Microsoft jobs plan tied to long term

Updated: 2013-05-23 11:09

By Michael Barris in New York (China Daily)

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Microsoft Corp's plan to add several thousand employees to its work force in China is part of a long-term investment by the software giant in the country's growing market for cloud computing and other "enterprise" software, an analyst says.

Sid Parakh, of McAdams Wright Ragen Inc, a Seattle-based investment firm, said the enterprise-software market in China "has the potential to grow long term".

Enterprise software is used by companies and organizations to keep track of inventories, manage customer orders, automate bookkeeping and keep supply-chain operations running smoothly, among other core functions.

Although Parakh said China's economic boom creates "tremendous room" for Microsoft to increase sales of enterprise software, he emphasized the market will take time to reach its potential. Although it contains half of the world's population, the Asia-Pacific region still generates far fewer sales for Microsoft and other technology companies than the Americas or Europe, Parakh said.

Referring to CEO Steve Ballmer's statement at a news conference on Wednesday that the Redmond, Washington, company will hire several thousand workers during the next year, Parakh said he doubts the expansion will pay immediate dividends.

"I don't think any of the investment will benefit them this year or next," he said. "This is about taking a longer-term view for Microsoft."

Ballmer didn't provide a specific number for new workers at the news conference in Shanghai. Microsoft currently employs 4,000 people in China.

As the popularity of smartphones contributes to a global slump in demand for personal computers and they use, Microsoft is moving to reposition its enterprise-software business for the era of cloud computing - applications and services offered over the Internet from data centers around the world. Consumers can now buy these resources as a utility, on demand.

Microsoft's view of China as a potential cloud computing market is expressed in a book the company put out in January to "evangelize Chinese industry and government" about the trend and raise its brand profile there with respect to cloud products and services.

Published in Chinese by Publishing House of Electronics Industry, a leading domestic information-technology imprint, the book states that "the cloud opportunity has the power to change lives" and "is predicted to generate millions of new jobs in China over the next several years". Microsoft, according to the book, "is committed to help make the vision of a continuous cloud service for every person and every business across China a reality".

In the short term, Microsoft's hopes for boosting growth in China rest on products such as Windows Azure, a cloud-based platform that the company will make available in China on June 6 through local partner 21 Vianet Group Inc. Azure stores business information and programs on remote servers and lets customers access them over the Internet. Clients use the service to run corporate programs, websites and applications from Microsoft's data centers, rather than spending on their own servers, storage and workers.

Azure will make Microsoft the first multinational corporation to offer public cloud computing in China.

Linda Deng in Seattle contributed to this story.

(China Daily 05/23/2013 page2)