Fragmented international market

Read this story on Forbes today titled “Software Surprise” how in China a small local enteprise software vendor “Ufida” is capturing SMB market from the likes of Oracle and SAP. Article suggests that Ufida has captured 20% of the domestic business market. It touts the benefit that local vendor knows local rules, etc. supporting easy sell of domestic developed products to the less complex customer scenarios.

Although the article heavily touts the “price” advantage local company suggests it has over the large established leaders. I am not sure, if that is what is keeping Ufida afloat. At best it can be a short term ploy as price advantage don’t sustain too long. At least not against companies like Oracle, SAP that runs on high margin and generate enough cash to compete effectively on price point – if they decide to capture the market and keep thrifty competitor away.

One sliver line that emerges out of such success story of domestic product companies is the awareness they create around software intellectual property within the country. Local success stories will bring appropriate legal practices and improve the local enforcement situation to tackle privacy and other relevant issues effectively. Thus solidifying the path for large multi-nationals to increase their penetration and provide more sophesticated solution to the diverse geopgraphical market – in some regard leveling the playfield for competition.


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