Microsoft wants to sell more software to a largely untapped market in poor and developing economies and today is laying out a plan...
Microsoft wants to sell more software to a largely untapped market in poor and developing economies and today is laying out a plan — including a $3 software suite — to do so. The company says extending the benefits of technology to the vast majority of the world’s population will promote positive social and economic change.
“We are trying to be more comprehensive and connecting the needs for economic development and social inclusion into the mainstream about how corporate America sees advancing the business,” Orlando Ayala, a veteran Microsoft executive leading the effort, said recently. “And these things should not be two different things.”
Currently, the information-technology industry reaches the world’s richest 1.2 billion people, mainly in the mature economies of Europe and North America. At Microsoft’s Government Leaders Forum today in Beijing, Chairman Bill Gates provided details on the company’s “Unlimited Potential” plan to reach the next 5 billion people.
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Gates said more opportunities would be created as technology becomes easier and cheaper to use as it advances.
“I’m often asked, is the technology revolution going to reach an end? And the answer is certainly that in the decades ahead, we don’t see any limits,” Gates said.
Gates cited the growing prevalence of video on the Internet as an example of how quickly and dramatically technology improves.
“Five years ago, we talked about music on the Internet; we talked about photos on the Internet,” he said. “But video was not a mainstream thing. Today, it’s very mainstream. Why? The power of the systems, the power of the software tools, and the use of high speed connections allow video to work very well on every one of these systems. “We see the fact that the power will just get better and better.”
Analysts who reviewed Microsoft’s plan, and Microsoft itself, acknowledged that the company has a clear business interest in the effort, in addition to its philanthropic goals.
“Any technology company worth its salt knows that there is limited growth potential in mature markets and that the competitive nature of the industry means that if they don’t solve the riddle of reaching the next billion or two people, that someone else will,” Simon Yates, an analyst with Forrester Research, said in an e-mail from China.
The program combines several new and existing efforts under the direction of an internal board of top executives, including Craig Mundie, one of the two men tapped to replace Gates’ functions when he stops working at the company full time next year. Others include Windows Division President Kevin Johnson and Chief Operating Officer Kevin Turner.
Some of the specifics of the program:
• A goal of reaching an additional billion people by 2015.
• A Student Innovation Suite available for $3 per license to governments buying Windows PCs for students, including basic versions of Windows XP, Office 2007 and learning programs.
• New tools for educators to build content for classes and institutions.
• Expansion of “Innovation Centers,” which seek to foster local software development efforts around Microsoft products, into 25 new countries by 2009.
• A jobs portal to help IT workers in India — and eventually around the world — gain additional business skills and match them with employers.
Ayala said Microsoft aims to form partnerships with governments, nonprofits and other corporations to help advance this effort, which centers on a cycle of improving education, local innovation and job creation.
While Microsoft may not see huge sales right off the bat as a result of the program, analysts see the potential for big dividends down the road.
For example, if Microsoft gets a third of the students in a country comfortable with its software, that could make it easier to persuade businesses to buy more Microsoft software in the future and fend-off competition from open-source software.
“When [the students] go into commercial environments … they’re not going to take too kindly if there’s all of a sudden a Linux desktop with Open Office on top of it,” said Clive Longbottom, an analyst with U.K.-based Quocirca, who gave Microsoft feedback on its plan in advance of today’s announcement.
Luis Anavitarte, an analyst focused on Latin America and emerging markets for research firm Gartner, said he expects the Unlimited Potential initiative to awaken governments to technology.
“Politicians [in the developing world] seldom mention the word technology,” said Anavitarte, who served as an economic counselor in the Peruvian state department for 18 years.
He said he hopes Microsoft’s announcement will begin to change that.
Benjamin J. Romano: 206-464-2149 or email@example.com
Material from The Associated Press is included in this report.