Microsoft plans to nearly double its work force in India over the next three to four years, investing $1.7 billion and adding 3,000 jobs in a vote of confidence in one of the world's fastest-growing markets, Bill Gates told a forum of Indian business leaders.
Microsoft has long viewed India, a country of 1 billion people with a robust economy, as a potentially huge market. In his fourth trip to the nation, Gates was to meet with senior Indian officials, business leaders and programmers and take stock of a US$400-million investment program the company announced for India three years ago.
We are keen to grow Microsoft activities in India, Bill Gates, the company's chairman and co-founder, told reporters. The growth in employment for Microsoft will be more in India than the United States.
Earlier this year, the company opened a research center in the southern city of Hyderabad, the fourth such Microsoft facility worldwide. Next month, the company plans to open an innovation center in Bangalore, India's technology hub, which will be part of a global network promoting education, entrepreneurial development and innovations by small businesses.
Although scores of Western companies have tapped India's large pool of technical workers by increasingly hiring either Indians or Indian firms to handle their software-related work, a large number of people in the country have no access to computers or the Internet.
More than 35 percent of the country's population cannot read or write and nearly 400 million people earn less than a dollar a day. Still, a 300-million strong middle class and the country's booming economy make India a big market for western firms, including Microsoft.
Gates said the company's efforts in India were aimed at narrowing the digital divide; by creating products that are not only affordable to the poor people but also address their unique needs. Some of the ideas he raised included making a mobile phone work as a computer, and a television as a monitor. One idea Gates raised has long been a Holy Grail in computing: developing thinking machines that respond to speech - in various languages - and thus render keyboards unnecessary.
These are the challenges of the future, Gates said, and India is a place where breakthroughs like these are necessary and will take place.
Microsoft also said that it plans to put aside funds for computer education and training, including adopting 100 schools for computer education, and support an Indian program to offer computers and training at 100,000 centers across the country.
Gates' visit comes at a time when many Indian companies are increasingly turning toward open source operating systems, particularly Linux, as a low-cost alternative to Windows. Open source operating systems allow users to copy, distribute and modify the program's code, and are relatively cheap compared to proprietary systems like Windows, which does not allow users to modify its secret code.
U.S. computer firm Red Hat Inc., a distributor of the Linux software, announced that it had bought out its Indian partner and plans to invest $20 million in the country over the next few years.
While exact figures are hard to come by, a survey of Indian companies by Network Magazine released in June found that nearly 40 percent use Linux to run their servers. The magazine polled 340 companies, and offered no margin of error.
However, Microsoft insists its market share in server operating systems grew from 57 percent in early 2004 to 65 percent in late 2005. During his previous visits, Gates has downplayed the Linux threat.
The tech research firm Gartner Inc. said it expects Indian businesses to spend $25.12 billion on information technology in 2006, an increase of 23.7 percent over the current year.
Despite a low installed base of just 17 million computers, India's technology adoption is gaining momentum thanks to a booming software export industry and a growing domestic market.
Gartner said India can expect a growth of 20.8 percent for the next four years in business spending on computer hardware, software and communication products.