Outsourcing means purchasing ongoing services from an outside company that a company currently provides, or most organizations normally provide, for themselves. For over a decade, there has been an increasing interest in the use of supply chain methods to improve performance across the entire business enterprise. In addition to individual companies, numerous industries have recognized the importance of supply chain integration. International software outsourcing involves subcontracting software development and related activities to third parties abroad. This paper firstly presents the difference among three concepts, i.e. IT outsourcing, software outsourcing and international service outsourcing. Secondly, this paper proponents the supply chain of international software outsourcing and analyzes the structure of such supply chain. Thirdly this paper puts emphasis on the supply chain of software outsourcing China engaged in. Finally this paper makes an empirical analysis on the structure and capabilities of the supply chain where China being a member.