Monday, September 27, 2010

Digital China to enhance profitability yet ready to fight a protracted war

Recently, Digital China announced first-quarter results in 2006, Digital China IT services grew more than 20% market share ranks third, behind IBM, Hewlett-Packard. Digital 20 billion in dollar sales revenue, IT services, the "star service" only 6.2 billion, not contributing its due share.

To the nation's largest IT systems integrator as split out from the Lenovo Digital China, in 2002 announced a transformation of IT services. Distribution business in the hope to find a bigger profit, "Blue Ocean."

China's IT services market presents tremendous opportunities, but does not represent a huge market opportunity for profit and revenue. Lenovo started with the times compared to the traditional distribution business, restructuring IT services are Digital China, an "adventure." Digital agency with more than 10 international brands of products distribution business in 2006 grew by over 170%. China IT services market still in its infancy, there are data, IBM, the world's largest IT services companies in China's market share of 4.2%, however.

Some experts think the domestic market and the user needs to understand and grasp that Digital China and other advantages of domestic firms, but provides overall consulting services are still dominated by IBM and other multinational companies. So, faced with competition in IT services, IT services, Digital still need to increase investment.

"IT services are split after the development of business associations, at the input of the current task is bigger and stronger, not profit." President and CEO of Digital China, said Guo Wei, "From market share, enterprise competitiveness and all aspects of customer value perspective, Digital China IT Services to the successful transformation, IT services business of some of their profits into research and development and business development is the main reason for net profit growth is not obvious. "

He said Digital China IT Services will continue as a strategic development goals.

Compared with the distribution, Digital China's IT services business net profit margin high, more than 10% (sales of 620 million Hong Kong dollars, the profit 63 million Hong Kong dollars), with IBM, Hewlett-Packard little difference. This also shows that the "Digital transition to a service line of thought right." An industry source said.

The right idea can not explain the success of Digital China in transition has been. IBM and HP, whether profit or sales are greater than Digital. The future may compete with these two giants of the domestic IT services company, Digital China to adhere to in the end in transition, still face the test of strength and endurance.

CCW Research senior analyst Caokai Bin said: "IT service management level and large-scale test of the viability of domestic enterprises is the key to Digital scale operation should be more emphasis on ability."

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