Alibaba link up with software service provider

A receptionist works at Alibaba's headquarters in Hangzhou, capital of East China's Zhejiang province, Jan 30, 2015. [Photo/Xinhua]

Alibaba Group Holding Ltd announced on Tuesday a strategic partnership with one of the largest software service providers in China.

The e-commerce giant's messaging platform DingTalk has teamed up with Hecom (Beijing) Technology Co Ltd, with the aim of helping small and medium-sized companies attract more clients and improve marketing techniques.

"We are aiming to build the best mobile management platform for small and medium-sized businesses," Liu Xuecheng, chief executive officer of Hecom, said.

Hecom is the largest "software as a service" company in China. Established in 2009, it has 35,000 paid corporate clients, which rely on its mobile app to track the work performance of sales staff, manage client data and communicate with product distributors.

Software as a service, or SaaS, is a licensing and distribution model. This involves software being licensed on a subscription basis and centrally hosted.

Under the pact, DingTalk and Hecom will join hands in developing better products and share client resources. DingTalk, which was launched last year, said the number of its clients exceed 500,000.

But unlike Hecom whose clients all pay money to use its app, DingTalk is providing mobile office and communication services for free.

"The deal is a win-win cooperation. Partnering with DingTalk, which is owned by Alibaba, will significantly boost the reputation of Hecom. Meanwhile, the former can also benefit from the offline resources of Hecom," Jack Liang, managing director of Bosun Kinzon Capital, an investment agency in China, said.

Unlike the United States where 32 SaaS companies have gone public and each one was valued at more than $1 billion, there are no big SaaS providers in China. But analysts expect a major Chinese company will emerge in the next five to ten years.