The UK’s software sales are lagging behind China by almost $60bn. This is forcing the UK to rethink its strategy and abandon the low-end segment of the market. The Chinese software product and services sector is expected to reach $140bn by 2010. It has already hit the $21bn mark during the first quarter of 2008. The figure is close to the entire sector’s $27.5bn revenue predictions for the whole year in the UK.

Sean Finnan, who is the president of the UK trade association for technology Intellect and also the country manager for EDS UK, opines that it is high time for Britain to come to terms with the ground reality and give up on hopes of matching China in the low-cost software market.

Experts believe that instead, the country should try and carve out a niche for itself in the high-value end of the sector. Trying to dominate the low cost sector will not be feasible for the UK anymore. It will not be able to compete with the volume produced by China. It is better to concentrate on the high value end market as it will help the country move forward. So it makes sense to concentrate the efforts on knowledge services.