Looking East: Growing With Offshore Outsourcers

Steve Ballmer ended his keynote speech at Microsoft's Worldwide Partner Conference in Toronto earlier this month with a rallying cry: "I don't care who it is, if we have an opportunity together, let's go win, win, win!"

That strategy extends to the fast-growing software centers of India and China. Microsoft is teaming with companies such as HCL Technologies, Infosys Technologies, Satyam Computer Services, Tata Consulting Services, and Wipro Technologies. Of Microsoft's 18 global alliance partners, those five are based in India.

Microsoft is helping them develop service offerings, devise marketing strategies, and find customers, most of which turn out to be U.S.-based companies. "They're going to grow their business whether they work with us or not," says Tarun Gulati, director of global partners with Microsoft's platform strategy group. "We want to get our share of that growth."

Infosys' Microsoft-related business exceeded $200 million last year, says John Conlon, VP of global alliances for the outsourcing company. In fact, Microsoft-related revenue is shooting up faster than Infosys' overall growth rate of 30%, he adds. Infosys and Microsoft are brainstorming now on ways to support radio-frequency identification projects.

Microsoft's relationship with offshore outsourcers is a potentially sensitive subject in the United States, given the belief of some that overseas programmers threaten domestic IT jobs. But Microsoft officials argue they're treating offshore outsourcers the same as other partners, such as BearingPoint Inc. in McLean, Va. "I really don't want to distinguish where they're headquartered," says Jared Wheeler, Microsoft's general manager of enterprise services and technology partners.

General Motors Corp. CIO Ralph Szygenda sees the logic in Microsoft's strategy. Microsoft is "selling software through services," Szygenda says. "I believe what you're seeing is just the globalization of the IT marketplace."

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