CDC Software will develop, market, and deliver Microsoft Dynamics CRM to customers in China, either as on-premise or on-demand solutions. It will use the infrastructure of internet services and online game company China.com to deliver CRM on demand.
There are two phases to the alliance. During the first phase, the two companies will offer a bundle consisting of Microsoft Dynamics CRM and CDC Software’s c360 CRM add-ons as on-site applications in China. c360 CRM are add-on products and development tools for Microsoft Dynamics CRM and have been delivered to about 1,000 customers worldwide. phase two should see the companies develop and deliver Microsoft Dynamics CRM applications as hosted on-demand services in China, starting in December 2006. The vendors are also thinking about integrating Windows Live services and MSN with the China.com portal.
CDC has been building the China.com network over the past five years and it now has a presence in 30 provinces and four municipalities, and supports the company’s online games, portal business, and hosting services for more than 1,700 businesses in China.
The benefits for Microsoft are obvious because it gains a channel into the Chinese market via an established player that is a native Chinese company, despite the CDC Software subsidiary having its HQ in Atlanta, Georgia. We understand the bureaucracy and scale of China, said CDC CEO Peter Yip in a recent interview with Computer Business Review. That will keep other vendors out.
CDC will benefit because Microsoft’s CRM product will help its ongoing move to establish itself as an enterprise applications vendor and it also fits with its strategy of taking western software into China. CDC Software’s existing enterprise application portfolio is Microsoft-centric. Dynamics will add a second CRM application to its portfolio because it already offers Pivotal CRM software, but there is little risk of one hindering the other due to the sheer size of the Chinese market.
CDC Software is adopting the SaaS model within its business, and will offer both on-demand and on-premise. In July 2006 it will start delivering its own enterprise applications as hosted services via the China.com network. Yip said SaaS will represent 25% of its business within three years, but said he does not think on-demand will be used for mission-critical applications. He said it will find a ready market among small and medium-sized companies, especially for standard functions like employee tax payments and scheduling facilities because of its impact on IT budgets. China is a great place for on-demand, he said, [because] we service many customers, CDC can take on the cost of [for example] updating tax software.
Yip said the China.com network is already running on-demand applications, simultaneously servicing 350,000 users. It expects to be servicing 750,000 to 800,000 concurrent users by the end of the year.
