Associated Press - Tuesday, November 12, 2002
Rajesh Mahapatra, Associated Press Writer

The three-year initiative - part philanthropy, part business boost - would seek to entrench products of the world's dominant software company in schools as well as among India's stable of talented programmers.

"We are very optimistic as to what will happen to information technology in this country," Gates said of India, whose strength he said lies in its education system, a fast-developing communications infrastructure and its vast pool of skilled labor.

India's software industry has bucked a global slowdown to post high growth in revenues and employment. Last year, its exports grew by 29 percent.

Microsoft will invest about a quarter of the $400 million in its software development center in the southern city of Hyderabad - the company's only such facility outside the United States. Gates said the center's staff would more than triple to 500 by 2005.

Gates said about $20 million would go toward training teachers and students on computers and software at government-run schools.

Microsoft aims to reach 80,000 teachers and 3.5 million students under "Project Shiksha," the Hindi word for education.

Microsoft also plans to set up 10 information technology training centers in partnership with Indian states.

Gates sought to downplay India's growing enthusiasm for the open-source Linux operating system, noting that Microsoft's Windows remains far ahead of its competition in India and elsewhere.

Indian software companies are increasingly opting for Linux, whose users here say they prefer the system because its basic code is non-proprietary, can be freely modified and thus makes better sense for the developing world than Windows.

Indian companies including Silverline Technologies, which trades on the Nasdaq Stock Market, have set up development centers to make Linux-based software.

Indian subsidiaries of IBM Corp. and Sun Microsystems are also exploring software applications using Linux.

Supporters of the "free software" campaign in India argue that Gates' software giveaways and computer literacy training come at a price.

"His work is irrelevant to 95 percent of Indians. It could take several months' income for an average Indian to buy Microsoft's software," Frederick Noronha, founder of Bytesforall.org, whose group works for information technology access to poor people.

"Microsoft's software may be ubiquitous, but it restricts many freedoms of the users like any other proprietary software," Noronha said in Bangalore, India's technology hub.

Gates, who said Windows would remain a market leader in the country, dismissed such criticism.

"We are careful to cater our prices to what is appropriate to different segments," he said, adding that Microsoft, for example, charged much less - sometimes nothing - for software used in education.

Gates announced the investments on the second day of a four-day visit to India. On Monday, he pledged $100 million from his private foundation to help fight the spread of AIDS in India.

Much of the funds for the Hyderabad center will go toward promoting the use among Indian companies of .NET, Microsoft's new platform for providing services over the Internet.

Gates said Microsoft would also customize its software to Indians' needs. He said Microsoft plans to launch versions of the popular programs Windows XP and Office in Hindi, the most widely spoken language among India's more than 1 billion people, next year.

Further launches in other Indian languages will follow, he said, "advancing the frontiers of technology and breaking down language barriers."

Microsoft first opened offices in India in 1987.
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