•        Strong R&D potential of former USSR nations

•        Strong language skills (not only good English language but also German, French, Spanish, Italian language skills).

In 2011 22% plan to transfer their IT software development near shore versus 11% of those who plan to outsource offshore.

Trends and changes.

•        An increased demand for outsourced IT services for public sector. Demand will increase due to recent turmoil in such countries as Ireland and Greece as well as economic uncertainties in other EU state members.

•        An increased focus on  Small or Medium Enterprises. SMEs account for 59% of the total Union economy, generate 67% of employment and contribute around two third of the EU GDP.

•        Cloud sourcing. The European commission has commissioned the report “The future of Cloud Computing” to capture the development and its relevance and meaning for the European market.

•        Mobile Development and integration explode. The phenomenon of Mobile Application Stores (Apple, Android, and Nokia) has created a new industry. Mobile portable devices appear more essential in enterprise business processes so requiring integration and calibration with existing infrastructures and systems.

To stay part of the game in Europe Chinese providers must focus on SMEs and anticipate smaller and, thus, less profitable deals in the short term. To ensure more significant profits in the long term they will have to improve their adding-value service offering and cloud capabilities.