From your book one can gather that Microsoft made a few big mistakes when it entered the Chinese market. What were those and how did it correct?
I think in the early years they made a lot of mistakes. And I think it is a prototypical case study of a series of very classic mistakes. One is the presumption that the mechanism through which they had managed to get packaged software standardised in the West could be replicated in China.
And the presumption that the Chinese will see that what we did with the standardisation of the software industry was so good for the industry and that the Chinese want a software industry and therefore they will let us do it. What they did not realise at that time, though it was reasonably clear— that there was an indigenous software industry that would not want to see its own bread and butter being taken away from it and so understandably would resist and more than that, the local industry understood the power structure much better.
I think at some point, particularly under Craig Mundie, who is the No. 2 or 3 guy in Microsoft — and he is jokingly referred to as the secretary of state within Microsoft — with reference to the term that is used for the American foreign minister….
So what was the lesson learnt?
They realised that you almost needed a secretary of state to deal with many countries, that you need to be plugged in not just into the technical aspects of the industry structure but you need to understand the political and social environment as well. Somebody with Mundie’s stature is fulfilling that role. Microsoft did not set itself up as a partner in progress in those days. It set itself as ‘we are the software vendors of choice, you should use us as it is good for us, it’s good for you.’
Is Google making the same mistakes now in China?
No, Google has a different set of challenges but it’s not making those mistakes. For instance, Google had been pretty aggressive in tapping into high-end technical Chinese talent, which Microsoft was not doing in the early days, though now they have corrected that mistake. The Beijing R&D centre of Microsoft is state-of-the-art and is fantastic.
I think it is the best in the world among Microsoft’s centres anywhere, at least in some technical areas. And Google is doing the right thing by tapping into high-end technical talent even in China, of course it’s got a different set of issues—the privacy issues, the emails, the security issues - something that Microsoft didn’t have. Whether Google will be able to surmount those challenges, I don’t know.
You are on the board of SKS Microfinance. How do you see that company doing in the days to come?
The thing that really makes me happy about SKS Microfinance is the women whose children are going to the school
because they have good few extra rupees and we know from decades of social science, not just in India but also across the world that once children go to school, the families in the next generation would be better.
How do you actually rate entrepreneurship in India vis-a-vis the Western world and the emerging markets?
Right now it’s hard to find a place that is more exciting than India. You know, this is our moment in the Sun.
Which are the companies in India that you really find exciting?
Companies that I find really interesting in India are companies like SKS, or start-ups like Aspiring Minds or companies like Bharti Airtel that has taken communication to the masses. Or even my good friend, the heart surgeon in Bangalore, Devi Shetty (of Narayana Hrudayalaya fame) who has taken cardiac surgery to the masses.
I think the common denominator among these is finding economically viable, sustainable ways to take things that we normally associate, whether it is cars, financial products, heart surgery or fancy phones, to anybody and make them readily really available across the spectrum and affect change and enable livelihood. What I am waiting for is a revolution in education.
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