Int’l firms to shake out China’s software market

June 27, 2013 Leave a comment

Int’l firms to shake out China’s software market

Staff Reporter

2013-06-27

Along with major changes happening in the global software market, leading international software firms, such as SAP and Infor, announced plans for more concerted efforts in the Chinese market. Domestic Chinese firms are bracing themselves for the onslaught.

TimMoylan, president of Infor’s Asia Pacific division, said that China, Japan, and Australia/New Zealand have become the three largest sources of the company’s revenue, with China leading the list. To facilitate further inroads into the Chinese market, Infor recently poached Lin Xinhua, former vice president of the Autodesk’s Greater China region, in order to tap his abundant knowledge of the Chinese market. With 26 years of experience in the field and having worked a vice president for Oracle’s Greater China marketing division, Lin is just as qualified as any to approach the ambitious task.“We aim to double our profits in the greater China region in the next three years, representing 25% annual growth,” reported Lin Xinhua in a recent interview with National Business Daily, adding that the company will extend its reach to northern and southern China, from its current focus on eastern China. Lin assumed the office as president for Infor’s Greater China operations on June 19. To expand sales in China, Infor plans to push packaged business software, featuring easy and quick installation, among Chinese enterprises.

According to the National Business Daily, Infor intends to embrace the strategy of differentiation by focusing on medium enterprises in manufacturing, logistics, and transportation, so as to counter the advantages of Oracle and SAP in the management software market, especially for large enterprises, in China.

Lin notes that the company can expand along with the growth of medium enterprises, thereby creating steady revenue growth. While Oracle and SAP excel in universal products, Infor has more in-depth knowledge of specific lines, capable of assisting clients in cloud computing and large databases, according to the report.

SAP is also doubling its effort in tapping the Chinese market. After scoring record sales in China in 2011, the company announced in Nov 2011 a plan to invest over US$2 billion by 2015. The investments focus on the three major sectors: innovation, sales channels, and talent cultivation. The company wants to focus on cooperating with local partners.

In 2012, the global software market only grew 3.6% in scale, less than half the growth rate in 2010 and 2011, but markets in Central and Eastern Europe, the Middle East, and Africa jumped 7.2%, boosting the latter’s global share by two percentage points. The slackening of the global market was attributed mainly to slowdown in the mature markets of Western Europe and Japan.

International firms intend to create a major shakeout in the Chinese market in the coming years, when many domestic firms will be ousted by acute competition, an industry insider said. To survive the competition, many local firms plan to resort to custom-made services and intensified deployment in cloud computing.

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment