Why Software Industry

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  • Courtesy of www.zerohedge.com

    Prepared by: Lim Son Eng (SoE)

  • Outsourcing Providers (Outsourced IT Operations (embedded software) < Business Process Outsourcing (higher-tiered and certainly more profitable) (Majority)

    Software Developers (Good, but produces non-distinctive products)

    System Integration Providers (Moderate, undertaken by bigger firms)

    Information Technical Consultation Service Providers (Low)

  • Trends: 1. Positive comforting double-digit growth rate in revenue

    2. Negative stagnant in the lower rungs of supply value-chain for the

    past 30 years or so.

    3. Hard to Determine distribution of firms from big cities to 3rd- / 4th tier cities

    4. Negative limited talent pool due to lack of focus on IT skills in schools

    5. Negative biggest customer, Japan, does not seem to be a permanent customer.

  • Traps:

    Vicious competition between firms further discourages

    spending on quality labour China eventually may lose its



    Huge Market in China due to Urbanisation

    Protectionist measures by the Chinese Government