MICROSOFT INDIA: Soft and Steady

It was a busy year for Microsoft India. First came two high profile visits:

Microsoft CTO Craig Mundie with 25 executives, last October, followed by CEO

Steve Ballmer in November. And the year ended with HP's sales chief Neelam

Dhawan joining in as managing director of Microsoft India Sales, replacing Rajiv

Kaul, who moved back to Redmond.

Growth was gentle in its "core area": PC operating systems and

suites, thanks to the expected issues: piracy, and inroads by Linux, and despite

explosive growth in its key partner constituency: the branded MNC PC vendors.

Much of the growth was in the other areas: servers, database, business apps.

This enterprise/institutional focus is likely to continue.

HIGHLIGHTS New low-cost Windows version targeting non-English users BizTalk server application integration saw 200% growth Server growth over 35%, Office Suite 25% Local language versions, lower prices could drive growth Participaton in egov projects Desktop near-monopoly continues Rising software piracy levels in India-74% in 2004 Linux continues to pose a threat Needs to build up channel affinity l Start-up Year: 1990 l Products and Services: Consumer and enterprise software l Branches: 12 in India; 36 overseas l Address: Microsoft Corporation (India) 9th Floor, Tower A, DLF Cyber Greens DLF Cyber Citi, Sector 25A, Phase III, Gurgaon-122022 l Tel: 91-124-5158139 l Fax: 91-124-5158888 l Website: microsoft.com/india

The company continued its solution-centric approach in India. It launched a

reporting solution product 'Score-Office as Smart Client' which provides

updated support and features to users of other ERP or legacy systems. For

instance, it integrates exception reporting and dashboards, out of the box. The

company also launched BizTalk Server 2004, its integration server offering for

enterprises.

In peripherals, Microsoft launched a range of "biometric-enabled"

hardware like mouse and keyboards: wireless optical desktop comfort edition

mouse, optical desktop unit with fingerprint reader; wireless intelliMouse

explorer with fingerprint reader, etc.

The company's focus on SMBs continued with products from its Navision

acquisition, Axapta and Navision. Microsoft plans to develop more partners who

can deploy the solution in the SMB segment.

Microsoft's growth last fiscal was driven by the banking, government and

telecom sectors. It continued its association with e-governance initiatives like

the Bhoomi project in Karnataka, NCRB, the Postal Department, Project Bhasha and

Project Shiksha, which has now been rolled out in seven states (with $20 mn

invested by Microsoft last year).

Microsoft CEO Steve Ballmer also concluded multi-million dollar software

partnerships with two of India's leading outsourcing firms Infosys and Wipro

during his visit to India last November. The deals came amid increased efforts

by Microsoft to retain its hold in the Indian market in the face of growing

competition from the promoters of Linux.

Microsoft's 28-acre India development center, the largest software

development campus outside the US, was also inaugurated in the last fiscal at

Hyderabad. Last year, the roughly 500-member product development team at the

R&D center filed 40 patents.