Microsoft (MSFT) has signed a memorandum of understanding with Suzhou Software Park for a Software as a Service incubator program to attract more Chinese software companies to develop software based on SaaS.

SaaS is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. SaaS is a model of software delivery rather than a market segment; software can be delivered using this method to any market segment including home consumers, small business, medium and large business.

In previous years, Microsoft has launched many other incubation programs in China including projects for its Xbox platform in Chengdu and Shanghai.

This cooperation with Suzhou Software Park is part of the "Potential Development Plan" jointly initiated by Microsoft China and National Development and Reform Commission on November 25, 2005.

Xu Min, a director from NDRC, says that the implementation of this program is aimed at promoting the development and expansion of domestic software enterprises and software technology parks, and helping China improve its software industry competitiveness, train software talents and develop domestic software copyrights.