Steve Ballmer, Microsoft’s executive vice president, in charge of the organization’s sales, support, and worldwide strategy divisions, arrived in Israel today. At a press conference, Ballmer said that Microsoft would expect the software copying situation here to be better and that "the software piracy rates here are much higher than we would expect. Microsoft’s losses from software piracy in Israel amount to more than $50 million annually."
Ballmer came to Israel to sign a cooperation agreement with the Israeli government. Under the agreement, Microsoft and the government will establish a computerized and networked system for the legislation process, which will give citizens the opportunity to participate in the early stages of the legislative process.
Ballmer said that the project will enable joint development of the concept of making government information available to any citizen via the Internet. He stated that similar projects are under way in Florida, Hampshire in Britain, and Singapore.
Microsoft invested $7.5 million in the new venture capital fund Orion. The fund plans to raise $100 million for investment in Israeli companies involved in developing technologies and products for the Internet, including software and hardware. Microsoft is the first founding investor in the fund.
In exchange for the investment, Microsoft will receive right of first refusal for investment in companies the fund chooses to support. The Orion Fund was founded by Aura Investments, Eyal Levy, and Boaz Grey.
three other international companies are negotiating their status as founding investors in the fund, similar to Microsoft’s status. The companies operate in computers, communications, and software. The fund plans to complete fundraising and begin operations in June of this year.
When asked why he decided to invest in Israel, Ballmer said that Israel has a talented technology community which does a great deal of work in the areas of communications, software, voice mail, computer-telephone integration, and more. "Where there is such a critical mass of engineers, it is small wonder the place becomes fertile grazing land for venture capital."
The fund estimated that one of the reasons for Microsoft’s investment in Israel is the fact that the company currently suffers from a shortage of at least 1200 programmers.
Published by Israel's Business Arena April 20, 1998