Chinese software and service outsourcing enterprises are turning to cloud computing as part of their strategies to face emerging challenges from intensified global competition and rising domestic salaries.

"Cloud computing is having a strong impact on the outsourcing sector. The traditional outsourcing business might shrink by 40 percent within three to five years," said Xu Zhen, chief architect of Newtouch Cloud, a division of Shanghai Newtouch Software Co Ltd.

Cloud computing standardizes resources, thus greatly cutting cost and time. By registering an account, anyone can buy solutions according to their need, Xu told China Daily during the China International Software and Information Service Fair 2016, which was held last week in Dalian, northeastern China's Liaoning province.

Newtouch embraced cloud computing in 2014. It helps its existing customers from banking, insurance and medical companies to build private clouds or hybrid clouds. It also provides one-stop service for software development teams to create tasks, share files and conduct online discussions.

Xu said Newtouch has seen a remarkable increase of requirements for cloud service from customers.

"Outsourcing enterprises should join the tide. If they have gained advantages in a particular industry, they could keep the advantages by providing additional cloud services," he said.

Ye Ming, vice-president of Yida New Software City Co Ltd, a leading operator of software parks, said innovation, entrepreneurship and smart manufacturing offer great opportunities for outsourcing enterprises.

"I think outsourcing is not an industry but a business model. There are possibilities in any industry for the need of outsourcing - call centers, product segments, or solutions for the whole procedure," said Ye.