China isn't that different after all, not even when it comes to public-sector IT contracts.
Sinosoft, a small Chinese software house, has reported its first set of interim results since listing on London's AIM market earlier this year.
Just like countless other IT companies, Sinosoft has run into a delay on a key contract and, "as a result, revenues and profits in the first half are lower than expected".
Sinosoft's fortunes hinge disproportionately on one big customer, China's State Administration of Tax, which has contracted Sinosoft to supply the software for managing export taxes nationwide.
But drawing up technical specifications and a timetable for the roll-out of the software has taken longer than expected. Hence, Sinosoft is taking a more "cautious view" on achievable revenues for the full year. However, the long-term outlook remains unchanged.
Its familiar language and the sort of profit warning that could -- and regularly do -- get issued by any software house working on a big project. And that, I suppose, is the point.
Writing software for China's tax department is not really that different from public sector work in the west -- or any other type of big IT project, for that matter.
For that reason, I'm surprised that the west's big systems integrators and software houses have not shown more interest in China. After all, they have unrivalled experience in managing complex projects and their "global delivery" model lets them develop software in low-cost locations like China.
I'm also surprised that China's tax department apparently entrusts this contract to a single small software house -- Sinosoft's revenue in 2005 was just over $6m.
However, the public sector has traditionally been the last bastion of protectionist procurement policies -- in the west as well as in China -- so I suspect that that it will be a while before Beijing considers letting Accenture or IBM design its new tax system.
So Sinosoft's future contract flow seems assured -- at least for the time being.
