HONG KONG, 30 OCTOBER 2008 – Microsoft plans to invest more on research and development (R&D) and outsource more business to China despite tightened global cost controls.
In China, Microsoft’s R&D and outsourcing budget will both grow in “double-digits” this year, according to Zhang Yaqin, Microsoft’s corporate vice president and chairman of Microsoft China.
Microsoft said previously it would invest US$100 million annually on research and development in China starting from 2006. Meanwhile, the firm said in January it will outsource a total of US$100 million in business to China within the next five years.
“It’s a tough time for all industry players (due to the US credit crisis) worldwide including Microsoft, but we will continue to expand in China,” Zhang said during an interview after the China Business Leaders Awards 2008, which was held in Shenzhen on 28 October 2008.
Search, mobile talent needed
In 2006, Microsoft had a research team of 500 people and now it has 3,000 people in its R&D team. Zhang said the company needs more talent in the search, service and mobile platforms. Globally, Microsoft released its results for its fiscal first quarter ended on 30 September. The company reported US$15.1 billion in quarterly revenue, up nine per cent from a year ago.
“Microsoft’s 20-year effort to expand beyond personal computer client software now allows it to balance weaknesses in some areas with strengths in others, such as service business”, said Dwight Davis, analyst at consulting firm Ovum.
Regional pricing for China
Responding to the recent black screen issue, Zhang said Microsoft will launch a flexible price strategy, and provide more products with “regional pricing” in China,.
Last week, computers in China with Windows and Office applications, which failed an online validation check, had screens turned black every 60 minutes, with pop-up alerts appearing that warned of piracy.
