A New Chapter for ITAM in China

ITAM News & Analysis

A New Chapter for ITAM in China

Why ITAM has struggled to take root, and why I believe that’s about to change.

Executive Summary

Current ITAM Ecosystem in China:

• China, despite being the world’s second-largest enterprise software market, shows limited ITAM awareness and adoption.
• Lack of commercial incentive: Cost-saving arguments do not resonate, as software often bought as protection from piracy raids remains unused; preference for in-house software development reduces demand for third-party software management.
• Geopolitical Initiatives (Xinchuang): Government policies aiming for technological independence mandate improved visibility and reporting on foreign software usage, directly stimulating ITAM adoption. Western sanctions restricting critical software access necessitate better software management practices.

Predictions for ITAM in China (Next 5 Years):

• Software Legitimacy as Trade Differentiator: Chinese firms will increasingly need certifications or assurances to verify software legitimacy, enhancing market access.
• Emergence of Local ITAM Tools: Chinese vendors will create domestic ITAM solutions, integrating with local IT systems and complying with regulatory frameworks.
• Formation of Professional Community: Localised professional training, certification pathways, and standards will emerge, establishing ITAM as a recognised profession.
• Governance Mandate within SOEs/Public Sector: Formal ITAM practices will become institutionalised in public institutions, driven by localisation and compliance mandates.
• AI and Intelligent Asset Management: Rapid AI adoption will drive demand for dynamic, intelligent ITAM practices to manage new usage-based and complex software assets, giving rise to specialised AI Asset Management frameworks.

Introduction

China is the world’s second-largest market for enterprise software, ranked just behind the United States or third if the European Union is treated as a single market. Yet, ITAM  remains relatively obscure within Chinese IT circles.

Despite its scale, China accounts for just 6% of global enterprise software spend. This is striking when compared to its economic footprint: China represents 17.7% of global GDP (and over 19% when adjusted for purchasing power parity). Its share of software spend is less than a third of its economic weight.

As a career ITAM practitioner with nearly two decades of experience across Western markets, I’m fascinated by China’s lack of ITAM discourse. Why isn’t the world’s largest economy (by PPP) thinking about, or talking about, ITAM?

During the past two years, I’ve spoken with and learnt from many exceptional professionals across the Greater China region – including the mainland, Hong Kong, Macau, and Taiwan. These conversations have spanned a wide range of stakeholders: CIOs, CISOs, junior analysts, Western software resellers and their Chinese counterparts, local systems integrators, and IT operations and tooling providers. It’s been an eye-opening journey.

Here, I’ll explain why ITAM hasn’t yet taken hold in China. I’ll also provide a snapshot of  current ITAM market dynamics and my projection of how the China ITAM industry may evolve during the next 5 years.

The ITAM Ecosystem in China

In short, it’s fragmented, immature, and largely reactive. While China is a major consumer of enterprise software, the supporting ITAM – standards, tools, services, and professional roles – is in its infancy.

• Awareness of ITAM as a discipline remains limited. The term “IT Asset Management” is not widely recognised, and when it is, it’s often misunderstood or narrowly associated with software compliance. Frameworks such as ISO/IEC 19770 are virtually unknown, and there’s no local equivalent or commonly adopted standard guiding ITAM practices.
• Audit pressure is fundamentally different in China. In Western markets, software audits focus on contractual compliance. In contrast, audits in China have historically focused on anti-piracy enforcement – investigations aimed at identifying the use of unlicensed or cracked software, often in partnership with local authorities. These audits are more about legal risk than contractual optimisation.
• ITAM is not yet a distinct career track. Where software licensing is managed, it’s often split across procurement, legal, and IT operations teams, with no single owner. Formal training or certification options are scarce, and Western credentials (e.g. IAITAM, BCS, ITIL SAM modules) are rarely recognised or pursued.
• There are no major domestic vendors offering dedicated ITAM or SAM tools. Most organisations rely on spreadsheets, basic in-house inventory tracking, or embed minimal asset tracking within broader IT operations or observability platforms. Due to the invasive nature of typical lifecycle ITAM tooling (e.g. discovery agents and usage monitors), Western tools are rarely considered. However, Western point solutions that address specific licence management challenges – typically focused on a particular vendor or narrowly defined licensing scenario – are seeing some adoption, with domestic alternatives also beginning to emerge.
• ITAM-related services remain niche. Global consulting firms do offer SAM or compliance advisory services in China, but these are usually targeted at multinational clients or state-linked entities. Among local providers, services are often bundled into broader IT or procurement consulting.
• The regulatory environment is beginning to touch on ITAM-adjacent areas, but there are no explicit mandates for ITAM practices. Recent trends – including China’s Cybersecurity Law, Data Security Law, and the Xinchuang (信创) localisation initiative – are increasing awareness for visibility and control over software assets. In particular, SOEs under Xinchuang must now report software usage more systematically, which may create demand for ITAM.

In short, China’s ITAM ecosystem is embryonic. The foundations are sparse, and the drivers are few – but the potential is there. What exists today is a patchwork of compliance responses and operational workarounds.

Why ITAM Has Yet to Take Hold in China

Cost-saving and compliance risk avoidance are the primary drivers of ITAM in Western markets. In China, however, these motivations are far less compelling. To understand why, we must look at the risk environment and purchasing behaviours unique to Chinese businesses.

A High Tolerance for IP Risk

Chinese organisations generally have a higher tolerance for the misuse or overuse of third-party software, largely because the risk of enforcement is perceived to be low. This stems from several structural and cultural factors:

• During times of stronger US–China trade relations, software compliance was heavily promoted, with China’s National Copyright Administration cooperating with Western vendors on anti-piracy raids. Today, with geopolitical tensions rising, these efforts have disappeared. Many Western vendors have downsized or dismantled their anti-piracy and compliance operations in China.
• China doesn’t have homegrown equivalents to Microsoft or SAP with the scale or dominance to enforce licensing. The domestic software landscape remains fragmented, and no single vendor has the market power to push rigorous compliance standards.
• Most large Chinese enterprises are State-owned enterprises (SOEs) across critical industries such as telecoms, utilities, and finance. They have huge commercial and political leverage to demand the removal of audit clauses from contracts or simply reject audit requests. Ironically, this gives risk-sensitive organisations more freedom to misuse or overuse third-party software, knowing the likelihood of enforcement is minimal.

There are also cultural factors at play:

• The importance of guanxi: In China, long-term relationships and personal trust often outweigh contractual obligations. Vendors that attempt to enforce strict audit rights risk damaging key relationships, making aggressive compliance action commercially and culturally risky.
• Owner-managed growth mindset: Many of China’s large, non-SOE firms are still relatively young, and typically led by their founders. These companies prioritise rapid growth and market expansion over formal governance and risk management.

The Cost-Saving Argument Falls Flat

In the West, Software Asset Management (SAM) often demonstrates clear financial value by identifying cost-saving opportunities. In China, this isn’t the case:

• Many Chinese organisations only began buying software seriously within the last decade, often doing so as a form of baohufeì (保护费) – a “protection fee” paid to avoid piracy-related investigations or compliance audits. In practice, it’s common for IT teams to keep legitimate licences untouched, while continuing to use unrestricted cracked versions. This creates a situation where money spent on software doesn’t reflect genuine usage.
• Chinese companies lean towards building, not buying, software. A deep domestic talent pool of STEM graduates makes in-house development technically and economically viable. Moreover, a key benefit of buying enterprise software lies in adopting embedded business logic. Much of the logic in Western products doesn’t align with Chinese business practices. Local adaptation therefore requires significant R&D. With the “buy” option becoming less attractive, the potential cost efficiencies offered by ITAM are irrelevant.

While ITAM delivers clear value, China’s unique mix of political, structural, and cultural factors makes the traditional ITAM value propositions less attractive.

Why ITAM Still Has a Future in China

Despite these headwinds, I believe ITAM (or a version of ITAM for China) will become increasingly important – and eventually critical – within China. thanks to several underlying trends, both external and domestic.

Trade Pressure

The most immediate and compelling force behind ITAM adoption is trade-related pressure. The logic is simple: when companies use unlicensed or pirated software to manufacture goods, they gain an unfair cost advantage, effectively engaging in unfair competition.

This concern has been raised repeatedly by the United States, featuring in USTR reports and WTO complaints, and it played a role in escalating the US–China trade war. It was even addressed in the Phase One trade agreement, which included specific commitments by China to improve software licensing compliance, especially in manufacturing.

This issue will likely resurface during any future negotiations or retaliatory measures. Meanwhile, for Chinese exporters increasingly turning to European markets, a new challenge is emerging: the EU has begun placing IP enforcement – including software licensing – at the centre of trade dialogues, most recently in the 2023 EU–China discussions.

Information Security

Beyond trade, cybersecurity concerns are driving a shift in how software legitimacy is perceived. CIOs and CISOs in China are recognising that pirated or unlicensed software introduces serious vulnerabilities.

As a result, ITAM is being reframed as a core element of enterprise risk management. Businesses are increasingly aware that unmanaged software assets also pose material financial and reputational risks.

Geopolitical Pressures

A third driver comes from China’s push for technology independence under the Xinchuang (信创) policy. This initiative requires SEOs and public sector entities to report quarterly on their use of foreign software, aiming for complete domestic software replacement by 2027.

But, you can’t reduce reliance on foreign vendors if you don’t first understand your existing IT estate. While some may argue that Xinchuang reporting is today, largely symbolic, a functional ITAM capability is essential for this policy to achieve real impact.

In addition, Western sanctions have restricted access to certain critical tools – for example, EDA software used in chip design. Companies therefore face a dilemma: they can’t legally acquire new licences, yet demand remains high. These tools are often tightly licensed and token-controlled, requiring careful tracking and optimisation.

Laying the Foundation

If China is serious about building a strong domestic software sector, ITAM will be indispensable. A healthy, competitive ecosystem cannot thrive without mechanisms to manage and protect intellectual property.

IT assets still need to be governed and with a set of underlying principles: visibility, compliance, cost control, and risk mitigation. The future of ITAM in China may look different in form but not in function.

Five Predications for ITAM in China (Next 5 Years)

As China’s technology landscape continues to evolve under the twin pressures of global trade scrutiny and domestic digital sovereignty, ITAM is poised to become a strategic capability. While current adoption remains nascent, several factors suggest China will carve out its own ITAM trajectory, shaped by local policy, enterprise culture, and rapid innovation.

Here are five key predictions for how ITAM will develop in China.

1. Software Legitimacy Assurance Will Become a Trade Differentiator

As digital trust becomes a prerequisite for cross-border business, Chinese companies will increasingly be asked to demonstrate the legitimacy of their software estate – certifications, third-party assurance reports, software governance attestations, etc – in a globally recognised way.

Trade partners will demand transparency as a condition for continued market access. In export-sensitive industries such as electronics, automotive, and pharmaceuticals, demonstrating software legitimacy will help mitigate claims of unfair competition or piracy-related cost advantages. For companies targeting Europe or North America, this assurance may become a strategic asset.

2. Domestic ITAM Tooling Will Emerge and Gain Ground

Domestic vendors will develop modular ITAM and SAM solutions, initially targeting use cases such as licence tracking and compliance reporting under Xinchuang mandates. These tools will likely integrate with existing Chinese observability and infrastructure platforms (e.g. Huawei, H3C, UnionTech), making them easier to adopt within local IT environments.

As localisation pressure increases, a few platforms may gain official Xinchuang certification and appear in government procurement catalogues, accelerating adoption.

3. A Professional Community and Certification Path Will Begin to Form

As ITAM roles become formalised, a local, professional community will take shape. This will likely include:

• Locally-developed ITAM training programmes, supported by government-linked think tanks or tech associations
• Adaptations or translations of international standards, such as ISO/IEC 19770
• The emergence of full-time ITAM professionals embedded in Xinchuang compliance teams or digital governance units

By 2030, we can expect a visible cohort of Chinese ITAM practitioners operating within a distinctly localised but globally- informed ecosystem.

4. ITAM Will Become a Governance Mandate

As localisation policies such as Xinchuang become more structured, SEOs and public sector organisations will be expected to implement formal ITAM capabilities. This will be driven by the need to distinguish between foreign and domestic software, monitor progress in replacement programmes, and meet mandatory reporting obligations.

ITAM will be anchored in compliance, audit readiness, and policy alignment. The function may not be called “ITAM”, but its underlying disciplines – inventory, tracking, usage visibility – will become institutionalised.

5. AI Proliferation Will Drive ITAM Expansion into Usage-Based and Intelligent Asset Management

China’s enterprises are deploying AI tools at a speed and scale that often exceeds Western counterparts. From internal LLMs to embedded AI in customer service, logistics, and manufacturing, the software stack is evolving fast – and becoming harder to govern.

AI tools typically introduce usage-based pricing, opaque cost structures, and decentralised procurement models. In response, ITAM will need to evolve into a more dynamic, intelligent function capable of tracking AI-specific assets, managing consumption, and optimising value.

This evolution will also push ITAM closer to FinOps, data governance, and security functions, creating a more integrated view of software and platform usage. A new sub-discipline – AI Asset Management – may emerge, bringing fresh tooling, metrics, and accountability frameworks tailored to the demands of China’s AI-first enterprises.

Closing Remarks

China clearly stands at an exciting turning point in the evolution of ITAM. Trade pressures, cybersecurity priorities, geopolitical localisation initiatives, and rapid AI adoption signal that ITAM is poised for significant growth. This presents a tremendous opportunity to collaboratively shape a distinctly Chinese approach.

It’s also recognises that the ITAM landscape and regulatory expectations differ across Greater China. Hong Kong and Taiwan each have their distinct legal frameworks, business cultures, and market conditions. These differences necessitate tailored approaches and nuanced ITAM strategies.

 

About the author

Eric is the ITAM Forum Greater China Area Chapter Lead and Managing Partner at General Interfaces, a dual-based tech advisory firm and think tank in London and Hong Kong. He began his career at Deloitte and spent nearly two decades advising global blue-chip organisations on IT risk governance, cost control, and digital strategy.

Eric represents the United Kingdom within the ISO/IEC 19770 Working Group and was a founding committee member of the ITAM Forum. He also served as an advisor to CESI (China Electronics Standardisation Institute) on ITAM practices.

Eric holds an MBA from London Business School. He is currently a doctoral researcher in AI Safety at the University of Warwick and A*STAR in Singapore.

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