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Microsoft initiative to promote Indian IT market

Strategy aims at developing tools, technologies and training

Ravi Venkatesan, Chairman, Microsoft India

THE INDIAN IT industry has earned a great name in the global software market but has failed to develop the domestic market with the same vigour. Only a small number of IT companies are focusing on building custom solutions or developing affordable packaged software for the Indian market.

In the absence of ready-to-use packaged software, local users in many cases have to depend on custom solutions. Strangely it has been left to the software giant Microsoft to fill this critical gap through its network of ISVs (IT solutions vendors). Microsoft India, according to its Chairman Ravi Venkatesan, has tied up with 4,000 partners to offer technology-based solutions to its customers in India.

Microsoft has been making significant investments in `skills transfer' and `joint go-to-market' initiatives with tier-2 ISVs, enabling them to tap the domestic and international markets. It is also committed to help the Indian ISV community realise the opportunity in the software products space. The attempt is to change India from renting intelligence quotient to owning intellectual properties, he elaborates.

The company works closely with over 6.5 lakh developers in India with the aim of empowering them with the tools, technologies and training required to develop high-end skills and compete in the global market place. Its scope of work with the Indian technical community is spread across the country and the Indian business contributes one per cent of its global revenue, he says.

According to him, there are two important reasons for the lack of focus on the domestic market. For one, the domestic demand depends on PC (personal computer) usage. This is very low in India compared to developed countries. Generally, government is among the early spenders on IT. In India, it is not so.

The second important factor is piracy in software. Nearly 75 per cent of IT solutions used in India are pirated. According to a Business Software Alliance (BSA) study of global trends in software piracy, conducted by International Data Corporation (IDC) India, wherever IT exports are more than three times the domestic IT market, the piracy rate is around 74 per cent — despite the strength of its world-class software development skills and government efforts to quell piracy. This is a major inhibitor of growth of a local packaged software industry.

Unfortunately, the high piracy regions have also been the high market growth regions, he says. In high piracy countries such as China, India and Russia, the IT market is growing at 15 per cent or more. The emerging markets account for over one third of PC shipments, but only a tenth of the spending on PC software.

Microsoft's focus areas

According to Mr. Venkatesan, there is a window of opportunity in India for IT companies. There is a need for inclusive economic development. Microsoft has identified five areas to improve inclusive growth in IT — rural development, education, Vikas project, e-governance and local software economy.

Under rural development, the main problem is lack of access to proper information. The programme aims to educate rural masses on the usability of PC and avoid interference of middlemen in their livelihood. Till date, Microsoft has made grants aggregating Rs. 30 crore.

If there is a synchronised growth in rural development and IT, it will be easy for State governments to adopt the e-governance model. Though there is much talk about e-governance, most models have not been successful. The reason is not far to seek. There should be a single model for all State governments to follow. But no state government adopts or follows a successful model from another State.

Accent on education

E-governance or rural development is linked to a good education system. Microsoft is planning to provide an end-to-end solution. The two-pronged strategy is to create employability and unlock innovation. For this, it has tied up with various universities for providing the right education for the right job. Microsoft's project Shiksha — "Empowering for the future" — is designed to deliver affordable software solutions, comprehensive training and curriculum leadership for students and teachers in government schools.

The company has invested $20 million in India for Project Shiksha over a five-year period. The aim is to promote increased technology access for students through wide deployment of donated PCs in classrooms.

Under the Vikas project, small and mid-tier companies are connected and provided with affordable IT solutions.

Though Microsoft is working hard to improve PC penetration in the country, it is still the Centre's responsibility to make IT one of the main infrastructures. With the world's largest software company sharpening its focus on India, the IT market is likely to see accelerated growth and witness a marked change in the market dynamics.

Shanthi Kannan

in Chennai

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