US software firm Microsoft is to greatly boost its investment in research and development (R&D) in China, after it united all development organizations under one umbrella.

Zhang Yaqin, the company's corporate vice-president and vice-chairman of Microsoft China, said yesterday that the new Microsoft China Research and Development Group would aim to recruit 800 people this year and 3,000 within three to five years.

"Our goal is simple and clear: to allow this group to become a world-class technological and product R&D center," said Zhang, who was appointed to head the new group on Wednesday.

Currently, all Microsoft's R&D organizations in China have more than 800 people in five big organizations and several regional teams.

Zhang said his company's annual investment in R&D in China was about US$100 million, but that number will also rise as the team becomes bigger.

He said one main reason that Microsoft wanted to place all R&D teams in one group was to increase co-ordination among different teams.

The software giant's R&D organizations in China used to focus on different areas and operated comparatively independently of each other, but as the organization grows they need more co-ordination.

"Too many organizations caused certain inconveniences to the management. The integration will help Microsoft cut costs and, more importantly, increase synergy," said Wang Tao, an analyst with the technology industry consulting firm Analysis International.

Zhang said the united group would play a bigger role in developing products for the local market.

Previously, a large portion of the work of Microsoft's engineers in China was for the global market or basic research, but they will focus on Chinese customers in cooperation with Microsoft's local business units.

The new group will also work more closely with local partners and establish a department for strategic cooperation.

Microsoft will also outsource more work to local partners, which will reduce costs and help local companies grow.

Google, a major competitor for Microsoft, is also expected to launch an R&D center in China, headed by Kaifu Lee, former Microsoft corporate vice-president and founder of its R&D organizations in China.

The web search giant planned to recruit 50 people initially, but it has decided to expand more quickly.

(China Daily January 20, 2006)