By Huang Xin

Stepping into the year of 2007, the development of domestic software and information industry is facing much more advantage factors.

On the one hand, under the driving of strategies of central region rising and west area exploitation, the increase of informatization demands will drive the development of software market; on the other hand, the radiation effect to be caused by 2008 Beijing Olympic Games, the World Expo 2010 Shanghai, and 3G (the third generation mobile communication) will further optimize the informatization construction and application framework of some industries.

Based on the latest statistics from Ministry of Information Industry, by the end of 2006, the sales income of China software industry reached RMB 480 billion yuan, increasing by 23 percent year on year. This figure is expected to reach RMB 580 billion yuan in 2007, keeping the growth speed of over 20 percent.

From 2006, domestic software industry has gone into integration period. It becomes more obvious in 2007.

Last year, the world software industry presented a play called "Big fish eat small fish": IBM purchased Internet security company ISS with US$1.3 billion; EMC purchased safe software retailer RSA with US$2.1 billion.

At home, China Enterprise, a leading brand in domestic IT application services for businesses, purchased Redflag Chinese 2000 Software Co., Ltd., a forerunner in domestic softwares; UF Audit Software Co. merged Beijing Nordsan Technology Co., Ltd.; in January 8th 2007, China Soft International Limited announced that it would completely purchase Hinge Global Resource Inc. with at most RMB 429 million yuan.

Experts pointed out that merging was just a measure; its goal was product integration and product line perfection. It was embodied by the integration among enterprises, which would bring the integration of products and the flourish development of software and platform with having integration features. Along with the purchase actions was the trend of integration and increasingly raised industrial concentration in software industry.

A salesman inside the circle said frankly, individual software sales no more had advantages in the software market. On one hand, industry giants are eager to set up an integral solve plan, and strengthen their own market status and search for new growth point of profit by offering customers a set of solve plans; on the other hand, customers wish to buy products with more functions at a lower price.

The scale equals to the power. It can be foreseen that the annexation will continue to go on and industrial concentration will be further strengthened in 2007. Analyst inside the circle predicted that at last there would only be a small number of producers in each field.

If the integration and annexation among enterprises can be called a "game" of large enterprises, then the platform and framework represented by SAAS (Software-as-a-service) and SOA (Service Oriented Architecture) have caused a new revolution in terms of technology and ideas for software industry.

In 2006, 18 international and domestic companies jointly established the OSOA organization to push the formulation of standard; ChangFeng Open Standards Platform Software Alliance (CFA), one of domestic software company alliances, signed an agreement with OASIS (Organization for the Advancement of Structural Information Standards) which aimed to push the formulation of international standard related with SOA and offer assistance for the internationalization of standards concerned with China software industry. Under this circumstance, in November last year, IBM SOA Solution Center was built in Beijing and India separately to formulate modularized SOA solutions for each industry; Microsoft and Oracle also put efforts into this market.

Besides, as more and more domestic customers accepted the SAAS, their awareness of service value raised year by year. SAAS created a new form: it's not necessary to buy software by virtue of Internet but just pay for the service.

Insider gave an example: you can get the usufruct of Gold Abacus 9i Elementary Module by just spending RMB 298 yuan a year. SAAS solved the problems for SMEs concerning its small scale, few fund and shortage of IT personnel. With advanced technology and low purchase and maintenance cost, SAAS will become the best way for the informatization application of millions of domestic SMEs.

It can be seen that along with the integration of new products, more and more small and medium-sized software producers will realize their own development and leaping. Based on prediction, the market demands of SOA has a compound increase of 94 percent on average; in the next 10 years, the total input in Web services will reach US$184 billion.

The self-innovation of software has attracted much attention from all circles of the industry. In 2007, as many supporting policies concerned with software development come out, domestic software industry will go into a new peak period of development.

In fact, the support for self-innovation software has got full play in 2006: the state drew up a set of policies, which produced good market environment and policy support for the dissemination of domestic system software; in 2006, under the background of the governments at levels promoted to use the genuine software, as a result, the development environment of domestic software was further optimized; the application of genuine software also transited from mainly in government to other circles, and realized a growth in a large scale.

At the same time, the new software platforms like SAAS and SOA brought opportunities to domestic software enterprises. Consequently, the development of domestic software achieved a breakthrough: Red Flag Software, Linux operating system of China Standard Software won the bid in government procurement, and domestic database substituted part of foreign products in some large application system; some software such as office software, middleware, embedded software, application software and information security software got breakthrough continuously, the performance of word processor software like Kingsoft WPS and Evermore Office reached internationally advance level; the middleware of Tongtech, ERP of UF and Kingdee had obvious advantage in market competition; the firewall, anti-virus and intrusion detection software of enterprises such as Rising held a leading position in domestic market.

Certain expert pointed out that domestic software and information service industry should hold the opportunity of industry integration and re-form the layout of industrial value chain by active innovation; this is beneficial for China's enterprises to strengthen the voice right and self-innovation capability, realize the leapfrog development of the whole industry, and finally become the vital power in international software industry.