Has lack of sufficient growth here prevented Microsoft from making a meaningful investment in India?

That is not correct. We have invested in India. But we never talk about investment and revenue figures. Across the country, we are growing in manpower, we continue to invest further in the Hyderabad R&D centre. The development centre has been doing very well. Indianoperations have grown a lot in the last two years. Our first goal in India was to be close to our partners and customers and we have achieved that. One of the hallmarks of Microsoft is that we constantly go to the customers for product improvement. A prime example is the beta testing that is going on for Office 2000 with over 4,30,000 customers worldwide and 1,40,000 developers. That for us is a major investment. So we invest in terms of the market development, products quality, infrastructure (channels) or product development. In March this year, we launched an India-specific MSDN website with events and registration listings and information updates.

Besides, we don't profess to do everything. So if there are companies that have better ERP solutions or banking solutions, we take the onus of providing a platform early to these people. Customers get our technology, expertise and niche solutions from our partners based on our platforms and the service and support from them. So it could be NIIT and Aptech fortraining and certification, HCL and Compaq for hardware and system integration.

Which are the internet companies you are working with currently?

We are working with a wide spectrum of companies such as those in the hosting business, in content development, or in the access business such as ISPs for platform. Some of these are companies like Citil, NetAcross, DBS Internet, Planetasia.com and Microland.

Are you close to announcing a joint venture or investment in any such company?

We never do JVs, only strategic alliances. And we will not do a JV in India. That route is ruled out. If you look at Microsoft's history, we never do JVs, may be buy equity stake in certain companies. But in India, we are not even considering that right now because any acquisition has to be done out of the US. Microsoft Corporation is totally focussed at broad-band services right now and that is yet to happen in India.

What do you achieve by entering into strategic alliances?

What we do is that weoffer our products to partners before they are released so that they are tested or developed further, their staff can train on it. We bring them consulting services, set up pilots if the need be, or do value-added services for them through our consulting expertise.

Between the small and medium enterprise (SME) segment and the government sector, which has been a better market for Microsoft?

Both are very fast growing and very important markets for us. The government sector has given us more revenue, but things could change. Over the next five years, SME will be the fastest growing segment. We have had major success in our efforts to educate SMEs to buy legal software, run programmes inviting 50 of them where we talk about technology and licensing. In the SME segment, people still use illegal software. We have met with some success in changing peoples' viewpoints in the last one year.

SME as a significant market has taken off only in the last couple of years largely because the costs of owning acomputer, including hardware and software, have come down substantially. They are also beginning to realise that if they are not digitally enabled, don't have basics of office automation, electronic communication and are not web-enabled, they will go out of business.

Has your product focus undergone any change?

From being known as a desktop company, we have moved to the enterprise space with BackOffice, NT and SQL and making serious inroads into the market share of well-established players like Novell and Unix.