When Microsoft CEO Satya Nadella begins his three-day India visit in Mumbai on Monday, he will have his task cut out.
Decades of goodwill and immense brand recognition in the country notwithstanding, Microsoft faces a tough challenge as newer and nimbler rivals expand market share, helping Indian companies migrate their information technology infrastructure and applications to the cloud.
Many of these younger rivals have lower running costs, superior customer service and can adapt to changes at a faster pace, forcing incumbents such as Microsoft to invest heavily to catch up. While globally, Microsoft, along with Amazon Web Services (AWS), dominates the on-demand cloud computing platforms and application programming interface (API) business, it faces a three-way fight in India, where Google Cloud is seeking to brand itself as the preferred hyper-scale cloud ecosystem, even though Microsoft Azure and AWS had the first-mover advantage. In India, Google is partnering with regional infrastructure service providers to go deeper into the market to build scale, but will continue building the enterprise focus. “India is an important growing market for cloud, which both Amazon and Google are also trying to capture," said Pareekh Jain of Pareekh Consulting, a Bengaluru-based technology research and consulting firm.
In Mumbai, Nadella’s itinerary includes speaking to an exclusive gathering of leaders across sectors, many of them running large legacy businesses, Microsoft’s traditional customer base. His next stop will be Bengaluru, arguably India’s digital transformation hub and home to the country’s startup ecosystem. While Microsoft’s marketing approach of promoting itself as a partner to most legacy enterprises as they seek to fend off new rivals is resonating well with customers, it may face an uphill task in signing up new-age businesses as customers.
According to industry analysts, Microsoft’s deep relationships and decades of experience in selling to large corporations in India is an advantage as newer entrants such as AWS and Google have limited histories of working with traditional enterprises whose IT infrastructure are predominantly on-premise.
But Microsoft’s rivals are making inroads here too. For instance, Google Cloud is working with Flipkart, Indiamart, ICICI Bank, L&T Finance, NoBroker, Life Insurance Corporation of India, HDFC Life, Bharti Airtel, Star India, Tata Steel and Dr Reddy’s, among others.
Last month, telecom operator Bharti Airtel and Google Cloud announced a partnership offer, G Suite, to small and medium-sized businesses (SMBs) in India as part of their integrated information and communication technology portfolio.
Airtel serves more than 2,500 large businesses and over 500,000 SMBs and technology startups across India, while Google has already seen interest from thousands of SMBs through the initiative. But over the past year, Microsoft has announced some major cloud-related deals in India, including a 10-year partnership with Reliance Jio Infocomm Ltd. Microsoft is selling cloud-based products that mirror its on-premise portfolio such as SQL server and Azure SQL.
SQL server is Microsoft’s traditional on-premise database product, while Azure SQL is the public cloud version of the product in which clients can seamlessly move workloads from one to the other, creating a hybrid IT environment.
Analysts say that as far as enterprise cloud services are concerned, Microsoft is a preferred choice for several C-suite executives due to its enterprise presence globally as well as in India.
However, AWS offers a larger variety of service offerings, which makes it popular with the digital ecosystem.
Google Cloud, on the other hand, has a reach across open source technology adopters.