Microsoft Teams Up With Indian Service Providers

On Monday, Microsoft forged a multimillion dollar software deal with two of India's prime tech service providers, Infosys Technologies Ltd. and Wipro Ltd.

The deal will make it possible for Infosys and Wipro to use Microsoft technology in building software for their clients.

Infosys and Microsoft have announced that they are investing a total of US$8 million in the venture.

[Microsoft CEO Steve Ballmer] said customers would be the beneficiaries of Microsoft's partnership with Nasdaq-listed Infosys, India's second largest exporter of software services. The agreement will lead to "increased efficiency and cost savings," a Microsoft-Infosys statement quoted Ballmer as saying.

In early trading on Monday, Microsoft shares were up 36 cents, or 1.3 per cent, at $27.33 on the Nasdaq stock exchange.

Infosys' US-traded shares were up $1.45, or 2.2 per cent, at $67.35, while Wipro's shares were up 40 cents, or 1.8 per cent, at $22.59 on the New York Stock Exchange.

The deals come amid increased efforts by Microsoft to retain its hold in the Indian market in the face of growing competition from promoters of Linux, the open source software that can be downloaded from the Internet for free as opposed to Windows which comes with a license fee.

Recently Ballmer met with Prime Minister Manmohan Singh in order to promote his company, and to ensure its supremacy in the Indian software market.

Ballmer is also scheduled to meet with other business leaders in Mumbai during his three-day stay. Earlier on Monday, the busy first day of his visit, he opened the new Microsoft center on the outskirts of Hyderabad. The new Microsoft campus in Hyderabad is expected to eventually host 3,000 programmers.

An online poll launched by the Equitymaster website early in September this year ranked Infosys and Wipro as the second and third most "popular picks" in the Indian IT industry, trailing behind Tata Consultancy Services (TCS).

It should be remembered that during the height of the controversy, Microsoft denied that it was outsourcing to India, though it acknowledged that it employed consultants all over the world, and that India was going to be a major factor in the company's cost cutting measures.

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