Tech behemoth sees huge growth opportunities in China’s digital transformation
Technology heavyweight Microsoft Corp plans to create nearly 2,000 new jobs in China in the next 18 months as it sees strong opportunities in accelerated digital transformation in the world’s second-largest economy.
The move is part of Microsoft’s long-term commitment to the China market, a strategy that has never been disrupted by the COVID-19 pandemic, said Alain Crozier, chairman and CEO of Microsoft Greater China.
“About 90 percent of the new positions will be engineers and research and development staff members. We keep investing in China for a lot of reasons, including the quality of the people and the necessity for us to support our customers and partners on innovation,” Crozier said.
“Microsoft Teams, a communication platform, saw an almost 500 percent growth amid the pandemic (affecting China). Our cloud computing services also recorded high double-digit growth,” Crozier said.
When the pandemic hindered supply chains, Dynamics 365, another online platform developed by Microsoft to maintain customer relationship management and facilitate supply chains, grew more than 130 percent in China.
For instance, Chinese technology company Lenovo Group Ltd has used Microsoft’s products and services to manage its supply chain amid the outbreak, which is a challenging task given that Lenovo has businesses in more than 160 countries and regions, and boasts more than 100 supply chain partners.
According to a joint study by market research company International Data Corp and Microsoft, as Chinese companies continue working to deal with the economic fallout of the outbreak, 63 percent of local organizations said they will further speed up digitalization to ensure business resilience.
Both Chinese and foreign technology companies, including Alibaba Group Holding Ltd and Amazon Web Services, see solid opportunities in mounting enthusiasm for digitalization, and have devoted more resources to China’s proliferating cloud computing market.
Crozier said Microsoft enjoys a string of unique advantages that have enabled the company to have “a very good year” in China, and can help it to stand out amid intensified competition.
“We’ve comprehensive product portfolios and solutions, and we’ve a strong engineer and R&D workforce in China that has grown tremendously during the pandemic, and keep launching new solutions,” Crozier said.
“Meanwhile, we also have the largest and strongest ecosystem of more than 17,000 partners in China. Such partners are not just pure distributors, but also include cloud providers, which are developing solutions on top of Microsoft’s underlying solutions to re-provide products and services,” Crozier said.
Microsoft’s emphasis on helping small-and medium-sized businesses also differentiates it from competitors, he said. “SMEs account for 90 percent of companies in China and they were hit hard by the epidemic. We have launched a lot of free offers to help them resume business activities.”
Charlie Dai, a principal analyst at Forrester, a business strategy and economic consultancy, said Microsoft was the first global vendor to commercialize its public cloud operations in China, and it has sustained its local expansion by continuing its ecosystem synergy between enterprise collaboration tools, digital operations platforms, and the Azure cloud solution.
Such advantages have helped Microsoft to increase customer base during the pandemic. Crozier said Microsoft has booked more Chinese customers, which are chiefly from the gaming and entertainment industry, to embrace its technologies to go global, as social distancing made more people embrace digital entertainment.
Meanwhile, multinational corporations are also placing greater emphasis on the China market where economic activities rebounded significantly and Microsoft’s technologies can help them better innovate in China, and scale their solutions to global markets, he said.
Despite geopolitical uncertainties, Crozier said many companies now look at China as a growth platform for not just this year but next year and beyond. China is also an important innovation platform where the products and technologies can be developed and taken to the rest of the world.
Crozier’s remarks find an echo in a study by the US-China Business Council, an organization of over 200 US companies that do business with China. The study, published in August, showed that 83 percent of the US companies surveyed said China remains among their top five markets if not the most important one for them.
Matthew Margulies, vice-president of China operations at the US-China Business Council, said earlier that regardless of the hype over technological decoupling, US companies’ commitment to working with Chinese partners remains as steadfast as ever.
Crozier, who has been in charge of Microsoft’s China business for more than four years, said that MNCs, in order to succeed in the China market, need to be in China for the long term and participate in society.
“Continuous innovation is also needed, because the society is evolving at a very fast pace in China,” Crozier said.