A modern and fully integrated business city, located off the Mumbai-Pune highway, will be set up by 2011 that will encompass both business and social infrastructure with the theme "work-live-learn-play".

The Maharashtra government on Friday signed a memorandum of understanding with the Mahindra Group to set up the 3,000-acre special economic zone — "Mahindra World City" — in Pune district.

In this joint venture with the Maharashtra Industrial Development Corporation, the Mahindra group will be the major stakeholder, catering mainly to electronic and hardware industry.

"The Mahindra group and the MIDC will ensure the project brings prosperity to the people of Maharashtra by attracting investment and creating jobs," chief minister Vilasrao Deshmukh said.

Said Arun Nanda, Mahindra group president (infrastructure development): "The project is expected to generate investment in excess of $2 billion and around 75,000 jobs."

Mr Deshmukh, in whose presence the pact was signed by state industry secretary V.K. Jairath and Mr Nanda, hoped the project will be another testimony to the state being the best investment destination.

Information security has become a top concern among US companies evaluating current and potential outsourcing relationships, according to a new study by Booz Allen Hamilton. Further, companies perceive a significantly higher security risk in working with offshore providers over those in the US, due to a lack of trust in legal and regulatory environments in developing countries.

Most survey respondents indicated that security management requirements need to be defined in the contracts and agreements governing outsourcing relationships, with nearly 80 per cent highlighting it as the biggest management challenge in outsourcing. However, the legal and regulatory infrastructure necessary to support the contracts is seen as lacking in key geographies and the study found that only 27 per cent believed that India had a robust legal infrastructure while only five per cent felt the same about China.

North America is perceived to have a healthy legal and regulatory environment by 83 per cent of respondents, followed by Ireland and eastern Europe. Booz Allen surveyed 158 US-based senior executives, focusing on executives in frequently-outsourced functions such as human resources and finance. The survey found that information security is one of the top three most important factors in selecting an outsourcing partner, ahead of financial strength, business stability, and reputation. In fact, 85 per cent of respondents said they may be willing to pay 10-15 per cent more to be ensured of superior security.

Micros-oft Corp. announced a shake-up on Thursday of the unit that includes its flagship Windows operating system, two days after the company admitted it won’t have its next consumer version of Windows ready for the holiday season as planned.

Under the changes, Micro-soft said Steven Sinofsky, a high-ranking executive currently in charge of developing many of the company’s Office business products, will lead a new group that includes Windows and Windows Live, a key effort to provide more Web-based offerings.

Microsoft said Mr Sinofsky will focus on planning future versions of Windows, while outgoing Windows executive Jim Allchin will work closely with another Microsoft executive, Brian Valentine, to finish the long-delayed Windows Vista.

Microsoft also said Ben Fathi, a Windows executive currently working on storage and file systems, will replace Mike Nash as head of its Security Technology Unit. Mr Nash will take on another, as yet unannounced role at Microsoft.

Security issues were among the reasons for the delay in Windows Vista. But Kevin Johnson, co-president of the unit that is being reorganised, said Mr Nash’s departure from that job is unrelated.

The Redmond-based software maker said the restructuring is aimed at improving its online strategy, making quicker decisions without going through layers of executive approval, and responding more nimbly to growing threats from online competitors.

Companies such as Google Inc. and Yahoo Inc. are fast developing Internet-based products for such things as sending e-mail or storing photos, and these free services threaten Microsoft’s desktop-bound Windows and other products. Micro-soft has responded with a beefed-up online effort of its own, Windows Live. The reorganisation also will create a group to focus on the engineering of new online products, and another to ha-ndle business functions, su-ch as marketing and advertising sales. Other groups will work on the core operating system and on servers and software tools. (AP)