The software outsourcing market in the United States is monopolized by India and that in Europe by the Ireland. India, Ireland and Israel hold an important international status in the global software industry and have formed respective characterized service domain. As the names of the three countries all start with the letter "I" (India, Ireland and Israel), they are given the name of "3I¡± in software industry.
From the success story of the "3I" countries in software and information services industry development, we can draw the conclusion that a healthy development of software and information services industry can not be achieved solely by market self-improvement and development, it is indispensable for the government take the responsibility to lead and promote.
"3I" have different strategic focuses for software outsourcing
Although the "3I" countries have been successful in developing software and information services outsourcing industry, they obtained the success through thoroughly different ways.
First of all, the "3I" countries have different strategic development focuses. India starts with Call Centers and BPO (business process outsourcing), Ireland¡¯s core strength is to provide advices and services for multinational corporations to enter the European market, while Israel has become an international software design and development center.
India is becoming the software supply and development center globally. In a survey conducted by the World Bank on software export capacity of various countries, India ranks first in terms of software export scale, product quality and cost. Among the global top 500 enterprises, more than 250 use software and the corresponding services provided by India to serve their operation offices around the world, and the demand for software developed by India has increased more than double. India's software services have spread to 106 countries worldwide, of which 33 countries rely completely on India's software and services. The United States is India's main market, more than 60 percent share of which is gained by India; and 80 percent of U.S. companies prefer India as the first choice of software provider. At the same time, India is also deemed as the largest source of international software talents by German.
Ireland places their eye on the demands from the international market to boost their software industry. They fix their business on software localization of the software products from American providers according to different language needs of more than 20 languages in Europe and have become the gateway and distributing center for the U.S. companies to enter the European market. Ireland concentrates on providing systematic services of software products facing the international market, developing middleware products, undertaking mainly outsourcing processing orders of software engineering and project, as well as exporting non-brand software products. In fact, Ireland has adopted a development strategy of "limited objectives, key breakthroughs" for the software industry, as well as intending to make breakthrough of software industry development by software localization and software exports.
Israel has become an important international software design and development centers. Israel's software industry development mainly relies on exporting to European and American markets, which has taken the opportunity of providing data processing system and application to continuously produce new technologies and products. Some of their software products are in line with the hardware technological progress, while some others are to fill gaps in the market. These new technologies and products are involved in almost all aspects of human life, including industrial and commercial, government, education, banking, financial services and entertainment. Israel has become one of the leading countries in software development for domains such as communications, Internet, e-commerce, data protection, e-education.
The "3I" countries have respective advantage in software outsourcing
Secondly, the "3I" countries rely on different advantages to boost their own software and information services outsourcing industry.
There are mainly two reasons for India¡¯s success in leading the global software and information services outsourcing industry, firstly, the cost advantage, the second is the advantageous number of software talents. In the above indicators, software quality, cost advantages and the number of software engineers determines whether the economy of scale can be achieved and proficiency in English are the first and foremost factors, which are then followed by the government support, infrastructure, education system, cultural compatibility and other factors.
Ireland¡¯s software industry development mainly benefits from the rapid transformation of research results, as well as the tight tie and integration of universities and research and development institutions with enterprises. Irish national technology park set up in 1984 is a link for enterprises to establish intimate relationships with educational and scientific research institutes as well as for business to business contact by providing medium and incubation services to the establishment and development of high-tech enterprises. Meanwhile, the cooperation between schools and enterprises is successful: on one hand, the researchers open their own companies and on the other hand the enterprises establish business relationship with schools by investing on research institutions and then enjoying the outcomes.
The extraordinary success attained by Israeli software industry should be attributed to its highly qualified human resources. There are about 30,000 software experts nationwide, of which 13,000 are working at the 400 software development companies. These software experts are equipped with strong business capability, mostly graduating from domestic and overseas first-class universities, and they also have extensive work experience and technical expertise. Moreover, the Israeli government attaches great importance to transferring military technology to civilian use, so the rapid development of Israeli software industry is the results of applying military technology to economic field.
In a word, the success of the "3I" countries is gained based on their respective conditions. They make a point of taking their unique advantages and together with the government's policy and the active participation of intermediary service organizations. In turn they have attracted international financial investment, vigorously fostered and imported software talents and have promoted a number of successful large enterprises.
