by CIO Staff

Ballmer Inks Deal to Reduce China’s ‘Digital Divide’

May 22, 20062 mins
Data Center

Microsoft has signed a deal to help China’s Ministry of Information Industry (MII) speed economic development in China’s rural areas.

“Microsoft will work closely with MII to reduce the digital divide and increase informatization in China’s rural communities,” said Steve Ballmer, the company’s chief executive officer, after signing the memorandum of understanding.

Rapid development has transformed many Chinese cities into showpieces of the country’s resurgent economic power. But the futuristic skylines and sprawling factory complexes are just half of the story. Most Chinese still live in the countryside, where economic development lags behind the cities.

The growing economic disparity between rural and urban areas is a major concern for China’s central government, which has made rural development a priority. For Microsoft, which is counting on Chinese officials to reduce software piracy, support for this policy helps to strengthen its relationship with the government.

Under terms of the deal signed with MII, Microsoft will train more than 70,000 software engineers through a combination of classroom instruction and distance learning. Microsoft will also provide training and consulting for a handful of Chinese software companies, promising to help them win 250 million renminbi (US$31 million) of business over the next five years.

Microsoft CEO Steve Ballmer
Microsoft’s Ballmer

Microsoft and MII will also set up several joint R&D centers in rural areas of China to develop new software technology and applications. “World-class facilities should help ensure and enhance China’s innovation capabilities,” Ballmer said.

Microsoft will spend 250 million renminbi over the next five years to fund the R&D centers.

Ballmer’s visit to Beijing follows a high-profile April visit by Chinese President Hu Jintao to Microsoft’s headquarters in Redmond, Wash., including a dinner at the home of Bill Gates, Microsoft’s chairman and chief software architect.

That visit followed a $1.2 billion deal between Microsoft and Lenovo Group, China’s largest PC maker, to install licensed versions of Microsoft’s operating system on PCs sold in China and other countries. Microsoft also signed similar deals with two other Chinese PC makers in April.

-Sumner Lemon, IDG News Service

This article is posted on our Microsoft Informer page. For more news on the Redmond, Wash.-based powerhouse, keep checking in.

For related news coverage, read Microsoft’s Hotmail Problems Persist in China and China TechFaith, Microsoft Team Up.

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