Microsoft and Hewlett-Packard are expanding their
outsourcing operations in India.
Microsoft is increasing the number of staff at its software
development centre in Hyderabad from 200 to about 500 employees by
2005.
This year the company is also increasing the headcount at
another centre in Hyderabad that handles application development
for Microsoft's in-house IT requirements. This centre already
employs about 125 staff.
Details of the number of staff being added this year were not
available from Microsoft, although it is likely to be another 125,
according to sources.
"We are taking both these operations and combining them at a
single facility," said the spokeswoman, who declined to be
named.
Microsoft announced last year that it had entered into a
Memorandum of Understanding with the government of the state of
Andhra Pradesh to acquire 42.5 acres of land for a facility.
Construction of the facility in Manikonda is scheduled to be
completed by the end of this year.
The news sparked protest from the Seattle-based Washington
Alliance of Technology Workers.
"Microsoft expanding in India means that workers in Redmond will
face direct competition from workers that make a fraction of their
wages," said Marcus Courtney, president of WashTech.
"This will only lower wages and benefits for Microsoft US-based
employees. The work that Microsoft is getting done in R&D in
India can be done in this country."
Microsoft, however, counters that Redmond will continue to be
its development hub. "Ours is a centralised development model, and
we don't see the staff in India growing into thousands," the
spokeswoman said.
"While we do not yet understand how large our presence will be
in the future, it made good business sense to buy this parcel now
should we need it in the future."
Microsoft has also set up a support centre in Bangalore, which
offers voice and e-mail based tech support to Microsoft customers
worldwide.
"We have this strategy to follow the sun to offer
round-the-clock support, and hence a support centre in India made
sense," the spokeswoman said. The center employs about 250 staff,
and Microsoft does not have any immediate plans to increase the
number of staff there.
Microsoft also outsources software development and some tech
support and call centre work to Indian companies. Microsoft's own
operations and partners together account for about 900 to 1,000
staffers, but the numbers at contractors' facilities could be far
more than the company reports, and run into thousands, according to
Courtney. Outsourcing companies doing work for Microsoft are tied
in by nondisclosure agreements.
Microsoft's Hyderabad software development centre, which opened in
1998, has created a number of technologies and products, including
Services for Unix, which enables customers to integrate Windows
into their Unix environments, and Visual J#.net, a Java language
development environment for targeting the .net platform.
Meanwhile, HP, which has handled a large chunk of its own global
accounting functions from a subsidiary in Bangalore for more than
three years, is now offering similar back-office services from
India to its customers.
"Having gained the confidence that we can do this out of India,
we are extending these accounting services to our clients," said a
senior HP official in India, who spoke on condition of
anonymity.
To begin with, HP is setting up a back-office accounts
processing facility in Bangalore for Procter & Gamble. It was
unclear how many staff will work at the P&G facility or exactly
which accounts functions will be handled.
HP has offered some of the staff working in its own accounting
operations the opportunity to work at the P&G facility, the
sources said.
HP said in March that it had agreed in principle to outsource
P&G's worldwide transactional accounts payable operations to HP
Services, although it did not say at the time where the work would
be done.
P&G is the largest household products company in the world,
operating in markets such as foods, beverages, personal care,
laundry and cleaning.
HP is creating a team of language experts at its back-office
facilities in Bangalore to process accounts from non-English
speaking countries. The operation already handles some of HP's
accounts in other languages, including Spanish.
John Ribeiro writes for IDG News
Service