Microsoft Corp announced yesterday that it was licensing new software to local firms in China for the first time in a move that showed confidence in China's economy and hope for its anti-piracy efforts.
The Redmond, Washington-based software giant struck part-nerships with Comtech Group (
Comtech will license software making it easier to view pictures or high-quality videos on mobile devices. Talkweb will use Microsoft software for a Web site that converts digital images of people into cartoons.
Microsoft has had software licensing deals with international firms operating in China, but the agreements with Comtech and Talkweb marked the first such partnerships with local companies.
The deals were signed under the auspices of the Intellectual Properties (IP) Ventures program launched by Microsoft last year to unite entrepreneurs with software innovations from the firm's five research labs worldwide.
Microsoft was "rolling out" the IP Ventures group in China with a focus on software developed in its lab in Beijing, where it has 160 researchers, Harnett said.
The technology license to Talkweb and Comtech was from the Beijing lab.
"The broader perspective is that Microsoft is committed to working with Chinese companies to develop the software economy in China," Harnett said.
"It allows us to connect with innovative companies that understand customers in China. You will see a lot more of us working with our development centers there. You will see a lot of these products reaching the market through China," he said.
Comtech and Talkweb are both located near Microsoft facilities, where researchers trained the firms' employees in the new software.
"We find existing companies with footholds in the market and embed our technologies in the company," Harnett said. "In China, technology from all our research labs will be available to China companies."
Microsoft's IP Ventures lets the firm profit on software creations that it did not necessarily use in its own products, analyst Matt Rosoff of Directions on Microsoft said.
Helping cultivate a vibrant Chinese software industry also plants seeds for tougher protections of intellectual property rights, Rosoff said.
"If China eventually has a thriving home-grown software economy, the Chinese government will clamp down harder on piracy," Rosoff said.
"Microsoft has seen this cycle take place in other countries, such as Taiwan and South Korea, where piracy was a problem," he said.
Comtech is a publicly traded company that specializes in programs for mobile handsets and digital media hardware made by its customers.
"Using Microsoft cutting-edge technology will definitely help us," Comtech chief executive Jeffrey Kang said. "The partnership with Microsoft is very valuable."