I. Overview on Software Market in 2000

The year 2000 saw the most rapid continuous growth of the software industry in many years. The development of the software market created a sound foundation for the creation, management, and transformation of channels.

II. Overview of Software Channels in 2000

1. Types of Channel Systems

2. Price System of Channel

3. Development Characteristics of Software Suppliers’ Channel

a. Horizontal Channels

b. Internet based Channels

4. Anti-pirate Channels

5. Linking Channels

Chapter Highlights

In this chapter, the main types of software channels are introduced and their price systems are analyzed.  Moreover, it includes the analysis of the development characteristics of software suppliers’ channels, specifically the horizontal channels and Internet based channels.  Lastly, information and analysis concerning anti pirate channels and linkage of channels is presented.

According to the analysis, the development of horizontal channel is uncertain, and many suppliers are beginning to transform their channels in order to meet the requirements of the Internet. According to supplier’s feedback, Software channels will be more dependent on the Internet in three aspects: website construction, on-line procurement and on-line sales. In 2000, supplies and dealers launched various anti-pirate activities in order to fight the spread of illegally pirated software.

The specific characteristics of software make its price system not as clear as that of hardware channels. In 2000, a significant price drop in software market posed a challenge to both software developers as well as dealers of channels.

Software channel systems can be classified into traditional types and Internet based types. The year 2000 witnessed the merging and acquisition of several large channel corporations, which will prove to be a vital way for software suppliers and dealers to survive.

III. Case Study of Channel of Financial Management Software in 2000

1. Comparison of Channel Size and Management

2. Comparison of Channel Policy

3. Comparison of Services

a. Comparison between service and product description

b. Comparison of Charges of Product

c. Comparison of Pre-sale Consultation

d. Comparison of Pre-sale Training

e. Comparison of Implementation of Sale

f. Comparison of After-sale Maintenance

h. Comparison of After-sale Training

4. Development of Horizontal Channel and Internet-based Channel

Chapter Highlights

Using this case study, the development of financial management software channels is analyzed from the perspective of size, management, as well as related policy and services.

Financial management software companies have adopted various methods to build and enhance agent loyalty. This chapter also introduces Service Charge Standards. Service charges can be paid entirely at the time of purchase, each year when free services have expired, or whenever services are needed. Other types of service were also presented, namely, suppliers providing detailed information concerning pre-sale training (i.e. the organization responsible for training, time, venue and trainees).

IV. Case Study on Channels of Mid-ware and Security Software in 2000

1. Comparison of Channel Framework

2. Comparison of Channel Construction

3. Strategy to enhance the Channel Loyalty

4. Development of Internet-based Channels

5. Evaluation of Channel efficiency

Chapter Highlights

Using this case study, this chapter is focused on the structures of mid-ware and security software channels, construction of channels, channel loyalty and the development of e-based channels. Finally, the evaluation criteria of mid-ware and software channels are discussed.

Generally speaking, channel frameworks provided for mid-ware and security software is fundamentally different to those of financial management software, as they are still in the preliminary stages of development. As for the construction of channels in the future, some suppliers are exploring the market potential for training courses authorized by partners.  Virus-Protection software is the best choice to tap into the e-commerce market, as it needs to be upgraded frequently, and downloading is a good way to satisfy the need. However, customers in China prefer physical transaction, especially for high-end goods. Therefore, there is still a long way to go before this aspect of e-commerce becomes viable. In this regard, it is recommended that suppliers of security software could use venture investment to eliminate the risks arising from e-commerce.

In general, the efficiency of channels of mid-ware and security software suppliers should be improved.

V. Analysis on Factors Influencing Development of Software Channel Systems in 2001 to 2003

1. Influence of Products on Channel Development

a. Influence of Software Products on Channel Development

b. Influence of Service Products on Channel Development

2. Influence of Customers Requirements on Channel Development

3. Influence of the Internet on Channel Development

a. Influence of e-commerce on Channel Development

b. Internet Security

Chapter Highlights

From this analysis, it can be seen that the development of the software market and the service product market will affect the suppliers’ choice of channels and their construction. However, the change of demands, penetration of Internet and e-commerce will play a more important role in the development of software product channels.

As the Internet spreads, channel dealers and suppliers are faced with the challenge of guarantying the security and efficiency of their new Internet-based channels.

Ⅵ. Trend of the Development of Future Software Channel Systems in China

1. Design of Future Software Channel Systems

a. Traditional channels + Internet：

	suppliers

   

b. Types of e-commerce

2. Trends in the Development of Software Channel Management Policy

Chapter Highlights

In the future, software channels will exist in two types: the combination of Internet + traditional channel as the primary type, and e-commerce type as a supplement. The e-commerce type will include both channels provided by suppliers as well as by large-sized on-line sale providers.

In general, the government policy will benefit both the development of the software industry as well as channel construction.

Ⅶ. Conclusions and Recommendations

1. Traditional channels will remain the leading force of the market

2. Traditional channels should be integrated with e-commerce in the future

Chapter Highlights

We believe that traditional channels will retain their position as leaders of the software channel market, but they need to evolve to meet the fluctuation of the market. Only through such a change can an enterprise, or even the entire industry, survive. With the spreading of the Internet, the software industry will have to depend more on Internet technology. To this end, traditional channels have to take advantage of Internet technology and apply it in the development of software channel so as to ensure the survival of traditional software channel.