Tuesday, July 13, 2004
I have a few headier postings in the queue about usability for pervasive devices; another on data extraction and knowledge representation(focused on three very different approaches and tools, XWRAP Elite, Ontos and ViSWeb); a review of five papers from a current, special issue of an ACM journal covering Web mining, P2P search, XML and software agents -- the issue is titled, "The Evolution of New Technologies"; and another on social networking for developing advanced technologies (a different spin on the social networking phenomena). Alas, news noise got the better part of me.
published a nice piece on BearingPoint's expansion in China, specifically in Dalian
. Good piece, but old, old news: ChinaTechNews
had the announcement last Monday (the 5th) -- a week in Internet time is like a year in human time; the actual announcement was on the 2nd. (For the Computerworld
story, see http://tinyurl.com/6syo5
; for the ChinaTechNews
story, see http://tinyurl.com/66rm3
No surprises from BearingPoint: They'll be offering "software development" (I love these nebulous phrases), ERP implementation, application integration, app management (I think they mean software maintenance), and BPO services.
In the Computerworld article, a NeoIT analyst knocked China (again) as being well behind India as a provider of software development services. (IMHO, this particular NeoIT analyst has an extremely pro-India, pro-Eastern Europe bias.) He stated that India had IT services exports of about US$9.5 billion last year compared with about US$700 million for China. He went on to state (correctly) that most of the work done in China is for Korean and Japanese customers. My question to NeoIT: Can't "China" leverage the $700 million in work done for Korean and Japanese clients into contracts with U.S. systems integrators (SIs) and software vendors (ISVs)? The answer: Of course!! Nobody is saying that it will be easy -- and it will be easier for some companies than for others. BTW, IDC is estimating $2.5 billion in IT services exports for China by 2008. I guess IDC is figuring that China, will indeed, figure it out.
The NeoIT analyst cited project management as a problem for China's SIs. Excuse me Mr. Kublanov, but there are some very capable PM (project managers) in China. And guess what: Many of them have pretty good English-language skills. Yes, SIs in China could use more experienced PMs -- but IBM Global Services alone has more "experienced" PMs than the top 20 SIs in India combined
. Don't give me headcounts including a bunch of 20-something PMs a few years out of an IIT campus. I said, "experienced," not "junior" PMs. BearingPoint's Craig Franklin believes that BearingPoint has the necessary resources, including good PMs, to make a success of their ops in China. Guess what, Mr. Kublanov: Craig Franklin is right!! BTW, IGS is expanding their operations in China, too. And guess what: Some of India's largest SIs are setting up shop in China, too. (See http://tinyurl.com/5wyga
.) There are also the Indian-Chinese JVs, like ZenSar and BroadenGate -- a superb business model with a superb management team.
A Silicon Valley-based company which has a development center in India is eyeing China because the country "has the best combination of cost advantage and supply of strong engineers." (Quote from Marc Herbert, VP, Sierra Atlantic.) True. Cost Advantage + Supply of Strong Engineers = China (NOT India). Market access is also a key factor in opening a development center in China, which is what IBM has been touting for a while. The two "negatives" to using offshoring services in China cited by Marc Herbert are real, however: A language barrier and government bureaucracy. Yet, the bureaucracy issues can be overcome (ask me how) and the language barriers are nil in certain cases (ask me where).
There was an article on Kingdee featured in today's issue of Investor's Business Daily.
, although IBD
doesn't keep their articles up for free viewing for very long. Matter of fact, this posting is going out before most Americans will wake up; hence, many readers in China are reading about the IBD
article before most Americans. It's currently a bit past 3 am on the West Coast, 6 am on the East Coast.)
It's a good article, but a bit confusing. Kingdee's chief strategic officer is claiming that "(Kingdee) can find alliances to help these U.S. companies tap the Chinese market and vice versa" with a focus on "channel partners." However, something doesn't make sense. Kingdee competes with a lot of these same companies. Is Kingdee really going to help Bamboo or Achievo? I'd be surprised to see this happen. It will be interesting to see if Kingdee can pull this off. This seems to go beyond any notion of coopetition into a bit of sillyness and wishful thinking.
Tidbits on IT Outsourcing
U.S. financial services firms imported US$1 billion in application development from offshore locations in 2003. It's still the best sector for IT outsourcing, although India has a commanding lead and the financial systems in China are radically different; hence, a tougher market to leverage with domestic experience. (See http://tinyurl.com/5bqsq