As minicomputers pushed the mainframe vendors up-market, then workstations pushed minis up-market, then micros pushed workstations up-market, then lightweight mobile pushed micros up-market ...
What happens to those up-market vendors of yesteryear? Well, IBM is still shipping mainframes, although they look a lot like the minis and workstations of yesteryear. DEC is gone, but Sun has turned its workstations into something remarkably similar to the mainframes from IBM. Both are niche players.
This, "we didn't really want to compete in the volume part of the business anyway" strategy is remarkably like describing a rout as an "orderly advance to prepared positions with the enemy left racing about in disorder."
UK warned of China, India software threat
Summary
Key UK industry figures believe Britain should forget any hopes of matching China and India in the low-cost end of the software market, and instead carve out a high-end niche.
Topics
UK software sales are on course to lag almost $60 billion behind China this year, fuelling high-level calls for Britain to abandon the low-cost end of market.
Revenues in the Chinese software product and services sector are forecast to reach $140 billion (£70 billion) by 2010, and already hit $21bn during the first quarter of 2008 alone, close to the sector's $27.5bn revenue predictions for the entire year in the UK.
India's software sales and services revenues are forecast to reach $52 billion this year.
Sean Finnan, president of the UK trade association for technology Intellect and UK country manager for EDS, said it is time for Britain to forget any hopes of matching China and India in the low-cost software market.
Finnan says the country should instead carve out a niche for itself in high-value end of the sector.
An Intellect report into the state of the UK technology industry published today shows the European technology industry growing by 5.7 percent last year, compared to 33 percent in India and 28 percent in China.
Finnan said: "It is unsustainable to try and dominate the low-cost ground. China and India will always be able to win the volume game. We need to try and follow the lead of the financial-services sector to reposition ourselves at the high-value end of the market. We believe that the knowledge-economy services will be critical for the economy going forward."
Speaking at the launch of the report, Richard Holway, of Farnham Consulting, said that less software was being sold as companies tried to extend the life of existing products.
He said: "Seventy to 80 percent of the revenue is being generated by existing clients saying they are going to keep the software longer and spend more money on bolt- and add-ons."
Tom Wills-Sandford, deputy director general of Intellect, said China is yet to cut into the UK software market but this could change in future.
He said: "The UK software industry has seen steady growth over the last few years and is in good shape. The software sector in China is certainly growing fast, but we have not seen a significant impact in the UK from either Chinese software products or Chinese outsourcing.
"However, given their appetite for expansion into new markets and the staggering rate of development both internally and externally seen to date, this may well change in the future."
The Chinese first quarter figures released by the Ministry of Industry and Information showed software services has generated $4 billion, software outsourcing £258 million and software sales $7 billion in revenue during the first three months of the year.
The European Information Technology Observatory software revenues forecast for the UK for 2008 predicted €10 billion revenue from system software and €7.9 billion from application software.
Talkback Most Recent of 37 Talkback(s)
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Yagotta B. Kidding14th May 2008 -
OButterball14th May 2008 -
RE: UK warned of China, India software threat
As a manager of a tech business, I have found it is now essential to differentiate my products and services in such a way, they cannot just be easily outsourced to the lowest bidding company. Cheaper development of more routine tasks can be beneficial for all, and can be used by British companies as a compliment to their existing product line and service offering. If British companies focus less on low value products, they can focus more on higher margin more value adding products.
We deal in artificial intelligence and high end consultancy at Brainy Technologies. Since we have access to the best universities in the world, and the best professors, our services are not so easily duplicated by those without this access. To stay competitive, we also offer free services for a limited time such as free support. Going forward, I believe this will be essential as service augmentation and differentiation are one of the few legitimate survival strategies remaining in the western tool box. Good quality and excellent communication remain also, but for how long?. Also, manufacturers for electrical products offer manufacturer warranties. If you believe you have solid code, then support for a limited time should be standard also. After all, people will not use a support service much if you built good easy to use code. You are not really giving away much if you did the job right the first time.
That is a controversial issue. I just wanted to highlight what is needed to survive in today's globalised world.
aiguy14th May 2008 -
Its simple.
"...to highlight what is needed to survive in today's globalised world."
Its really simple. Stop giving subsidies to companies (in the USA at least) that OUTSOURCE TECH JOBS TO China and India and Vietnam, etc, etc...
Our tax-base is eroding and highly qualified people are ending up working at Borders and Home Depots!
DailyWTF14th May 2008 -
RE: UK warned of China, India software threat
And we're surprised??? Come-on, the Chinese and Indian tech sectors are smart and savy. Plus we taught them a lot of what they know. Does anyone expect them to sit on their bottoms and let us (meaning Western IT sectors) keep the markets to ourselves??? This is human marketing at its best. If we in the West sit on our laurals, we are going to get trounced but good. Here is a prefect example of that.
RGrimsrud@...15th May 2008 -
What low-end software products do they make?
I've yet to see anything useful the Chinese or Indians have made available in software.
By "useful" I mean software other than games.
This article did not give one example of any software title created by Chinese or Indian programmers.
The funny thing about this is that the Chinese will have to stop pirating software because they won't be stealing from foreigners, they will be stealing from other Chinese! Maybe then they will come to respect copyright laws...
Terry Thomas
President
PC Tech
Atlanta, Georgia USA
AtlantaTerry15th May 2008 -
Products from India
Finnacle is a banking solution product developed by Infosys technologies India. The solution is used by 7 banking companies out of top 10.
Another Banking solution known as Finnacle is developed by i-Flex Solution India.
Please comment when you really know it.
unbeatensujoy15th May 2008 -
Nothing spectacular about that stuff
Other than PRICE, there isnt anything special about that software. Nothing at all.DailyWTF22nd May 2008 -
That's low end?
What's highend software then?
voska129th May 2008 -
Er...automotve industry...Japan anyone?
Forty years ago (and well into the 90s) people were making a very similar argument about the likes of Honda, Nissan and Toyota and about cars, trucks and motorcycles.
As someone who lives close to Coventry in the UK which once upon a time had several hundred 'high end' car, motorcycle and bycycle manufacturers (and now has naff all) and as a small software company owner I'd hate to see history repeat itself in this respect.
Face it; they have a massive staff and overhead advantage, less employment legislation and are a dam site more hungrier than your average Western IT company (and it's staff).
Time to recognize we cannot compete on price and focus on quality and high-end innovative niche markets...and relentless R&D and innovation! Don't fight them - partner with them.
Kevin Corti,
CEO
PIXELearning
kevincorti@...18th May 2008 -
What low-end software products do they make?
Thats a good one !!. OR...maybe India & China will steal from each other.
p_enterprises@...19th May 2008 -
Read my post and you would know
And just so you know Finnacle is not a low end product. Banks like HSBC use it. I'm sure they won't sacrifice online security over money.
sonusingh19th May 2008 -
dont bet on that
the odds are against you.DailyWTF22nd May 2008 -
Don't accuse anyone of stealing unless you've the facts
Finacle, the universal banking solution from Infosys, empowers banks to transform their business leveraging agile new generation technologies. This modular solution addresses the core banking, treasury, wealth management, consumer and corporate e-banking, mobile banking and web based cash management requirements of retail, corporate and universal banks worldwide.
This is just one example and this should shut your mouth. And If you really are a president of that company then you need to go on the internet, leave your prejudices aside and read about INDIA and its achievements. INFOSYS is one of the biggest company in the world and they handle more than 50% of your country's software business. So DON'T CONSIDER YOURSELF TOO PRECIOUS. WINDS HAVE ALREADY CHANGED AND ITS ABOUT TIME YOU REALISE THAT WE PLAY IMPORTANT PART IN WORLD ECONOMY.
And to answer someone else's post who said "STOP OUTSOURCING TO INDIA" well Infosys has outsourced to USA, Australia, UK and a few other countires. What do you want to say about that?sonusingh27th May 2008 -
Predjudices? Look in the mirror...
Stop telling people to stop trying to protect their own nation by worrying about their own nation's problems. YOU worry about yourself. No one said SHUT YOUR MOUTH until you posted it, sir. Its OK if you want to play a part in this global economy and ITS OK FOR PEOPLE TO BE ANGRY THAT YOU HAVE OUR JOBS.
I think maybe its time to create AMERISYS and get together all of the laid off software developers who can run circles around you people night and day. Why? Because we built this nation and because of the actions of a few idiot CEOs who think no further than their own wallets, they're destroying this nation from the inside out.
You do not want to ignite angry Americans who can develop better software than you've ever dreamed of wherever you're from.DailyWTF22nd May 2008
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