Financial Associated Press, March 4th (Reporter Guo Songqiao)This year’s National Two Sessions, Liu Shangxi, member of the National Committee of the Chinese People’s Political Consultative Conference and president of the Chinese Academy of Fiscal Sciences, submitted a proposal on vigorously cultivating the SaaS market and helping small and medium-sized enterprises to transform digitally.
Liu Shangxi believes that digitization is the key to enhancing international competitiveness. my country’s digitalization started from the digitalization of consumption, and explored the path for the digitalization of various industries and industries. However, the digitalization of Chinese enterprises is developing slowly, especially the digital transformation of small and medium-sized enterprises lags behind. This is not because the government does not pay attention, but because the market force is weak, that is, the cloud-based “software as a service” (SaaS) market has not been fully developed.
“Compared to the traditional software service model of localized deployment and one-time fee, SaaS provides cloud-based modular services, enabling enterprises to use and pay on demand through the ‘subscription model’, which greatly reduces the threshold for digital transformation of enterprises. In particular, it allows small and medium-sized enterprises to enjoy the technology benefits of ‘check-in’ without having to bear high customization costs and computer room construction costs.”
According to IDC data, China’s SaaS market in 2021 will be 60.6 billion yuan, only 1/18 of that of the United States. Compared with the second place in the world in the scale of my country’s digital economy, it is far away.
Liu Shangxi said that the problem has three aspects.
First, the business environment for the growth of the SaaS market needs to be optimized. The current support policy lacks a systematic concept, and there are more sporadic support, such as chips, operating systems, middleware, etc., and does not pay enough attention to the formation of application ecology. The formation of application ecology is the biggest driving force for digitization, and the rapid development of consumption digitization in my country benefits from this. In the face of digital applications in enterprises and industries, there are still many obstacles to market access. For example, some regulatory authorities only require cloud service providers to file for records, and the guidelines and norms are not cultivated enough, resulting in widespread concerns about the use of SaaS in “cloud migration”.
Second, the supply innovation capability of my country’s SaaS market is low, and the technical foundation is weak. After 50 years of development, the software industry in Europe and the United States has established an ecological division of labor system. Leading companies that provide SaaS services have continuously exported their technologies, standards, and capabilities to the market through the establishment of developer platforms and application markets. The overall industry development, sales, and collaboration costs have been continuously reduced, giving birth to a large number of service segments. SaaS companies, the total market value of specialized SaaS companies in this type of service segment is in the leading position in the world. However, China is still in the early stages of development, with insufficient accumulation of digital technology, high labor costs, low gross profit margins, and lack of resources and motivation to provide products suitable for segmented fields and small and medium-sized enterprises.
The third is that the demand of my country’s SaaS market is insufficient. Small and medium-sized enterprises are more or less aware of digital transformation, but most of them are confused about how to transform. They wait and see, and the path to improve quality and efficiency through digital technology is not clear. In addition, the average survival period of small and medium-sized enterprises in my country is about 3 years, and they are under great pressure to survive. They generally value immediate marketing and income growth. Their business models are relatively traditional, their management is relatively extensive, and their demand for digitalization is not urgent.
In this regard, Liu Shangxi puts forward the following suggestions.
One is to position SaaS services as a new type of industry and improve the business environment. In some cities, it can support the cultivation of a number of “unicorns” in the SaaS market through industrial cluster planning and other methods. For SaaS companies investing in research and development of products and services suitable for small and medium-sized enterprises, targeted support policies can be provided. Learn from the practices of Germany, Spain and other countries to provide special subsidies for small and medium-sized enterprises to purchase and lease digital software and hardware applications.
The second is to guide enterprises to actively go to the cloud and increase the penetration rate of SaaS applications. Establish an industry standard system, promote cloud security and risk detection, assessment, certification, and backup management mechanisms, promote industry cloud or hybrid cloud cloud mechanisms for some specific industries, and reduce the compliance risk of SaaS applications. Sort out and select a group of excellent companies that use SaaS to achieve digital transformation as benchmarks, summarize their successful experience, explore the path of large-scale promotion, improve the overall awareness of the industry, and reduce the overall learning cost of the industry.
The third is to encourage all kinds of leading enterprises to give full play to their advantages in technology and talents to help accelerate the formation of the SaaS market ecology. SaaS requires a platform base to reduce the development cost of new software, requires the standardization of open interfaces to realize the mutual integration of data flow and SaaS applications, and requires secondary developers to provide differentiated services. Encourage digital technology companies, platform companies and other leading companies to open up their accumulated technical capabilities and customer resources, and help the formation of the SaaS market ecology through low-code platforms, developer platforms, and technology open source.