For years, it was difficult for software companies to establish a presence in the China because software piracy was so prevalent. However, SaaS applications cannot be pirated as of yet, and one Chinese software expert believe that cloud computing is the key to establishing a strong software market in China, according to Reuters.

Kai-Fu Lee, the former head of Google China, recently announced he has begun a $115 million software venture called Innovation Works, which will focus on using cloud computing to establish China as a leader in global software development. In 2009, the Chinese software market was a $6.2 billion industry, while the U.S. market reported earnings of $99.2 billion.

"But it's irrelevant now, because software distribution is shifting from packaged software, from end user licence, to cloud internet distribution. and when you're on the cloud you gotta pay," Lee told the wire service.

Microsoft recently acknowledged its minimal presence in China and stated that it was hesitant to establish a strong presence in the country because of its poor intellectual property rights. However, the company also announced it will not withdraw or lessen operations in the country following the January hack of Google that has allegedly been traced to a pair of Chinese schools.ADNFCR-2553-ID-19665025-ADNFCR