BILL GATES VISIT TO INDIA-NOVEMBER 11-14, 2002
Source: The Times Of India Ahmedabad 13-11-2002
AN EXERCISE IN CORPORATE ENVIRONMENT MANAGEMENT
Corporate Environment Management precedes Marketing
Bill Gates, Chairman of the
world’s largest IT firm, Microsoft Corporation and the world’s richest man
(worth $42 billion equivalent to about 10% of India’s GDP) visited India for
4 days from November 11 to 14, 2002.
He arrived in India’s
capital New Delhi on Monday, November 11, 2002 morning and left from
Hyderabad on Thursday, November 14, 2002 evening moving in between through
Mumbai, the commercial hub and Bangalore, the IT hub of India.
During the visit, he
attended a variety of business, met important people, held several meetings
and addressed seminars.
However, what caught the
attention of everyone most was his exclusive devotion of the first day for a
philanthropic activity i.e. fighting of AIDS and announcing an extraordinary
aid of $100 million (Rs.500 crores) for the same. It was the single largest
charity given to any country so far by Bill and Melinda Gates Foundation.
Like Microsoft, Gates Foundation is also the world’s largest charitable
organization formed with $24 billion (Rs.12000 crores) contribution from
Bill Gates. The announcement of charity was made prior to the declaration of
equally sizeable investment plans worth $ 400 million (Rs.2000 crores) for
business promotion in India.
Addressing a social cause
before business and that too with an unprecedented sum of funds could not be
considered as a casual affair. It surely was a well planned strategic act on
the part of Bill Gates and Microsoft.
We do not
know what rationale would have prompted Bill Gates to adopt such a strategy.
But, we certainly consider it as an extraordinary and shining example of
Corporate Environment Management (CE Management or simply CEM) exercise. The
study below attempts to understand how Microsoft Chairman Bill Gates had
brilliantly applied CEM concept for managing Microsoft’s business
environment in India, its most important and potentially largest business
PURPOSE OF VISITING INDIA
Officially, Nov 11-14 visit
was aimed at boosting the work of Bill and Melinda Gates Foundation partners
in India and raising the profile of the healthcare issues particularly
concerning HIV Aids. Gates Foundation is the world’s largest private charity
created in 2000 by Bill Gates and his wife Melinda by contributing an
awesome $24 billion (Rs. 12000 crores) endowment. It grants aids mostly to
healthcare programs. India incidentally is the largest beneficiary of Gates
However, the charitable
concerns had business connection, too. It is amply evident in Bill Gate’s
“India has contributed
an amazing amount to the software industry as a whole and to Microsoft in
particular. A high percent of our great people come from India, a lot of our
key partners are based in India, and so there is a desire to give back
because of that.”
“India is a super super
important country for the software industry and for Microsoft, yes, but also
for the rest of the world.”
“Between India and China
they form a third of the world’s population. If they do the right things it
would be such an amazing thing for the entire world…that makes it a sum of
These statements indicate
that Bill Gates is clear about India’s importance in the world as a supplier
of software products, software personnel and as a consumer of Microsoft
products, now and in future. He also realizes India’s place vis-à-vis that
of China. Microsoft’s business interests in China are approximately 10 times
the $ 75 million it decided for India two years ago. These are the reasons
enough for him to woo India.
PRIORITY FOR PHILANTHROPY
While Microsoft considers
China and India as strong future markets for its products, it is also aware
of their impending fate on healthcare front. They are expected to account
for about 50 million AIDs cases over the next decade. India is considered
worst hit with an estimated 4 million HIV cases at present. Despite such
seriousness of the problem, it could not secure assistance from an UN
initiated Global Fund for TB, Malaria and Aids.
Here Microsoft found an
opportunity to extend a helping hand to India through his charity arm i.e.
Gates Foundation. Regarding the philanthropic favor to India, Joe Carrier of
the Foundation mentioned as follows:
“Bill is very passionate
about fighting AIDS, since in India it is yet not a big problem, he feels
putting in money for the cause will avert a crisis later. Also, he wants to
return some of what he has got back to society.”
Bill Gates wanted to ensure
that his philanthropic action during the visit received extensive publicity
and was noticed by Indian public and government. In pre-visit press
releases, the whole emphasis was on AIDS charity totally obscuring business
interests. Microsoft officials were reported to instruct media person’s
ground rules for meeting Bill Gates:
“Don’t talk about
Microsoft. Don’t even breathe software. Delete Linux from your
consciousness. Just stick to the Gates Foundation and AIDS.”
The first day was scheduled
exclusively for Gates Foundation related activities and no other business,
not even the talk of it. Such was the importance attached to the Gates
Philanthropy was consciously planned to precede business.
THE VISIT –
EVENTS AND ACTIONS
the role of CE Management, it is worthwhile to look at the itinerary of Bill
Gates’ 4-day visit and study the events and actions taken place during the
MONDAY, NOVEMBER 11, 2002
Arrived in morning into the national capital New Delhi.
The day was scheduled to be devoted exclusively for the charity work of
Bill and Melinda Gates Foundation.
Met Prime Minister Atal Bihari Vajpayee who appreciated the efforts of
Gates Foundation partners in India and assured to be supportive of
The day was scheduled to be devoted exclusively for the charity work of
Bill and Melinda Gates Foundation.
Visited Naz Foundation Trust in New Delhi; met AIDS patients at the
volunteer group’s office.
At a press conference, announced a $ 100 million (Rs.500 crores)
grant to fight Aids in India; largest ever single-country grant by
Gates Foundation; work of the Foundation will complement the Government
work; a Board will be constituted to manage the fund with Minister for
Health & Family Welfare, Mr. Shatrughan Sinha as Chairman; other members
will include Government officials, representatives from business,
medical and NGO communities.
SECOND DAY: Tuesday,
November 12, 2002
Stayed put in New Delhi.
The day allotted to declaring Microsoft’s business plans for India.
Had a meeting with Mr. Kunhalikutty, Kerala’s Industries & IT Minister.
Called on Mr. Pramod Mahajan, Union Minister for Parliamentary Affairs,
Communication and Information Technology; Mr. Mahajan made a
presentation on Project ‘Shiksha’ aimed to accelerate computer literacy;
Gates decided to back up the project.
Gates made a presentation to Mr. Mahajan on “Realizing Potential in the
Digital Decade” and “Bridging the Digital Divide” which contained his
vision of Digital Decade 2000-2009.
Announced an investment of $ 400 million(Rs.2000 crores) in India;
investment to spread over 3 years to boost
education, partnerships, innovation and localization; the investment will
support the following initiatives:
Literacy program for computer literacy at school level-it will cover
80,000 school teachers and 35, 00,000 students in 5 years; allocation $20
Media Lab Asia project to dovetail a ‘Shiksha’ initiative to IT Departments
on –going ‘Vidya Vahini’ project; allocation $ 1 million.
‘Akshaya’ a Kerala Government’s proposed project for ICT dissemination
involving local bodies like Panchayats and private sector.
‘Gyandoot’ –a citizen’s interface presently in Dhar district of Madhya
Pradesh to be extended to entire state.
Partnering with state education Departments to set up Microsoft Academy
Centers and collaborate with over 2000 partner driven school labs in 5
Announced Microsoft’s future business strategy for India; it
Localization of Microsoft products:
launching Windows and Office in Hindi within the next year.
Windows XP local language support to Bengali and Malayalam.
Competition from Linux: Gates hit back at Linux his fastest growing
rival giving free access to its software products; refuted growing clout of
Linux in China; and possibility of Indian states preferring Linux over
Windows; said Linux will not affect MS Windows but other Unix based
Launching of Tablet PC in India next month: A new generation ‘can’t
fail’ computers from Microsoft.
Expansion of Microsoft’s India Development Center at Hyderabad; will
increase number of engineers from 200 to 500 over next 5 years.
THIRD DAY: WEDNESDAY,
NOVEMBER 13, 2002
Reached Bangalore, the Information Technology capital of India.
Purpose- to meet his Business Associates Infosys and Wipro who are
important software product suppliers to Microsoft; India is the only
country other than US which exports software and a major part of it
comes from these companies.
Address at Infosys campus; addressed about 2500 software
developers and Business Executives; told that India and China would
define the future of the world business and India had all the makings of
a competitive manufacturing hub; India is on course to become a global
hub for ‘mission critical activity’ in software; envisioned that in
Digital Decade 2000-2010 everyday life will be touched in a dramatic way
by the benefit of the PC as a tool; presently major R&D spend is towards
voice and speech recognition, trustworthy computing and Web services.
Address at Wipro’s Learning Center on campus; addressed about
2000 plus Wiproites; Microsoft is a leading software vendor of Wipro
products; mentioned that Wipro-Microsoft combination can take on
competitors like IBM.
DAY: THURSDAY, NOVEMBER 14, 2002
In Mumbai, India’s commercial capital.
Purpose-asserting Microsoft’s supremacy and marketing
Addressed India’s Business and IT leaders at a gathering
organized by The Economic Times-a national leading business newspaper;
the most glamorous event of the visit; attended by who’s who of business
; Gates was welcomed and introduced by Mr.Mukesh Ambani ,Chairman
,Reliance, the largest corporate in India;
Presented future in Digital Decade 2000-2009; it will be world
without barriers in which smart computers and snaking cables will
render irrelevant all time zones and space; everything will be in
digital format; there will be pocket sized devices, portable PCs and
connection to Net.
Hard sale of TabletPC; the latest gizmo of Microsoft.
Predicted India’s future in Digital Decade; informed that India
would benefit because of its unique education system and the number of
engineers it turns out; India is the only country other than US which
exports software services; reputation of the Indian companies is
growing; it is becoming common sense to look at India, if you want to do
anything in software.
via Hyderabad its base in India
ANALYSIS – THE CEM
To understand the
compulsions and pressures of business which have led to Bill Gates visit to
India and make $500 million (Rs. 2500 crores) worth commitments in
investment and charity, an understanding needs to be developed of its
Business Environment through an analysis of the itinerary, events and the
actions taken during the visit, of course, within the CEM perspective. It is
Microsoft’s Business Environment-Global:
Microsoft is the world’s largest
supplier of computer operating systems popularly known as Windows and MS
Office. It reins supremacy by controlling 93% software used in desktops
across the globe. India and China are the largest markets for Microsoft’s
software products, now and in future. Till recently, Microsoft has enjoyed
almost monopolistic situation. Microsoft softwares are not available free
and source code not accessible freely. This has helped it earning
phenomenal wealth and making Bill Gates the world’s richest person. So
far, so good. But, a competitive situation has been developing particularly in
China from Linux. Linux offers a free access to its source code and
computer operating softwares. Obviously, Linux has started making a dent
into Microsoft’s largest market. And, hence a cause of Bill Gates business
Microsoft’s Business Environment-Indian :
Microsoft’s business growth is directly linked to the
growth of PCs. India and China because of their populations are indisputably
the apples of its eyes in terms of market size. India scores higher than
China due to the Indian education system which Bill Gates has found
conducive to IT education and product applications. Thus, it is quite
natural for Microsoft to attach top priority to India as the most
important market for its software products.
Microsoft finds India
important for two reasons-the size of population and quality of the
people. The size makes India quantitatively the largest market for
Microsoft products. The superiority of their technical competence, English
communication capability, intelligence and hard working attitude make them
ideal employees for software development and research. Microsoft knew from
the beginning that India had been a dependable source for Human Resource.
It has been producing the largest pool of engineers, programmers and
developers in the world. About 10% of its present 50,000 employee strength
comprises of Indians even in the top echelons. Telugu could well be
passing to be a widely accepted language at Redmond, the Microsoft Head
Quarters. Like China, a competitive threat has started developing in
India, too, from the Linux operating systems. As Linux source code is free
and downloadable from the internet, it is rapidly winning over home PC
users and state Governments in India. According to reports, Chief Minister
of one state had confided that Bill Gates’ India visit was mainly to woo
Microsoft operates in India through its branch India Development Centre
(IDC) at Hydrabad opened in 1997.This is Microsoft’s second office outside
USA. (The first office was opened in Haifa, Israel in 1997.).The present
strength of IDC is about 200 engineers. IDC is of strategic importance to
Microsoft which has been assigned to developing products and
technologies in three strategic areas of work. However, it seemed to be
External Forces operating in Indian Business Environment :
Microsoft’s Business Environment in India was certainly disturbed. To
turn it favorable, Microsoft needed to identify various External Forces
particularly with negative influences and apply adequate pressure of
communication and resources to turn them positive. Here is an attempt to
identify what were the external forces important from the Microsoft’s
point of view which required corrective actions.
Society : As mentioned earlier, Indian public
as a whole is important to Microsoft business. To expand market in
India, Microsoft required enlarging the PC user base by targeting
English speaking students and non-English knowing people. Students
required computer education and training. Non-English knowing people
required user friendly software in local languages. Further, keeping in
view the ensuing competition from Linux a need had emerged to create
awareness and long term loyalty towards Microsoft. It also owed an
obligation towards Indian society, which has been a major source of its
technical manpower who has contributed significantly towards the success
Business Rivals : The fast developing
popularity of Linux in India had become a matter of serious concern for
Microsoft. To combat this threat was the most important agenda of the
visit. Yet, it was not to be highlighted as it could create an
impression of a disturbed business leader for Microsoft.
Government: To implement all its business
plans and making business investments, approvals of Govt. of India and
particularly the Ministry of Information & Technology, which is the
relevant Ministry, are required. Long term sustained Govt. support is
essential as Microsoft initiatives in India are designed for mass scale
and long term influence. Further, State Governments which were showing
preferences for Linux required convincing about Microsoft’s superiority
over Linux and any other competitor.
Investors : Investors here would
also include Business associates Infosys and Wipro in Bangalore are
Microsoft’s important suppliers of software products. Apart from USA,
India is the only country in the world which is exporting software and
it primarily comes from these institutions. It required transacting
business with them and rejuvenating business relations including
briefing them of Microsoft’s future business plans.
Business Groups : Support of business leaders
and their representative associations is required for the success of any
Corporate. While on visit, it is customary to make courtesy calls to
local business leaders. A business leader also needs to share his
vision, plans and achievements with peer groups. Their support is also
required to favour policies and strategies relating to your business.
Media : Visit of a global business leader
after about two years in itself is important news for the media to give
proper coverage. However, in the present case, Microsoft had some
specific objectives to attain. It was interested in informing the Indian
people about its extraordinary philanthropic action for them and
registering that this action did not have any correlation with business
interests. Next, its long term investment and business plans countering
the competitive threat of Linux also required highlighting. Hence,
Microsoft required extra care in mustering media support.
Other External Forces like Bureaucracy, Law & statute and Religion were
apparently found not significant and relevant for the purpose of this
visit and hence no explicit action was envisaged with regard to these.
Strategy to Mitigate Negative Influence of External Forces :
To influence a potential customer base, as large as
Indian nation, the influencing action too was required to be
proportionately sizeable. An opportunity was found in AIDS prevention
program. Statistical information had indicated India to be the worst
affected in the World. Despite the serious magnitude of the problem,
Indian Government had failed to procure assistance from UN agencies.
Microsoft sensed an opportunity here sizeable enough to fit its purpose
and the bill. Gates Foundation-the world's largest charity organization
only could serve as the alternative source of funds. For it, to commit an
assistance of $ 100 million out of its $24 billion could never be a
Actions Taken for the Management of External
Having identified the active external forces in its
Indian business environment, Microsoft went about taking corrective
actions to mitigate their negative influence and convert them for
favorable effects. The actions taken by Microsoft in this case were as
Society: To appease the Society in general,
Bill Gates announced an aid of $100 million for protection against AIDS
in India. It was one of the highest amounts of charity committed in the
world. The magnitude of the charity was in proportion to the magnitude
of the problem and the size of the potential customer base. Further the
exclusive attention given in the form of allotting the whole first day of
visit for charity had created a definite positive impression on the
people at large. In Bill Gates own words “…it is yet not a big
problem, putting in money for the cause will avert a crisis later. Also,
he wants to return some of what he has got back to the society.”
The announcements of financial support to Shiksha, Gyandoot and Akshaya
projects would help Microsoft linking with the students and people in
the project areas on a massive scale for next five years.
By announcing Windows and MS Office compatibility in Hindi by next year
and in Malayalam and Bengali in subsequent years, it had already
influenced a major segment of non –English speaking population.
Government : It started immediately on
arrival. The first meeting took place with the Prime Minister Atal
Bihari Vajpayee in New Delhi who assured Bill Gates full support for all
Microsoft initiatives in India.
The announcement of $ 100 million charity for AIDS would certainly have
pleased the Govt. of India who could not procure it from other agencies.
The management of Fund was also left with the Minister for Health as the
Chairman of the Board.
The next meeting on second day was with the Head of the most relevant
Department concerning Microsoft Business-Minister of Information &
Technology, Mr. Pramod Mahajan. Bill Gates announcement of $ 400 million
investment in India in next 5 years would also have pleased the Govt. of
India. Further favour was secured by agreeing to a $ 20 million aid for
Shiksha- an IT computer literacy program of the government. He also
apprised him of his present investment plans worth $ 400 million and his
future programs in Digital Decade 2000-2010.
To gain favor of state Governments, he announced financial support to
Kerala Government’s Akshaya project for ICT dissemination and MP
Government’s Gyandoot project. To strengthen the relationship further,
it announced setting up of Microsoft Academy Centers and 2000 partner
driven school labs over the next five years.
Business Rivals: At every given forum, Bill
Gates refuted the threat from Linux. Bill Gates claimed that Linux would
affect only the UNIX based softwares rather than Windows and MS Office.
Some of the states which had shown preference for Linux were committed
financial support to its IT projects. These moves were supposed to
containing the competition and rivalry. The rivalry concern was subdued
behind the massive AIDS charity announcement.
Investors (Business Associates) : Bill Gates spent his entire third
day at Bangalore visiting Infosys and Wipro discussing business and
future plans. He addressed gatherings of over 2000 employees each at
their respective premises and shared with them about his vision of IT
industry’s future and trends in Research and Development. Same day after
the visit, Wipro announced possibility of signing a deal for handling
BPO business of Microsoft in India. To boost activities at its own
establishment IDC, an investment of $100 million (Rs. 500 crores) and
increase in engineer’s strength to 500 in next five years was announced.
Business Groups : Instead of choosing platform
of any known Business Association in India, Bill Gates gathered the top
business leaders of Indian IT and other business. Appropriately, he
addressed them in the commercial capital Mumbai on the fourth day.
There, he grossly indulged in sharing with them his vision of the
Digital Decade and hard core selling of TabletPC, the latest IT gizmo
from Microsoft. It not only educated and thrilled the business leaders
but reaffirmed Microsoft’s supremacy in the IT world.
Media : The pre-visit publicity was very low
keyed restricting to highlight the AIDS support program and not the
business schedule. Even on the first day of the visit, media was advised
by Microsoft officials to talk and communicate only the AIDS program. It
created the feeling that how much Bill Gates was concerned about the
AIDS and Healthcare problems of the people of India. But, from the
second day onwards, it was business and nothing else. The $400 million
investment plan was highlighted properly.
It was significant that The Economic Times, India’s leading English
language Business newspaper organized the Business Meet in Mumbai and
gave voluminous coverage to the event. It would go a long way in
building a strong corporate image for Microsoft.
Cost of CE Management :
Like any managerial function, there was a cost accrued to Microsoft for
its Corporate Environment Management initiative. It was $100 million
(Rs.500 crores) one of the highest in the world. In addition, investment
commitments to Shiksha, Akshaya and Gyandoot projects may also be added to
Bill Gates’ Nov 11-14, 2002 visit to India was
definitely a business visit during which he announced $400 worth
investment plans for India in the next 5 years. The investment plans
included state govt IT projects, computer literacy and education programs
of the govt, and setting up of Computer Labs etc. All these were aimed at
developing a long term association with Microsoft and his products. He
also promoted his new product TabletPC which was scheduled for market
entry in the subsequent month. An extensive awareness was created about
BillGates future vision for IT industry and its impact on human life in
‘Digital Decade 2000-2010’.
Despite a definite botheration about the business threat developing from
Linux, it was not explicitly admitted. It was subdued with the
announcement of declaring a $ 100 million charity for AIDS and Healthcare
support programs. This action in Corporate Environment management won a
favorable corporate image with the people of India, indirectly giving a
blow to the competition.
Thus, Bill Gates visit to India and actions taken during the same have
become a classic case of Corporate Environment Management to combat an
ensuing business threat. This is perhaps the largest case of its kind
considering the area of influence as big a nation as India and the cost as
big as $100 Million (Rs. 500 crores) and executed by the largest corporate
of the world. Most important of all, Bill Gates had chosen to assign
priority to CEM and precede it over the other management functions.
( Acknowledgement: The above case study has been prepared based on
the news and reports published chiefly in The Times of India, Ahmedabad;
The Economic Times, Ahmedabad ; Business Standard, Ahmedabad etc in the
relevant period. The author acknowledges their support and thanks for the
free use of their reports.)
13-Dec-2002 : The
Economic Times, Ahmedabad
share Windows code with India : One month after the visit,
Microsoft is reported to have already moved a proposal to the Ministry of
Information and Technology for sharing the Windows source code with one
Comment : Please, recall Bill Gates
refuting a threat from Linux and hitting back hard during Nov11-14
visit. And, also his meeting with Minister of IT on Nov 12 in New Delhi
and agreeing to support his ‘Shiksha’ project with $ 20 million grant.
16- Jan- 2003 : The
Economic Times, Ahmedabad
Microsoft opens source code to governments : Two
months after the visit, in an unprecedented move, Microsoft declared
to open its source code to governments and international organizations
worldwide. Under a programme called Government Security Programme,
Microsoft intended to allow governments and their agencies to examine its
source code to enhance the security of their software used for tasks such
as tracking personal data, taxes and ensuring national security.
The disclosure will be done at the discretion of
government agency. Whereas, NATO and Russia have agreed, discussions are
on with more than 60 other governments. Indian Government has already been
approached about a month ago.