Customer needs are vital to Microsoft
By Liu Baijia (China Daily)
Updated: 2004-06-30 08:31

The US software giant Microsoft requires every executive in the company to undertake training to learn how to communicate with customers and listen to their needs.

For Microsoft's chairman and chief architect, Bill Gates, listening to customers is important work.

This is especially true in China, where the Microsoft boss started his ninth visit late yesterday evening. It is Gates' fourth tour to the world's most populous country in the past three years.

Bill Gates: listening to clients [newsphoto]

The frequency of the visits coincides with Microsoft's increasing understanding of China. The world's largest software firm is seen to have become less self-centred and more integrated into the local software industry.

Necessary change

One of the major missions for Gates during his trip is to announce the opening of computer classrooms with the Ministry of Education today.

It is a milestone in the Partners in Learning programme launched by the ministry and Microsoft.

According to a memorandum of understanding signed between the two parties last November, the US software company will donate US$10 million over five years to train teachers and build a computer lab for each of 100 middle schools, mostly in rural areas.

"Both education and information technology can be good ways to improve the quality of living for the people in remote rural regions and we hope Microsoft can make some contribution to this cause," said Tim Chen, vice-president of Microsoft and CEO for Microsoft in the Chinese mainland, Taiwan, Hong Kong, and Macao.

The partnership is another move by the US behemoth as it shifts its strategy in China, and realizes the need to adapt.

Since coming to China in 1990, Microsoft has faced the difficulties of not being acclimatized: its way of handling software piracy issues was not welcomed, its frequent changes of senior management made Microsoft look unstable in China, and its typical American straightforward and proud behaviour created a love-and-hate response.

But last year, Microsoft changed its way of doing business.

In September 2003, the Microsoft China Technology Centre was opened in Beijing to provide access to Microsoft's latest technologies and support Chinese partners in the development of local software, hardware and application solutions.

Most recently, Microsoft opened the Windows platform labs with the Ministry of Information Industry (MII) in April as an important part of the MII's National Public Platform for Software and Integrated Circuits, to support Chinese software firms developing products on the Windows platform.

In the past four years, Microsoft has opened three joint ventures in China, which is unprecedented for the software giant anywhere in the world.

During his last visit in February 2003, Gates signed an agreement with China which allows designated Chinese agencies to view the source code of Microsoft Windows software, in an effort to ease security concerns.

According to Chen, Microsoft in China has the most complete organization structure outside of the US head office, ranging from joint ventures to research, development, technological support and sales and marketing.

"Our core strategy is to implement a unified strategy, get rooted in China and grow with the local economy and software industry," said Chen.

The US giant's efforts have helped to change its image.

Gou Zhongwen, vice-minister of MII, said earlier this year that foreign software companies, especially those making investment in China, should be treated equally with domestic firms in the government software procurement regulation, which is being drafted by MII and other government agencies.

Since operating systems and office software are big items in software procurement, the remark was believed to be a recognition of Microsoft's efforts.

Beijing Vice-mayor Fan Boyuan also said: "My view about Microsoft has experienced a transformation: Microsoft has very good and well-developed software, which is well received around the world, so we should work with it in the development of our software industry, rather than working against it."

Partner with the local industry

Working with local partners is another major strategy for the US software giant.

Microsoft signed China's leading software company China National Computer Software and Technology Service Corp (CS&S) as its first Chinese global partner last November, to extend into e-government and other industrial application markets.

Tang Min, president of CS&S, thought the co-operation with Microsoft was successful. "One of the biggest weaknesses of Chinese software companies is lack of knowledge of the operation of international software companies and how they work on software projects. But with the co-operation with Microsoft, we have greatly shortened this distance."

In April, Microsoft inked a similar deal with Powerise, another major Chinese software company in Central China's Hunan Province.

On Sunday, Microsoft penned a deal with Changhong, China's leading home appliance manufacturer, to co-operate in the multimedia area.

It is believed that Microsoft may soon announce a new global partnership with the domestic IT distributor and software company Digital China.

Huang Yong, senior vice-president of CCID Consulting, one of the biggest domestic IT market research houses, pointed out that the co-operation between the Chinese software industry and Microsoft will create a win-win situation.

"China has (viewed the) software industry as a priority for the high-tech sector for many years, but the industry is still very small and there are few big domestic software firms," he said.

"Lack of knowledge of international practice is one of the reasons for the situation," he said.

From being treated with distance to being accepted and appreciated, Microsoft may be taking the first sweet bite from the fruit of its changes in China.

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