China Law Blog

In a recent article, entitled, "China: The Next Software Center," Leonard Liu, CEO of Augmentum, a Silicon Valley software services company with offices in Shanghai, states China is still years away from becoming a software outsourcing center. 

Liu notes that no Chinese company comes close to rivaling Indian outsourcing powerhouses like Wipro (WIT), Infosys (INFY), and Tata Consultancy Services and says that those who predicted a quick rise for China's software industry didn't understand the business:

While it's easy to build up a manufacturing base, creating a knowledge industry takes a lot more time, he says. "Software experience is nothing that you can get very quickly," Liu points out. "You can rebuild a TV factory that you had in Japan, because most of the work is automated, and workers can be trained very quickly. However, software is a knowledge effort and it takes time for team members to form."

Liu goes on to predict it will take another ten to twenty years for China to be a big player in the software industry.  Is he right?  Who will actually lead that charge?  Will it be "American" companies like Augmentum, Indian companies like Wipro, Infosys, and Tata (which are already in China and expanding), or will it be local Chinese companies? 

For more on China software outsourcing, check out the following:

1.  SDF China: Opportunities and Challenges

2.  China Invades the Service Outsourcing Industry

3.  China Outsourcing -- Consolidation Waiting (And Waiting) To Happen

4.  India and China for Offshore Software Development services

5.  Big Bucks in China's Software Industry 

For an interesting and thoughtful post on perceived evils and dangers of outsourcing, check out "Outsourcing to Hell."