21st Century Business Herald Insigma Technology and Microsoft Enter Partnership

After cooperating with China Digital, Shandong wave, ChinaSoft and Powerise, Microsoft settles on Insigma Technology Corp. for partnership.

Insigma Technology Corp.( 600797.SH ) announced a global strategic partnership with Microsoft ( China ) on March 8, 2007. According to Li Hui, Assistant to President of Insigma Technology, collaboration with Microsoft consists of four fields including intellectual training, technology collaboration, programs based on .NET platform and software outsourcing. Li Hui also said that a 10-member coordination team has been specifically established to work on the collaboration between the two parties.

Microsoft’s Strategy

By cooperating with China Digital, Shandong wave, ChinaSoft and Powerise, Microsoft trys to fall back on its partners capable of getting bulk orders from local governments and special clients, while the company itself is also expected to share more technological supports and stages with those Chinese ventures.

Both parties would jointly make a plan of market projection and execution strategy. Microsoft would provide Insigma Technology’s software architects, developers, solution program sales, team support etc with various trainings, and support Insigma Technology’s application design and construction development based on the .NET platform. Furthermore, software service and outsourcing business of Insigma Technology would be assisted by Microsoft.

According to Deming Hong, global partnership strategy director of Microsoft China, not only technology trainings but also sales and management methods trainings would be available to Insigma, which would be very favorable for developing Insigma’s capability in R&D and business negotiation.

Hui Li also mentioned that some basic training would be in Microsoft for Insigma’s employees, while teaching staff from Microsoft would be sent to Insigma for some special training programs.

Cooperation in 3G technology would be another highlight based on Microsoft’s .Net platform. The increasing demand for 3G technology definitely provides IT solution programs a much larger market currently. And depending on Microsoft’s .Net platform and R&D capability, Insigma would strength itself in developing and applying software technology.  Also more market share is expected for Insigma.

To Microsoft, Insigma’s service capability in financial software, E-government, energy, environment protection is worth relying on.

Insigma Technology’s Blueprint

In fact, the software outsourcing orders from Microsoft are the visible benefit to Insigma Technology.

In the year of 2002, Microsoft CEO Steve Ballner went to China and signed a contract worth 6.2 billion RMB with China development and reform committee. The contract consists of an overall investment terms such as hardware manufacture,software outsouricing and technology training. According to Deming Hong, the Microsoft orders would be priorly given to outstanding software outsoucing players like Insigma Technology.

Currently, 60% of outsourcing businesss in Insigma comes from North America market while 40% is in Japanese market, which indicates a great increase of software outsourcing in North America for Insigma.  The cooperation with Microsoft is indeed helpful for Insigma to expand its business in US market, according to Hui Li.  And he also points out that, not including employees in Comtech, there are around 1200 employees in Insigma engage in the software oursouring towards European and American market, and in 3 years, the number will outpace 2500.

Zhaohui Xia, a specialist in Huatai Security Corp., represents that in 3 years, Insigma’s outsoucing revenue from Europe and America will recepectively reach US$30 million, US$ 50million and US$80 million, even in 2008, the net profit is expected to outpace US$100 million.

Under the firm support from Microsoft, Insigma Technology has taken a much closer step to its “International Software Factory” dream, according to Chun Chen, Chairman of Insigma Technology.

(21st Century Business Herald)