The latest report from MIIT shows Huawei at the top of the list of 100 largest software companies in China. On reflection, that’s not surprising. Half of Huawei’s business is now phones, where chief rival Apple has long considered itself a software company.

The great achievement of Huawei’s phone division was to pull ahead of everyone in the quality of picture-taking. The hardware can be matched; Huawei’s advantage comes from software.

The Hong Meng/Harmony operating system is more than just an Android replacement. It’s already being used on TVs and IoT devices. Huawei’s Cloud division is among the fastest growing, requiring a massive investment in software.

The key performance improvements in telco networks are likely to come from software, not hardware. Massive MIMO and more spectrum are currently the key drivers, but the performance of today’s wireless systems is again approaching Moore’s Law limits.

Reconfiguring beams and coordinating cell sites has enormous potential, which Huawei has demonstrated at trade shows. The location of mobile users shifts very rapidly as people head home from schools and offices at the end of the day. In urban areas, a telco can adjust the overlapping cells to match the traffic demand.

Ultimately, the likely goal is a “no cell” network, constantly reconfigured for maximum efficiency. Huawei is spending heavily on the necessary software.

China Software Business Revenue Top 100 Enterprises Development Report 2019

Release time: 2020-01-19   Source: Operation Monitoring Coordination Bureau 

First, the basic situation of this hundred software

Facing the complex and ever-changing domestic and international environment and increasing economic downward pressure, hundreds of software companies actively respond to risk challenges, persist in promoting transformation and upgrading, and continue to expand integration applications, while maintaining a steady growth overall, the R & D innovation momentum continues to explode. Proactively strengthen industry chain collaboration, integrate upstream and downstream and cross-domain resources, continue to improve profitability and enhance core competitiveness, and the momentum of high-quality development is more obvious.

The company has progressed from a volume increase to a high quality stage, showing the characteristics of “high gross profit and high R & D”. This year’s 100 software companies completed a total of 821.2 billion yuan in software business revenue in 2018, an increase of 6.5% over the previous period, and more than 30% of the enterprises with revenue growth of more than 20%; a total of 193.6 billion yuan in total profits, an increase of 14.6% over the previous period. The average main profit rate is 11.3%, maintaining a leading level in the industry; a total of 174.6 billion yuan was invested in research and development, an increase of 12.6% over the previous session, and the average research and development intensity was 10.1%, which was 2.2 percentage points higher than the industry average. Compared with 5 years ago, the main software business profit margin of this hundred software companies increased by 2.6 percentage points, and the research and development intensity increased by 3.1 percentage points.

The stability and activity of the company coexist, and the supporting forces in emerging areas have significantly increased. The top 100 software companies this year is Huawei Technologies Co., Ltd., which has been ranked as the top 100 software companies for eighteen consecutive years. Compared with the previous session, Alibaba Cloud Computing Co., Ltd., Beijing Xiaomi Mobile Software Co., Ltd., Beijing Jingdong Shangke Information Technology Co., Ltd. three companies entered the top ten for the first time, and their businesses are mainly in the field of cloud computing and mobile Internet. The top ten companies also include: Haier Group Corporation, Inspur Group Co., Ltd., and Hisense Group Co., Ltd. , Hangzhou Hikvision Digital Technology Co., Ltd., China UnionPay Co., Ltd., and Nanrui Group Co., Ltd. 6 companies have been on the list for 5 years. Compared with the previous session, the current 100 software companies’ turnover rate increased by 7%. 14 companies withdrew from the current software 100 list due to declines in revenue, business transformation, losses, or mergers and acquisitions; 10 companies involved in information security In the first time, companies in the fields of logistics, logistics intelligence, and cloud services entered the list, and four other companies re-entered the list.

The agglomeration effect and demonstration effect are outstanding. With the support of national policies and the promotion of governments at all levels, the demonstration leading effect of 100 software companies has continued to appear, and the regional layout has the characteristics of widespread distribution but obvious clustering. This year’s 100 software companies are distributed in 17 provinces and cities nationwide, 89 of them are concentrated in eastern provinces and cities. The specific regions are: 32 in Beijing, 18 in Guangdong, 10 in Shanghai, 9 in Zhejiang, and 9 in Jiangsu. There are 5 in Shandong, 4 in Fujian, 3 in Sichuan, Tianjin, Liaoning, Jilin, Hubei, Hunan, Anhui, Jiangxi, Chongqing, Yunnan and other provinces and cities ranging from 1-2. Compared with 5 years ago, the number of enterprises in Beijing continued to lead the country, and the number of enterprises in Guangdong, Shanghai, Jiangsu, Tianjin, and Sichuan all increased.

Second, the characteristics of this hundred software companies

Hundreds of software companies, as the industry’s leading companies, are the “vane” of the industry’s development trend. The current enterprise has the following development characteristics:

(I) Business income increased steadily, and the performance of two types of enterprises was outstanding

The software business revenue of the hundred software companies in this session maintained a growth trend. In 2018, the total software business revenue was 821.2 billion yuan, an increase of 6.5% over the previous session and accounting for 13.3% of the industry’s revenue. Among them, there were 14 companies with software business revenues of over 10 billion yuan, an increase from the previous session; 59 companies with software business revenues of over 3 billion yuan, an increase of 2 from the previous session.

Among the 100 software companies this year, some companies showed strong growth, with 34 companies with revenue growth of more than 20% year-on-year; 9 companies with a growth rate of more than 50% reached 9; two consecutive years in the list of companies, rankings improved by more than 10 The number of enterprises reached 16 and 1 more than the previous session. From the perspective of fast-growing companies, two types of companies have made eye-catching performances. First, companies with earlier deployments in the fields of cloud computing, big data and artificial intelligence focus on technological innovation, have accumulated certain core technologies and leading advantages, and continue to maintain a strong development momentum. Secondly, with the full launch of China’s smart finance, smart transportation and smart security markets, some enterprises seized development opportunities, were application-oriented, and enabled emerging technologies to upgrade and upgrade traditional industries, achieving rapid growth in revenue.

(2) The company’s efficiency and efficiency have continued to improve, and it has accumulated strength for healthy development

This year’s 100 software companies actively adjusted their strategies, prioritized efficiency and efficiency, strengthened cost control, and achieved a total profit of 19.63 billion yuan, an increase of 14.6% over the previous session, an increase of 8.1 percentage points higher than the total revenue of the industry, 21.9%. The average main profit rate of the 100 software companies in this session was 11.3%, and the average total asset profit rate was 8.8%, which were 0.6 and 0.3 percentage points higher than the previous session. Among them, 22 companies had a main profit rate of over 20%, which was higher than the previous session. 6 more.

In terms of operating efficiency, the per capita software business income of this hundred software companies was 866,000 yuan, an increase of 83,000 yuan over the previous session; the per capita profit was 207,000 yuan, an increase of 33,000 yuan over the previous session. At the same time, half of the 100 software companies listed this time have increased by 2 compared with the previous one. The comprehensive strength and financing capacity of the company have been continuously improved, laying a good foundation for future growth.

(3) The company’s R & D investment continued to increase, and innovation results continued to emerge

This year’s software companies invested a total of 174.6 billion yuan in research and development, an increase of 12.6% over the previous session, accounting for 27.9% of the industry’s R & D investment, far exceeding the proportion of revenue and profits in the industry, and the backbone of the software industry’s R & D investment. The average R & D intensity of enterprises is 10.1% (the ratio of R & D expenditure to the main business income), which is 0.4 percentage points higher than the previous session and 2.2 percentage points higher than the industry average. There are 20 companies with R & D intensity exceeding 15%, an increase from the previous session. 5; the number of people involved in software research and development reached 375,000, accounting for 39.5% of the total number of employees in 100 software companies.

This year’s software companies registered more than 30,000 software copyrights and more than 130,000 authorized patents. Among them, invention patents accounted for 40% of all patents, and the amount of innovation results increased. According to the State Intellectual Property Office According to the published rankings of patents granted by domestic companies in 2018, Huawei and Guangdong Opper ranked first and third respectively. After continuous R & D accumulation, hundreds of software companies continue to usher in new gains. For example, Huawei officially released its independent intellectual property operating system Hongmeng OS in 2019, which can provide multiple smart terminal devices to lay the foundation for building a new type of future-oriented ecosystem; At the same time, new breakthroughs and progress have been made in the fields of databases, industrial software, and domestic office software.

(IV) Continuous adjustment and optimization of the industrial structure and continuous improvement of supply quality

This year’s software companies accounted for 28.6%, 50%, 3.6%, and 17.8% of the revenue in the four areas of software products, information technology services, information security, and embedded system software. Compared with the previous session, information technology The percentage of revenue in the service sector continued to increase by 5 percentage points, and the service-oriented transformation of 100 software companies continued to advance; compared with the revenue structure of the entire industry, the information security revenue of the 100 software companies accounted for 1.7 percentage points higher, which is to build China’s information security. As an important backbone force, the percentage of embedded system software revenue is 8.4 percentage points higher, and the support of 100 software companies for intelligent manufacturing has further increased.

Hundreds of software companies are actively exploring various scenarios in the new economy and intelligent manufacturing fields, deeply cultivating finance, transportation, logistics, medical treatment, tourism, government affairs, e-commerce and other industries, and the industrial chain has been continuously extended; with the role of enabler, Carry out in-depth cooperation with customers in other industries, and the number of partners continues to increase, and a benign industrial ecosystem is gradually formed. With artificial intelligence, big data, and cloud computing technologies as the core driver, the industry will precipitate industry data during the cooperation, open up data silos, and actively try various value-added services. And innovative business, and then subvert the tradition, accelerate innovation, and realize digital transformation; companies such as Haier, Ali, Inspur, and UFIDA have joined the construction of industrial Internet platforms, which has continuously improved the industrial Internet ecology in China and driven the development of manufacturing to high quality.

(5) Actively participate in international competition and continuously improve its international operation capabilities

Facing the complicated international trade environment, this year’s 100 software companies insisted on promoting international operations and actively consolidating and expanding the international market. This year’s 100 software companies realized software exports of 20.1 billion U.S. dollars, accounting for 16% of the business revenue of 100 software companies, and accounting for 39.3% of the industry’s software exports. Cooperation in terms of talents, the export market continues to expand to emerging markets, software exports to Southeast Asia and other countries continue to expand, an increase of 172% over the previous session, software exports to Africa have maintained rapid growth, and software exports to South America have started. The development of traditional major export and outsourcing service markets has been differentiated. Exports to European countries have steadily increased, while exports to the United States and Japan have fallen sharply. This year’s 100 companies insisted on transnational business activities and promoted localized operations overseas. 31 companies established branches, branches or R & D centers overseas.

(6) Helping the transformation of the real economy and promoting economic and social development

Driven by new technologies such as cloud computing, big data, and artificial intelligence, the core position of software in promoting the digital, network, and intelligent transformation of the real economy has become more prominent, and its supporting role in economic and social development has become more significant. As one of the leading companies in the software industry, the software companies have played a long-term role in their respective fields, and their economic and social values ​​have become increasingly prominent. The first is to contribute to stable growth and employment. Under the increasing downward pressure on the economy as a whole, this hundred software companies accounted for 0.3% of the industry’s total number of enterprises and generated 13.3% of the industry’s total revenue. % Of the tax provides 15% of employment opportunities in the industry, of which the total paid taxes are more than 100 billion yuan, which has doubled from 5 years ago; the number of employed people is 949,000, which is 159,000 more than 5 years ago. The second is that the development results benefit the public and play an important role in social development and improvement of people’s livelihood. For example, hundreds of software companies have continuously upgraded the construction of smart cities and are committed to providing “urban brains” and solving urban transportation problems in new ways; promoting smart medical care The landing of various applications has brought new possibilities to the medical industry and has effectively promoted the equalization and facilitation of medical resources. The third is to promote the transformation and upgrading of the real economy. The hundred software companies have deepened their integration and application. They have gradually expanded from fields such as telecommunications and finance to industries and logistics, relying on the platform and adopting technologies such as big data and artificial intelligence. Means to reshape the structure and ecosystem of the real economy format, and it has a significant effect on the transformation and upgrading of upstream and downstream industries. In the field of industrial Internet, by promoting the access of industrial enterprises to the industrial Internet platform, the application of industrial apps can be enriched, which can effectively stimulate the vitality of enterprises and promote The cultivation of new industrial production models and new ecology.

Leading the high-quality development of the software industry

At present, with the acceleration of China ’s 5G comprehensive commercialization process, the era of the Internet of Everything is getting closer and closer to us. Software, as the technological foundation of “human, machine, and object” integration and interconnection, its “software-defined” value is being extended to various fields. Software companies The application scenarios faced will be expanded to a greater extent, and in the emerging fields such as Industrial Internet, artificial intelligence, and intelligent connected cars are about to usher in an unprecedented period of development opportunities.

However, we must soberly realize that compared with large international companies, the problem of “small or not strong” among the hundred software companies in China has not fundamentally changed. This year’s 100 companies have some noteworthy problems: First, revenue growth has slowed down, and traditional business revenue has dropped significantly. System integration business is an important source of revenue for many software companies, but due to increased customer demand levels and increased delivery difficulties The impact of factors such as the increase in capital occupation and the increase in labor costs, the profit of this part of the business has dropped significantly, and some companies have begun to shrink the integration business. 3. The ability to incubate emerging businesses is weak, and new kinetic energy is still insufficient to guide and support the development of enterprises. The third is the lack of collaborative innovation in the industrial chain, the lack of cooperation models for joint research and development, and the high innovation cost of individual companies. The fourth is high-end talents. Insufficient reserves, insufficient talents and inadequate talent capacity have become “bottlenecks” restricting the high-quality development of enterprises. Fifth, difficulties in the development of international markets and risks coexist. The environment at home and abroad is changing rapidly, making it more difficult for enterprises to go global.

Under the new situation, China’s software companies need to develop their confidence, continue to innovate and upgrade, and accelerate the path of high-quality development. As one of the industry’s leading companies, the software companies are developing in the next step: First, they must continue to practice “internal skills”, improve efficiency, and let innovation become the driving force for the continuous growth of enterprises. Achieve quality enterprises. The second is to actively participate in international competition, benchmark international advanced enterprises, exercise the team’s leading consciousness and competitiveness in competition, maintain synchronization with international advanced concepts and technologies, and gradually cultivate and form its own competitive advantages. The third is to actively participate in the formulation of international standards and strive for greater international discourse. The fourth is to seize the new development opportunities of 5G and artificial intelligence, truly get rid of following and imitating, and actively explore first in the frontier areas and move towards the mid-to-high end of the value chain. We will further optimize the business environment, strengthen the protection of intellectual property rights, accelerate research and improvement of policies and measures to promote the development of the software industry to a higher level, help enterprises grow and develop, promote the sustainable development of the software industry, and make more progress for the construction of a manufacturing power and a network power. Great contribution.