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Microsoft to Invest $1.7 Billion in India

Posted on: Tuesday, 13 December 2005, 18:00 CST

By RAJESH MAHAPATRA Associated Press writer

NEW DELHI -- Microsoft plans to nearly double its work force in India over the next 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.

The investment would be among the largest an information technology company has made in this country of 1 billion people, which Microsoft Corp. has long viewed as having huge potential in human capital and for sales.

"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."

A substantial part of the money would go to creating a Windows operating system designed specifically for India and available in nine Indian languages. That could help Microsoft fend off challenges from cheaper open-source operating systems led by Linux, which has made deep inroads in India.

Half the money would go to improving Microsoft's research and development capabilities, including the creation of a new facility in the southern city of Bangalore, India's technology hub, the company said.

On a previous visit to India in 2002, Gates announced similar plans for $400 million in investments. On Wednesday, he called the company's progress since then "fantastic" and said, "That's part of the reason we are able to make such a strong and increased commitment."

Other firms invest in India

Gates' announcement was the latest in a string of recently announced investments in India by American technology firms.

On Monday, chipmaker Intel Corp. said it planned to invest more than $1 billion over the next five years to expand its operations in India and invest in local technology companies.

Cisco Systems Inc. said in October that it plans to spend $1.1 billion in India over the next three years.

Earlier this year, Microsoft opened a research center in the southern city of Hyderabad, its fourth such facility worldwide. The Bangalore center is to be opened next month.

The expansion plans will nearly double Microsoft's work force in India by adding 3,000 jobs over the next three years to its existing pool of 4,000, Gates said Wednesday.

Microsoft's efforts in India are aimed at narrowing the digital divide by creating products that are not only affordable for the poor but also address their "unique needs," he said.

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.

"India is a place where breakthroughs like these are necessary and will take place," Gates said.

Microsoft also said Wednesday 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 with proprietary systems like Windows, which does not allow users to modify its secret code.

Source: Columbian

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