Microsoft Pushes Emerging-Market Access

Senior VP Orlando Ayala tells how Redmond's "Unlimited Potential" program will use technology to create an educated workforce

By Aaron Ricadela

In his nearly 17 years with Microsoft, Orlando Ayala has run the company's Latin America division, worldwide sales & marketing, and its corporate applications group, among other jobs. In 2006, he became senior vice-president of Microsoft's emerging segments & markets group, charged with selling software to schools, governments, and consumers in developing countries.

On Apr. 19, Ayala—along with Microsoft (MSFT) Chairman Bill Gates and Chief Research & Strategy Officer Craig Mundie—held a press conference in Beijing to announce the expansion of Microsoft's "Unlimited Potential" program, aimed at using technology to help schools and create jobs in China, India, South America, Africa, and elsewhere.

Among the highlights of the presentation: Microsoft will begin selling a $3 software bundle that includes Windows XP, a version of its Office suite, and educational software, to several government agencies for distribution to low-income students. The software giant also is working with the Indian government to create a Web site where computer-science graduates can sign up for additional courses that could make them more employable. And the company's expanding a program under which it sells low-cost PCs to foreign governments, including China, Chile, Egypt, Botswana, and Argentina.

In a recent conversation with BusinessWeek.com technology writer Aaron Ricadela, Ayala talked about Microsoft's future growth, technology in education, and competing efforts to put computers in the hands of the world's poor. Edited excerpts from their conversation follow:

Microsoft is expanding an initiative to distribute low-priced technology to people in developing countries. There's certainly no shortage of efforts like this in the technology industry. How is this one different?

This is about the 5 billion people with no PC or Internet access, and Bill Gates will announce Microsoft's expansion of its commitment to those people. "Unlimited Potential" is the umbrella term. Microsoft has used this name before, mostly for efforts around social responsibility. But it wasn't very well known.

There are three pillars in which Microsoft has decided to invest: transforming education, fostering local innovation, and enabling jobs and new entrepreneurial opportunities. Local communities are really important. It's impossible to reach out and do any of this without new partnerships with nongovernment organizations, government agencies, and customers. By 2015, we would like to see another billion people with technology access.

How much is Microsoft investing in these initiatives?

The last thing we want is to quote numbers. Everybody announces a billion dollars extra on this and that, but when you look at the details, it's very hard to pin down. Should I count all my R&D?

A lot of Corporate America is wired to think $1 of input means $1 of output. That's what gets many companies in trouble—they think too short term. A dangerous thing is [the attitude of], "If I don't see return in three quarters, I won't invest." We prefer not to look at it that way. There's no doubt in my mind the future growth of the company is going to come from this sector. And some growth is already coming from here.

For Microsoft, this is building capacity. The next 50 years of the company are going to rest on the next billion users. This is one of the big bets we're making.

One place where people are rapidly getting online is India. Yet there's also a looming shortage of trained IT workers who can meet demand for technical jobs there. What's Microsoft doing about that?

We're announcing a partnership with the government of India to create a job portal. India produces about 400,000 technically trained graduates a year. But only 100,000 are considered immediately employable.

The portal will help graduates determine the gaps in their skills. The next step after the online assessment is recommendations on what classes to take. The full announcement will happen in November, when [Microsoft CEO] Steve Ballmer will be in India.

There's another well-publicized effort to bring computing to disadvantaged kids and that's former MIT professor Nicholas Negroponte's One Laptop Per Child initiative. Microsoft has criticized that effort. Is that because their $100 laptop runs Linux, and Google (GOOG) invests in the project? Or do you find other faults with it?

The idea of giving a computer to every person or every kid isn't viable. Who's going to pay for it? A lot of people say Microsoft doesn't like One Laptop Per Child or one-to-one computing. But the solution to these problems is more complex than one single thing. People get so centered on the technology as opposed to the outcome. That has to be exposed.

We think the three pillars of education, local innovation, and creating jobs are totally interconnected. People tend to oversimplify.

Ricadela is a writer for BusinessWeek in Silicon Valley.