China’s Software Outsourcing Market Reached RMB 2.592 Billion in Q1 2006

Analysys International, a provider of business information about technology, media and telecom industries in China, says in its recently released report, “China Software Outsourcing Market Quarterly Tracker Q1 2006,” that China’s software outsourcing services market size reached RMB 2.592 billion in the first quarter of 2006, increasing 43.9% over the first quarter of 2005 and 2.1% over the fourth quarter of 2005.

In terms of vendor ratings, Neusoft, Hisoft and SinoCom held the top three positions in the first quarter. HiSoft’s marketshare climbed to position two by virtue of its acquisitions of both Ensemble International and Teksen last November. The research firm says China’s software outsourcing market concentration is low. The top 10 software outsourcing service providers’ marketshare accounted for only 19.2% of the market total in the first quarter.

The China Software Outsourcing Market Breakdown by Vendor

China Software Outsourcing Market Breakdown by Vendor

Segmented by industrial markets, industries including high tech, consumer electronics, telecom and finance accounted for 95.4% of the market total. According to the report, the high tech industry is still the most important software outsourcing market in China, accounting for 59.8% of the market total, followed by consumer electronics at 25.3%.

Analysys International says Japan is still the biggest contracting market to China, accounting for 59.2% of China’s software outsourcing market. Orders from Europe and the US increased slightly in the first quarter, accounting for 22.5% of the total marketshare. Contracting orders from Hong Kong accounted for 10.9% marketshare in China.

Analysys International is online at http://english.analysys.com.cn/.