It now appears that the situation does not optimistic.
In April 2004, the country's new round of macro-control so that part of the ERP vendor's performance has been not a small impact, but in the absence of macro-trend of enterprises affected by the day does not better. Because the ERP industry is "chronically" suicidal, suicidal way is to price wars.
According to media reports, a national project of about 500 million U.S. dollars, domestic and foreign software companies struggled, finally even the hardware on the deal, including hundreds of millions of dollars; a State-level ministries and projects, World Bank loan budget is 60 million U.S. dollars, but the domestic and foreign software companies to tender, quotes are 30 million U.S. dollars following the final turnover of less than 20 million U.S. dollars; the original 2 million Rupees a local e-government projects, 50 million on resolved.
In the management software market, the price war has become a "staged suicide every day." Software's Sales for each scene shook their heads out of the tender sigh, but the next one beginning of the project tender, they will involuntarily, rushed away.
Manufacturers are now still in dire straits the competition stage, we are well-informed sources, as long as there is a list, in the first round of bidding in the customer, more than 10 well-known ERP vendors will rush into mass action to participate in the competition, and some software vendors that do not have customers the required functions, often pack of lies, and flaunt their own full-featured product.
In August 2004, domestic software companies in mid-year report released in stages. Mid-2004, the majority of company's main business revenue growth above 20%. But overall profit growth lagged far behind the revenue growth. Most listed companies have shown a downward trend in gross margins, and even some of the company's gross margin declined 10 percentage points. Market analysts attributed the main reason for the fierce competition in the software industry, the most obvious manifestation is the price war. The price war is bound to compression software enterprises R & D investment, which makes a new round of price wars as the original relatively poor technological innovation capability of domestic software enterprises the only option.
Multi-price competition is the application software, infrastructure software is relatively small. Same ERP software, the same application software, A business enterprise and B, where the presentation to the user scenarios are similar, the last can only rely on prices to attract customers.
"In the user view, the price of the software is very flexible. Now there is no standard price of the software and reference system to measure, but also the price war is not the reason the bottom line."
"This phenomenon could affect the development of India's information technology level and destroy the future of India's software industry so that the whole industry chain caught in a vicious cycle." A well-known domestic enterprise CEOs says.
SAP launched the product in a number of different versions and price advantage of their channels (because of SAP in the country are the agents do, and agents from SAP, where to get a lower discount), less than four to five million of the list prior to its fundamental the dismissive, but now its not even list one or two million are desperately Tanul, domestic manufacturers have been so SAP is not a small blow. "Boss (SAP) to bargain, as well as who could shore, while the cost of domestic manufacturers have been relatively low, their bargain is to pull more people into the water. A list to fight to the last, if not unique strengths, we can only depend on prices. In the final stages of decision-making, can also make inexpensive 500,000 customers 'shake' a half-day. "
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