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China Technology

China Software Companies I

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I thought about this topic for a while; I decided to start it after seeing the recent hypes on E-future stock. E-future claims it is the first Chinese software company listed in the NASDAQ Capital Market. This is correct but it is a bit misleading. There are two markets in NASDAQ: National Market and Capital Market. Capital market is for small capital companies; and most Chinese companies such as Netease and Home Inns (Ru Jia) are listed in the National Market. The reason I mentioned this is there are at least two Chinese software companies in the NASDAQ right now: China.com (CDC Corp) and Ninetowns. You may say many Internet companies such as Baidu, Sina, Netease and Sohu are also developing software, why don’t I categorize them as software companies?

Well, in this discussion I define software companies as the companies that develop software and sell them to the end users (mainly enterprises), by licensing (Microsoft) or sell them as a service (Salesforce); and sometimes they derive majority of revenue from support and service (RedHat). In other words, as much as we like Google and Baidu, and their fantastic technology, they are not considered as enterprise software companies. In addition to companies that develop software (and have intellictual property), I will also discuss some software outsourcing companies in China. Because they also do enterprise software development or customization for companies like Microsoft or Oracle; and they provide consulting services for the end users sometime.

When I talk to people about enterprise software in China, the most frequent word I heard is “ERP”, or enterprise resourcing planning. It seems to many people that ERP is the only thing in enterprise software world. This is obviously not true. But on the other hand, I think it is also the first area computer (software) is used in the Chinese companies. UFSoft (Yong You), one of the largest software company in China, got started in Accounting and ERP software about 15 years ago. Interestingly, about 12 years ago I wrote a foxBase program to manage the cost accounting for my first employer in Shanghai. To be continued…

UFSoft