Microsoft looks to CEE – The Baltic Times

Microsoft recently held a summit in Lisbon to discuss, among other issues, the challenges that businesses face in Eastern Europe amid the economic crisis. Tomek Bochenek, vice president of the sales, marketing and services group for Microsoft Central and Eastern Europe (CEE), sat down with The Baltic Times to outline the challenges he faces and what the company is doing in the region.

What have the main conclusions of the summit been for you?

The key subject of the summit was how to react to the crisis – ‘what can we do?’ The key conclusion of the high-level business perspective is that in a situation like this cash is king. Anyone who can generate more cash is very much welcome, so the question was how technology can help an organization to achieve its objectives. CIOs [Chief Information Officers] are thinking ‘how can I make my organization more efficient?’ and ‘how can I generate more revenue?’ and ‘how can I understand which market segments are giving me more benefits and more profitability?’ and of course ‘how can I save on costs – what can I do and how can I leverage technologies to benefit my bottom line?’

So what can businesses do?

In general, what I see across the board – which is especially true in CEE, where we have enjoyed the last couple of years where business was growing – is that people were not looking at efficiency and at the bottom line and all parameters. They were looking at how they could outgrow competition. So there are two elements that businesses are looking at – one is cash flow, the other is [market] share. One of the areas where IT can definitely help is in business intelligence. You can learn more about your market and your customers, CRM [customer relations management], all these elements that usually help organizations improve efficiency and focus on the segments that are most appropriate for them.

What are the biggest challenges for Microsoft in CEE?

I would say this is more of an opportunity than a challenge. It is very different country by country – we say CEE, but at the end of the day, CEE is not a homogenous region. The impact of the crisis is not the same across the board, Slovakia is different than Ukraine and Czech Republic is different than Hungary. Probably the challenge is still piracy – this will remain for quite some time. It is a bigger challenge in some countries where piracy is really high – it is probably less a challenge in core CEE countries like Hungary, Czech Republic and Slovakia, but still, the level is high across the board, so that would be the biggest challenge. On the other hand if you look at the opportunity, and you could also call this a challenge, is how you have in CEE a huge number of IT specialists and developers comparing to the IT market size. The challenge is how to serve them, address them and reach them – all of the developers and IT specialists, so that they are willing to work with us and use our technology. Some are not even aware of our technology. So, how to support educational systems and IT system – this is number one.

What about the Baltics?

I think that the Baltics are again pretty different. If you look at Latvia and Estonia and Lithuania, the economic situation is different, but I think there are a couple of common elements – GDP growth is significantly lower or in decline compared to other markets, so one challenge is the economy and the other is the size of the market and how to address market opportunity when the size of the local market isn’t very big, so to go outside and cooperate with other companies outside the country [is a challenge]. The Baltics as a region is more impacted by the crisis than many other countries – dealing with this situation is fairly new. My view is that the challenge for the Baltic countries is that they are going through this situation for the first time. We need to continue to fuel the economy and influence customer behavior and convince them to keep spending money that is important for overall growth.

What investments is Microsoft making into the Baltics?

There are two areas where we are making the biggest investments – one is the partners system and we are continuing to invest. It will be about $400 million over the next few years for CEE. For the Baltics, as an estimate, it is less than 10 percent, but this is still quite a lot. The other investment is education – we will continue to invest in PIL [Partners In Learning] program in the Baltics and we will do quite significant investments supporting IT professionals and developers.

Are the Baltics attractive for investment?

I think it is, but the question is what sort of investment are you talking about. If you are talking about a manufacturing plant, I know companies are looking at how quickly they can hire people and what ability they have with logistics – how efficiently can they supply their product and buy all components. In terms of Microsoft, we are not building and manufacturing because we are a software company, but our core area that we are investing in is about education, number two is innovation and yes, we do plan to support innovation centers and we will be putting up innovation centers across CEE and you should expect that a little later that we will also have innovation centers in the Baltics, so that’s our investment into these countries.

The Baltic Times