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Observations on Chinese business

Company Blogs June 30, 2008 By Michael C. Han Staff

Well, I'm back in our offices in Asia to help our sales folks and to sign some partnerships with local system integrators.  This has been a rather interesting trip, especially learning some of the different ways Chinese businesses operate and some of their rather unique requirements.

Some of my observations:

1) During the sales cycle, Chinese customers tend to ask for far more upfront in the POC than we normally see in the US and Europe.  One of our potential SI partners is working on a deal with a Chinese mobile carrier.  They have been developing a POC for 1 man year, all unpaid.

2) Chinese executives at state owned enterprise expect longer shelf life for software systems.  The heads of state owned enterprises change every 8 years or so.  Thus, their expectation is that if they put a piece of software in service during their term, it will last for their term and several years beyond.  I think most European and US executives would agree (be it grudgingly) that investments in software systems really do not live more than 3-5 years without continuous technology updates.

3) Many enterprises cannot efficiently pass information between business units.  This is a recurring theme among those I spoke with.  Just about every company in the world struggle with this type of issue, but I must say I am rather astounded by the magnitude of the issue.  Chinese companies are organized in the fashion of a holding company with many smaller limited companies (e.g. Liferay INC holds Liferay Dalian Software Ltd, Liferay Beijing Ltd (does not exist yet), Liferay Shanghai Ltd (does not exist yet).  Each LTD company often has their own systems for finance, inventory control, and etc.  It is not uncommon to find all major database vendors (and some no longer in existence) utilized in different LTD companies.  I was told one story where one holding company held LTD companies using dBase IV, DB2, Oracle, MS-SQL, Informix, Access, and Sybase.  Each LTD company within this firm held 4-5 other LTD companies, each again with their own systems.  I shudder to imagine the potential errors when reporting utilization, revenues, or any statistics.  Overall, it's a problem that would make an enterprise architect run screaming for the door.

more later...

Threaded Replies Author Date
of course, requirement in China is much much... chan yong quan July 3, 2008 7:07 PM
Nice stuff Mike. When in China... do as the... Brian Chan July 3, 2008 7:49 PM

of course, requirement in China is much much more different between US and Europe, and it is the reason why baidu can hold bigger market than google in China
Posted on 7/3/08 7:07 PM.
Nice stuff Mike.

When in China... do as the Chinese do.
Posted on 7/3/08 7:49 PM in reply to chan yong quan.