The development center is TCS’ second in China; the company currently operates one in Hangzhou. As with most of its service centers around the world, TCS will begin staffing the new site with current employees and hopefully transition to mostly local hires, according to John Lenzen, TCS’ vice president for marketing and communications. Lenzen cited the model of the company’s centers in South America, where the majority of employees are now locally hired.
Although the exact size of the new Beijing operation is still undetermined, Lenzen said it would be a substantial center, and would provide core TCS services such as application development and maintenance.
A Microsoft spokesperson said the center would begin operating sometime early next year.
The parties also hope to establish a model for the future of the Chinese software industry. A report earlier this year from McKinsey found that China’s IT services sector is growing rapidly, but it is still years behind India. The report noted that the Chinese industry was highly fragmented, with thousands of small firms and little of the consolidation needed to win large global contracts.
TCS will be the majority investor in the joint venture, and Microsoft will be a strategic investor holding monitory equities, the Microsoft spokesperson said. The remaining stake will be held the three participating Chinese firms: Beijing Zhongguancun Software Development Co, Uniware Co and Tianjin Huayuan Software Park Construction and Development.
Neither Microsoft nor TCS was able to comment on whether this was an exclusive deal between the two companies or whether Microsoft might be looking for similar opportunities with other vendors.
