Offshore Software Development Outsourcing Service Providers China

Looking At Today and Ahead

The Present

One strong reason that India has captured the interest of the global IT outsourcing market is the fact that it has about 1 million IT developers, which provide a strong and steady supply of talent for the growing market of software development. While India remains to be the top IT services outsourcer, many industry analysts believe that China will quickly close the gap in a matter of five years because its more than 1 billion population also offers the advantage of abundant IT talent.

In terms of cost benefits, an offshore software development outsourcing service providersin China offer competitive labor rates. Software developers in China receive an average salary of US $700 to 800 about similar to that of India and Russia and only slightly higher than that of the Philippines.

Another factor that, undoubtedly, will drive industry growth are the continued efforts of the Chinese government and the offshore software development outsourcing service providers in China to develop their industry by building more technological and business infrastructures and improving the skills and capabilities of its workforce. Indeed, the Chinese Government has long supported science and technology in its country since the 1980s and today, information technology development is a top priority of the state. The strong willingness of every offshore software development outsourcing service provider in China to excel globally and become a world class IT services provider give China a great chance to succeed in its goals.

The Future

Recent industry researches on offshore software development outsourcing service providers in China said that their domestic market will grow rapidly at a rate of about 35 percent to generate an estimated US$ 29 billion in the 2009, sharply increasing from about US $8 billion in 2005. The entire IT services outsourcing market in China is said to reach more than US $90 billion by 2009.

A contributing factor to this forecast is the accelerating pace at which the United States, Japan and Europe – the biggest software markets – are all outsourcing their software development to service providers in developing countries due to cost reduction requirements. As expected, this scenario provides plenty of opportunities to top outsourcing countries like India and now, China. Every offshore software development outsourcing service provider in China aims to promote their industry to the global market and form a strong global IT outsourcing hub in the country.

Leading the growth of offshore software development outsourcing service providers in China are those in the Northeast and Eastern parts of the country while the Southern region of China will also develop but at a slightly slower pace because of the smaller size of the market there despite an abundance of talent.

The drivers of growth for Eastern China offshore software development outsourcing service providers are their strategic advantages in location and strong ties with Japan, the United States and the European Union. Much of the predicted growth in this region within the four year period from 2005 to 2009 will be coming from the areas of Shanghai and Yangtse River Delta.

A significant outlook on the development of offshore software development outsourcing service provider in China indicates that instead of competing with each other, India and China will continue to form alliances to benefit both countries. This has already started with Chinese government officials visiting India to foster partnerships with their IT outsourcing industry and Indian IT outsourcing companies establishing their operations in China, jumping at the great opportunity to break into the country’s huge domestic software market and gain access to its advantages in other Far East Asian markets like Japan. For the part of offshore software development outsourcing service providers in China, an alliance with the mature IT outsourcing industry of India will boost the development and maturity of its own industry.

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