Business integration specialist webMethods is cranking up its expansion into China with an ambitious software development venture in Shanghai with BearingPoint, formerly KPMG Consulting. The two Virginia-based firms last month announced an agreement to widen their alliance and pursue joint software applications development work in the mainland. That work will be done at BearingPoint's four-storey, 45,000-square foot Global Development Centre, in the Zhang Jiang Software Park in Shanghai's Pudong district. Financial terms have not been provided, but officials at webMethods described the manpower and financial investment from both partners as 'significant'. 'We believe this joint effort will help webMethods jump-start its business in the China market,' webMethods Asia-Pacific vice-president Maruf Majed said. The company supplies enterprises with so-called integration middleware, technology used to glue together an organisation's legacy business processes and computing systems with newer, more efficient Internet-based programs. It competes against the likes of Tibco Software, Vitria Technology and SeeBeyond, as well as larger rivals IBM, Microsoft, Oracle and BEA Systems in a segment of the software market forecast to be worth US$10 billion by 2005, says research firm International Data Corp. BearingPoint is one of the world's largest business consulting, systems integration and managed services firms. Clients include multinational and domestic companies, medium-sized businesses and government agencies. 'The Shanghai Global Development Centre can become the type of resource we can offer clients across borders in developing cost-effective solutions and applications,' said Bradley Schwartz, group executive vice-president for worldwide client service at BearingPoint. 'The BearingPoint and webMethods agreement continues the work between our companies to provide clients with leading solutions to meet their global market demands.' Work at the centre will be jointly led by Chen Ling-Sheng, BearingPoint director for the Global Development Centre, and Larry Li, webMethods general manager in China. Besides developing software applicatons, the centre will be used for client presentations, systems integration and management outsourcing services. The facility would be aimed at enterprises in China's burgeoning telecommunications, energy and financial services industries, Mr Majed said. Mainland customers of webMethods include service providers China Mobile and Digital China, while users in Hong Kong include PCCW, the Wallem Group, Manulife and Credit Lyonnais unit CLSA. David Mitchell, webMethods president and chief operating officer, said the centre will be 'solely focused on reducing the cost and complexity of integration'. Forging partnerships, such as the one with BearingPoint, has been a key move for webMethods to expand its business worldwide. The firm depends on channel distribution - through market resellers and professional information technology services organisations - to put its products in the hands of enterprises in the financial services, manufacturing, telecommunications and public sectors. The activities at the BearingPoint centre are also expected to serve as a 'dress rehearsal' for implementing webMethods' plan to set up its own research and development laboratory in the mainland. The planned facility will be the second for webMethods in Asia. It formed a Japan lab in 2000, representing a strategy to raise investments in the region. 'The economic reforms in China are fuelling potentially huge demand for our integration technology,' webMethods chairman and chief executive Phillip Merrick told the South China Morning Post in March. Research firm Gartner has ranked webMethods as the world's top supplier of application integration software, with annual revenues of almost US$200 million in its last financial year, which ended in March.