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Microsoft to Invest $1.7 billion in India
piyushranjan writes "Bill Gates has announced that Microsoft will invest $1.7 billion in India over the next four years to expand its operations. The fund would also be spent in making India a major hub of Microsoft's research, product and application development, services and technical support for both global and domestic companies. Microsoft plans to create 3000 more jobs at India, taking it's headcount at India to 7000."
...that they are crapping their pants at the state of linux acceptance in india, and the widespread use of the operating system independant programming language java.
Reuters news story on CNet
s t.util.print/
http://news.com.com/2102-1014_3-5985482.html?tag=
how much money they are making in India now. I suspect this is just a reasonable investment for such a big market.
Why worry about H1B Visas when you can just buy India.
Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
From experience of remote call centers.
You'll get more sense out of the dog.
Well...they had to catch up intel announcement yesterday that they are investing $1billion in india: http://www.indianexpress.com/full_story.php?conten t_id=83365
...as my right hand takes your wallet.
Cue the debate about US job losses and globalisation. The real issue IMO is the Microsoft tactics of using trade pressure to lobby for anti-competition legislation. "Yes, I'll invest 1.8bn, but only if you ban free software and enable software patents".
The truth is that India is capable of doing a lot better without this kind of "help". I encourage Indian politicians to reject any such pressure. Indian IT can compete securely on the open market, without favours or protectionism. Software patents, and other anti-competitive laws will only hurt India in the medium and long term.
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I expect Microsoft will be making similar investments in China too.
I see this as partly a defensive move - they know India and China are potentially two big markets for the future, and they don't want them considering OSS alternatives. They will use these investments to twist the governments arms. Although I don't think it will work with the Chinese, it might work in India.
Demand will begin to outpace supply in India's IT sector causeing the price of IT skilled labor to increase. If so it will reduce India's competitive advantage and less Indians will see any advantage to coming to the USA.
Meanwhile...
Whisky Tango Foxtrot does that mean? I'm not pedantic about language, but that's just absurd. Perhaps the true impact of this shift will be the reduction of English to verb tense confused propaganda?
Sig under construction since 1998.
The key markets for information technology in the next few decades are not the US, Western Europe or Japan. The key markets key, as in where the majority of goods will be purchsed and consumed-- are Mainlaind China, India, Eastern Europe and South America.
Where do I get that idea? Easy, hardware manufacturers. People in the wealthy nations often have a hard time imagining how hardware can get any cheaper and still remain profitable and yet it does relentlessly continue to decline in price. The answer to how it remains profitable is simple, volume. And that volume cannot and will not exist in the highly profitable and yet relatively sparsely populated wealthy countries. There simply are not enough consumers.
So, as a manufacturer, you simply enter new markets by lowering your costs until the real masses, the billions, can afford your products. And you can bet that WiMax is going to be one of the enabling technolgies that is going to make this push into the "third world" happen all that much faster.
Which means it makes perfect sense for Microsoft to have a real presence in these markets. In fact, you could argue they're moving too slowly.
But none of that has the slightest thing to do with "outsourcing". It's just the reality of where IT is going.
And Microsoft wonders why there are less and less people going into Computer Science and other Computer programs here in the States?
Let's see, population of approximately 1.1 billion... 7,000 total Microsoft jobs. Yes, I can see where that helps immensely!
India is poor, dirt poor. Even with the fairly decent number of jobs we've shipped there, it doesn't even begin to make a dent in the poverty level. And of course these jobs aren't available to the greater majority of the population, especially to the Dalit (formerly known as "untouchable") segment. Gates may be a big Kahuna in Africa but he isn't going to make much of a difference to India.
GetOuttaMySpace - The Anti-Social Network
Having worked with a software development group in India for 3 years now, I can honestly say I am not impressed. Many of the engineers there are well educated on paper, but in reality lacked creativity and the ability to work independently. They were definitely cheaper, but the price we paid for that was a huge cut in productivity. We needed 2-3x more of them to get the job of one engineer done here.
On the flip side, I also work with many Indians here in the US on my team. The differences are startling compared to their counterparts in India. They are much stronger in all aspects of engineering, whether its creativity or pure coding knowledge. It appears that the issues are somewhat cultural and will improve with time.
Good luck to Microsoft and the others, but we are scaling back our staff in India. It's just not worth it yet.
gasmonso http://religiousfreaks.com/Remember: you can get it fast, right, or cheap. Pick Two.
It would appear the Microsoft Doctrine thinks they can achieve all three.
"Success is a lousy teacher. It makes smart people think they can't lose."
William Henry Gates, 3rd
Apu: "Yes, I'm sorry, I do not speak English, okay."
Woman: "But, you were just talking to..."
Apu: "Yes, yes, hot dog, hot dog, yes, sir, no, sir, maybe, okay."
The bad thing is that it will be an improvement over their current tech support...but I digress.
fak3r.com
Yes, it works out to $141k/yr... assuming they work on the side of the road with 2 sticks they cut themselves.
-Daniel
They should have invested in South Korea instead......
--
As a matter of fact, I am a lawyer. But I play an actor on TV.
I actually got the response, "You don't need to know that" once. Sure, it was a relief after waiting almost an hour to get through, to ask a question that SHOULD have been available on the company website (Dell) anyway, and THEN have the individual on the other end tell me that I didn't need to know, but by that point I WANTED to know, and BADLY so I could jsutify the chunk of my life I'd wasted!
I still don't know, by the way. You'd think it'd be easier to figure out what an LED error code meant.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
It's not exactly the most stable part of the world as it is.
Not exactly the most stable part of the world?
The only real problem that India has is with Pakistan, which is way up north, around the Himalyan mountain range. China, its other neighbor is an economic power in itself, the last thing either countries would do is do something that would affect their economies.
Are there troubles in India? Sure, take any region of a billion people of an astounding mix and variety of religion and culture, and introduce secular democracy - see what you get. Most troubles in India are just that - they are troubles.
That hardly calls forth a strong word like "unstable". Btw, India is a huge country, both in terms of size and in terms of populace. Just because a nation has a pacifist outlook does not mean they are to be underestimated. It would take a whole lot to unsettle, undermine or destabilize India.
Nice troll, though.
Microsoft I can see...Not like they're error free to begin with.
But Intel? Didn't they learn anything?
Time to buy some more AMD stock.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Microsoft (or any American company) investing overseas is not news. It's foolish to assume that there is such a thing as American protectionism, pride, etc anymore. Whether or not this is a good move will depend on how it effects future software. If we get better Microsoft software that's great they need the help. If not they wasted their money big deal. I'd love to say Microsoft is betraying it's American roots but quite frankly there's nothing left to betray.
Yeah, I'm sure this has nothing to do with India's move to open source software. And I'm sure Microsoft's investment will in no way affect the government's decision. No sir.
___
If you think big enough, you'll never have to do it.
Can someone please explain to me why Microsoft feels the need to do this? Okay, application development is something that probably commands a higher salary in the U.S., but customer service?
I have a really big problem with companies that continually fork out technical support overseas. Regardless of location, just about everyone will need to be trained and learn the products that they have to support. Americans are no less capable of this than anywhere else. But keeping tech support in the U.S. has many benefits with respect to customer service that I think outweigh the cost savings.
Obviously, we have language difficulties when outsourcing. The Indian accent can be incredibly thick and very difficult to understand. I'm very adept at deciphering thick accents, but the Indian accent I find to be even more difficult at times than a thick, Scottish brogue. That certainly does not make the customer support experience any more pleasant.
Additionally, technical support nowadays is often nothing more than reading down a checklist of "did you do this?" Yes, I did before I called. "Well, let's try it again." *groan* Fine. "That didn't work either? Then let's try this." Face facts - anyone can do checklists for troubleshooting. Why is that being off-shored?
What's really infuriating about this announcement is that Microsoft is doing this as Louisiana and Mississippi are attempting to rebuild. You hear continual complaints about how companies are not moving back which can make sense from a manufacturing standpoint where large, capital investments of machinery and transportation need to be made; but from a services point-of-view, putting tech support and other business opportunities in Louisiana and Mississippi can still be cost-effective since those areas have incredibly low standards of living relative to the rest of the country. Then of course Microsoft would have the positive PR of (A) helping to rebuild an area that needs to be rebuilt, (B) having people who at least have an easier-to-understand (for the most part) accent on the other end of the line, (C) providing at least some type of jobs to an area that so desperately needs them, particularly now. Yes, I'm sure that hiring workers in LA/MS is still more expensive than India, but there's more to being a stable and respectable company than making the bottom line as large as possible. (I know, I know. Using "respectable" to represent Microsoft left a bad taste in my mouth, too.)
Am I being too idealistic? Well, perhaps. (Hey, at least I admit it.) But it just seems that Microsoft is missing a major opportunity here to do some good right here at home just so save some money that, frankly, it doesn't need to stay afloat. Hell, how large was its profit last year?
The Overrated mod is for reversing inappropriate, positive mods, not for voicing disagreement with a post.
not to be rude but they could be doing what any other company with the chance would do... invest where they see growth and not have all the eggs in one basket. Just a thought
'...if only "Jumping to a Conclusion" was an event in the Olympics.'
If that headline doesn't send MA a message on switching to OpenDoc nothing will
All the other crap about why MA should switch to OpenDoc I did not agree with. Totally did not (got modded down a bunch for my views also)...this reason, is a great reason why MA should drop office for OpenDoc. No reason to send our money to India...and what better way to penalize a gigantic business then by cutting off their gov't contracts.
I mod down so you can mod up. Your welcome.
I got an e-mail once stating Bill would give me a dollar...
I never got my dollar.
Looks like everyone in India will get $1.55.
See the Pictures of the Flood of '08
Well, the CIA says so:
o rder/2001rank.html
http://www.cia.gov/cia/publications/factbook/rank
It doesn't surprise me, but I think that table may shock the many Americans who have a very distorted view of the world!
If you are trusting the facts given by these sites:/ in.html
0 5091201.asp
http://www.cia.gov/cia/publications/factbook/geos
http://news.bbc.co.uk/2/hi/business/4436692.stm
http://www.dqindia.com/content/top_stories/2005/1
http://www.x-rates.com/
From the BBC article, it is about 5344 pounds ($9300 US) annual salary for a software engineer in India. Take that money and you can hire about 182,000 workers in India or give every person in the country $1.50 (or a little less than a pound for 1,080,264,388 people.) Otherwise if you hire 3,000 new workers and pay them that avg. $9300 annual salary, you will still have $1.67 billion left over to invest elsewhere.
He who knows best knows how little he knows. - Thomas Jefferson
" The expanding into Asia and Europe is hardly synonymous with outsourcing."
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You're right, but the word you are looking for is offshoring, not outsourcing. If the product is being consumed here in the US, but made elsewhere by a company located in the US, that is offshoring. Outsourcing is something totally different, and doesn't apply to this
" The key markets for information technology in the next few decades are not the US, Western Europe or Japan'
You mean, the key emerging markets. IT will still be bigger in the 'western world' + Japan for a while, but it's a lot more developed already, and has less opportunity for an entering player and/or initial sales.
"So, as a manufacturer, you simply enter new markets by lowering your costs until the real masses, the billions, can afford your products."
You mean, you lower your prices. Lowering your costs is not so simple, it doesn't automagically happen as a given over time. But, in essence, you are saying you need to lower your costs so you can lower your prices to be competitive in a poor market while maintaining profitability, right?
"The answer to how it remains profitable is simple, volume."
Again, not so simple. Yes, volume helps, since then fixed costs are diluted with respect to each unit sold. However, your marginal cost of each item sold doesn't change just because you increase your volume -- and labor, raw materials, and energy are not remotely free.
What's really driving the prices of hardware down is a reduction in production cost, based on new manufacturing processes and new designs using cheaper raw materials.
All increasing sales volume does is enable you to remain profitable while pricing your goods at a point closer to your marginal cost of production -- you can pretty much remove the cost of, say, administrative salaries, from your P&L analysis.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Partly true, but then economics is a funny beast. Does the value of the economy of the USA suddenly drop when the dollar drops? Of course not. That is why GDP (PPP) is used rather than straight GDP. Both figures are in some ways misleading, but GDP (PPP) is felt to be the less misleading of the two, which I expect is why it is the figure the CIA world factbook uses it.
There was a time when people could tell the difference between racism and nationalism too. No one is saying anything about the race which primarily inhabits India, but they are showing a general disdain more for foreigners in general. Which is perfectly natural, who doesn't want to be proud of where they came from?
As for anyone taking the piss in about accents and whatnot, rest assured that those in the East make just as much a joke about western mannerisms etc.
Stop being so politically correct and recognise a little pride or humour when you see it. (the best jokes are always at the expense of someone else)
C17H21NO4
No the story should read: "Microsoft outsources to India: Press Paid-off to show in Positive Light".
Occam's razor is the blind faith in the natural selection of least resistance and in universal oversimplification. -- EF
When comparing size of economies, is it not more useful to use PPP? In this case no, but read on to find out when to use what metric.
If a person in New York pays 20$ for a haircut, and a person in New Dehli pays 2$, where is there more economic activity going on?
If you just use exchange rates, you learn something about how one economy has sway over another, or how much shove it has on the global economy, but you do not learn about how large an economy is, i.e. how much economic activity is going on within the country. For example, rapid appreciation of currency (e.g. Japanese yen after 1985 Plaza Accords, or the recent rise of the Euro versus the Dollar) does not change the size of the economy (the Europeans didn't suddenly get 30% richer when their currency valued versus the dollar between 2001 and 2003); it does change how powerful of an investor the country can be in foreign lands.
If you are not convinced, here is another example: look at consumption of natural resources. China is the second largest consumer of most resources, even the largest for some, but its economy by exchange rates is only 1.5$Trillion (5th largest AFAIK, about the size of Italy). When adjusted for PPP, you see how much economic activity is really going on: ~8$Trillion (second largest).
So, the GDP of India when measuring economic activity is 3.3$Trillion. However, like I said, when it does come to international transactions, GDP comparison at exchange rates is more useful. I still doubt MS can buy India though.
If Microsoft is trying to influence legislation in India, thus making the market more favorable to itself, how is that a "free market"?
It's the per-head numbers that matter, absolute GDP doesn't really tell you that much.
o rder/2004rank.html
http://www.cia.gov/cia/publications/factbook/rank
India comes in at #154 (out of 232) with per captia gdp of $3,100. The entries at the top of the list are generally involved in banking\trading, that seems to make sense given the nature of that business.
There's a large positive relationship between the capital stock of a country and the per capita GDP. That's what drives the high incomes in countries in the the US/UK/EU/Asia regions. In general, the higher the per capita capital stock, the higher marginal return on capital. I couldn't find any good comparative data to cite, most of the World Bank info was from the last 1980's.
What about that older way, GDP (SL/IP)?
From Wikipedia:
"The economy of India is the fourth-largest in the world as measured by purchasing power parity (PPP), with a GDP of US $3.36 trillion. When measured in USD exchange-rate terms, it is the tenth largest in the world, with a GDP of US $691.87 billion (2004)."
http://en.wikipedia.org/wiki/Economy_of_India
The $3.3 trillion figure sounded wrong to me, as that would put the per capita income here around $3000 -- I've been in India for the past 6 months, and it certainly seems lower than that. So the real figure is around $600 US per capita.
Believe me, the influx of money from the technology industry has had a major effect in India. New building are going up in droves, land prices are skyrocketing, people are moving from villages into the cities. $1.7 billion is no drop in the bucket here.
That's exactly the point: $1.7 billion dollars goes a lot further in India than in the US.
Moreover, Microsoft is spending $1.7 billion actual US dollars -- not $1.7 billion dollars at Indian purchasing power parity. If you want to compare the purchasing power parity numbers, you should first change the $1.7 billion actual dollars into PPP dollars. Then it's about $8.5 billion as measured by PPP.
Don't forget that offshore development implies there is a manager in the US. The success depends heavily on the manager, too. You can't reject the idea of offshoring only because it failed in one case.
The question shouldn't be "if offshore engineering works or not". There won't be a general answer because it will always depend on the type of products you make, people you work with, etc. Of course it will work, in some cases.
The question should be "if offshore works in our case", and "how we can make offshore succeed". There are many things you can do. Frequent communication, commitment from both sides to help each other instead of blaming each other, etc.
Or what about the even older older way: GDP (Dialup)?
I was going to use my last mod point to mark your post as funny. However, I felt it better to add my own post (just to help clarify, in the event some folks didn't get the joke...)
This space unintentionally left blank.
I had the pleasure to talk to support this other week. I needed the lpd name of a Xerox Document Centre 440. I know for a fact that almost all printers who are net enabled do have a lpr que name, its just not printed on todays sorry excuses for manuals. This copier/printer do have a lpr que name.
I spoke to four different people on tech support who at first thought i was talking about something in MS Windows. I tried in vain to explain what i needed to know, why, that their machine did really have an lpr que and no, it was not a Windows application. I further explained that i needed the name to be able to connect the printer to an Novell Open Enterprise. The fast answer was ofcourse "-we dont support open enterprise". Well i didnt want support on OES, all i wanted was the name of the friggin lpr que. Fourth call i called it a day and swore to never ever have anything to do with a Xerox machine of any kind ever again. Looked around a bit and found the lpr que name of every net enabled printer in history on Novells own site. How is it possible that a tech support dont know that lpr even exist? This wasnt just a consumer support, it was the support for big customers.
Support like that are cheap but really worthless for the consumer.
HTTP/1.1 400
Well, I doubt that most actual Ulster-Scott-Irish rednecks would have even heard of India, let alone hate it. Most of them can't find Earth on a map of Earth.
I think you are referring to a new phenomenon in American society today. You see, outsourcing and foreign investments are nothing new in America. They've been going on for many decades now. The only difference is that previously, it was restricted to blue collar low class jobs, which predominantly consist of the Sub-Applachian Ulster-Scots and nobody in America cares about them in bulk, not even the blue collars themselves (and they call us class-based, yeah right).
The wave of offshoring over the last few years, however has affected the lower echelons of the intelligentsia and has generated a reactionary response among them. These are people of poor (but existent) educational background but who, nonetheless, can construct a sentence without summarily murdering the English language with "y'all" and "tater salad".
However, these people have been inculcated with the ideology that they are supreme caucasian beings with some sort of divine right to go through life without working but nonetheless getting paid relatively high wages. They've been brainwashed by the media and their own culture to think that it is their manifest destiny to live out their lives as parasites. When their employers get sick of their sloth and start outsourcing those jobs to people who ARE willing to actually work, they react the only way that their poor education allows them to, by touting racist canards and spreading hate against the outsourcees on the internet.
l'Homme n'est Rien l'Oeuvre Tout: Gustave Flaubert to George Sand
Clue #2, there's more where that came from and they are cheaper where they are. It's easier to find bright people when you have a billion to chose from.
Currently, those you see here are more "motivated". When you have a chance to leave a $3 trillion economy for a $12 trillion economy with one quarter the population, or 16 times the wealth. People in India still starve to death, while "poor" people in the US are fat.
All this gets around the fundamental problem, the use of slave labor. Microsoft, like GE and other big dumb companies think they can use IP laws to keep control of the world without real intellectual effort. It's a suicidal betrayal to put research facilities offshore. Those that do are those that know. In time, they will develop better weapons systems than we have and the "slaves" will break free. What kind of neighbors they will be is largely dependent on how we treat them now. As big dumb companies have used such labor moves to threaten their own employees, the treatment of others is bound to be poor.
Friends don't help friends install M$ junk.