The software industry is embracing AI at an accelerated pace

According to data released by the Ministry of Industry and Information Technology, in the first half of this year, the revenue and profit of the mainland's software business maintained double-digit growth, and the growth rate of export revenue of the software business turned from negative to positive. Among them, the software business revenue was 6,235 billion yuan, a year-on-year increase of 11.5%; the total profit of the software industry was 734.7 billion yuan, a year-on-year increase of 15.7%; The export of software business was 25.46 billion US dollars, a year-on-year increase of 0.6%.

Experts believe that in the first half of the year, the artificial intelligence model promoted the upgrading of the software industry and empowered thousands of industries. It is expected that in the second half of the year, software technology innovation represented by cloud computing, big data, artificial intelligence, etc., will continue to promote the transformation of software technology, model, and ecology, continuously give birth to new growth points, and drive the continuous increase of business revenue.

Artificial intelligence drives industrial upgrading

Pu Songtao, deputy director of the Institute of Informatization and Software Industry of CCID Think Tank, analyzed that in the first half of this year, the software industry as a whole continued to develop strongly. The information technology service industry, represented by cloud computing and big data services, played a significant driving role, with a year-on-year increase of 12.6%, and the proportion of information technology service business revenue maintained an upward trend, accounting for 67.7% of software business revenue. The software development potential in the central region is prominent, and the growth rate of business revenue increased by 13.2% year-on-year, ranking first among the four major regions. Among them, the growth rate of Shanxi, Anhui, Hubei and Hunan exceeded that of the whole country.

Zhao Gang, President of Saizhi Industry Research Institute, concluded that in the first half of the year, the development of the mainland's software industry showed three bright spots. Enterprises have increased R&D investment, and emerging software such as artificial intelligence models have risen rapidly, driving the rapid development of new business formats such as chip design, basic models, and vertical models. Software related to the development and utilization of data resources has maintained rapid growth, and software formats such as data governance, data labeling, data training, and emerging databases have accelerated their development. With the advancement of digital and real integration, industrial software has achieved rapid development and deeply empowered the industry.

"In the first half of the year, the mainland's software revenue grew significantly, especially in emerging fields such as artificial intelligence, represented by large models. 2024 is the year of large-scale model application, and large-scale models continue to deepen innovation for industries, fields, and scenarios, becoming a major highlight in the development of the software industry. Wei Daisen, vice president of Inspur Group and general manager of Inspur Soft, said.

According to the latest financial report released by Tencent, the total revenue in the second quarter of this year was 161.1 billion yuan, a year-on-year increase of 8%. Among them, the revenue of enterprise service business achieved double-digit growth rate, benefiting from the growth of cloud service business revenue and the growth of technical service fees of Channels merchants. In the quarter, Tencent increased its investment in the field of artificial intelligence. For example, based on the basic model "Tencent Mixed Yuan", Tencent Yuanbao launched the AI assistant Tencent Yuanbao. In addition, Tencent Cloud has also released three AI engine tools, such as the Large Model Knowledge Engine, as well as high-performance computing services such as the proprietary cloud intelligent computing suite, which is committed to lowering the threshold for the implementation of the large model industry and shortening the distance from models to applications.

In the first half of the year, the export growth rate of software business turned from negative to positive. "This is mainly due to three factors." According to Zhao Gang's analysis, first, in order to obtain incremental market opportunities, a number of software companies actively expand markets in Southeast Asia, the Middle East, Africa and other markets, driving the growth of software product technology exports. Second, platform companies such as Douyin and Alibaba have stepped up efforts to expand overseas markets and drive the growth of related digital service trade exports. Third, artificial intelligence large-scale model enterprises actively expand overseas application scenarios and drive the export of large-scale model-related products and services.

Pu Songtao believes that the main factor is the growth of software outsourcing service exports. From the demand side, the global demand for digitalization continues to be released, opening up a new space for digital services for software enterprises. From the perspective of the supply side, with the continuous deepening of domestic software applications, the level of R&D, implementation and delivery of software enterprises has been continuously enhanced, and the international competitiveness has been improved. From a policy perspective, the mainland continues to increase its opening-up efforts, actively promotes economic and trade cooperation under the Belt and Road Initiative, focuses on promoting the high-quality development of trade in services, and provides strong policy support for the export of software services.

"In the context of global economic integration, mainland software companies have effectively enhanced the international competitiveness of software products and services through technological innovation and overseas market expansion, and realized the transformation of export revenue from negative to positive." Wei Daisen said.

The development of basic and industrial software is accelerating

The "Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese-style Modernization" adopted by the Third Plenary Session of the 20th Central Committee of the Communist Party of China proposes to build an independent and controllable industrial chain and supply chain, improve and strengthen the development system and mechanism of key industrial chains such as integrated circuits, industrial machine tools, medical equipment, instrumentation, basic software, industrial software, and advanced materials, and promote technological research and application of achievements in the whole chain.

Why the emphasis on the development of basic and industrial software? Pu Songtao said that basic software is the key infrastructure of the digital economy, and its development level is related to national security and industrial security. As the brain and nerve of industrial manufacturing, industrial software is a key supporting tool to promote new industrialization and build a manufacturing power. In recent years, despite the fruitful innovation achievements in the field of basic software and industrial software, due to factors such as the late start of industrial development and high dependence on foreign countries, it is still facing outstanding problems such as obvious supply shortcomings, weak demand traction, and incomplete ecological system, and the situation of long-term control by others has not been fundamentally changed.

"Basic software and industrial software are the foundation for the high-quality development of the software industry, and they are also an important support for promoting new industrialization." Zhao Gang said frankly that the overall technical level of basic software and industrial software is not high, the supply capacity of high-end products is insufficient, and the problems of insufficient industry application promotion still exist, and high-end basic software and industrial software such as artificial intelligence operating systems, electronic design automation, and complex industrial analysis still have the problem of "stuck neck".

In the first half of the year, the revenue of software products was 1,396.9 billion yuan, a year-on-year increase of 9%, accounting for 22.4% of the industry's revenue. Among them, the revenue of industrial software products was 132.4 billion yuan, a year-on-year increase of 9%; The revenue of basic software products was 85.04 billion yuan, a year-on-year increase of 10.7%.

Pu Songtao introduced that since the beginning of this year, with the help of the open source model, the construction of basic software ecology has made great progress. At the same time, the policy environment of industrial software continues to be optimized, and the process of intelligence is accelerating. In the first half of the year, the number of unit members of the openKylin community, the root community of open source operating systems, exceeded 500; UnionTech's UOS ecosystem has grown to 3,765,000 software and 406,400 hardware. Huawei has more than 900 million HarmonyOS ecosystem devices, more than 2.54 million developers, and more than 1,500 HarmonyOS native applications.

According to Zhao Gang's analysis, in the first half of the year, basic software and industrial software showed the characteristics of localization, intelligence and scale. The development of large models has promoted the upgrading of basic software and industrial software, emerging software such as artificial intelligence operating systems, deep learning frameworks, and vector databases have performed prominently, and the development of industrial large models and industrial digital twins has accelerated. Basic software and industrial software enterprises have accelerated the process of listing, mergers and acquisitions, and further improved market concentration and enterprise competitiveness.

Wei Daisen believes that the digital transformation of the manufacturing industry is promoted in depth, intelligent manufacturing is the core, and the in-depth application of industrial software is the key, which will effectively improve the production efficiency and product quality of enterprises and boost the development of new industrialization. Software enterprises should increase investment in R&D in core technologies, deepen industry-university-research cooperation, and stimulate innovation capabilities. Cultivate high-end software talents, enhance collaborative innovation among enterprises, build an open and shared software innovation ecosystem, and promote the high-quality development of the software industry.

Deeply promote the integration of data and reality

The scheduler of Lenovo's Hefei Intelligent Manufacturing Base Lianbao Factory has to process more than 8,000 orders per day, 80% of which are small batch customized orders of less than 5 units, and these orders come from more than 180 countries and regions, and the scheduling is no less complex than chess. Before the intelligent transformation, factories could only rely on experienced schedulers to perform semi-manual operations with the help of simple scheduling software, which took 6 hours to end at a time. After the intelligent transformation, the core algorithm in intelligent scheduling can complete the entire work in 1.5 minutes.

Zhao Gang believes that the key to the integration of data and reality is the digital transformation of the industry, and software is the core driving force of the integration of data and reality. Promoting the wide application of software technologies such as artificial intelligence, big data, and digital twins in the real economy is conducive to realizing advanced production and operation models such as large-scale customization, intelligent production, networked collaboration, and end-to-end delivery, significantly improving the production efficiency of the real economy, reducing production costs, enhancing the resilience of industrial and supply chains, cultivating new formats and models of the digital economy, and promoting high-quality economic development.

"Overall, it is expected that the revenue and profit of the software business will continue to maintain a relatively high growth rate for the whole year." Pu Songtao said that the development of the software industry is driven by both endogenous innovation momentum and external digital transformation demand. Driven by emerging technologies and policies, the software industry is expected to usher in multiple growth drivers. In the second half of the year, emerging software technology innovations represented by cloud computing, big data, artificial intelligence, etc., will continue to promote the transformation of software technologies, models, and ecosystems, continuously give birth to new business growth points, and drive continuous improvement of business revenue. In addition, with the implementation of major national strategies and the implementation of projects related to security capacity building in key areas, the demand for software products and services in key industries is expected to be released. At the same time, whether the willingness and intensity of government and industry users' informatization investment will continue to remain strong will also affect the space and potential of the mainland software industry market to a certain extent.

"Artificial intelligence will usher in a new era of digital economy and stimulate a new wave of innovation in the software industry. It is expected that in the second half of the year, the software industry will continue to maintain a rapid growth trend, and the market increment will mainly come from artificial intelligence large models, embodied intelligence software, data software, industrial software and other fields. Zhao Gang said.

Focusing on expanding the market scale of the software industry, Zhao Gang suggested that we should promote the opening of key industry scenarios, support innovative enterprises to obtain software application orders from the government and central state-owned enterprises, and promote the deepening of the application of technologies such as artificial intelligence models in key industries; Promote platform enterprises to reconstruct the software ecology around basic large models, etc., and drive more small and medium-sized software enterprises to achieve symbiosis and win-win results; Support software companies to go overseas and expand emerging software markets.

"The government needs to strengthen planning guidance and standard guidance, unswervingly increase policy support for software companies, and promote the enjoyment of various preferential policies. Software enterprises should accelerate strategic cooperation with platform enterprises, large-scale model enterprises, and industry leading enterprises, explore the transformation path of industry knowledge to automation and intelligence, and promote the paradigm revolution of industry knowledge production. Pu Songtao said.

Source: Economic Daily