Rediff Logo Infotech Banner Ads Find/Feedback/Site Index
September 18, 1997


Distribution is the key, claims piracy-hit Microsoft

Microsoft claims that in the next five to ten years in India, acquiring software will be similar to buying any 'fast moving consumer goods' such as toothpaste, soap or a confectionery.

"If FMCG companies can have about 5 lakh (500,000) retail outlets, why can't Microsoft?" asks Sanjay Parathasarathy, regional director, SAARC, Microsoft Corporation.

Distribution is top on the agenda of Parathasarathy. He says "This is the only alternative I have to counter piracy in India, currently in the magnitude of around 80 per cent. I can create the awareness and availability of my software but unless the copyright law is strengthened, piracy levels cannot be reduced."

The Indian software market, which is growing at a rate of 40 to 50 per cent annually, has contributed more than Rs 2 billion to Microsoft's turnover of $11.4 billion last year.

Microsoft's market share in operating systems (legal and pirated) is in excess of 95 per cent in India on desktops. In networking software, it is fast closing the gap with market leader Novell. Microsoft also markets its Backoffice Suite of products comprising database, communication and messaging software and development tools in India.

As you start estimating the amount (in millions) that Microsoft will earn in India if the piracy level goes down, Parathasarathy, assuming the role of an evangelist of Indian software companies says "Piracy is inhibiting Indian software companies from developing products. They need a domestic market of legal software as that guarantees an incentive to take the risk of developing software products. Around 90 to 95 per cent of companies in India are operating as sweat shops for overseas companies as piracy makes it a more attractive option."

Microsoft's concern for Indian software companies is anything but altruist. With a near complete monopoly in the desktop operating systems business, Microsoft is now growing into the enterprise or multi-user market, eating into the share of Novell and the UNIX market.

At the same time it is continuing to consolidate its monopoly position in the desktop market which at one time was threatened by the emergence of Internet and the development of the browser by Netscape.

The success of Microsoft's approach depends a lot on the growth and availability of applications of its software products and tools. As Microsoft seeks to increase its presence in India, it needs to get these applications developed which meet the local market requirements and that need can be fulfilled by Indian software developers.

Parathasarathy says "while Microsoft's partners earn $30 for every $1 earned by Microsoft in markets such as the United States, the ratio in India is very low. We are providing the resources to our partners to take advantage of the market's acceptance of our products."

- Compiled from the Indian media

Tell us what you think of this story