[Fsf-friends] NEWS-BANGALORE: Big Blue counters Gates' offer for Indian software

[Frederick Noronha]

Big Blue counters Gates' offer for Indian software

By Imran Qureshi, Indo-Asian News Service

Bangalore, Dec 12 (IANS) After Microsoft chairman Bill Gates' lavish
offerings for health, education and proprietary software, his company's
biggest competitor IBM has offered to transform India into a software
industry hub if it adopts the open source standard.

The world's second largest software company that is also known as the Big
Blue is offering to build "enablement centres" for India to shift from being
a mere software services powerhouse to a full-fledged software industry hub.

"We are willing to invest heavily in the enablement centres based on what
decision the government takes. It should standardise on open source and we
will create centres for the software industry to flourish," Amuj Goyal, vice
president, solutions and strategy, IBM software group, told IANS.

"Innovation on the Microsoft platform has moved out. VCs (venture
capitalists) are not investing any more on the MSN platform. Gates' visit
was only to carry the message of proprietary software that will not benefit
the customers," he said.

Goyal, the highest ranking Indian in IBM worldwide, has helped drive the
growth of the hardware leader's foray into the software business and made it
a $13 billion group in just seven years, displacing Oracle from the position
of the world's number two software company.

"IBM was on proprietary technology in the early 1990s. We could not see
outside that. We were trying to look after ourselves, not the customers,
until we started the software business in 1995. Today Microsoft is on the
wrong side," said Goyal, an alumni of the Indian Institute of Technology
(IIT), Kanpur.

"We will put up enablement centres (like e-governance or e-business centres)
for software centres. Our strategy is different. Customers need to have
control and that can come only through open standards. Microsoft's strategy
is to get in their proprietary technology. That's a big trap," he added.

"Today you can use database from IBM or any other vendor on open standard.
The reason why customers like us is because our systems are robust and
scalable and for support services. If you are caught in the proprietary
trap, the software business cannot be built. Those are hooks and lures he
(Gates) is investing in. Customers don't want that," Goyal said.

He quoted examples of the governments of Britain, Germany and Singapore that
have adopted open source standards. "India does not have a software
business. We want to build the future SAP or a BEA in India by focusing on
open standards."

IBM is leveraging India not only for its "tremendous skills in software and
services" but also because it sees the country as an important market. It
has set up five software research and development centres and a solution
partnership centre in India.

The company has committed $100 million until 2003 for the India software
laboratory in Bangalore, which is being scaled up from a headcount of 500 to
about 600.

"But the skills in India can be applied far beyond the Indian market,
primarily the English-speaking countries in the Asia-Pacific unlike China or
Japan, which are country-focussed labs," Goyal said.

So, was the shift in focus from hardware to software during the downturn
coincidental? "No, it was not coincidental. We have been on this strategy
for the last 10 years. We have recorded growth for 21 consecutive quarters,"
Goyal said.

The software group drives about 30 percent of IBM's profits. It is the
largest supplier of Internet infrastructure software, called middleware,
which accounts for about 80 percent of IBM's software revenue of over $10
billion.

"We are young -- just seven years old -- and growing, and we will continue
to grow. Given the current economic situation, if an opportunity exists, we
will go in for acquisition, as we did with Rational Software (the world's
leading supplier of software tools for $2.1 billion). It makes sense because
it is open standard. We have completed seven acquisitions in 18 months."

--Indo-Asian News Service