Red Flag Software Co Ltd, a leading domestic Linux developer, has said that it will set up a joint venture with Japanese and South Korean partners to promote its latest Linux software in South and Southeast Asia.

"We want to put our efforts in developing Linux as a substantial entity by establishing an Asianux company, as we will soon expand into the South Asian market," Zhao Xiaoliang, deputy president of Red Flag, told China Daily.

Zhao said that Red Flag, Japan's Miracle Linux and South Korea's Haansoft would invest in the company. It has not been decided how much each party's stake will be but Red Flag will "definitely" hold a controlling interest, he noted.

The company recently launched its server Linux software Asianux 2.0, jointly developed by Red Flag, Miracle Linux and Haansoft. The alliance, in which Red Flag plays a leading role, aims to provide a unified Linux operating system for Asia through its Asianux products.

According to Zhao, the three companies will market Asianux 2.0 under their own brands in their respective countries - Red Flag Data Centre Server 5.0 in China, Miracle Linux 4.0 in Japan and Haansoft Linux 2000 Server in South Korea.

Meanwhile, "we have been mulling over expansion into other markets in the past two years, especially India, Malaysia, Singapore and Viet Nam," said Zhao.

Setting up the Asianux company will make it easier for the three to co-ordinate the expansion, he said.

The new company will seek local partners to make use of their strengths in services, technical support and sales channels, added Zhao.

Asianux 2.0 supports four languages Chinese, Japanese, Korean and English and is in line with globally-adopted Linux standards.

The product has won support from the world's leading IT vendors. Hardware and software companies including Dell, Hewlett-Packard, Intel, NEC, Oracle, SAP, Symantec and TrendMicro plan Asianux certifications.

Red Flag, founded in 2000, began to make profit last August. And "for this year we expect a much higher profit rate - we believe that we have found the right approach to sustainable business growth," said Zhao.

Government procurement still remains the largest contributor to the company's revenues, accounting for between 30 and 40 percent.

But it has successfully marched into other key sectors including telecoms, finance, insurance, energy, logistics and transportation, Zhao said.

(China Daily September 6, 2005)