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March 28, 2006 4:30 pm

Jean-Philippe Curtois, Microsoft: In search of mouseless markets

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The developing world is a tough place for technology companies to do business. How do you sell software to people who don’t know what a mouse is, let alone how to use one?

For Jean-Philippe Courtois, president of Microsoft International, the appeal of finding ways into such markets is partly personal: although he only lived in Algeria for the first 18 months of his life, his passion for developing countries has stayed with him.

For Microsoft, of course, the appeal is largely financial: “More than half of new PCs are being sold into these markets – and not just into India and China. It is many countries across the world,” says Mr Courtois, who heads up all Microsoft’s operations outside North America.

He has found that Latin America, Africa and the less developed parts of Asia and Europe require a different approach from westernised nations. And one of the biggest factors he has to consider is cost. Not only is the price of using Microsoft software in such places sometimes prohibitively expensive, it is also one of the biggest incitements to piracy.

Microsoft has taken account of this and reduced the entry level cost of its flagship operating system. In 2004, it launched Windows XP Starter Edition, a stripped-down version of the normal desktop suite, which sells for about $30, two thirds less than the full home edition.

Users are restricted to opening three applications at once, partly to help the software run on low-powered computers. It also gives wealthier buyers an incentive to spend the extra money on the complete edition.

Mr Courtois won’t discuss whether other Microsoft applications, such as Office or Small Business Server, will receive the same treatment. “We have learned a lot,” is all he will say.

But Microsoft has been working in other ways to try and make computing more affordable. In Egypt, for example, Microsoft has launched a finance programme, offering people low-interest loans to buy PCs, which are paid back a few dollars at a time on their telephone bills. It has run similar programmes in Latin America.

Mr Courtois is keen to emphasise the company’s global view but, to date, Microsoft has put most effort into wealthier countries, such as India and China. For example, the languages Microsoft has chosen to translate its software into hints at its priorities.

Bengali, for example, is a widely spoken language, with around 250m speakers. About half of them live in Bangladesh, one of Asia’s poorest countries. Hausa is another language spoken by large numbers of largely poor people – 25m in West Africa.

But Windows XP is not available in either language, while it is available in far less widely spoken Spanish languages, such as Galician and Basque.

Mr Courtois explains: “Historically it has been about addressing the richer segment of the market, pretty much. In future we will have a more balanced mix.” Bengali and Hausa are both due to be covered by the next releases of Windows and Office, he says, part of a general shift towards less wealthy and potentially more difficult markets to do business in.

Besides absolute wealth, Microsoft’s engagement priorities have also been determined partly by government attitudes. Governments are a big user of technology in any country, but particularly so in emerging economies – and their influence extends through the business and education sectors.

So doing business with a favourable country such as Egypt is easier than working in where the government is publicly hostile to Microsoft, such as Venezuela.

Doing business in such places requires commitment and patience, he says, waiting until the political climate has changed.

“We have been doing business in Venezuela for 15 years. Frankly speaking, in the world there are a number of places where the political leadership is changing. We are taking a longer term view.”

Mr Courtois claims that “we have never closed an office”. He once temporarily shut Microsoft Kuwait when Saddam Hussein invaded, but otherwise, has never had to retreat from a country in which a subsidiary has been opened.

That is not to say that Microsoft always makes money – in many territories, he concedes, it does not. But the company is now looking to invest in countries for the long term, investing in education programmes and working to stimulate the local IT economy.

This in turn leaves Microsoft open to the charge that its “education programmes” are partly marketing exercises in disguise. Surely a Microsoft-designed curriculum won’t give Apple or Linux systems the same attention as Windows?

“It covers a broad side of technology,” says Mr Courtois. “It is a very straightforward discussion” with the governments concerned – there is no attempt to conceal anything.

The traffic is not entirely one way. Some of the innovations designed for use in the developing world make their way back to the west. For example, Windows Starter Edition does not assume that the user knows how to use a mouse, so it plays a visual tutorial when it starts up for the first time. But there are also people in the west who don’t know how to use a mouse, so the feature will be built into the next version of Windows for Europe and North America.

“Emerging markets are an incredible source of innovation and new business models,” says Mr Courtois.

No western company’s activities in developing nations will be entirely uncontroversial. But if Microsoft can help to make computing available to the world’s poorest people, through long-term investments and more language translations, its impact will, on balance, be positive.

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