Microsoft Invests in India's IT Services

Area Development Site and Facility Planning, Dec 2004/Jan 2005

LTKE MANY OTHER American computer industry giants such as Computer Associates and Intel, Microsoft Corp. is significantly expanding operations in India. In November the company opened a new campus near Hyderabad, India, Microsoft's second largest campus after its headquarters in Redmond, Wash.

Overseas outsourcing of jobs by U.S. companies was an issue in this year's presidential elections, with Democratic challenger Senator John F. Kerry vowing to curtail federal subsidies for companies engaged in the practice. However, Microsoft's chief executive Steven A. Ballmer - who formally opened the 28-acre campus 250 miles north of the thriving technology center of Bangalore - denies that the expansion in india will impact its U.S. operations.

"There is enough growth potential which allows us to hire both at our Redmond headquarters and here in India," The Neu} New York Times quoted him as saying.

Many multinational companies have stepped up outsourcing recently, increasingly sending high-end technology work to India, where an entry-level programmer might earn $125 a month. Microsoft's software development center in Hyderabad, which opened in 1998 with only 12 employees, now has nearly 450 programmers. Ballmer, who visited three cities while in India, signed major agreements with two of the country's leading outsourcing companies, Infosys Technologies and Wipro in Bangalore. The Infosys agreement alone represents an $8 million joint venture.

"These deals signify the growing clout of Indian outsourcing companies in influencing technology in American boardrooms," says Sudip Nandy, chief strategy officer of Wipro.