Big Blue counters Gates' offer for Indian software

By Imran Qureshi, Indo-Asian News Service

Bangalore, Dec 12 (IANS) After Microsoft chairman Bill Gates' lavish offerings for health, education and proprietary software, his company's biggest competitor IBM has offered to transform India into a software industry hub if it adopts the open source standard.

The world's second largest software company that is also known as the Big Blue is offering to build "enablement centres" for India to shift from being a mere software services powerhouse to a full-fledged software industry hub.

"We are willing to invest heavily in the enablement centres based on what decision the government takes. It should standardise on open source and we will create centres for the software industry to flourish," Amuj Goyal, vice president, solutions and strategy, IBM software group, told IANS.

"Innovation on the Microsoft platform has moved out. VCs (venture capitalists) are not investing any more on the MSN platform. Gates' visit was only to carry the message of proprietary software that will not benefit the customers," he said.

Goyal, the highest ranking Indian in IBM worldwide, has helped drive the growth of the hardware leader's foray into the software business and made it a $13 billion group in just seven years, displacing Oracle from the position of the world's number two software company.

"IBM was on proprietary technology in the early 1990s. We could not see outside that. We were trying to look after ourselves, not the customers, until we started the software business in 1995. Today Microsoft is on the wrong side," said Goyal, an alumni of the Indian Institute of Technology (IIT), Kanpur.

"We will put up enablement centres (like e-governance or e-business centres) for software centres. Our strategy is different. Customers need to have control and that can come only through open standards. Microsoft's strategy is to get in their proprietary technology. That's a big trap," he added.

"Today you can use database from IBM or any other vendor on open standard. The reason why customers like us is because our systems are robust and scalable and for support services. If you are caught in the proprietary trap, the software business cannot be built. Those are hooks and lures he (Gates) is investing in. Customers don't want that," Goyal said.

He quoted examples of the governments of Britain, Germany and Singapore that have adopted open source standards. "India does not have a software business. We want to build the future SAP or a BEA in India by focusing on open standards."

IBM is leveraging India not only for its "tremendous skills in software and services" but also because it sees the country as an important market. It has set up five software research and development centres and a solution partnership centre in India.

The company has committed $100 million until 2003 for the India software laboratory in Bangalore, which is being scaled up from a headcount of 500 to about 600.

"But the skills in India can be applied far beyond the Indian market, primarily the English-speaking countries in the Asia-Pacific unlike China or Japan, which are country-focussed labs," Goyal said.

So, was the shift in focus from hardware to software during the downturn coincidental? "No, it was not coincidental. We have been on this strategy for the last 10 years. We have recorded growth for 21 consecutive quarters," Goyal said.

The software group drives about 30 percent of IBM's profits. It is the largest supplier of Internet infrastructure software, called middleware, which accounts for about 80 percent of IBM's software revenue of over $10 billion.

"We are young -- just seven years old -- and growing, and we will continue to grow. Given the current economic situation, if an opportunity exists, we will go in for acquisition, as we did with Rational Software (the world's leading supplier of software tools for $2.1 billion). It makes sense because it is open standard. We have completed seven acquisitions in 18 months."

--Indo-Asian News Service