The myth about India being the source of first-class software for global markets starts crumbling: according to the opinion of German decision makers in the IT field, India’s software companies do worse than their Chinese counterparts in eleven out of twelve criteria. There are deficits with regard to investment risk, availability, maintenance and reliability. With regard to these criteria the assessment of Indian service providers is only half as good as that of Chinese ones. This is blurring the business prospects of Chinese software manufacturers on the German market.
Even though last year one out of fourteen German companies bought business software in India, one out of twenty already prefer software from China. One competitive advantage of manufacturers from India is their reputation to develop more innovative solutions than their Chinese competitors. This fact, however, does not quite meet with the demand from Germany given that only about one quarter of German companies turn to software producers because they look for particular sophisticated systems. In high demand are in particular tested and proved as well as secure solutions. These are the findings of the “Software – Made in Germany” study carried out by the PPI software and consulting firm in co-operation with the Institute for Management and Economic Research (IMWF).
While the IT industry of China is becoming more and more powerful and has many qualified people at its disposal, the Indian IT industry suffers from an acute lack of specialists. In order to get around this problem, Indian companies themselves are currently buying IT services from abroad – according to a recent study by Gartner in particular from Singapore, the USA or China.
For the time being the trust of German customers in IT providers from Asia is still relatively small. In 2007 eighty percent of German companies bought their software from manufacturers based inside Germany. About 40% of German IT executives trust in the capability of German manufacturers to develop efficient and profitable software systems and implement them. German IT service providers are still particularly trusted in terms of data security, maintenance and reliability and enjoy a leap of faith as compared to their competitors from India or China. 