New Delhi: In India for the two-day Microsoft global leaders forum, Bill Gate, Microsoft chairman and the world's richest billionaire, announced in the capital yesterday that Microsoft would invest $1.7 billion (Rs7,800 crore) in India in the next four years - the highest IT-sector investment to have been announced so far.
The announcement was made by Gates in the presence of communications and IT minister Dayanidhi Maran.
The software giant will also double its workforce in the country. "We depend on India for manpower that is why we are scaling up operations here,' Gates said. Microsoft views India as a market with huge potential and the investment is among the largest by an IT company.
Gates said the new hiring in India was part of a "conservative estimate' of $1.7 billion the company would spend in India. "This amount will be deployed across select focus areas over the next four years, in line with Microsoft's strategic vision for India."
Reacting to the announcement, Maran said the government considers the announcement an indicator of the value Microsoft attached to its development and R&D in the country as well as its recognition of the accelerating pace of growth of India's ICT sector.
"I am also pleased that Microsoft has offered its full cooperation on various matters relating to security, which is a key area of concern as we move into a digital era,' Maran added.
Other foreign companies to have announced multi-billion dollar IT-sector investments in India in the recent past include:
Cisco Systems' $1.1 billion over the next three years
Intel's over $1 billion in various aspects of its business.
SemIndia's $3-billon in a chip manufacturing plant based on technology from Advanced Micro Devices (AMD).
Microsoft Corp has long viewed India with a high-growth economy. Ravi Venkatesan, chairman, Microsoft India, said, "There is a great potential on the Indian market. And India is also one of the priority areas for Microsoft Corp to develop in the world, which will be further proved by the Bill Gates' trip to India. This is Gates' fourth visit to the country.
In recent years individual users and even Indian companies have been increasingly turning toward open source operating systems like Linux, a low-cost alternative to Microsoft's Windows, though the company maintains that its market share in server operating systems in India haws increased from 57 per cent in early 2004 to 65 per cent in late 2005. Moreover, during his previous visit to the country, President Kalam had told Gates that India required
low-cost software and whose architecture alternatives like Linux
Speaking earlier at a CII organised forum on 'realising India's potential', Gates outlined his vision for Microsoft in India and the areas in which the company would continue to partner with the Indian government and the industry. "India's IT prowess has a global reputation. For India to sustain economic growth it needs to leverage IT as an enabler and focus on rapidly enhancing two key areas: literacy and productivity. India will have to use IT as an enabler for a sustainable and equitable development model to realise the benefits for all of its citizens across the country." Gates said.
Elaborating on the business model, Venkatesan said, "In the next phase of our growth, we will expand our reach across the country and work with system integrators, ISV partners and the developer community to develop solutions and services which will enable the growth of Indian IT market. Further, the research, product, services and technology support divisions of Microsoft based in India will see major expansion in line with our aim of delivering solutions aimed at emerging markets and global customers from India. Innovate in India and Innovate for India will be a focus area for us."
Broadly, the $1.7-billion investment will be leveraged to drive momentum in four broad areas over the next four years. This includes, delivering on Microsoft's mission to create a digitally inclusive society via local programs to accelerate IT literacy, create local language computing solutions and facilitate affordable access to technology in rural areas.
The second focus area is strengthening the local knowledge economy. In this direction, Microsoft has been working with local ISVs and partners to provide technology based, customised and relevant solutions to customers across a cross section of industries. This entails significant investments in skills transfer and joint go-to-market initiatives, in order to deliver increased business value to customers. Microsoft will equip India's 650,000 developers with tools, technologies and requisite training.
The third focus area is expanding Microsoft's marketing infrastructure and presence across India. To achieve the same, Microsoft proposes to further extend its reach across the country. Plans include the setting up of offices in 33 cities, for enhanced market penetration, as well as the addition of 700 retails outlets. Additionally, one world class Innovation Centre will be set up in Bangalore in January 2006.
Last and the most aspiring goal is to expand India into a major hub for Microsoft research, product and applications development, services and technical support for both global and domestic industry.
This year Microsoft opened its fourth research centre in Bangalore after the US, Europe and China - with low-cost computing for rural India as its theme.
Microsoft's plans, says the company, also include releasing its