com/upload/11443.gif

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 the 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 contact: Cynthia Liu Coordinating Manager CCID Consulting Co., Ltd. Tel: +86-10-8855-9080 Email: liuyan@ccidconsulting.com

SOURCE CCID Consulting Co., Ltd.

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