Microsoft will invest $750m (£489m) in China's software industry
over the next three years under a Memorandum of Understanding (MOU)
signed between Microsoft and China's State Development and Planning
Commission (SDPC).
The MOU represents the largest software industry cooperation
venture by a foreign company in China. It will include education
and training, academic and research cooperation and strategic
investments and cooperative developments in local software
companies, Microsoft said.
The investment will be managed by the SDPC-Microsoft Cooperation
Committee, to be jointly chaired by SDPC Minister Zeng Peiyan and
Microsoft chairman and chief software architect Bill Gates.
Microsoft chief executive Steve Ballmer and chief technology
officer Craig Mundie will be vice-chairmen, along with
vice-minister of the SDPC Zhang Guobao.
The SDPC said that the cooperation will help attract foreign
investment in China, expand the export of software and related IT
products, and help to import advanced technologies and management
experience from overseas. The SDPC said that Microsoft had
committed to helping China develop world-class software talent,
especially project management professionals and software
architecture design professionals.
The deal marks a welcome boost for Microsoft in China, after
several indications that the world's most populous nation, and one
of Microsoft's biggest potential IT markets, was drifting towards a
policy of encouraging open-source software.
Although reports that the Chinese authorities had mandated the use
of the open source Linux operating system in government departments
have been denied, China's government works closely with local Linux
developer Red Flag Software, based in Beijing, to install Red Flag
Linux on some government computers.
Other large public sector deals, such as the China Post Office
signing a contract with IBM to run Linux at 1,200 branch offices,
led some observers to see China as a major force in the open source
versus proprietary debate being conducted around the world.