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Microsoft’s Gates in Russia to combat piracy, strike deals

October 10, 1997

MOSCOW (AP) _ Russia has vast potential as a computer market and software development center, but must rein in its rampant software piracy, Microsoft chairman Bill Gates said Friday.

Gates, on a two-day swing of business meetings in Moscow, said he was surprised by the extent of piracy in Russia _ an estimated 90 percent of all software is unlicensed _ and hoped Russian authorities would crack down on the problem.

Still, at a lengthy news conference, he was mostly upbeat about Russia’s potential as a computer industry market.

``Our growth in this market has been very strong, and we see the potential for that growth to be even stronger in the future,″ he said. ``We’re a little impatient about the piracy problem ... but I’m sure there will be progress along those lines.″

Gates said he saw Russia emerging, along with India, as one of the world’s two major centers of software development outside the United States.

``There is no doubt that Russia will become a major software exporter,″ he said.

Russia has natural advantages as a computer industry center. It has a highly educated work force, including many people with advanced training in science and technology. But it has lagged far behind the West, partly because it was long closed off from Western technology, and partly because its economy is in tatters.

For Western software companies, piracy has been a huge problem.

Pirate versions of Microsoft’s Windows 95, for instance, are sold openly for under 60,000 rubles ($10) at Moscow street markets, while licensed versions go for 10 times as much in legitimate computer stores.

And the problem isn’t limited to the streets.

High on Gates’ agenda Friday was a meeting with the chairman of Russia’s largest bank, Sberbank, at which the two signed a $1.65 million contract intended to end the bank’s unlicensed use of Microsoft products.

``Sberbank’s cooperation with Microsoft is long-term, fruitful and mutually beneficial,″ the bank chairman, Andrei Kazmin, said afterward, according to the Interfax news agency.

Gates also met with the chairman of Russia’s Central Bank, Sergei Dubinin; the president of the Lukoil oil company, Vagit Alekperov; and one of President Boris Yeltsin’s closest aides, Deputy Prime Minister Anatoly Chubais.

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