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Home >> Business
UPDATED: 18:08, December 08, 2005
Microsoft to invest 1.7 billion US dollars in India
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Microsoft Chairman Bill Gates said on Wednesday to media that the US software giant, Microsoft Corp, plans to invest 1.7 billion US dollars in India and double its work force there, according to sources from New York, reports International Finance News on December 8.

Microsoft Corp has long viewed India, a nation of 1 billion people with a high-growth economy. India has 17.2-billion-US-dollar software services as well as many skilled lower-paid workers. As a result, Software Corp has attached great importance to the Indian market. Ravi Venkatesan, chairman with 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 Bill Gates' fourth visit to the country.

Bill gates started a four-day visit to Indian on Tuesday. His trip to India will mainly focus on the survey on Indian market potential. In recent years, Microsoft has maintained its market share of Indian server operating system. Microsoft insists its market share in server operating systems grew from 57 per cent in early 2004 to 65 per cent in late 2005.

In the meanwhile, the Microsoft Corp has also got to know that more and more local Indian enterprises are engaged in their fierce competition with Microsoft, especially in Linux operating system. Linux is a low-cost alternative choice to Windows. A director with Red Hat, Indian seller of Linux said, "Bill Gates' visit to India comes at a time when the ruling position of Microsoft's software Windowx is encroached greatly. We will show him that we have made successes in many aspects". For this, a responsible official for Microsoft's servers in India said the Corp will continue to consolidate its market share obtained on the Indian market, and invest more here".

"For us, India is a very important market geographically. Despite that Indian main point was placed on service overseas, we think that at the present, Indian domestic demand is growing", said a management head of the public planning department under the Microsoft Asian and Pacific Region.

In addition, Microsoft said on Tuesday that the Corp plans to build more than 30 innovation centers in the world to reach 90 of the centers within a year. Microsoft officials said first of all, it will build a multi-functional Indian science and technology center in Bangalore, India's technology hub, so as to closely cooperate with the organizations from various countries, academic institutions and computer industries. Microsoft Corp will surely emerge as a big company in India.

Relevant background

Prior to 2002, Microsoft Corp was only engaged in solely funded enterprises in the world. In 2002, Shanghai Wicresoft Co Ltd became the first joint venture between Microsoft Corporation and local government in China. On the same year, Microsoft got a 750-billion-yuan purchase order from the Shanghai Municipal Government Following this, Microsoft has continued to invest in China. The number of its joint ventures in the country has been on increase. In 2005, its investment and shares in the country is close to 10 billion yuan.

As the biggest software-developing firm in the world, it needs more market sales on China's market in order to push on its global sales growth. Despite Bill Gates' repeated investment, making donations to the schools in China and lobbying the Chinese government to crack down on software piracy, these efforts have only resulted in little effectiveness. Microsoft has not achieved its profits in its China business. And the situation will likely continue for many years.

According to Microsoft's prediction, by June 30 this year, namely the end of the current fiscal year, its sales growth rate was lowered to 8 per cent, the lowest record in history. As the second largest PC market in the world, Microsoft's sales only account for 1 per cent share on China's market of its annual sales volume valued at 36.8 billion US dollars globally.

By People's Daily Online

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