Microsoft picks up 10% in TCS China

Global software major Microsoft Corporation has signed a tripartite agreement with software and services major Tata Consultancy Services (TCS) to acquire a 10 per cent stake in the Indian company's Chinese subsidiary, TCS China. While the financial details of the transaction were not disclosed, Microsoft is believed to have pumped in $1.3 million.

The agreement was signed at an Indo-Chinese business forum, addressed by Chinese President Hu Jintao earlier in the day here.

The entry of Microsoft follows the granting of the business operating licence to TCS China. It also signals the culmination of the process to get the joint venture operational after a memorandum of understanding (MoU) was signed between the three parties in June 2005.

Following Microsoft's entry with a minority stake, the shareholding of the joint venture will alter, with TCS Asia Pacific owning a majority 65 per cent stake and the three Chinese partners, supported by National Development and Reforms Commission (NDRC), holding the remaining 25 per cent.

The Indian company's Chinese partners are Beijing Zhongguancun Software Park Development Company, Uniware Company and Tianjin Huayuan Software Area Construction and Development Company.

"The cooperation with Microsoft and national software export base located in the new upcoming economic zone in Beijing and Tianjin will help TCS China achieve great leaps in the future," said Zhongguancun Software Park (Z Park) CEO Zhou Fang. Z Park is one of the parties in the joint venture.

TCS China will provide IT outsourcing services and solutions to the Chinese domestic and global markets. The venture, located in Beijing's Zhongguancun Software Park, is also well positioned to bid in the Chinese domestic market, including government projects, and assignments for Beijing Olympics scheduled in 2008, said sources.

"TCS China will allow TCS to provide our clients with the best in technologies at affordable local prices, with services delivered at TCS's known global quality processes," said Girija Pande, head of TCS in Asia Pacific.