Overseas R&D Expanding

Recent expansion of Microsoft’s India Development Center (IDC) in Hyderabad, along with reports of plans to send some “Longhorn” development and testing to Indian companies, have led to concern that Microsoft may move core development abroad to save money. In fact, although labor costs in countries such as India are certainly lower than those in the United States, these savings are partly offset by communication difficulties; other risks and benefits must also be considered. Consequently, Microsoft’s core research and development will remain concentrated in Redmond, WA, and the company will continue to be selective about the type of work done elsewhere.

A Global Company

At the beginning of 2005, approximately 28,000 of Microsoft’s 57,000 employees work on the company’s main corporate campus in Redmond, WA, or other offices located near Seattle (including a large facility in Issaquah). These employees perform a wide variety of functions, including marketing, operations, and support, but the majority of them are in product planning and development. The company also has large development offices in Mountain View, CA (part of Silicon Valley, a critical IT hub), and Fargo, ND (headquarters of Great Plains, which Microsoft acquired in 2001).