Welcome!

Open Source Cloud Authors: Elizabeth White, Jason Bloomberg, Yeshim Deniz, Derek Weeks, Jyoti Bansal

Related Topics: Open Source Cloud

Open Source Cloud: Article

Selling Software in China

Better Than You Think

Technology companies have been taking a beating lately because of their efforts in China. Google and Yahoo are torn between the evil of government censorship and the prospect of doing business with the world's fastest-growing economy. Microsoft, Adobe, and content providers like the American movie studios face serious problems with piracy. A recent report by the China-Britain Business Council stated that only one in four people in China has purchased software legally.

Imagine my surprise then when I took over a San Jose-based enterprise software company with virtually no sales to learn that our main sales effort was in China. It's a big world, I thought, and surely we could find a safer, less controversial market. My skepticism didn't prevent me from investigating our possibilities there, however, and I'm glad it didn't. I have been pleasantly surprised by the receptive business climate, the ability of clients and other contacts to separate government ideology from business issues, and, most importantly, the size and receptivity of the market.

With an initial software licensing deal under our belts, and the prospect of more to come, I thought I could provide a few insights for others who might find themselves in my shoes.

Business, Not Politics
First of all, business people have to be able to separate political/social views from business issues. The Chinese business people I've dealt with certainly do. This doesn't mean leaving your conscience at the border, but it does mean realizing that not everybody looks at the world the same way we do. Silicon Valley is a leading source of technological innovation, and if we're going to export that technology to the world at large we must learn how to operate in different environments.

The government controls almost all aspects of Chinese society; we revel in relative freedom from government interference. Good for us, not so good for them. But my advice is simple: deal with it. I tip my hat to the U.S. tech leaders who have been grilled by Congress and often vilified in the U.S. press for "selling out" in China. To me, they are pioneers in this brave new world of capitalism co-existing with communism, and I appreciate their willingness to take their lumps in the cause of market expansion.

Intellectual Property Safety
My company's product is software, that most fragile of business products. We pour all our ingenuity and hopes for the future into bits and bytes encased in a disk or downloaded from the Internet. The very act of licensing someone else to use that software carries the implicit hope that they will respect the intellectual capital it represents and use it ethically. Is it reasonable to hope that Chinese business people will live up to their side of that bargain?

My experience, based our initial sales success in the Chinese oil and gas industry, tells me the answer is yes. China is furiously trying to develop energy supplies for its vast and growing population, and realizes it needs help to do so. It doesn't make sense that our customer, a giant oil company whose shares are traded on the New York Stock Exchange, would cheat on someone who is helping it overcome obstacles. Is this a leap of faith? Maybe, but it's one made with the realization of the tremendous opportunities in enterprise software that exist in China.

We have made a further leap in entering into an outsourcing contract with ChinaSoft Resource Co., a branch of the China Software and Technology Service Corporation (CS&S). CS&S is an example of the efforts of the Chinese government to restructure its state-owned enterprises and bring more transparency to their operations. Through this alliance we eventually hope to outsource parts of our Quality Assurance and final test process, plus other functions. Giving us confidence is the fact that among other U.S. companies using ChinaSoft are Microsoft and IBM.

Don't Go It Alone
Although many things about doing business in China surprised us, one truism remained unchanged: you need local partners. We proudly display in our reception room a plaque certifying us as members of the Zhongguancun Software Association (ZSoft), and I'm glad to be a member of its advisory committee for American software companies. This plaque is the global economy's version of a Chamber of Commerce or Rotary Club membership citation

ZSoft is an interesting example of China's efforts to catch up with the world - particularly India - in software outsourcing. Named after the Zhongguancun region of Beijing, which is widely regarded as China's Silicon Valley, it functions as U.S. trade associations do to promote China's software industry. It recently hosted an outsourcing summit on the theme "Software Changing China" that was attended by more than 300 representatives of governments, associations, companies, and institutes.

Joining ZSoft was in my company's best interests, and also served China's goal of improving its software capabilities. China graduates two million engineers a year, but its largest software outsourcing firm employs fewer than 7,000 people. Clearly there's a gap between where they are at present and where they want to be. They see contact with U.S. software companies as an opportunity to learn what skillsets they need to develop and the direction that technology is headed. As a young company trying to get a foothold in the Chinese enterprise software market, we clearly need the kind of contacts that ZSoft offers. And if they can learn a thing or two from us, that's fine, too.

Be Opportunistic, Be Smart
My overall assessment of the Chinese opportunity for U.S. enterprise software companies is optimistic. For companies in the storage and security fields, particularly, China presents an enormous opportunity. The commoditization of high-end serving technology, which bedevils companies like Sun and SGI, has opened up a large market for companies that can offer solutions for the new-era enterprise data center. China's preference for Linux-based server architectures is a real advantage for those who can deal in the Open Source environment.

It's not a perfect world in China. Its transformation from a planned economy to a market-driven economy proceeds in fits and starts. As often as you see promising developments you run into incomprehensible regulations. Piracy and lack of protection for intellectual property remain serious problems. Finding local partners with a commitment to outflanking the bureaucracy and guaranteeing IP integrity is an absolute necessity. But, in a brave new world, only the brave will thrive.

More Stories By Bud Michael

Bud Michael is CEO of San Jose, CA high-availability software company Availigent (www.availigent.com).

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
Cybersecurity is a critical component of software development in many industries including medical devices. However, code is not always written to be robust or secure from the unknown or the unexpected. This gap can make medical devices susceptible to cybersecurity attacks ranging from compromised personal health information to life-sustaining treatment. In his session at @ThingsExpo, Clark Fortney, Software Engineer at Battelle, will discuss how programming oversight using key methods can incre...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
SYS-CON Events announced today that Hitachi Data Systems, a wholly owned subsidiary of Hitachi LTD., will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City. Hitachi Data Systems (HDS) will be featuring the Hitachi Content Platform (HCP) portfolio. This is the industry’s only offering that allows organizations to bring together object storage, file sync and share, cloud storage gateways, and sophisticated search an...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.