The Growth Mode Of The Small And Medium-sized Software Companies And Influencing Factors

Software industry is an important industry for the development of Chinese economy. In recent years, the Chinese software companies have increased quickly in term of numbers, but most of them are small and non-competitive. Knowing the nature of software companies' growth will help us promote the development of Chinese software industry and the whole economy. This paper is aimed at improving our understanding of software companies' growth, summarizing the major growth mode of Chinese software companies, and analysing the key factors in different growth mode.This empirical study is based on on-site interviews and case studies. Researchers had interviewed 18 software companies in Henan,Beijing,and Shanghai. The results show that there are five major growth mode: fundamental software provider, application provider,system integrator, professional coder, and general software provider.There are three groups of factors in the growth of software companies: external environment, strategy, and internal resources and competencies. Due to the difference on technology and market nature, the key factors of companies in different growth paths are not the same. In specific, we analysed the key elements of internal resources and competencies: marketing and sales skills, cooperative skills, human resources management skills, technology management skills, and researched the evolvement process of competencies.Based on above analysis, we suggest that software companies need to understand the different competencies needed in various growth paths, and allocate resources into the development of the core competencies. In the course of growth, companies need to develop and update capabilities continuously in order to adapt to the changing business natures in stages. Inaddition, the government should create customized policies for companies in different growth paths to promote the development of the key capabilities.