An ode to India

Moumita Bakshi Krishnan Thiagarajan

Bowled over: Steve Ballmer speaks of Microsoft's India plans.

WHEN Steve Ballmer, Chief Executive Officer, Microsoft Corp, came on a three-day whirlwind tour of India in November last year, he met the Prime Minister, senior Government officials, and top honchos of India Inc.

He talked in detail about the company's plans to localise its Windows and Office software in 14 Indian languages by 2005-end.

In plain speaking, the Microsoft CEO also urged the Government to take measures to stimulate the IT economy in India, saying the country lagged in investments in computerisation.

Terming Microsoft's sentiments for India `enthusiastic', Ballmer had also indicated that there were opportunities for India to do even more on the issue of digital inclusion.

Four months after his high-profile tour, eWorld caught up with Ballmer again to discuss a slew of issues ranging from piracy to India strategy, and find out more about what is brewing in Microsoft Labs. Excerpts:

Recent reports indicate that Microsoft's `Longhorn' initiative will be developed entirely in-house, and that none of this work will be outsourced from Indian vendors. Given the time-to-market advantage and the value proposition offered by Indian vendors, do you think that inevitably parts of Microsoft's work will move offshore? How do you view the entire debate on outsourcing?

(Microsoft is working on integrating several key features such as search, speech recognition, online music and storage into the next version of Windows, code-named Longhorn, to be launched in 2006.)

You're right - Longhorn is being developed entirely by Microsoft employees, mostly in the US.

But precisely because of the advantages you mention, we're doing a significant portion of this work in India. A third of our India Development Centre staff at Hyderabad is working on Longhorn. They're working on remote access and VPN features, data protection features that will be built-in, fax services for both the client and server, and services for UNIX.

We are most impressed by the indisputable talent of India's developers, its strong education system and the dedicated IT vision of the Indian Government.

We're focused on continuing to grow our technical workforce in India. While the majority of our product development work will remain in Redmond, we do have very specific plans to grow our Hyderabad Microsoft staff, which will give us huge time-to-market advantages in the long run.

Microsoft has stated that India is of strategic importance to the company. What is the long-term growth strategy of Microsoft for India, in the larger context of the Asia-Pacific region?

India is one of the Asia-Pacific region's fastest growing PC markets. It has the region's fastest growth in Internet usage and it has a wealth of technology expertise.

Our approach in India mirrors what we are doing throughout the Asia-Pacific region - which is to partner effectively with governments and work with each country's developer communities to create new opportunities for customers and for our industry.

All the programs that we have in India are a result of this approach. Our Hyderabad campus is our effort to achieve `One Microsoft India', bringing together three units: the India Development Centre (IDC); the Global Delivery Centre India (GDCI), which covers almost 46 per cent of all Microsoft internal IT application work, and works with all major Indian systems integrators; and our Global Support Centre in Bangalore that covers technical support and customer service for Microsoft customers.

For the long term, one of the most important things we've done is opening a Microsoft Research facility in Bangalore.

The State's strong research and technical talent pool made it a natural hub for our research, as it is for the Indian Insbreastute of Science, Raman Research Insbreastute and government research organisations such as the Defence Research Organisation, National Aeronautical Lab and Indian Space Research Organisation.

As for expansion, we plan to grow our Hyderabad Microsoft staff to approximately 500 by 2005. We will continue to pursue partnerships with companies such as Infosys, Wipro and Satyam. All these are examples of the great things that can happen when we work with a country that has a clear IT vision, a strong education system, and highly talented developers and computer scientists.

Do Microsoft's research labs examine product ideas suitable for emerging markets like India?

Yes, definitely. India provides an excellent environment to do certain kinds of research that will be relevant for large segments of the developing world. In our new R&D lab in Bangalore, two of the first research groups to be established were the Technology for Emerging Markets Group and the Multilingual Systems group.

India is a microcosm of the developing world worldwide, uniquely diverse in terms of religion, culture, geography, climate, language, etc.

You had recently announced the inclusion of India among the five countries where low-cost Windows XP Starter Edition would be launched. This is being seen by some as a move to combat the growing popularity of Linux amongst State-run agencies and insbreastutions, and the Government. What strategy do you plan to grow the market for your products? Could you also elaborate on the pricing model?

Microsoft has invested in resources to engineer products that it stands by - products that are comprehensive, easy-to-use, and deliver value `out-of-the-box' for key customer scenarios. So the availability of Windows XP Starter Edition in early 2005 is a significant step both for Microsoft and for India. This is a low-cost, customised and localised technology solution that will not only help spur PC usage in India, but also create broader IT ecosystem opportunities - for the local economy and for Microsoft.

Retail pricing is currently handled locally by participating PC OEMs (original equipment manufacturers) and Microsoft OEM Distributors. So there are some slight regional differentiations. As for open source, we think it's important to focus on the value delivered to end-users. Users tell us that they continue to choose Windows for ongoing innovation, interoperability and overall ease of use that allows them to focus on enhancing productivity.

You have talked about software piracy being a major factor impeding the growth of Microsoft (and other companies) in emerging markets such as India. You have also talked about the need for a $100 PC. What is the biggest challenge for Microsoft in the Indian market? How do you plan to address it?

Well, you're right that piracy is an important issue. Fundamentally, we start with the belief that piracy hurts the whole economy. Two years ago, International Data Corp and the Business Software Alliance released a study indicating that if India were able to reduce its piracy rate by 10 per cent, it could create nearly 50,000 jobs, add $2.1 billion to its economy, increase local industry revenues by more than $1.6 billion, and generate an additional $92 million in tax revenues. That's impressive. Our focus is on making sure people understand the benefits of genuine software.

Another challenge is ensuring that the benefits of technology are affordable and not limited to urban populations. That's why making XP Starter edition available here is such a significant step. It is about much more than the technology, it's about access. Ultimately, giving people low-cost, customised and localised technology solutions will give India many more IT opportunities. The benefit of working with a country like India is that we are able to partner with Indian business and Ggovernment to make progress on these challenges, so that all of India can make the most of its IT vision.