Can Microsoft Win The Cloud Battle In India?

by Priyanka Pugaokar    Sep 23, 2016

Can Microsoft Win The Cloud Battle In India

India is a promising growth destination for all the major cloud vendors, who are looking to leverage the USD 1.26 billion opportunity. The huge business prospects in the Indian market intensified the battle between all the major cloud vendors. Microsoft which was a late entrant in the space witnessed a steady adoption of its cloud services by businesses in the country in no time. The company which competes very closely with Amazon Web Services (AWS), Oracle, IBM to name few, is heavily focusing on the Government, SMB and startups to win to take the lead over the competitors.

With focused cloud strategy and robust channel ecosystem, Microsoft is very rapidly surging in the race for leading position in the Cloud space.

Since CEO Satya Nadella took over the reins of the technology giant, Microsoft has sharpened its focus around the cloud business putting the emerging economies such as India on its priority list. Microsoft is eyeing an aggressive geographical expansion and plans to open new offices at 65 locations covering tier two towns across India by this financial year.

Gartner expects public cloud services in India is growing at over 30 percent and will reach USD 1.26 billion in 2016. This growth is going to come from both cloud system IaaS and PaaS. Microsoft is betting big on SaaS and PaaS cloud model in addition to IaaS services that the company offers from its local data centers in India.

The company reported higher quarterly adjusted revenue, driven mainly by growth in the company’s cloud business, last quarter. Sharp growth in its commercial cloud computing business helped the company lift quarterly revenue above Wall Street’s expectations.

Microsoft reported 7 percent rise in its cloud business including Azure cloud platform as well as products related to server software, which accounted for $6.7 billion. The company posted net income of $3.12 billion, or 39 cents per share, for the fourth quarter ended June 30, compared with a loss of $3.2 billion, a year earlier.

While AWS has a lead over the cloud market in India, Microsoft Azure has grown significantly and is focusing on across the industry verticals.

Google, IBM and Oracle are other major players in the space which mainly focused on their on-premise solution to Indian businesses. In addition, Intel Capital-backed IT infrastructure services firm NxtGen is an emerging and relatively mid-sized player in the data centre and cloud services space.

Microsoft has managed to grab some of the strategic accounts across the sector such as ICICI Lombard, Bajaj Financials, Wipro, Tata Communications, Essar Group, MAX Healthcare and Fortis Healthcare. Microsoft Edu-Cloud to name few.

Apart from some big customers wins, the company is also focusing on the in the SME and startups space. Government and commercial are the two key verticals where it closely competes with AWS. The company is extensively leveraging its channel ecosystem to expand its cloud footprints in the length and breathe of the country. Microsoft has over 10,000 channel partners for retail business and has associations named IAMCP India with independent software vendors for IT support services across India.

Though India’s cloud potential is promising growth, as the industry evolves, the competition is going to become tougher for cloud vendors. Industry experts say that the intensified competition will further lead to poaching of customers among the cloud vendors.

All the cloud vendors have clear opportunity to leverage on business prospects coming from booming E Commerce, healthcare, banking and other sectors. Therefore, it would be interesting to see how players like Microsoft can establish its niche to win the battle.