Can the hottest transformation service become the

Can transformation services become the way out for domestic software?

"the software industry has only so much living space, and the software industry will continue to integrate." A Wall Street analyst announced recently. Caokaibin, a senior analyst at Jishi information, also believes that the vertical M & A integration of the software industry is a very obvious trend. So, who will be the next acquisition target? The obvious trend of this round of mergers and acquisitions in the global software industry is that large software manufacturers nibble at the professional and segmented software market through mergers and acquisitions, and large software enterprises are increasingly taking an all inclusive route. Can software enterprises like sap and BEA, which once took the "small and beautiful" route, be spared? At the same time of this round of global software industry integration, domestic software enterprises are still in a "naive" period as a whole and lack the ability to "participate" in the integration. But under the industrial environment and trend of "big is the law of the market", is there still room for Chinese software enterprises to survive

is scale strength

"generally, large manufacturers have stronger viability and can provide services at a lower price than small manufacturers." A software analyst pointed out. The source said that in the software industry, scale is of great significance for integrating better product lines, more customer groups and sales channels. In this case, it is more difficult for small manufacturers to survive and develop, and more and more small manufacturers will be acquired

the rise of software industry integration trend is also the result of market promotion. Some analysts believe that today's corporate customers are more willing to buy low-cost Boston Scientific and use simple software technology. In order to adapt to this change in feeding time, software manufacturers must find ways to reduce costs and bundle as many products as possible to meet the needs of corporate customers. For example, through the acquisition of PeopleSoft, Oracle is expected to provide more financial, human resources and customer relationship management software to corporate customers. As a manufacturer of computer security and maintenance software, Symantec hopes to combine Veritas' data protection, storage and server management software products with its own products to provide more attractive software packages for its customers

"because customers need consolidation solutions, the current trend is integration. With the development of this industry, before the birth of disruptive innovative technologies, people pay more attention to applications, more integrated applications and more integrated applications. If there are powerful manufacturers in this market that can provide all-round applications, there is no doubt that such manufacturers will have a greater competitive advantage." Xu Shaochun, President of Kingdee software, said in an interview. But he believes that it is actually very difficult to take all measures. The effect of the acquisition remains to be tested by the market

who can become a survivor

market integration is accelerating, and the market pattern will be broken. "These mergers and acquisitions can only allow the strong to survive, while the weak are gradually eliminated or acquired." An insider analyzed. Analysts said that as the shock continues, Microsoft, IBM, sap and Oracle may be "survivors" in the software field. Others believe that "in the future, only Microsoft and IBM will be left in the software market." "It may be a global trend to 'take all' the whole software industry chain. Small companies are difficult to get a foothold, but there must be many market segments or small companies in a certain industry or field that will live well." Zheng Yulin, the product director of UFIDA software, believes that this is also the basic law of any mature industry, such as petrochemical and automotive. Their present is the future of the software industry

Cao Kai, a senior analyst at planning world information, needs to take it out through surgery. Bin also believes that there is still a lot of innovation space for small software companies in the games of several giants in the future. "In the market that several software giants have not realized or have not had the energy to take into account, some professional small software companies can still live well." they are either merged or dead. " Such a statement may be alarmist. However, it is true that under the background of the software industry integration of "big is the law of the market", Chinese enterprises that are still in the "naive" period will face the test of life and death. It can be said that many software enterprises in China are not strong enough in their sense of crisis and are not quick enough to respond to changes in the market

under such a situation, where is the future of China's software industry

is selling services a good way out

according to the recently released financial reports of software listed companies, the overall profits of software enterprises in 2004 were not ideal. In 2004, while the scale of Kingdee's business projects adopting advanced electrophoresis technology continued to grow, its net profit fell by 7% over the previous year; UFIDA and Kingdee are in the same boat. The turnover increased by 21%, while the net profit decreased by 7.3% compared with the previous year; The main business income of Neusoft, the "first share of software", increased by 11% in 2004, and the net profit increased by 336% over the previous year, mainly due to the asset transfer income of some tangible assets related to CT, MRI, X-ray machine and B-ultrasonic products sold to Philips investment company in 2004. The actual operating profit decreased by 41% compared with the previous year. Most of the profits of these software enterprises are still supported by "tax rebates". "I feel that if the state cancels the tax incentives, everyone may not be able to support themselves." A software company boss told the truth

at a seminar in the software industry, a boss once lamented: "only by jumping out of the quagmire of hype concept and price war as soon as possible and looking for a practical profit model, can software enterprises not be dragged down or starved to death."

in fact, many software enterprises have readjusted their strategies and development ideas since this year. Some software enterprises also began to find a way from the service. Software companies such as UFIDA and Kingdee have begun to turn their attention to services. Kingdee, which proposed to give up service and focus on products two years ago, now emphasizes service and has designated 2005 as the "year of active service". Xu Shaochun explained that the connotation of Kingdee service is "the products we provide to our customers can be collectively referred to as a kind of service, because the cycle of ERP products is very long, and it is not the end of selling a product, so we need to constantly update. In this sense, what we provide to our customers is a kind of service for enterprise management process optimization, which includes both products and maintenance, consulting and other service-oriented businesses." Now, service accounts for 18% of Kingdee's revenue. "Although this proportion is very low, there is a lot of room for growth." (end)