Efforts by Hong Kong software firms to take on government-backed technology projects in the mainland may also benefit foreign high-technology companies. 'It could work both ways,' said Duncan Chiu, vice-president of the Hong Kong and Mainland Software Industry Co-operation Association. He said many firms were combining their market knowledge with tools from foreign suppliers to develop commercial software programmes and services for Chinese businesses. Industry executives are looking at an initiative by Guangdong authorities to open up business opportunities for local IT firms in China, before the Closer Economic Partnership Arrangement (Cepa) is implemented on January 1 next year. Discussions between the association and officials of the Guangdong Economic and Trade Commission have resulted in a plan to qualify a group of Hong Kong software firms to bid for enterprise IT projects across the border. Mr Chiu said the association had asked for an extension until this month to submit a list of participants who would be certified by an expert body formed by the Guangdong commission. The enterprise IT projects to be subsidised by the Guangdong government are expected to range in cost from a few million yuan to 60 million yuan (about HK$56.2 million). There is no limit to the number of Hong Kong companies that could qualify. Foreign firms likely to benefit indirectly from this initiative include giants such as Microsoft and Hewlett-Packard, as well as smaller industry players such as Compuware and Indian software houses keen to expand in the mainland. 'Our success is reflected by the success of our partners, which include many Hong Kong ISVs [independent software vendors] and systems integrators,' said John Ball, director of Microsoft's small, mid-market solutions and partner business unit for Asia-Pacific and Greater China. 'Through Hong Kong, we are investing more to become a local company and to become more engaged in the mainland market.' He said Cepa and other initiatives geared towards opening up trade between China and the rest of the world would also give Microsoft partners in Hong Kong and the mainland fresh opportunities to expand in markets overseas. 'We call this our IT software ecosystem,' he said. Mr Chiu said the Guangdong IT projects and those under Cepa could help revitalise Hong Kong's IT sector as opportunities opened up in key mainland sectors that included banking, manufacturing, travel and logistics. Computer and printer giant Hewlett-Packard said its US$100 million marketing and development initiative targeting small firms in Asia would prove a welcome development, because those projects will attract Hong Kong's large community of small and medium-size IT firms. 'Our small and medium-sized enterprise customers understand the benefits of technology and how it can help their businesses,' said Clarence Cho, HP's director for SMB marketing in the Asia-Pacific region and Japan. He said participants in Cepa projects, such as Hong Kong's ISVs and systems integrators, 'want to work with a technology partner that can ensure they get more business results wherever they work, with reliable, uncomplicated products and technology solutions, and comprehensive support from HP'. United States-based Compuware also expected to cash in on inroads made by Hong Kong software firms building business applications for mainland enterprises. 'The issue of software quality and reliability continues to challenge application developers and users worldwide,' said Ross Wilkinson, regional director for Compuware Asia-Pacific. He said Hong Kong ISVs would have to rely on technology such as Compuware's to ensure the quality of their work. A recent Hong Kong Trade Development Council study on India's IT industry shows that co-operation between the two markets in software projects could generate new business opportunities.