Microsoft’s Indian operation is a Janus-faced entity: one milks money out of the Redmond giant’s current products, while the other develops future cash cows. The first face – Microsoft Corporation India Pvt. Ltd. – oversees the sales and marketing functions for Microsoft’s product range in India.
With its headquarters in New Delhi, Microsoft India focuses on market development activities, including partnerships, vertical markets, education, certification, the ISP market and the developer community. While Microsoft India has been establishing the dominance of its products in the Indian marketplace over the past decade, it is the company’s other face — the Microsoft India Development Center (MS-IDC) – that has attracted the maximum buzz in the recent past. And, why not? After all, the India Development Center at Hyderabad, Andhra Pradesh, is Microsoft’s second software development center outside of the US. (See box.)

Despite the distracting buzz around the MS-IDC, the way in which Microsoft India been steadily and methodically developing the Indian software market is an equally fascinating story. Though Microsoft does not provide financials for its subsidiary operation, the Indian arm’s revenues for the year 1998-99 are estimated at Rs. 3.3 billion – up almost 15 percent from the Rs. 2.9 billion reported for the previous year and a whopping 66 percent higher than the figure for 1996-97.

Software Explosion

How did this explosive growth take place? “It was like a spark was lit sometime in early 1997,” recalls Sanjay Parthasarathy, former regional director (India subcontinent division). “The single most key thing was a step function in the awareness and use of personal computers. All the other things — developer programs, education initiatives, Internet initiatives, price of PCs, et cetera — were necessary and key, but they were micro issues. The macro issue was simply the explosion of interest,” he says.