Strategic Research on the Investment, Financing, Merger, and Acquisition of China's Software Industry (2011) Issued ——CCID Consulting's Comprehensive Analysis on Current Situation of the Investment, Financing, Merger and Acquition ofChina's Software Industry and its Capital Operation Opportunities
Published: 2011-12-05 10:44 Source: CCID Consulting
On January 28, 2011, General Office of the State Council promulgated the Notice of the State Council on Issuing Several Policies on Further Encouraging the Development of Software and Integrated Circuit, which made further supplement and improvement for the investment and financing policy of software and IC industry development, clearly encouraged and supported software enterprises to strengthen the integration of industrial resources, actively supported and guided software enterprises to carry out their reconstruction, merger and acquisition (M&A) across regions so as to achieve resource integration and business prosperity. Meanwhile, our country will expand equity financing, debt financing and other direct financing channels for the software industry, set up a risk compensation mechanism for lending, promote the software enterprises to increase investments in its expansion and technological innovation, accelerate the rapid combination of software enterprises with capital market, realizing a win-win result for China's software industry and the capital market by way of investment and financing.
China's software industry keeps a momentum of rapid development, being impelled by industry clusters in four regions simultaneously
In 2011, China's software industry kept a momentum of rapid development, with a monthly growth rate of 30%, and by the end of August, 2011, the revenue of the software industry had exceeded RMB 1 trillion. The rapid growth trend of the software industry has been particularly prominent in recent years. In 2010, the business revenue of China's software industry reached RMB 1.3364 trillion, up 31% YOY, with its revenue scale first over RMB 1 trillion. Compared with RMB 75.1 billion in 2001, the growth rate was 17.8 times higher, with an annual growth rate of 37.7%.
From the national spatial distribution, four big industry clusters of China's software industry has begun to take shape, namely, Bohai Rim Area with Beijing as its representative city, the Yangtze River Delta Area with Nanjing as its representative city, the Pearl River Delta Areas with Guangzhou as its representative city, and the Western Triangle Area with Chengdu as its representative city.
Figure 1 Regional Business Revenue of China's Software Industry in 2010
China's software industry keeps a momentum of rapid development, being impelled by industry clusters in four regions simultaneously
In 2011, China's software industry kept a momentum of rapid development, with a monthly growth rate of 30%, and by the end of August, 2011, the revenue of the software industry had exceeded RMB 1 trillion. The rapid growth trend of the software industry has been particularly prominent in recent years. In 2010, the business revenue of China's software industry reached RMB 1.3364 trillion, up 31% YOY, with its revenue scale first over RMB 1 trillion. Compared with RMB 75.1 billion in 2001, the growth rate was 17.8 times higher, with an annual growth rate of 37.7%.
From the national spatial distribution, four big industry clusters of China's software industry has begun to take shape, namely, Bohai Rim Area with Beijing as its representative city, the Yangtze River Delta Area with Nanjing as its representative city, the Pearl River Delta Areas with Guangzhou as its representative city, and the Western Triangle Area with Chengdu as its representative city.
Figure 1 Regional Business Revenue of China's Software Industry in 2010
Sources: National Bureau of Statistics and Ministry of Industry and Information Technology, collated by CCID Consulting, October 2011
The four industry clusters radiate towards four directions, with the key city in each region being the cluster center of the industry development. In 2010, the business revenue gained in the eastern region was RMB 1.1449 trillion, up 31.8% YOY, and many coastal provinces and cities kept a momentum of rapid development besides Beijing and Guangdong. The growth rate of business revenue of the software industry in four provinces, namely Jiangsu, Liaoning, Fujian and Shandong, exceeded 35%, with their business revenue accounting for 35% of the total, gradually breaking the past situation that half of the software industries were concentrated in Beijing and Guangdong. The key cities become the main clusters for the development of the software industry. In 2010, the business revenue of the software industry in four municipalities and 15 sub-provincial cities reached RMB 1.0643 trillion, up 32% YOY, accounting for 80% of the total, and the growth rate was 1% higher than the average level nationwide. In the first quarter of 2011, the business revenue of the software industry in15 sub-provincial cities reached RMB 174.7 billion, up 33.3% YOY; with its growth rate 6.3 percentage points higher than the national average level, 2.3 percentage points higher than the previous year. In particular, the growth rate in Qingdao, Nanjing, Shenyang, Xi'an and Jinan was all above 35%.
In 2010, the export volume of China's software industry increased by 27% YOY, but the growth rate slowed down to some extent. In the first half of 2011, the software industry realized an export volume of USD 13.36 billion, of which, USD 2.28 billion was the export volume of outsourcing service, 7.6% higher than the growth rate in the same period of 2010. China's software outsourcing industry has its traditional strengths. With the mild development of the world economy, China's software outsourcing industry will lead the rapid development of software exports.
The startup of GEM board, new three-board expansion and favorable policies bring golden opportunities for the capital operation of the software enterprises.
Software enterprises have performed a series of great shows in the capital market from the reopen of IPO in June 2009 to the official launch of the Growth Enterprise Market (GEM) board in October 2010. The roll-out of GEM board has broadened the financing channels, which helped software enterprises gain more development funds, attracted the strategic investors who were helpful for the long-term development of enterprises, and enabled rapid business expansion and industrial upgrade. New three-board, as a favorable supplement to the main board market in the capital market, has brought a major opportunity for the enterprises in the park. At present, there is only one pilot park — Zhongguancun Science Park — in the new three-board market in China. A good momentum of development for enterprises indicates that the simultaneous development of business and capital in enterprises will boost the development of enterprises at a high speed. Consequently, in order to become the pilots of new three-board expansion, many parks began to greatly develop the software industry parks and provided a series of policy supports for the enterprise in the parks, which will create favorable development environment and platform for software enterprises.
The equity financing of the software industry is regionally concentrated, and investors are keen on application areas.
From 2010 to October 2011, there were altogether 74 equity financing cases disclosed by the Chinese software enterprises, 45 cases of which had the amount disclosed, reaching RMB 6.554 billion in total and RMB 146 million each on the average. Among them, Tencent bought into DST with USD 300 million, accounting for 46.62% of the total financing amount disclosed in 2010.
Table 1 Equity Financing Cases of Software Enterprises from 2010 to October 2011
Unit: RMB 100 million
In 2010, the export volume of China's software industry increased by 27% YOY, but the growth rate slowed down to some extent. In the first half of 2011, the software industry realized an export volume of USD 13.36 billion, of which, USD 2.28 billion was the export volume of outsourcing service, 7.6% higher than the growth rate in the same period of 2010. China's software outsourcing industry has its traditional strengths. With the mild development of the world economy, China's software outsourcing industry will lead the rapid development of software exports.
The startup of GEM board, new three-board expansion and favorable policies bring golden opportunities for the capital operation of the software enterprises.
Software enterprises have performed a series of great shows in the capital market from the reopen of IPO in June 2009 to the official launch of the Growth Enterprise Market (GEM) board in October 2010. The roll-out of GEM board has broadened the financing channels, which helped software enterprises gain more development funds, attracted the strategic investors who were helpful for the long-term development of enterprises, and enabled rapid business expansion and industrial upgrade. New three-board, as a favorable supplement to the main board market in the capital market, has brought a major opportunity for the enterprises in the park. At present, there is only one pilot park — Zhongguancun Science Park — in the new three-board market in China. A good momentum of development for enterprises indicates that the simultaneous development of business and capital in enterprises will boost the development of enterprises at a high speed. Consequently, in order to become the pilots of new three-board expansion, many parks began to greatly develop the software industry parks and provided a series of policy supports for the enterprise in the parks, which will create favorable development environment and platform for software enterprises.
The equity financing of the software industry is regionally concentrated, and investors are keen on application areas.
From 2010 to October 2011, there were altogether 74 equity financing cases disclosed by the Chinese software enterprises, 45 cases of which had the amount disclosed, reaching RMB 6.554 billion in total and RMB 146 million each on the average. Among them, Tencent bought into DST with USD 300 million, accounting for 46.62% of the total financing amount disclosed in 2010.
Table 1 Equity Financing Cases of Software Enterprises from 2010 to October 2011
Unit: RMB 100 million
Source: Collated by CCID Consulting, October 2011
VC and PE are the main equity financing channels for software enterprises. Some 48 cases of equity financing of software enterprises through VC or PE were disclosed from 2010 to October 2011. The cases were found regionally concentrated, mainly in Beijing, Guangdong and Shanghai. Among them, 27 financing cases were in Beijing, accounting for 56.25% of the total. A total of 9 equity financing cases were financed by Angel investment. Among the 9 cases, only one case disclosed the amount of equity financing. One of the financing ways adopted by strategic investors is to leverage its management, fund and technologies. Among 17 strategic investment cases that were disclosed, the financing amount in 12 cases was disclosed, reaching RMB 3.693 billion.
Affected by the concentrated distribution of software industry, the investment and financing of the software industry also shows a trend of geographical concentration. Among them, Beijing, Shanghai and Guangdong become the concentrated areas for equity financing. According to statistics, from 2010 to November 2011, there were 27 VC/PE financing cases of the software industry in Beijing disclosed, accounting for 56.25% of the total VC/PE financing cases; and there were 11 strategic financing cases in Beijing disclosed, accounting for 64.71% of the total strategic financing cases. Following Beijing, Shanghai and Guangdong also become cluster areas of equity financing of the software industry.
In view of the scale of equity financing, its distribution also shows a trend of geographical concentration. The scale of the equity financing of the software industry in Beijing, Shanghai and Guangdong ranks top 3 over other cities. The geographical concentration is mainly affected by regional advantages. The prosperous development of the software industry in Beijing, Shanghai and Guangdong makes the three basically become the cluster areas of the software industry. These areas are not only geographically advantageous, but also rich in talent resources. Their regional facilities and policy environment create a sound development platform for software enterprises.
The business types of equity financing enterprises in the software industry are mainly industrial applications, management software, security and storage, Internet applications and services, outsourcing services, infrastructure software and game software business. Among them, the investment and financing in the application software industry are highly concerned. According to the VC\PE equity financing cases collected from 2010 to October 2011, the number of the enterprises dedicated to industrial application is 13, the most among all the other cases, accounting for 27.08% of the total. Next to the industrial application are enterprises dedicated to management software and Internet applications and services, respectively accounting for 18.75%. In the 17 strategic financing cases disclosed, the number of enterprises of industrial application is 6, the most among all the other cases, accounting for 35.29% of the total. Next to it are enterprises of management software, accounting for 23.53%.
VC and PE are the main equity financing channels for software enterprises. Some 48 cases of equity financing of software enterprises through VC or PE were disclosed from 2010 to October 2011. The cases were found regionally concentrated, mainly in Beijing, Guangdong and Shanghai. Among them, 27 financing cases were in Beijing, accounting for 56.25% of the total. A total of 9 equity financing cases were financed by Angel investment. Among the 9 cases, only one case disclosed the amount of equity financing. One of the financing ways adopted by strategic investors is to leverage its management, fund and technologies. Among 17 strategic investment cases that were disclosed, the financing amount in 12 cases was disclosed, reaching RMB 3.693 billion.
Affected by the concentrated distribution of software industry, the investment and financing of the software industry also shows a trend of geographical concentration. Among them, Beijing, Shanghai and Guangdong become the concentrated areas for equity financing. According to statistics, from 2010 to November 2011, there were 27 VC/PE financing cases of the software industry in Beijing disclosed, accounting for 56.25% of the total VC/PE financing cases; and there were 11 strategic financing cases in Beijing disclosed, accounting for 64.71% of the total strategic financing cases. Following Beijing, Shanghai and Guangdong also become cluster areas of equity financing of the software industry.
In view of the scale of equity financing, its distribution also shows a trend of geographical concentration. The scale of the equity financing of the software industry in Beijing, Shanghai and Guangdong ranks top 3 over other cities. The geographical concentration is mainly affected by regional advantages. The prosperous development of the software industry in Beijing, Shanghai and Guangdong makes the three basically become the cluster areas of the software industry. These areas are not only geographically advantageous, but also rich in talent resources. Their regional facilities and policy environment create a sound development platform for software enterprises.
The business types of equity financing enterprises in the software industry are mainly industrial applications, management software, security and storage, Internet applications and services, outsourcing services, infrastructure software and game software business. Among them, the investment and financing in the application software industry are highly concerned. According to the VC\PE equity financing cases collected from 2010 to October 2011, the number of the enterprises dedicated to industrial application is 13, the most among all the other cases, accounting for 27.08% of the total. Next to the industrial application are enterprises dedicated to management software and Internet applications and services, respectively accounting for 18.75%. In the 17 strategic financing cases disclosed, the number of enterprises of industrial application is 6, the most among all the other cases, accounting for 35.29% of the total. Next to it are enterprises of management software, accounting for 23.53%.
Source: Collated by CCID Consulting, October 2011
The software industry features light assets, and most of its main assets are intangible, such as technology, patents and talents. The industrial application software business brings this feature into full play. Investors are shifting their investment in the software industry from hardware equipment to technical services. Meanwhile, a business model combining the software and the industry is becoming prominent in increasingly fierce competition.
As for the scale of financing, from 2010 to October 2011, the equity financing of Internet applications and services is of the largest scale, accounting for 21.74% of the disclosed amount through VC/PE financing, 51.98% of the disclosed amount through strategic financing. It can be concluded although there are more financing cases in the industrial application field, their single financing is relatively on a smaller scale. Whether they invest in the industrial application or Internet applications and services, it shows that investors are keen on investing in software applications. Software enterprises should pay attention to the vertical and horizontal integration of both software and industry, and highlight putting software services as value-added business.
The software industry features light assets, and most of its main assets are intangible, such as technology, patents and talents. The industrial application software business brings this feature into full play. Investors are shifting their investment in the software industry from hardware equipment to technical services. Meanwhile, a business model combining the software and the industry is becoming prominent in increasingly fierce competition.
As for the scale of financing, from 2010 to October 2011, the equity financing of Internet applications and services is of the largest scale, accounting for 21.74% of the disclosed amount through VC/PE financing, 51.98% of the disclosed amount through strategic financing. It can be concluded although there are more financing cases in the industrial application field, their single financing is relatively on a smaller scale. Whether they invest in the industrial application or Internet applications and services, it shows that investors are keen on investing in software applications. Software enterprises should pay attention to the vertical and horizontal integration of both software and industry, and highlight putting software services as value-added business.
Source: Collated by CCID Consulting, October 2011
A positive IPO market is becoming prominent, and technical upgrade and capital operation become the main flow of fund-raising.
From 2010 to October 2011, there were altogether 52 software enterprises for IPO, 43 of which are in the China Mainland, with the financing amount of RMB 29.446 billion disclosed; there are 2 enterprises having its IPO in Hong Kong, with the financing amount of HKD 726 million; there are 7 enterprises having its IPO in the United States, with the financing amount of USD 734 million. China's IPO software enterprises cover more than 10 provinces and cities. The listed enterprises are mainly located in Beijing, Guangdong, Fujian and Shanghai, where there are a total of 44 listed software enterprises, with the financing amount of RMB 31.31 billion, accounting for 90.13% of total financing amount of the listed enterprises. Beijing remains the major area for the IPO of listed software enterprises, and sees a total of 25 IPO cases, with the financing amount of RMB 18.368 billion, accounting for 52.88% the total financing scale.
From 2010 to October 2011, the enterprises entering the capital market altogether disclosed 280 items for the purposes of fund-raising, and 138 of them were used for new projects, accounting for 49.29% of the total projects; 37 of them were used for capital operation (capital increase, M&A), accounting for 13.22% of the total projects.
A positive IPO market is becoming prominent, and technical upgrade and capital operation become the main flow of fund-raising.
From 2010 to October 2011, there were altogether 52 software enterprises for IPO, 43 of which are in the China Mainland, with the financing amount of RMB 29.446 billion disclosed; there are 2 enterprises having its IPO in Hong Kong, with the financing amount of HKD 726 million; there are 7 enterprises having its IPO in the United States, with the financing amount of USD 734 million. China's IPO software enterprises cover more than 10 provinces and cities. The listed enterprises are mainly located in Beijing, Guangdong, Fujian and Shanghai, where there are a total of 44 listed software enterprises, with the financing amount of RMB 31.31 billion, accounting for 90.13% of total financing amount of the listed enterprises. Beijing remains the major area for the IPO of listed software enterprises, and sees a total of 25 IPO cases, with the financing amount of RMB 18.368 billion, accounting for 52.88% the total financing scale.
From 2010 to October 2011, the enterprises entering the capital market altogether disclosed 280 items for the purposes of fund-raising, and 138 of them were used for new projects, accounting for 49.29% of the total projects; 37 of them were used for capital operation (capital increase, M&A), accounting for 13.22% of the total projects.
Source: Collated by CCID Consulting, October 2011
For the investment of the fund raised, new projects rank the top in quantity and scale of the cases disclosed. From 2010 to October 2011, 138 new projects were disclosed; accounting for 49.29% of the total projects; and the amount of the funds raised for new projects was RMB 8.672 billion, accounting for 48.02%of the total amount of the funds.
While choosing the equity investment projects for listing, enterprises will first consider meeting the demand of the existing market, keeping the finished projects at a low risk and ensuring its stable returns.13.33% of the raised funds are used for replenishing the working capital. Using the raised funds to replenish the working capital can help the enterprises to save more interest cost, and is conducive to improve the net profit of the enterprises. M&A is the shortcut for enterprises to gain predominant resources. Software enterprises are technology-intensive and have a relatively high demand for R&D. However, once the enterprises are confined to their limited R&D capability, they would choose to access the cutting edge technology through M&A, which will not only save the cost for construction and R&D, but also produce benefits by accelerating the application of new technologies into the market. Therefore, after choosing new projects and replenishing the working capital, the enterprises tend to use the raised funds to increase capital and make mergers & acquisitions and other forms of capital operation.
The external expansion of management software is emerging, and the vertical and horizontal M&A become an inevitable trend for the software industry.
One of the purposes of M&A for domestic and international software enterprises is to quickly gain their resource advantage, and achieve the business expansion and strategic integration. From 2010 to October 2011, management software enterprises represented by UFIDA and Kingdee completed a number of expanded M&As. In 2010, Kingdee stepped towards the professional software in the entertainment industry and the real estate industry, and UFIDA, also as a management software manufacturer is also marching into the real estate, automobile, government affairs, healthcare, tobacco, audit and other industries. At the beginning of 2010, the strategic planning of UFIDA Group is developed based on industries, and UFIDA divided its businesses into 8 sectors, namely, UFIDA Software, UFIDA Government Affairs, UFIDA Healthcare, UFIDA Tobacco, UFIDA Audit, UFIDA Cellsoft Technology, UFIDA Chanjet and UFIDA Weecoo. UFIDA is accelerating its vertical and in-depth layout for all its sectors, making the effective integration of the management software in various sectors.
The mode of vertical and horizontal mergers and acquisitions adopted by software enterprises is not only for expanding business and gaining more business revenue, and more importantly, it also aims to improve and enhance their core competitiveness through the integration of new business. With the increasing upgrade of software technologies and increasingly personalized demand of users, the demand for a higher level of software services is also increasing. The continuous emergence of new industries will gradually eliminate the existing industry boundaries, and all kinds of software technology, business services and information technology will accelerate their integration, and using the mode of vertical and horizontal M&A to make industry integration will be an inevitable development trend of software enterprises.
With the help of government planning, business innovation and the combination between industry and finance in face of the opportunities, the software industry is expected to rocket.
The issuance of the incentives policy has brought a great opportunity for the development of the software industry, and in this context, the government accelerates its industrial planning for the park with their forward-looking and strategic viewpoint, and provides its support in terms of policy and layout for the enterprises in the park in advance, and achieves a rapid development with the enterprises in face of the opportunities. Meanwhile, the government should further refine established laws and regulations, establish the investment and financing development system in line with the actual situation of the enterprises and build a sound and stable platform for the capital operation of enterprises. The government can make use of external resources to build a brand new investment and financing platform for the software industry by means of capital operation and through the carrier of the software industry. The government should also take the leading enterprises as pilots, build a sound software industry cluster and coordinate the sound development of related supporting industries.
For software enterprises, innovation is essential for their development. And the software industry, as a type of IT-intensive business, should strengthen its input into R&D, and gain access to the advanced software products in a short term. The enhancement of the software technology can be achieved by the enterprises through two channels: one is to focus on the development mode of cooperation between enterprises and universities, and complete technical upgrade through the accumulation of its own technology; the other is to rapidly gain R&D capabilities and achievements of high-tech enterprises by means of M&A and through the mode of capital operation. Currently, the funds have become one of the barriers in the growth of software enterprises, and software enterprises should actively innovate the capital operations through intangible assets as collaterals, collective small and medium-sized enterprise (SME) corporate bonds, financial leasing, new three-boards, government funds and other innovative capital operations, and combine the industry and finance to realize a leapfrog development of software enterprises.
For the investment of the fund raised, new projects rank the top in quantity and scale of the cases disclosed. From 2010 to October 2011, 138 new projects were disclosed; accounting for 49.29% of the total projects; and the amount of the funds raised for new projects was RMB 8.672 billion, accounting for 48.02%of the total amount of the funds.
While choosing the equity investment projects for listing, enterprises will first consider meeting the demand of the existing market, keeping the finished projects at a low risk and ensuring its stable returns.13.33% of the raised funds are used for replenishing the working capital. Using the raised funds to replenish the working capital can help the enterprises to save more interest cost, and is conducive to improve the net profit of the enterprises. M&A is the shortcut for enterprises to gain predominant resources. Software enterprises are technology-intensive and have a relatively high demand for R&D. However, once the enterprises are confined to their limited R&D capability, they would choose to access the cutting edge technology through M&A, which will not only save the cost for construction and R&D, but also produce benefits by accelerating the application of new technologies into the market. Therefore, after choosing new projects and replenishing the working capital, the enterprises tend to use the raised funds to increase capital and make mergers & acquisitions and other forms of capital operation.
The external expansion of management software is emerging, and the vertical and horizontal M&A become an inevitable trend for the software industry.
One of the purposes of M&A for domestic and international software enterprises is to quickly gain their resource advantage, and achieve the business expansion and strategic integration. From 2010 to October 2011, management software enterprises represented by UFIDA and Kingdee completed a number of expanded M&As. In 2010, Kingdee stepped towards the professional software in the entertainment industry and the real estate industry, and UFIDA, also as a management software manufacturer is also marching into the real estate, automobile, government affairs, healthcare, tobacco, audit and other industries. At the beginning of 2010, the strategic planning of UFIDA Group is developed based on industries, and UFIDA divided its businesses into 8 sectors, namely, UFIDA Software, UFIDA Government Affairs, UFIDA Healthcare, UFIDA Tobacco, UFIDA Audit, UFIDA Cellsoft Technology, UFIDA Chanjet and UFIDA Weecoo. UFIDA is accelerating its vertical and in-depth layout for all its sectors, making the effective integration of the management software in various sectors.
The mode of vertical and horizontal mergers and acquisitions adopted by software enterprises is not only for expanding business and gaining more business revenue, and more importantly, it also aims to improve and enhance their core competitiveness through the integration of new business. With the increasing upgrade of software technologies and increasingly personalized demand of users, the demand for a higher level of software services is also increasing. The continuous emergence of new industries will gradually eliminate the existing industry boundaries, and all kinds of software technology, business services and information technology will accelerate their integration, and using the mode of vertical and horizontal M&A to make industry integration will be an inevitable development trend of software enterprises.
With the help of government planning, business innovation and the combination between industry and finance in face of the opportunities, the software industry is expected to rocket.
The issuance of the incentives policy has brought a great opportunity for the development of the software industry, and in this context, the government accelerates its industrial planning for the park with their forward-looking and strategic viewpoint, and provides its support in terms of policy and layout for the enterprises in the park in advance, and achieves a rapid development with the enterprises in face of the opportunities. Meanwhile, the government should further refine established laws and regulations, establish the investment and financing development system in line with the actual situation of the enterprises and build a sound and stable platform for the capital operation of enterprises. The government can make use of external resources to build a brand new investment and financing platform for the software industry by means of capital operation and through the carrier of the software industry. The government should also take the leading enterprises as pilots, build a sound software industry cluster and coordinate the sound development of related supporting industries.
For software enterprises, innovation is essential for their development. And the software industry, as a type of IT-intensive business, should strengthen its input into R&D, and gain access to the advanced software products in a short term. The enhancement of the software technology can be achieved by the enterprises through two channels: one is to focus on the development mode of cooperation between enterprises and universities, and complete technical upgrade through the accumulation of its own technology; the other is to rapidly gain R&D capabilities and achievements of high-tech enterprises by means of M&A and through the mode of capital operation. Currently, the funds have become one of the barriers in the growth of software enterprises, and software enterprises should actively innovate the capital operations through intangible assets as collaterals, collective small and medium-sized enterprise (SME) corporate bonds, financial leasing, new three-boards, government funds and other innovative capital operations, and combine the industry and finance to realize a leapfrog development of software enterprises.