In Software Development China lagging behind to India

Tuesday, December 27, 2005

India is today’s hot destination for Software Development Outsourcing and Information Technology Outsourcing, but China is looking to give it a run for its workforce. Demand for IT workers in India will begin to outpace supply, driving up outsourcing costs there. As workers in India become more in demand, it will become more difficult to maintain employee continuity. It also may result, that in India, workers will be able to leave their jobs for better-paying ones as often as every six months.

To attract a larger share of United States companies, China’s Software Development Outsourcing companies are eying to replicate the success of their Indian rivals, seeking to diversify business beyond India. China’s Software Development Companies have traditionally focused on its fast-growing domestic market, Korea, and Japan. But as competition increases at home, they are starting to look abroad, particularly in the U.S., for new growth. In this massive onslaught of Offshore Outsourcing, there are not any other nations than India and China, who will become large Outsourcing centers for Offshore Software Development.

China’s Software Development Outsourcing export revenue grew by sevenfold since year 2000 to $2.75 billion because of increasing demand from the United States, which has helped in demanding of jobs to China at a very high speed. At annual sales of $27 billion, China’s software industry accounts for only 3.3 percent of the global software market. But several new companies have raised the competitive stakes abroad. China has become a leading maker of computers and electronic devices but lags behind in Software Development Outsourcing from its rival India.

Offshore Software Development 

The reason that China lags behind India in Software Development might be due to a lack of marketing acumen, the Indians have been really great at marketing themselves. Indian software giants drive the majority of their revenues from the U.S. and Europe, although sales have started to slow after growing a few years.

Foreign companies to take more control when they shift work to China and its Software Development providers to take pro-active measures to assuage these concerns as China has the world’s largest number of science and engineering graduates. The vast supply of technology talents helps to keep wage inflation and turnover rates at bay, while higher wage rates have cut into Indian companies’ margins. The country has also developed expertise in some niche areas such as software embedded in cell phones and digital cameras and open-source software which can be obtained for free and are easy to modify.

In Offshore Software Development Chinese companies will face formidable hurdles before posing a real threat to Indian rivals. Because of the English proficiency level is lower and the protection of intellectual properties remains a concern for foreign companies. China also lags behind India in terms of enforcement which India is putting intelligently in the Offshore Software Outsourcing Industry.