Microsoft started its India journey in 1990 with just one office in Hyderabad. Since then, the iconic IT company has changed with time — from being known as the Windows and Office pack to becoming a dominant cloud player. It has steadily increased its presence in India with offices in 11 Indian cities, currently employing about 16,000 people. Its US parent has a high-profile Indian CEO in Satya Nadella who was one of the first Indians to take up a leadership role at a global tech giant. However, of late, the company seems to have withdrawn from the public eye. Digital natives in India identify more with Google, Apple and social media giants than with the overarching lord of the PC. Outlook Business speaks with Anant Maheshwari, President, Microsoft India, to find out if the company has lost out in a crowded Indian tech market or if it no longer wants to “look cool” — as Nadella once said that Microsoft would rather ‘make others look cool’ — in public for strategic reasons. Edited excerpts:
One can say that India’s digital journey started with the entry of Microsoft in the country. How do India and Microsoft get defined with and by each other?
We are proud to have been an integral part of India’s growth in the last three decades. These decades have defined India’s emergence as one of the nuclei of tech transformation on the planet. The advent of Windows was the first big milestone and then came the PC that enabled the IT industry to become the largest export base for the country. We were one of the first, if not the first, companies to invest in public cloud in India. Today, we are India’s biggest public cloud and operate through 14,000 channel partners.
How has Microsoft sustained a symbiotic relationship with India, especially in the face of competition?
I value competitive intensity as it helps drive innovation faster and deeper, keeping the customer at the centre. B2B is the defining feature of Microsoft. A large part of our global business is B2B which may be quite unlike our peer group where B2B is relevant but the focus is the consumer. This is a distinct business model difference.
The “your data is your data” idea becomes more relevant in the B2B context because businesses know that we will not compete with them. We will not be a retail, logistics or media player or have a banking or finance approach. Microsoft brings businesses the widest end-to-end offerings so that they would not need multiple tech providers. We focus on B2B because as Satya [Nadella] says, “Our job is not (to) be cool ourselves but to make sure that others look cool”.
Did the philosophy of making others look cool dawn upon the company after the failure of Windows phones?
The cultural reset that Microsoft underwent about seven years back when Satya took charge was the turning point in driving this philosophy. The Microsoft of today is quite different from the Microsoft of a decade or two ago when we may not have had this level of focus on the B2B business model.
When Satya took charge, he asked his leadership team some questions—“What will happen to the planet if Microsoft disappears? What are we here for and what will we want to be remembered for?” They are existential questions that are also mentioned in his book Hit Refresh. That is what caused the leadership to say that the end-to-end B2B play was our core. It was more to do with the change in the leadership than an external market event.
Microsoft did this reinvention when it was among the top few companies on the planet. Office 365 was a leading franchise in its prior avatar. Satya drove disruption from within to take a significant franchise, disrupt it and take it to cloud. An important tech leader once said that one of the biggest innovations that Microsoft drove in its transformation was changing from Office to Office 365. So, it is not external market events that drove this change. It is a strong, strategic focus on what we want to be.
Amazon and Google are eyeing the B2B space but Microsoft is not competing with Google in the app space. How do you see this?
Generally, our philosophy is to stay focused on our customers and partners. For example, the scale of our small and medium-sized business (SMB) portfolio is a magnitude greater than that of our tech competitors. The reason is that we pack a lot into a combined offering. We bring six solution areas to every customer: infrastructure on cloud, data, applications, modern work, business applications and security. An SMB says, ‘With these six areas, why would I not work with Microsoft and choose five different players?’ Moreover, we have vertical and industry-specific cloud offerings. We have already launched public clouds for financial services, healthcare, retail and, looking ahead, sustainability. That is how we stay ahead of the curve.
Aren’t you far behind other big tech players in engaging with the Indian start-up ecosystem?
Five years ago, working with the start-up community in India was not the core focus for us. Today, I would change this perception as it stands. For example, six out of the top 10 unicorns in India leverage the Microsoft cloud. Our acquisitions are strategic. For example, our global acquisitions are very distinct. LinkedIn is an example of a strong B2C play which targets a specific community. GitHub targets coders. We are the largest franchise on gaming. Our acquisitions target specific communities of individuals. We also acquire in-the-deep tech sector which complements our existing capabilities on AI, security and so on.
How do you assess the quality of Indian coders?
India is among the largest coding communities in the world. It ranks among the top three globally. But, it is also a fact that there is a big supply-demand mismatch. The industry has been calling it a key priority. Cloud and security are new capabilities that every coder needs to get. A World Economic Forum report says that 54% of Indian employees will need to reskill themselves in the next three to four years. We have a good talent supply to start with. We need to continuously reskill this talent to train them in the expertise being demanded by customers. A NASSCOM report says that we can add half a trillion dollars to the GDP by making India a data and AI hub. I am bullish about the tech capabilities of the country.
How do you view debates around data localisation and data sovereignty?
As a new asset class, data needs to be managed differently than how it was done in the past. The European Union (EU) took the lead with the General Data Protection Regulation (GDPR). Microsoft was one of the first partners to work with the EU on it—even in writing the technical standards for the regulation. We decided to apply GDPR-driven changes not just for our EU customers but for everyone else as well.
Legislation creates clarity which is good for business. For example, Microsoft and Jio decided to partner more than two years back over Jio data centres on Azure which will become the core of their offerings of serving India from India. We value working with national champions. We have had more than two-decade-old partnerships with major Indian players like Infosys, TCS, Wipro and HCL which are driving this transformation.
Is Satya Nadella’s success a statement about the Indian tech ecosystem?
I endorse the fact that Satya has been an inspiration not just for India but for the entire tech ecosystem on the planet. He brought in a very different thinking that focused on empathy, ethics and trust in the context of tech. The ability to bring not just pure-play hard skills but soft skills that help one think through a tech ecosystem is Satya’s contribution to Microsoft. The leadership qualities that determine the tech leaders of the future are not just hardcore tech skills but also softer capabilities. Satya talks about how his background and his parents played a role in him acquiring different capabilities. He had seen the functioning of the Indian Administrative Service and education from close quarters. That influences you and goes to determine what you do with very large ecosystems like Microsoft.
What is the role of technology in a world that is becoming extreme in its views?
Microsoft is present in almost every country and each one of their ecosystems work differently in different political systems. We want to empower every business and person in each one of these political systems as we work closely with national ecosystems. Microsoft has been integral to the Indian tech story. We have seen a lot in the last three decades and we will see a lot in the next three decades. We will bring everything that we do to that approach.
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Life beyond vendor-client partnerships
Microsoft’s engagement with the Central and state governments, and the developmental sector explores opportunities beyond a vendor-client relationship. Microsoft India President Anant Maheshwari gives credit to the Indian government for placing emphasis on creating “billion-scale platforms” like Aadhaar, UPI, GSTN and others in the last decade. “They are driving tech intensity for the country. Our engagement with the government is in multiple parts — not just as a customer but as a partner, too,” he says. Microsoft partnered with the Punjab government to develop the Coronavirus Alert (COVA) app to disseminate Covid-related information. It is also partnering with grassroots organisations. Under Microsoft’s AI for Humanitarian Action programme, AI was used to predict Cyclone Yaas’ damage along Odisha’s coast.
The company recently partnered with the Ministry of Labour and Employment to launch DigiSaksham. It aims to reach 10 million job seekers and train them in skills like coding, data analytics and digital productivity. Microsoft also reaches out to Indian businesses through its AI Innovate programme.
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Rajiv Sodhi, COO, Microsoft India
Use, Build, Create: The Scope Of Azure
How big is Microsoft Azure in India? What about competition?
Top enterprises in India are on the Microsoft cloud. Microsoft does not offer just cloud or just infrastructure. Different customers use cloud differently. Some start with infrastructure, while others could be more digital savvy and treat Azure as a platform. The latter build own applications and use APIs. The SMBs, on the other hand, consume the Microsoft cloud in the form of SaaS, which is a packaged offering. We are the only firm that offers all three.
Do Indian companies prefer Indian data centres or opt for the foreign ones?
It depends on use cases. If a company operates in a regulated space, say BFSI or telecom, local regulations may require it to keep data and code within the country. Microsoft provides these capabilities, as it has services running inside the country. However, the companies that are more global in nature or have regional businesses may want certain aspects and capacity out of other data centres in other countries, because they want to be closer to their customers. Digitally savvy customers want specific services and feature on a particular data centre and may choose a different one for other services.
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‘Microsoft Not Interested In Customer Data’
Among the major big tech players, Microsoft seems to be best placed to take advantage of the spurt in demand for cloud services created by Covid-19. Well before the workplace changed due to the pandemic, Microsoft had decided to change its approach to technology in two major ways: it decided to downgrade its focus on the retail customer in favour of B2B and it pushed all its development to the cloud, both for B2B and the individual user.
By the time the pandemic hit economies, Microsoft had perfected its cloud system to turn it into a massive revenue churner. Microsoft’s global revenue from the Azure platform has hit almost a third of its total revenue. This development is helped by the fact that the internet has penetrated deep, especially in a country like India, and has become affordable enough for it to create a smartphone-based service economy.
In India, Microsoft has taken the interplay of B2B and cloud to both small and big players, most of which are bullish about offering better services on the cloud. Microsoft, along with the market research firm International Data Corporation (IDC), conducted a study to assess the post-Covid situation. It found that around 45% of Indian business leaders felt that the pandemic was pushing them to innovate and almost 80%w felt that the innovation had to be cloud-driven. “There is terrific adoption of cloud in India.
If you look at the top 10 banks, top 10 IT services companies, nine out of the top 10 manufacturing firms, a sizable number of unicorns—they all are based on the Microsoft cloud,” says Rajiv Sodhi, COO, Microsoft India.
Such a high adoption rate comes with concerns about data privacy. A big focus area for Microsoft is small and medium businesses (SMBs). Sodhi says that SMBs are adopting cloud fast and Microsoft assures them that it will not play with their data. “We were one of the first cloud providers to comply with ISO 27018 which is the privacy standard. We make it clear that the data that customers put in the Microsoft cloud is not Microsoft data. We do not use it for advertising, marketing or insights and compete with their business,” Sodhi adds.With these changes, Microsoft.
