Microsoft (NSDQ: MSFT) is teaming with Indian software services provider Tata Consultancy Services Ltd. to launch an IT-outsourcing company in China. TCS will hold a majority stake in the firm, expected to launch in early 2006 in Beijing, and Microsoft will have a minority interest. Three Chinese companies also are participating in the venture. Financial details weren't released.
The new business will focus on providing software-development services to Chinese companies and multinationals, according to TCS. It will provide services and support for all major types of software and won't limit itself to Microsoft's .Net environment. The company will offer specialty services for the financial-services, manufacturing, and telecommunications industries, as well as several other vertical markets.
Microsoft's investment marks the latest in a series of moves to build its presence in China, which eventually could become the world's biggest software market. Microsoft entered the country in 1992 with a sales office, and six years later it opened a research lab in Beijing. In 2003, the company signed a memorandum of understanding with Beijing municipal authorities to work with local software providers to develop E-government systems. Microsoft also is working with a number of major Chinese companies, including Petro China and China United Telecommunications Corp., to help them build systems based on its software.
The move could also signal growing interest by Microsoft in services. "They're starting to realize the importance of services, and how they are going to leverage them" to grow revenue, Gartner analyst Frances Karamouzis says. Microsoft holds a minority position in IT-services firm Avanade Inc., which Accenture mostly owns. Of late, it has been toying with the idea of entering the market for managed desktop services.
Infosys Technologies Ltd. is one o
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