Microsoft Corporation (NASDAQ:MSFT) will create 1,000 new jobs in China when it rolls out its Windows 8 operating system, a company executive has revealed. China has indeed become a hub business expansion for many companies, with the information technology companies leading the way.
Apple Inc. (NASDAQ:AAPL) also expanded its business in the country with its iPads unit, and expressed that the world’s most populated country is a major revenue stream in its income statement.
Nonetheless, these companies have not jumped into the Chinese market without caution, despite holding the record for being the most populated country in the world, software piracy is highest in the country, with the legal software market primed at $3 billion, whereas the pirated stuff tripled that number.
Indeed, Microsoft Corporation (NASDAQ:MSFT) is well aware of the potential threats to its intellectual property, as expressed by the global CEO, Steve Balmer, who pointed at the weak intellectual protection as a major quandary for the company and others setting up shop in the country.
Additionally, Microsoft has struggled with piracy attacks in the country, as noted by The Next Web. However, this was not a threat large enough to deny the company from expanding its presence in China, as it chose to focus on the good side, which is a massive opportunity for revenue generation.
The company has an estimated 4,500 staff members as of now, in China, and is seeking to grow this number by 20% during the next financial year, 2013. According to the report, the new staff will include sales, marketing, research and development (R&D), and services. Greater China operations CEO, Ralph Haupter, is quoted by Reuters as confirming this fact.
The Reuters report also quoted Ralph, who was appointed CEO of the Greater China Operations in April, saying that the expansion is geared towards reaching out to Chinese customers in the local governments and public institutions. This growth will also be largely reflected in the R&D department, which currently spends approximately $500 million annually.
According to The Next Web, R&D is set to grow by 15%, and it is believed that Microsoft’s new cloud computing plant in China, which is currently under construction and has a capacity to accommodate 600 members of staff, will house a majority of the new staff, as projected in 2013.
The additional 1,000 members will bring Microsoft’s workforce in the country to approximately, 5,500, just shy of its workforce in India, which stands at 5,800. Interestingly, the two countries form the world’s top two most populated nations, irrespectively.
One major reason Microsoft Corporation (NASDAQ:MSFT) will be happy to do business in China, despite the software threats, is because of its latest product, Microsoft Surface tablet. If Microsoft can convince Chinese customers to acquire its device, which of course earlier surveys in the U.S indicated some serious challenge in the Americas, then it could be set for some revenue boom, as China offers customers in large numbers.
However, Microsoft Corporation (NASDAQ:MSFT) will also need to be a little more prudent over its expectation in China, despite the massive expansion. This is because, a majority of its products are now in direct competition with those of Apple, which also strengthened its presence in China recently.
At the time of this writing, Microsoft Corporation (NASDAQ:MSFT) stock was trading at $30.98 per share, up $0.59, or 1.95% from the previous close.