Sharpening China's digital edge

Ralph Haupter, Chairman and chief executive of Microsoft Greater China

Under Ralph Haupter, Microsoft's local unit to transform Chinese companies' businesses with advanced IT

The man in charge of Microsoft Corp's China business thinks the recently announced national strategies to boost the information technology sector, will provide the company, the world's biggest software maker, with greater opportunities, despite a slowing economy.

Ralph Haupter, chairman and chief executive of Microsoft Greater China, is also eyeing technologies like augmented reality or AR and virtual reality or VR for which demand is rising in China.

"I feel very confident that Microsoft can be a key player and a key contributor in that digital transformation of the industry here in China," said Haupter, the first non-Chinese CEO since the United States company entered China in 1992.

"I'm deeply convinced that Chinese companies will very much focus on how digital technology will transform their business. Microsoft can play a pivotal role in this development," the German executive added.

China is pushing forward "supply-side structural reforms", cutting back overcapacity and improving efficiency and quality in manufacturing and many other sectors to stimulate economic growth.

Premier Li Keqiang said during an annual political meeting in March that the reform will be a key strategy in the country's 13th Five-Year Plan (2016-20).

"To me (this reform means China) is moving from a pure production-oriented key performance indicator model to a real market-oriented model where you very much focus on the demand and try to optimize supply and production towards demand," according to Haupter.

He said it will be a smart way for China to beef up competitiveness and technology innovation, which are the key pillars for real growth in markets.

China is seeing the weakest growth in a quarter century. GDP of the world's second-largest economy grew by 6.9 percent last year, the slowest pace since 1990. China has set the growth target of 6.5 to 7 percent for 2016.

Haupter, who loves skiing and sailing, said China is navigating its economy in the right direction at a pretty fast pace.

"I think six-plus percent GDP growth is still very strong," he said, adding the company will focus on producing value for customers, helping improve their business. "This will always be the sweet spot of contributing to the benefit of China, to the benefit of Chinese companies.

"Some think (AR/VR) will be very strong on the gaming side. I personally believe there is a lot of opportunity on the engineering side, on the production side," he said, adding the technologies have great business potential in many areas from traffic management to real estate and tourism.

Microsoft is developing VR technologies itself, introducing a VR goggle named HoloLens.

He said the company will partner with Chinese developers to expand the scenarios where the HoloLens can be used.

"We are just opening a chapter of very, very different opportunities on personal experiences going forward with the technology of HoloLens," he said.

Finding local partners has been one of the biggest achievements for Microsoft in China after Haupter, who used to help the software giant to find new partners in Europe, the Middle East and Africa, came to China.

Wu Lianfeng, associate vice-president of consultancy IDC China, said because of policy restrictions and stronger local competitors, overseas IT companies will need to join hands with Chinese partners to explore business opportunities.

In 2013, one year after Haupter, took over Microsoft's China business, the company introduced its cloud service with Shanghai-based 21Vianet Group Inc. The cloud computing market in China is closed to sole overseas providers.

Last December, Microsoft set up a joint venture with a State-owned technology firm China Electronics Technology Group to bring the United States company's latest operating system Windows 10 to government procurement market.

"We want to deepen our footprint of our business in China having entered the market more than 20 years back," said Haupter.

He said the JV has received the first government customers and the first product, running on Windows 10, is under test.

"Our technical people are working together here in China with Chinese officials to deliver a product which is meeting the needs and requirements we were asked to deliver," he said.

In the consumer market, Microsoft has several Chinese hardware partners that are making personal computers and mobile devices running on the Windows operating system.

Hardware makers in Shenzhen, Guangdong province, an electronics manufacturing hub, have developed about 200 devices running Windows, which are exported to 53 overseas markets. Microsoft said total sales reached 6 billion yuan ($928 million).

Last year, the company announced an unlikely partnership with Xiaomi Corp, a top Android device maker that had never launched Windows-based products.

In the mobile market where Apple Inc's iOS and Google Inc's Android controlled almost all the market share, getting the biggest Android phone vendor to accept Windows operating system was considered a big achievement.

"What I like in our partnership with Xiaomi is that they have a fantastic way of reaching out to the users and improve their product on an ongoing basis with customer feedback," said Haupter.

He said the partnership will enable the two companies jointly produce products customers are "interested in", and "willing to pay money for".

gaoyuan@chinadaily.com.cn

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Ralph Haupter

Chairman and chief executive of Microsoft Greater China

Born: Stuttgart, Germany

Current role: Microsoft corporate vice-president, CEO of Greater China Region

Previous positions: Vice-president of Microsoft Germany

Education:

Bachelor of engineering (graduated in 1992)

MBA (graduated in 1998)

Marriage status: Married with two children

Hobbies: Skiing, biking, golfing. Also a semi-professional musician for about 10 years