Mumbai: The world’s largest software company Microsoft Corp.’s decision to choose India-born Satya Nadella as CEO of its $78 billion business may give Microsoft India’s already-strong enterprise business and research and development (R&D) units a major boost.
Microsoft does not break-up country revenue but according to Dataquest, published by Cyber Media (India) Ltd, the company’s India revenue grew 13% in fiscal 2013 to Rs.6,122 crore. Much of that growth came from selling products and services to companies and governments.
According to Dataquest, the revenue of Microsoft’s Enterprise Partner Group (EPG) grew more than 250% while the company added over 15,000 Azure customers in India. Azure is the company’s cloud computing platform. On an average, Microsoft added 1,500 new Indian customers every month for Windows Azure, thereby catapulting Windows Azure revenue by 150% from a year ago. The company’s Windows server data centre revenue jumped 150% in fiscal 2013 from a year ago.
The opportunity for growing these businesses is huge.
According to research firm International Data Corporation’s (IDC) first annual predictions for 2014, worldwide IT spending will grow 5% to $2.1 trillion in 2014. Spending, said IDC analysts, will be driven by so-called 3rd platform technologies (comprising mobile computing, cloud services, big data and analytics, and social networking), which will grow 15% from a year ago and capture 89% of IT spending growth.
Sales of smartphones and tablets will continue at a torrid pace while outlays for servers, storage, networks, software, and services will fare better than in 2013, according to IDC analysts. They said emerging markets will return to double-digit growth of 10%, driving nearly $740 billion or 35% of worldwide IT revenues and, for the first time, more than 60% of worldwide IT spending growth. IDC analysts added that in the BRIC (Brazil, Russia, India and China) countries, IT spending will grow by 13% from a year ago.
Nadella’s elevation as the third CEO of Microsoft in its 39-year history could also put the spotlight on Hyderabad, where he was born. Hyderabad is home to Microsoft’s India Development Center (MSIDC) which was set up in 1998 by Microsoft India (R&D) Pvt Ltd, a subsidiary of Microsoft Corp. In October, Anil Bhansali was appointed managing director of Microsoft India (R&D) and also the general manager of the cloud and enterprise engineering teams at MSIDC.
Over the last 14 years, MSIDC has become one of Microsoft Corp.’s largest R&D centres outside its headquarters in Redmond. The centre’s development teams cater to Microsoft Business Solutions (MBS), Microsoft Office Division (MOD), Cloud and Enterprise Group, Online Services Division (OSD) and Windows.
Microsoft does have another R&D facility in Bangalore, which was set up in July 2011. Its team contributes to Microsoft Corp.’s adCenter technologies.
It was Nadella, then senior vice-president, R&D, Online Services Division (OSD), who said: “…the innovations from our Hyderabad team are already having significant impact on our US, UK, Canada, Australia and India products. The combined skills and talent of our existing OSD team at Hyderabad and the Yahoo employees who join us now in Bangalore will enhance India’s contribution to our OSD innovation charter inclusive of Microsoft Bing and Microsoft adCenter.”
One of his former colleagues expects him to sharpen his focus on such activities.
Ravi Venkatesan, former chairman of Microsoft India and also venture partner, Unitus Seed Fund said: “The India development centre might get the spotlight and might be marked for more important missions for the company. The new CEO will make use of the resource potential available there, potential that remains underleveraged now…most of all, given Satya’s understanding of technology, I hope he sees India as an innovation lab. We have Nokia, IDC (India Development Center), and all the ingredients needed for India to be a centre of innovation. I just hope it becomes what it is capable of.”