Microsoft in Dubious Outsourcing Flap

A Seattle labor group claims to have evidence that Microsoft is shifting mission-critical work--including parts of Longhorn, Microsoft's epic next-generation Windows project--to overseas contract workers. Microsoft denies the charges, maintaining that company employees still produce its core products.
  
The Washington Alliance of Technology Workers (WashTech), a union that's affiliated with the AFL-CIO, said that it's received leaked Microsoft contracts with Indian technology vendors that prove that the company is outsourcing core-product development. "The notion that next-generation technology is going to be the exclusive domain of domestic-based employees of the company is rapidly fading away with the disclosure of these documents," WashTech Organizer and President Marcus Courtney said.
  
According to WashTech, Infosys Technologies, Satyam Computer Services, Tata Consultancy Services, and Wipro Technologies--India's four largest software technology and services companies--are working on Microsoft projects. WashTech noted that these projects include building specialized tools, creating user guides and other documentation, and testing. One of the documents WashTech listed was a Longhorn migration guide. But none of these projects appear to be core Microsoft products, a fact that Microsoft noted yesterday in a public rebuttal of WashTech's allegations.
  
"These accusations don't reflect an understanding of our global business," a Microsoft spokesperson said yesterday. "As a global company with operations in more than 80 countries, we absolutely work with partner companies around the world, but both Bill Gates and Steve Ballmer have clearly stated the majority of our core development work will remain in the [United States]. All [core] intellectual property development, including Longhorn, is done by Microsoft employees." The spokesperson noted that for fiscal 2004, which ended June 30, outside companies performed only 4 percent of Microsoft's development work.