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December 5, 2005

Bill Gates visiting Bangladesh and India

Posted by David Hunter at 11:21 AM ET.

Bill Gates, accompanied by his wife, Melinda, is in Bangladesh today, and will be spending the following four days in India with both Microsoft business and personal charitable activities on the agenda. From the AP at TMCnet:

Gates and his wife, Melinda, who arrived in his personal jet, visited a public health research center and a micro-credit project that gives small loans to the poor in downtown Dhaka.

In a meeting with Bangladesh’s Prime Minister Khaleda Zia, Gates promised to expand investment in Bangladesh through its local office, which was set up last year, according to a statement by Microsoft Bangladesh.

Meanwhile, Zia promised to support Microsoft’s contribution in developing the Bangladeshi economy, the statement said.

Separately, Gates oversaw a signing ceremony between Microsoft Bangladesh and the education ministry to provide skill-based training to 10,000 teachers and 200,000 students at the country’s primary and secondary schools over next three years, the statement said.

Currently the Bill & Melinda Gates Foundation funds health programs for the poor in this impoverished country.

The software giant has funded a local subsidiary to train some 2,000 disadvantaged youths from rural Bangladesh each year. Also, it has converted eight rural telephone shops into Internet kiosks and computer training centers in northeastern Bangladesh.

Gates also met with government officials, experts and business leaders involved in the IT sector and made a speech titled “Innovation and Partnership.”

Tomorrow, they’ll be in India for a variety of similar activities that I won’t even attempt to completely enumerate, but briefly:

During his four-day visit, Gates will have meetings with key government officials in addition to business leaders, academicians, industry associations and policy makers, including a CII hosted CEO Forum in New Delhi and a Developers Forum in Bangalore on December nine, 2005.

He will attend Microsoft Government Leaders Forum which on December six which is a summit themed ‘Leading in a Connected World’, which will bring together government leaders across the Asian region to engage in discussions.

And that doesn’t even count kicking off the Indian Digital Lifestyle expo and the various charity visits. Continuing,

Elaborating on Microsoft’s India focus, Microsoft India chairman Ravi Venkatesan said, “India is not just the fastest growing subsidiary for Microsoft, but is also one of the few subsidiaries where Microsoft has an end to end presence of its entire business portfolio. Research, product development, application development, services delivery and technical support, it’s all here and contributing significantly in the global growth. India is very high on Microsoft’s priorities.”

And there’s the rub. While India may be “very high on Microsoft’s priorities” and Bill Gates is personally popular in India:

Gates is an icon to legions of programmers in India, and Indian leaders and business moguls line up to shake hands with him when he visits.

there’s not much revenue coming in and high expectations for investment:

Of the $40 billion-odd Microsoft makes in annual sales, just about $250-300 million comes from India.

Yet every time Gates arrives in the country, there is invariably considerable expectations from the government, industry and the media to announce big-bang investments, on top of routine annual costs to keep Microsoft India’s R&D and marketing going.

After announcing a $400 billion investment to bolster R&D and expand operations during his last visit in November 2002, the giant from Redmond is expected to up the ante this time around by committing a possible investment of around $1 billion.

plus there are considerable inroads from open source:

“Gates’ visit comes at a time when Microsoft’s domination is very much being eroded,” said Javed Tapia, head of Linux vendor Red Hat Inc.’s India operations. “This time, we have a lot of success stories to show him.”

While exact figures are hard to come by, a survey of Indian companies by Network Magazine released in June found that nearly 40 percent use Linux to run their servers. The magazine polled 340 companies, and offered no margin of error.

The Indian government last year dropped a requirement that companies doing business with it use Windows and now encourages the use of open source software, even going so far as to set up an open source software development center in the southern city of Madras.

The government of India’s western state of Maharashtra runs some of its operations on servers using Linux, as does the southern state of Andhra Pradesh.

In November, Canara Bank, one of India’s largest financial institutions, chose Linux to automate 1,000 branches involving 11,000 computers.

India has 200,000 open-source software programmers, and “companies are switching over to open source, layer by layer by layer,” said Atul Chitnis, a software consultant in Bangalore, the country’s technology hub.

There are more examples by following the link. So what’s wrong with this picture? Nothing really from a business perspective, it just appears that way because the aims and investments are generally conflated. India is another developing country where Microsoft will have a tough commercial battle with Linux and open source and in any case, revenues aren’t likely to be very big for quite a while. While Microsoft will invest in their local sales subsidiaries and partners, that’s not what’s really attracting the big dollars. Those dollars are going to non-sales activities like R&D because India remains a great source of inexpensive programming talent for offshoring Microsoft development, not to mention support and other administrative functions.

Filed under Bill Gates, Executives, General Business, Governmental Relations, Linux, Offshoring, Open Source, Public Relations

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2 Responses to “Bill Gates visiting Bangladesh and India”

  1. Microsoft News Tracker » Blog Archive » Microsoft Announces Worldwide Network of Software Innovation Centers Says:

    [...] As we mentioned yesterday in connection with Bill Gates’ trip to India, he is, among many other activities, joining the 200 delegates at the Microsoft Government Leaders Forum (GLF) Asia today in New Delhi: During the two-day forum, government, academia and industry leaders from around the Asia Pacific and other regions will explore how they can use information and communication technology (ICT) to help their industries and organizations remain competitive in an increasingly connected, technology-driven world. [...]

  2. Microsoft News Tracker » Blog Archive » Bill Gates’ tab in India hits $1.7B Says:

    [...] Bill Gates was only expected to announce a $1 billion Microsoft investment in India during his visit this week, but it turned out to be $1.7 billion and 3,000 new jobs. Rajesh Mahapatra at the AP: Microsoft Corp. plans to invest $1.7 billion in India and add 3,000 jobs in the country over the next four years, nearly doubling the world’s largest software company’s work force here, Chairman Bill Gates said Wednesday. [...]

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