On the heels of Red Hat’s foray into China last week, Microsoft today announced that it will hire hundreds of new employees at its Indian campus next year.
Microsoft currently employs 800 people at its US$400 million, 28-acre campus just outside India’s high-tech hub of Hyderabad in Manikonda. Company executives said the hiring spree is aimed at leveraging growth opportunities in Asia’s fourth-largest economy.
“I am quite sure of hiring hundreds over the next 12 months,” Reuters quoted Microsoft CEO Steve Ballmer as saying. “The work we are doing here is not low-level. It’s very high-level creative engineering.”
Tapping Into Talent
Rob Enderle, principal analyst at the Enderle Group, told the E-Commerce Times that India is a great location for very talented, relatively low-cost labor.
“What Microsoft, as well as a number of other countries, have discovered is having localized resources in a particular geography is critical to being able to maintain and grow your market presence in that geography,” Enderle said.
Other high-tech firms, like IBM, are also setting up outsourcing shops in India, and analysts expect the movement toward Asian countries to become an ongoing trend.
Understanding the Market
What Microsoft will do with hundreds of new employees in India is not clear. However, it is clear that there is opportunity for high-tech growth in Asian nations like India and China.
Enderle said the world’s largest software maker is not only leveraging local resources for the cost factor, but also for the cultural factor.
“Local labor understands the problems that people there deal with,” he said. “There are different socioeconomic conditions in India, and U.S. or European labor has no concept of what it is like to deploy a product in an area that is as financially challenged as parts of Asia are.”
Enderle said doing business in India requires a completely different mindset. Indian consumers are accustomed to paying much less for technology products than their U.S. or European counterparts, for example. So, again, it comes back to cost.
“If you want to maintain your margins in the Indian market, then your production costs have to be in line with those efforts,” Enderle said. “If you are going to do business in India, you have to use local labor as much as possible, otherwise you create too much cost.”