In his book ‘Hit Refresh- the transformation happening inside Microsoft’, Satya Nadella speaks of the time when he took over Microsoft’s top chair in 2014. His top focus was and is to establish the company as a leader in cloud in the world, a business area that brings a lot of competition from Apple and Google. Back then, a statement issued by Microsoft read “Nadella and his team are tasked with leading Microsoft’s enterprise transformation into the cloud and providing the technology roadmap and visions for the future of business computing”.
To fulfill its objective here, the company under his watch, has keenly followed the economic overhauls of the Modi government in the last years and have come to the conclusion that when it comes to aligning its business strategies with customers and partners, Microsoft’s goals in the world are not different from that in India. The only difference is the specificities of consumer market here, which has its own dividends. But the company’s plans with India are more ambitious and large-scale than just the board room objectives.
So what is it about India now that that has impressed Microsoft so much? India president Anant Maheshwari has the right answer and it lies in the heart of the digital transformations that India is going through.
Many parts of India have not been touched by the first waves of Industrial revolution but India is among the top 5 economies now and has a huge talent-pool warming up to the change. With government’s work, the economy is rapidly moving towards ‘digital’ and SMBs too have started embracing the transition. Seeing the pace in digital, availability of mobile market, the potential for ubiquitous computing, and the sheer force and macro trends of startups in the country, Anant believes that the forth industrialist revolution will come from India in the form of digital and all of these would help (infact are already helping) Microsoft reinvent its business in all of its three priority segments viz. 1] Enterprise, 2] Computing and 3] Cloud across it verticals of Delivery, research and innovation.
The key driving factors to invest in India and what make Microsoft so optimist it, besides Anant’s passion and nationalism to work for the people of his country, revolve around the consequences of the current government’s initiatives to ease business legal and economic transactions and a successful GST implementation. And with digital at the center of the transition wheel, Microsoft is not an exception in betting on it strongly when it comes to invest in India.
More specifically, the crucial areas that Microsoft is currently exploring for growth opportunities in India are Cloud, digital and AI.
With Cloud, the company understands that to be great in this arena you need to be great not just in Distributed computing systems, but also in consumer product design, in understanding the economies of the online business and in applied Machine Learning. ‘You cannot continue to hold yourself back to the Windows and SQL server era in the face of emerging future times’ Nadella thinks. They are here to stay like Mainframes, but only as a necessity, not an effective future roadmap. With this philosophy, Microsoft currently serves the Centre as well as 29 states with many cloud services and it eyes to collaborate even more with SMBs and government for its hyper scalable, hyper secure, hyper flexible cloud base offerings in public, private, hybrid mode. Further collaboration with Govt. and SMEs is expected to deliver a growth and investment opportunity of around $107 billion. Some of the potential applications in this space that India immediately offers Microsoft are the power of cloud computing to collect and analyze data and insights and leverage it to solve a host of local and national problems. From as simple as improving the dropout rates in Andhra Pradesh (they are doing the same in Washington), to speed up access to compensations and relief packages during calamities, wildfires using public data, to Rent cloud space to businesses and startups, are just a few among many.
Secondly, the digital transformation has become an enabler to create growth and combined with its intelligent cloud, Microsoft aims to make it available everywhere across the country. For example, one of the immediate applications, as Anant foretold, would be to bring India together by seamless translation of all native languages into every other and remove communication barrier for everyone and the company is already working on it.
Third is the Artificial Intelligence and applied Machine learning (ML), two areas which are shifting the frontiers of economies of computing around the world. The PC revolution of 80s started by Bill and Paul Allen in which Microsoft, along with Intel and others stood as the frontrunner and the client-server era of 90s, are no more seen as the core engine of future growth. For Microsoft, a whole lot of research and investment is going on in mixed reality, artificial intelligence, applied machine learning, new applications with personal assistance, bots, and experiences with internet of things for everything. For Microsoft, Quantum Computing isn’t about Moore’s Law anymore and the use of computational power to cure diseases, forecast epidemics and much more is currently taking a concrete shape and India is seen as one of the core exploratory market. There are many other distributed avenues of immense growth and not just above. The Company is also trying to replicate the success it had in Kenya with a project of building Solar grids for safe, lost-cost lighting and efficient cook stoves. No doubt, there is a lot for the tech giant to dig into the Indian Market. Even the Healthcare industry, where revenue numbers takes a lot of time to appear, there is huge optimism and Microsoft is already shaking hands with local partners for various healthcare services.
But what does it mean to the future of Startup ecosystem in India? Should they worry about Microsoft’s bold expansion plans?
Anant believes, No, Not at all. With a workforce of over 8000 and two lakh enterprise customers in the country, apart from 9,000 partners, Microsoft is already working with over 5,000 startups in India. No Doubt, India is brewing with thousands of startups in Mobile, cloud space, AI, ML, Healthcare et.al, and though the ROI may not be immediate but ROV (return on values) are. Taking a cue from the government’s hallmark ‘Make in India’ and ‘Digital India’, or what Anant calls it ‘Make Digital in India’, he looks to accelerate the company’s research and investment capabilities to explore new areas of Digital but ‘there is absolutely no need for startups to fret about it’.
The digital (or Digital India) is not just buzzword, or just a hype or a new product. For Microsoft, it is digital with enterprises.
Infact, in the process, both sides can be the beneficiaries. Startups make large enterprise more agile and more proactive and sometimes it needs more than one hand to solve a great problem. As such, Microsoft does not see Startups as competitions. Enabling its partners and consumers, empowering entrepreneurs and making Digital India a success, are key items of the company’s road map. Startups, on the other hand, can use the results of research and investment that Microsoft does and find more areas of business. Even mergers with Microsoft will create more employment, more opportunities. For example, Microsoft and LinkedIn integration was exciting and learning for both the companies.
Competitions are necessary in India because there are a plenty of problems to solve. Infact what enthuses the company is the growth opportunities in digital with SMBs. Plenty of Initiatives have already been taken and all are seen to move towards the same success (as Windows 10 had in India). But, for the success to be equally shared, it also believes that Indian government must continue to think about both small and large enterprises. Nadella believes that any for change to succeed, the government and businesses must continue to think about every individual in the same empathetic and inclusive way as India has done so far.
But there are other challenges and impediments that cannot be denied although not more than what the U.S government itself poses on its own companies doing business overseas. Speaking on the rhetoric of protectionism and the de-globalization trend that has worried many, especially after US governments new Visa policies, Anant argues that it is not an issue to worry and the technology trend suggest completely otherwise. In the world of augmented reality, online services and online capability, barriers of one nature always open doors of other kinds. And besides, the world acknowledges that there is a huge positive outlook now with massive Indian talent that cannot be overlooked.
What we should focus on are the challenges inside. With GST, we are doing a lot of rewiring in the old mechanics of work and it will not be easy. How much of the current jobs in India can be replaced with AI and robots is both an ethical question and a business think-over still. Speaking on India’s digital transformation on Future Decoded event, 2017, Norm Judah CTO of Worldwide Services at Microsoft said that Digital business is not a ‘one-size-fits-all’ approach. The priorities vary drastically depending on the type of company and industry. Of course, there is incredible enthusiasm about the potential and possibilities of the digital transformation but to make Digital Transformation a reality in India, the biggest challenge is creating a vision for the digital transformation journey.
But the good thing is that certainly, a vision, with elements of growth potential, success and revenue opportunities, has been created.Agree or not, but something big is happening in India in Digital space and the world is keen to grab its share of the opportunity and explore the potential that the transformation is slowly but steadily bringing and for startups, it would be all the more rewarding if they take part in it and not fear about.
 ‘Hit Refresh’, by Satya Nadella. Harper Collins Publications, 2017.