Microsoft plans to invest $1.7 billion in India

Earlier this year, the company opened a research center in the southern city of Hyderabad, the fourth such Microsoft facility worldwide. The Bangalore center is to be opened next month.

Gates said the company’s efforts in India were aimed at narrowing the digital divide by creating products that are not only affordable for the poor, but also address their needs.

“India is a place where breakthroughs like these are necessary and will take place,” Gates told business leaders earlier in the day.

Although scores of Western companies have tapped India’s large pool of technical workers for software-related work, many in the country have no access to computers.

More than 35 percent of the country’s population can’t read or write and nearly 400 million people earn less than a dollar a day.

Still, a 300 million strong middle class and the country’s booming economy make India a big market for Western companies, including Microsoft.

The company also said Wednesday it plans to put aside funds for computer education and training, including adopting 100 schools, and support an Indian program to offer computers and training at 100,000 centers across the country.

Gates’ visit comes at a time when many Indian companies are increasingly turning toward open-source operating systems, particularly Linux, as a low-cost alternative to Windows.

Open source operating systems allow users to copy, distribute and modify the program’s code, and are relatively cheap compared to proprietary systems like Windows, which does not allow users to modify its secret code.

While exact figures are hard to come by, a survey of Indian companies by Network Magazine released in June found that nearly 40 percent use Linux to run their servers. The magazine polled 340 companies, and offered no margin of error.

However, Microsoft insists its market share in server operating systems grew from 57 percent in early 2004 to 65 percent in late 2005. During his previous visits, Gates has downplayed the Linux threat.

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