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Secret Microsoft pacts leaked |
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Wednesday, June 16, 2004 |
 Confidential agreements between Microsoft and two software companies in India were leaked to a Seattle labor group that's lobbying against overseas technology contracting.
Microsoft publicized its partnerships with the companies, Infosys and Satyam, years ago and few new details are revealed by the circa 2001 contracts. They set terms for software work at Microsoft's Redmond campus and at their offices in India, but they do not say how much work is involved.
But the Washington Alliance of Technology Workers claims the documents expose Microsoft's intention to hire low-cost foreign vendors to write its software. It gave the documents to several newspapers this week.
"These documents clearly show that as a major software vendor they're looking at the highest skilled, highest trained workers to try to move their work abroad," said WashTech organizer Marcus Courtney.
A Microsoft spokeswoman said the company has long hired outside vendors in India and around the world, and that its core technology work will continue to be done in-house.
"There are companies that have deep expertise in certain areas that we do not, so at certain times we will partner with them," spokeswoman Stacy Drake said.
Drake said the company has hired "thousands" of vendors, including many in Seattle.
"We're in a cyclical business, so that's part of it," she said. "In the work we do, there are areas of expertise. It makes sense to go to the experts because it's not intellectual property, core technology. We'll continue to do that."
Complicated agreements
Microsoft also has other reasons to hire software companies in India, and the leaked documents offer a glimpse into their complicated partnerships.
Since the 1990s, Microsoft has been working to raise its profile in India's fast-growing technology industry, where competitors such as Sun Microsystems, IBM and Oracle have a larger presence.
By hiring companies in India, Microsoft gets programmers familiar with its software. It also forms partnerships to help those companies write and sell custom programs based on Microsoft technology.
Whether or not the documents contribute to the debate over outsourcing of technology work, the leak could indicate a sense of unease among employees at Microsoft. The company has cut benefits and its rate of hiring has slowed as it tries to cut costs and sustain profit growth.
Microsoft is simultaneously doubling the size of its product-development center in Hyderabad, India, to 500 people.
So far there has been little backlash among employees, according to S. Somasegar, the vice president in charge of the India Development Center.
"As long as we are communicating to employees in an open and transparent way, what we are doing, why we are doing, how we are doing, then we are OK," he said in an earlier interview.
More forthcoming
In light of public concerns about outsourcing and Microsoft's expansion in Hyderabad, the company has become more active "about telling our employees internally, if you are hearing something, this is what we are doing, this is why we are doing, this is how we are doing," Somasegar said.
Courtney said he received a call from a woman at Microsoft who asked if he would be interested in the documents but did not give her name. They arrived by mail in an envelope.
WashTech, an AFL-CIO subsidiary that has tried for years to unionize technology companies, has become a sort of clearinghouse for documents leaked by employees concerned about the hiring of overseas technology workers.
Last August the group created a stir by releasing internal material from IBM discussing plans to move thousands of white-collar jobs overseas.
The Microsoft documents do not say how many employees are involved or what projects are being done by companies in India.
They are contracts from 2001 that set rates and conditions for Infosys and Satyam to provide software development services.
For work at its campus, Microsoft agreed to pay $60 an hour for software developers, $72 for senior software developers and $90 for software architects. For work in India, Microsoft agreed to pay hourly rates of $23, $31 and $36 per hour.
Drake would not comment on the specific contracts.
Source: nwsource.com |
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