Microsoft, CDC Partner to Make Inroads Into China's CRM Market

Microsoft (Nasdaq: MSFT) is teaming up with CDC Software, which recently acquired partner company c360, to make inroads into the China market. The two companies are discussing plans to provide Microsoft Dynamics CRM on a hosted basis in China, Kevin Faulkner, product-marketing director for Microsoft Dynamics CRM, told CRM Buyer.

If that should happen, he said, CDC would be the second provider of hosted Microsoft Dynamics CRM in the Asia region. Currently, the only other provider is Philippines Telecom, which hosts Microsoft CRM in the Philippines.

Microsoft is also planning to broaden is local customer base with 3.0, which is available in Chinese; earlier Microsoft CRM products were not. Microsoft will also be introducing a Japanese language product in Japan for the first time. With its Chinese roots, Faulkner said, CDC will be a welcome addition to these initiatives.

"There are multiple levels [to the partnership] that we are exploring," he commented.

Acquiring a Microsoft Partner

Earlier this year, CDC Software announced a definitive agreement to purchase c360, a provider of CRM add-on products, industry-specific applications, and development tools for Microsoft Dynamics CRM.

Based in Atlanta, c360 is privately held and sells its products through a network of over 450 authorized partners. At the time, CDC told CRM Buyer it wanted to leverage c360's strong relationship with Microsoft.

Microsoft had not been that familiar with CDC prior to the acquisition, Faulkner said, simply because it had not been a partner company. CDC is getting set to invest some US$10 million in the company, which has added to CDC-c360's appeal. "We have over 1,000 customers with c360 so we are happy CDC is broadening its channel," he observed.

Targeting Domestic Firms

Previously, Microsoft targeted the many multinationals that had set up operations in China. According to Faulkner, Microsoft has closed on several large deals there, including a 1,000-seat deal.

Now that 3.0 is available in Chinese, Microsoft is shifting its tactics to include the domestic firms in the country. Initiatives that the two companies are exploring include a multi-phased plan to integrate Windows Live Services and MSN with CDC's China.com portal.

As part of the first phase of the agreement, the companies will offer the Microsoft Dynamics CRM platform together with the CDC Software c360 CRM add-ons as on-site applications in China.

The second phase of the agreement calls for the companies to host Microsoft Dynamics CRM applications by December 2006. It will leverage the infrastructure established throughout China by CDC Software's sister division, China.com, an Internet services and online game company, which has servers in all major Chinese cities.