[Discussion] impact of the Japanese earthquake on China's software service outsourcing industry (macro)

Source: Internet
Author: User

With the further development of the earthquake and secondary disasters in Japan, the software service outsourcing industry in Asia is also facing a possible round of new adjustments.

In Asia, the market share of Japan's software outsourcing service industry is also huge, such as software outsourcing in Europe and America (in terms of quality and quantity) basically, it is currently mainly concentrated in India, China, and Japan (there is also a market in Southeast Asia ). Based on some of my previous contacts, we can roughly draw some of the following characteristics (within a limited scope of samples, I have met dozens of cases ):

India: there are a large number of employees. In terms of code quality, the Code style and work style often make the old and beautiful (not derogatory). Therefore, some of India's first-package projects will flow to China for further development, the overall development cost is low.

China: there are a large number of employees and the average level is lower than that in India. Many powerful companies and individuals can provide good code (including specifications and comments), but the proportion is very small, the overall code standards are not as good as those in India. They work hard and the development costs are relatively low.

Japan: because of the population base, the absolute number is greater than that of China and India, but the average service level is higher than that of the two countries above. The United States and the United States seldom submit India's code to Japan, this is because the Japanese are usually cool on this code, unlike China's efforts to make a little profit. It is rare to see that the project terminated in Japan was sent to China for the reason that it was not studied. It may have been done once, or it may have been wrapped elsewhere. Japan's outsourcing (non-outsourcing) enterprises have the highest proportion among the three countries, which is also closely related to the management philosophy of professional collaboration. The labor costs of software service outsourcing in Japan are sharply different, and the prices of cities and rural areas are relatively different, but the prices are generally higher than those of China and India.

 

With the impact of the earthquake in Japan and the current employment situation in China, there may be some situations or psychological changes of outsourcing providers:

 

  1. This earthquake has resulted in many infrastructure damages. For a while, the failure to continue working will inevitably cause a lot of trouble and even economic losses to the employer. This may also bring more concerns to contractors who need long-term outsourcing cooperation in the future. A stable cooperation environment is expected by both parties. Therefore, India and China have advantages in this regard.
  2. The Japanese economy after the earthquake is a fan. The current arguments are just speculation. We assume that the Japanese economy is seriously declining, and the possible result is that the unemployment rate of IT personnel increases, lower development costs (like the United States in the financial crisis, the total amount of orders in the most month has dropped by 80%, and the number has dropped by 50%, so the transaction volume in a single batch has actually shrunk ), this may preemptible some of the printed and printed orders. Assuming that the Japanese economy continues to improve, the pattern of software service outsourcing may not change significantly, but in any case, many domestic environments need to be rebuilt, the package saturation will be greater than that in the middle and the printing, and the relative cost will increase.
  3. The Japanese earthquake will cause a sharp drop in the number of projects in Japan that are being sent to China and India. Of course, in the long run, post-disaster reconstruction will involve a large number of software outsourcing services, but in general, there will not be too many pieces of cake. Coupled with economic conditions and other factors, projects from Japan in general should fall.
  4. In Chinese local enterprises, at least the production cost around me has increased by more than 30% every year in the past two years, including wages, benefits, rent, and social networking (refer to CPI * 2-3 to be closer to reality), various management fees, communication costs (including on-network, you know), software/authorization costs, R & D costs, HR costs, and so on. This is not an inflation factor. It is not clear about the situation in India and cannot be compared. In short, the cost pressure of software service outsourcing in China is obviously increasing.
  5. Just now, I only talked about private enterprises in China and some foreign-funded enterprises, and their operating costs in China are also rising. In addition to the above mentioned, everyone can "enjoy" the cost, when the tax-free and rent-free policies for many places (such as Suzhou Park) have reached a new round of adjustment or expiration, many IT enterprises have moved out of the park and new area, and software enterprises have relatively small footprint, there is no escape in batches, but the increase in the cost of employment and rental leads to an unavoidable fact.
  6. With the strong CNY, more European and American enterprises are more interested in Chinese transactions (especially those who prefer to make time difference and pay for the contract amount at an estimated exchange rate ), this advantage cannot be achieved by other countries at the moment.
  7. This is not to be said, but it cannot be taken into consideration: one of China's major weaknesses is network control. Although many technologies can now allow you to work with European and American teams to develop collaboratively, and get the same information (such as google and some data sharing), but in fact many times (especially when the network environment of the other company is not so powerful) it will take some twists and turns, we can only silently bear the cost of time, energy, and mood. The other party will express sympathy, but will not increase the budget for this.
  8. In personal and peripheral situations, many (not all or most) SNS in China do not seem to inject new energy into software outsourcing, but it is a little drag (I wonder if you have the same feeling ?). Every day, there is a large amount of information, but it is fragmented, not to mention entertainment. This is not a serious threat, but the utilization of China's networks is constantly increasing. Otherwise, even if there is no harm, it will not bring benefits, because the amount of information displayed on the screen is limited, the time required to filter data is also limited. In this regard, India's network and programmers are generally doing better.
The above summary only makes a hasty analysis of some cases that have been personally used in recent years (only macro, micro, and some cases are hard to say). The above only represents my personal opinion and is a reference, I hope you can add and discuss it!

 

 

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