01:48 PM
Connect Directly

TCS Set To Launch Chinese Operations, Counts Microsoft As Investor And Customer

The Chinese operations will employ about 5,000 workers by 2010 and focus on providing offshore services for companies in banking, financial services, and other specialized industries.

With salaries in its home country on the rise and competition for talent there increasing, Indian outsourcer TCS is staking a claim to a new frontier—China.

The company on Monday said it has reached agreements with shareholders from three Chinese firms with whom it will in September launch a Beijing-based joint venture company called Tata Consultancy Services (China) Co. Microsoft is a minority investor in the venture company, as well as one of its first customers. "We cannot afford to ignore the Chinese market," says TCS CEO S Ramadorai.

TCS first announced its intent to launch the company last year. Participating in the venture along with TCS and Microsoft are Chinese tech companies Beijing Zhongguancun Software Park Development Co., Tianjin Huayuan Software Area Construction and Development Co., and enterprise software developer Uniware Co. The latter, says Ramadorai, "brings knowledge of the local market."

With tech salaries rising in India at about 15% per year, even Indian outsourcers are looking to expand their operations into new markets to ensure a steady supply of low-cost talent. A strong Chinese operation also would meet customer demands for greater geographic diversity, Ramadorai says. TCS's Chinese operations will employ about 5,000 workers by 2010. Ramadorai concedes that staffing up won't be easy in the early going. "An enormous amount of talent and an enormous amount of institution building capabilities will have to be brought in," he says.

TCS's majority investment in Tata Consultancy Services (China) Co. is $12.6 million. The company will specialize in providing offshore services for companies in banking, financial services, and other specialized industries, says Ramadorai. It will also provide testing and quality assurance services for Microsoft, which is investing about $2 million in the project.

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July10, 2014
When selecting servers to support analytics, consider data center capacity, storage, and computational intensity.
Flash Poll
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.