TCS-Microsoft Joint Venture to Begin Operations in September

By Stan Gibson  |  Posted 2006-07-24

The joint venture between Tata Consultancy Services, Microsoft and three Chinese partners is due to begin operations in September, the CEO of TCS said in an interview.

"The CEO is in place, the board is formed, and were starting the recruitment process. Well apply for a business license tomorrow and will be up and running in September," said TCS CEO S. Ramadorai. The joint venture, called Tata Consultancy Services (China), will provide outsourcing services and solutions to the Chinese and worldwide customers. The parties signed a memorandum of understanding on June 30, 2005, together with Microsoft, which will participate in the joint venture as an investor.

Ramadorais comments came on the heels of a milestone in the joint ventures progress. Tata Consultancy Services Asia Pacific Pte, a subsidiary of Tata Consultancy Services, the large outsourcing provider based in Mumbai, India, announced the signing of a shareholder promoters agreement on July 24 in Beijing with the three Chinese partners, Beijing Zhongguancun Software Park Development, Uniware and Tianjin Huayuan Software Area Construction and Development. The agreement paves the way for the joint venture to apply for a business license and the commencement of operations.

The total investment in the joint venture so far is $12.6 million, 72.22 percent of which has come from TCS. Microsofts investment of $2.1 million, bringing the total to $14.7 million, has not been made yet, but Ramadorai said he expects the investment to come within the next three to four months.

Ramadorai said the joint venture will concentrate on software development for banking, financial services and telecommunications companies. The HuaXia Bank of China is slated to be the joint ventures initial customer, he said. The joint venture may also do work in business process outsourcing, consulting and integration services, he said.

The joint venture will be located in Beijing Zhongguancun Software Park Development, which is known as zPark. TCS now has 500 employees in China, a number that Ramadorai said he expects to swell to 5,000 in four years as a result of the joint venture.

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