bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

SOFTWARE giant Microsoft will invest up to US$100 million in projects on the mainland over the next two years.

   Microsoft Far East vice-president for development Charles Stevens said yesterday that Microsoft had decided to launch at least 20 joint ventures and hire another 20 staff for its China operations to fend off stiff competition from IBM, Novell, Hewlett Packard and others.

  'We're throwing ourselves head first into the market,' he said in an interview before attending an American Chamber of Commerce lunch.

  'You could argue that's what we should have always done, but it's only since the summer that the Chinese have seen that we are committed,' Mr Stevens said.

  'We want to invest and we want to have Chinese partners. We're not going to go in there and try to develop our own standards.'   Microsoft's projects would run the gamut from local manufacturing enterprises to research and development to training programmes with universities in Beijing, Shanghai, Shenzhen and Guangzhou, he said.

  Over the past year, the company has attempted to market a Chinese version of its Windows software in China but efforts largely failed because the programme was developed in Taiwan and did not conform to mainland specifications.

  This generated resentment from officials in the Ministry of Electronics Industry (MEI), forcing Microsoft to adopt a new strategy.

   Instead of trying to charge into the market, the company has focused on building friendships with various ministries and large mainland computer manufacturers.

  'People often wonder, 'Why would Microsoft want to invest in Chinese software companies? Isn't that just setting up competition?' ' Mr Stevens said.

  'But I don't view it that way. Those companies will become more committed to working with Microsoft and supporting our operating systems. Then we'll have better Chinese software running our operating systems.

  'That will help the whole computer market to grow, and that's to our advantage.

  'Strong relationships are more important in China than probably anywhere else in the world.'   As yet, Microsoft has no joint ventures in China but is co-operating with Hong Kong-listed Legend Holdings to create a Chinese MS DOS disk operating system.

  It is also working closely with Great Wall Computer Group on an improved Chinese version of its Windows operating system.

  Microsoft has also approached five mainland computer companies and the MEI about collaborating on a Chinese version of Windows 95, the company's most advanced system.

  Although computers are still much too expensive for the average Chinese household, Microsoft sees a large emerging market for its Windows NT servers - machines that manage computer networks - among state-owned enterprises, multinational corporations and universities.

  Mr Stevens said his company had the potential to become the market leader in China despite being a relative newcomer because Microsoft's server system cost less, worked on many brands and ran more software than its competitors.

  Microsoft tried to make its products more tempting last month by slashing prices on software and systems sold to China by more than 50 per cent.

  Unlike elsewhere in the world, where the majority of Microsoft's revenues come from applications, in China the company makes its money on database products because '98 per cent of software is pirated', Mr Stevens said.

  While he acknowledged that China's intellectual property laws had improved significantly in recent years, the Chinese Government was only beginning to enforce the legislation.

      'Hopefully, in the next four to five years, we'll see a convergence of better enforcement and higher salaries. The market could explode at that point,' he said.



Microsoft to open US$100m China window