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January 3, 2006

New Microsoft deals in China

Posted by David Hunter at 10:20 PM ET.

Microsoft, TCS and Chinese firms cook up software deal:

The negotiations for the creation of a mega-software outsourcing company by Chinese companies, India’s software giant Tata Consultancy Services (TCS) and Microsoft are expected to be concluded in one month, giving China’s ambition to develop its software industry a big boost.

Grabbing the Chinese domestic market has been an ambition for TCS, so in order to get easier market access, it decided to form a joint venture with companies backed by the State.

“The biggest benefit for us is to get a bigger access into the Chinese market,” said V. Rajanna, general manager of Tata Information Technology (Shanghai) Co Ltd.

According to a report by the Beijing-based Economic Observer newspaper published on Monday, TCS is expected to take a 65 per cent stake in the proposed venture, with Microsoft and three Chinese firms designated by the National Development and Reform Commission sharing the remaining amount.

The joint venture aims to have 8,000 developers in five years, which will further expand to 10,000 in seven years.

The biggest Chinese software outsourcing company today has about 2,000 people.

The Economic Observer reported 90 per cent of the work of the proposed firm will be export-oriented, but that was denied by Rajanna, who said the focus will be both on the domestic and overseas markets.

Microsoft invests $13 mln in IT company in software:

The American Microsoft corporation has injected 13 million U.S. dollars in a Chinese IT company to develop softwares, according to sources of the Chinese company.

In August of 2005, Microsoft and the Jinan-based Langchao Groupin east China’s Shandong Province struck a 25-million-U.S.-dollars agreement to produce softwares for Chinese customers.

The remaining investment of 12 million U.S. dollars will be in place by June 2006, said sources with Langchao Group.

Of course, there’s always another side to the ledger in dealing with the Chinese government. Rebecca Mackinnon, a Research Fellow at the Havard Law School’s Berkman Center for Internet and Society, reports that Microsoft’s MSN apparently took down the blog of Zhao Jing who was doing more investigative reporting than was appreciated by the government. Microsoft’s Robert Scoble looks into the case, offers him blog space, and has an followup.

Filed under Alliances, General Business, Governmental Relations, Offshoring, Outsourcing

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2 Responses to “New Microsoft deals in China”

  1. METANOIAC! a weblog from China Says:

    Internet Censorship in China

    Bloggers all over the world are up in arms over Microsoft’s alleged censorship of a popular Chinese language blog on their free and widely used MSN spaces website builder. Some blogs in China get blocked for mentioning certain highly specific keywords…

  2. Microsoft News Tracker » Microsoft criticized for aiding Chinese censorship Says:

    [...] As mentioned previously, Microsoft has come under fire for shutting down the MSN Spaces blog of a mainland Chinese investigative reporter to avoid offending the Chinese goverment. The story has now gotten widespread coverage. Some relevant excerpts: [...]

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