Tata, Microsoft to set up Chinese outsourcing venture

Tata Consultancy Services Ltd. (TCS) is setting up an IT outsourcing services joint venture in China with Microsoft Corp., along with two software parks in the country and a Chinese software company, Uniware Co. Ltd. in Beijing., TCS announced Thursday.

TCS and Microsoft were selected as strategic partners by the Sino-India Cooperative Office (SICO) of the Chinese government, according to a statement from TCS, in Mumbai.

The joint venture is to be located in Beijing’s Zhongguancun Software Park and will start operations in early 2006. It will provide IT outsourcing and other services to all major worldwide markets including the U.S., Europe, China and the rest of the Asia Pacific region.

TCS, India’s largest software and services outsourcer, will hold a majority stake in the joint venture, according to a spokesman for TCS. Although Microsoft will be investing in the joint venture, the software and services to be offered will not be limited to Microsoft’s software platforms, the spokesman said.

A key objective is for the venture to serve as a role model for the growing Chinese software industry, according to the TCS statement. The project has been initiated and supported by China’s National Development and Reforms Commission (NDRC). Microsoft’s investment follows from an agreement between the company and the NDRC in 2002 to promote China’s software and IT industry.

The two software parks investing in the venture are Beijing Zhongguancun Software Park Development Co. Ltd. and Tianjin Huayuan Software Park Construction and Development Co. Ltd., according to the statement.

Other contenders to set up the joint venture were Wipro Ltd. and Infosys Technologies Ltd., in Bangalore, and Satyam Computer Services Ltd., in Hyderabad, according to the TCS spokesman. All three are leading Indian software and services companies.

Although India and China’s software industries grew quite independently of each other, the two have started to move closer together in the last few years.

Combining Indian software skills with Chinese hardware expertise can take both China and India to a leadership position worldwide in IT, Chinese premier Wen Jiabao said in April during a visit to Bangalore, India.

TCS already has a software development facility in Hangzhou which has about 250 engineers on its staff.

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Jim Love, Chief Content Officer, IT World Canada

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