CDC logo.jpgMore bullish talk on China's enterprise software market, this time from HK-based CDC Software, part of Nasdaq-listed CDC Corp.

CDC Software has announced record sales in China for Platinum, its human resources management software. New customer signings in the first half of 2007 included AGB Nielsen Market Research, Mitsubishi Chemical (Ningbo), Beijing SE PUTIAN Mobile Communications and Omni Industries.

New customers include a mix of local enterprises as well as multinational companies operating in China, and that perhaps is more significant than the names themselves. For, as we argued yesterday, China's home-grown enterprises are starting to look at enterprise software in much the same way as foreign multinationals.

Once, it was just the China subsidiaries of multinationals that bought enterprise software, typically because an edict from global HQ required all local operating units to standardise on Oracle, SAP or whatever.

But that opportunity is presumably close to being played out so enterprise software vendors are looking to convince China's local enterprises to invest in enterprise software.

Of course, CDC Software is in a special position because its HRM software was designed specifically to meet the business and regulatory requirements of HK and mainland enterprises — today it is used by around 700 of them.

But earlier this week US enterprise software giant Oracle also recited a long list of HK and mainland customer wins for its HRM software, including Matsushita Electric (China), PingAn Insurance, Guangzhou Toyota Motor, HiSoft Technology, Alibaba and a clutch of Chinese banks. More on Oracle in China in yesterday's story.

In the west, HRM software has historically not been seen as a priority area for IT investment, although it is enjoying a new-found importance because of the complexity of employment regulations and the growing interest in so-called “talent management” — preventing your best employees from walking out the door.

It is revealing that Chinese businesses have also woken up to the value of HRM alongside enterprise applications such as supply chain management or enterprise resource planning, whose strategic importance is perhaps more obvious.

As well as its home-grown Platinum HRM product, CDC Software owns various enterprise software programs it has acquired from second-tier western vendors. Although their principal market continues to lie in the west, these products are starting to gain traction in China.

One such product is its Pivotal customer relationship management software — CDC acquired Pivotal in 2004. RS Components Hong Kong, part of the UK-listed Electrocomponents, a leading electronics distributor, recently chose Pivotal CRM for its 14 offices in AsiaPac including seven offices in China. In addition, CDC recently signed a deal with a HK software distributor, Excel Technology International, to push Pivotal to financial services firms in Greater China and southeast Asia.

Meanwhile, Chinese plastics maker PTM Engineering Plastics, has signed up for CDC's Ross Enterprise suite of ERP software. The plastics firm, a JV with Japanese, Korean and German partners, said it chose Ross Enterprise to streamline compliance with the complex statutory tax requirements in China while also meeting Japanese regulations.

Nantong will streamline compliance with the complex statutory tax requirements in China while continuing to meet Japanese regulations. P Nantong will also be able to shorten processing time and improve throughput and utilisation with advanced planning, while gaining the visibility needed to monitor and adjust operations for peak operational efficiency, CDC Software said

Separately, CDC Corp has agreed to sell Ion Global, its interactive marketing services group, to Aegis Group, the London-listed media communications and market research group, for an undisclosed sum. Ion Global will become part of Isobar, Aegis's global digital agency network.

More on CDC in these stories.


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