BEIJING, May 8 /Xinhua-PRNewswire/ -- Data in CCID Consulting's
Analysis Report on China's Linux Software Market in 2007Q1 show that
operating sales revenues in China in 2007Q1 reached 1.234 billion Yuan, up
by 9.4% over 2006Q1. CCID Consulting is China's leading research,
consulting and IT outsourcing service provider, and the first Chinese
consulting firm listed in Hong Kong. Linux continued to top the growth of
all operating system products. Its sales revenues reached 31 million Yuan,
up by 30.9% year-on-year, continuing to maintain a fast growth momentum.
Linux accounted for 2.5% of the overall non- embedded operating system
market, up by 0.4% over 2006. However, it was still in a weak position as
compared with Windows, Unix and other competing products.
I. Affected by Vista, Linux growth slowed down.
As China's GDP grew by 11.1% in Q1, the Linux market also maintained a
relatively fast growth momentum. On one hand, this was closely related to
the overall situation of national economic operations. On the other hand,
it also benefited from the continuous pull of strategies towards the rise
of Central China and the revitalization of Northeast China. A steady
increase in IT application demand drove up the growth of the software
Thanks to the radiative effects of such large-scale activities as the
upcoming 2008 Beijing Olympics Games and the World Expo 2010 Shanghai
China, IT applications in some industries are gathering pace. To a certain
extent, this has pushed forward the growth of the overall software market.
In addition, State policy support for the Linux industry is also one of the
driving forces for continuous market growth. However, since Microsoft
introduced its Windows Vista operating system at the end of 2006,
particularly after it signed a series of pre-installation agreement with
leading PC makers, Linux growth slowed down in 2007Q1. The increased demand
was basically concentrated on server-end Linux.
CCID Consulting's analysis of the vertical markets shows that
government departments and big enterprises are still the main Linux users,
accounting for a market share of 67.2%. The "copyright software" policy
jointly implemented by the four major ministries and commissions has also
benefited Linux. Cooperation between vendors in the industry has directly
pushed forward further market growth.
As for industry segments, Linux market growth was mainly concentrated
in the government, financial services and telecom sectors, which accounted
for a market share of 34%, 22.5% and 21.2% respectively. The implementation
of some government procurements, telecom and netbar projects and the
upgrading of banking services systems were the important driving forces for
the growth of Linux applications. In addition, the education sector
achieved a market share of 10.4%, basically level with that of last year.
II. Linux faced more grave external challenges.
In the report, CCID Consulting pointed out that data released by
Microsoft at the end of March showed that 20 million sets of Vista Personal
Edition were sold worldwide in the first month of its introduction to the
market. Of this, the sales volume of Vista Personal Edition in China was
twice the initial sales volume of XP. All kinds of fast upgrading
strategies and the $3 copyright Windows XP provided to government
administrative departments in developing countries were yet another "war"
bugle call from Microsoft to Linux. Meanwhile, Oracle staged offensives to
Red Hat in the Linux services market. The dispute which Novell induced in
the open source software industry further intensified competitive pressures
in the Linux industry, adding too many uncertainty factors to the
originally relatively weak Linux industry.
III. Vendors played their respective skills and competed on various
As for industry standards, to strengthen the competitiveness of the
Linux industry, the Open Source Development Laboratory (OSDL) and the Free
Standard Group (FSG) were merged into the Linux Foundation. It will soon
introduce new test tools and thus strengthen Linux standards. This will
greatly improve Linux's ease-of-use and low cost advantages.
In the market, vendors came up with their tactics in the face of
competition inside and outside the industry. In January, Red Flag Linux
signed a joint operating system development agreement with MiracleLinux and
Haansoft. The new edition of Asianux will be released this July. Novell
released SUSE Linux Enterprise 10 at the BrainShare Conference. TurboLinux
further strengthened its cooperation with Intel in virtualization
technology. This made TurboLinux China's first Linux distributor to support
VT in China. The continuous introduction of new products and new
technologies is the very direct embodiment of vendors to meet external
challenges and serve consumer demands.
Meanwhile, Linux vendors are stepping up their efforts to expand in the
government procurement and SMB markets. In 2007Q1, Novell won the bid for
central and State organs' Project of Centralized Procurement and Supply of
Information Products. Red Flag Linux obtained the qualifications for "100
Piloting Innovative Enterprises". To a great extent, these have promoted
the development of Linux in China. In addition, with the gradual reduction
of government procurements and orders from big enterprises, strengthening
abilities of sales towards small- and medium-sized customers and expanding
marketing channels have also become the new areas of competition for Linux
To sum up, CCID Consulting's research shows that China's Linux market
is still small in size at present. In the face of great competitive
pressures, continuously improving their R&D strength, expanding marketing
channels, forging cooperation both inside and outside the industry and
carrying out M&As will become important strategies for vendors to compete
for the market. Meanwhile, CCID Consulting forecasts that in the remaining
3 quarters of 2007, there will be unprecedented competition in China's
About CCID Consulting
CCID Consulting Co., Ltd. (also known as CCID Consulting), the first
Chinese consulting firm listed in the Growth Enterprise Market of the Stock
Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of
the China Center for Information Industry Development (hereinafter known as
CCID Group). Headquartered in Beijing, CCID Consulting has so far set up
branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300
professional consultants and industry experts. The Company's business scope
has covered over 200 large- and medium-sized cities in China. Apart from
home market development, CCID Consulting is establishing international
cooperation links across the United States, the Asia-Pacific region and
Europe, by setting up agents in the U.S., Japan, South Korea, Australia,
Singapore, Italy and Russia, with the aim of going global.
Based on four major competitive areas of powerful data channels,
industrial resources, intense knowledge and deep understanding of
information technology, CCID Consulting provides customers with consulting,
research and IT outsourcing services covering strategy planning, IT
application, marketing strategy, human resources and information technology
outsourcing. Our customers range from industrial users in IT,
telecommunications, energy, finance, automobile, to government departments
at all levels and diversified industrial parks.
CCID Consulting is committed to becoming the No. 1 brand for strategy
consulting, the No. 1 consultant for enterprise management and the No. 1
expert in market research. For more information, please visit our website
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