Microsoft, TCS and Chinese firms cook up software deal

Filed in archive Outsourcing News on January 6, 2006

Chinese companies, Indian-based Tata Consultancy Services (TCS) and Microsoft are about to finish negotiations for the creation of a mega-software outsourcing company.

The Chinese Government, who is keen to develop their outsourcing and domestic software industry, has been seeking partnerships between Chinese companies and Indian software firms since last year.

TCS entered this joint-venture in order to penetrate the Chinese domestic market. "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.

Microsoft prompted both parties to discuss a deal.

According to a report, TCS is expected to take a 65 percent stake in the venture with Microsoft and three designated Chinese firms sharing the remaining amount. The project aims to have 8,000 developers in five years, expanding to 10,000 in seven years.

Huang Yong, president of the Hong Kong-listed Chinese research house CCID Consulting, said the joint venture could be beneficial for all three participants: China can learn from TCS' expertise, TCS can share opportunities in China and take advantage of China's talent pool, and Microsoft can improve its relations with the Chinese Government.

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