Cloud more important in hybrid work; doubled capacity in 20 mths: Peesker

Satya (Nadella) pays special attention to the work that we're doing here…. When it comes to investing, India is top of mind, says Microsoft's Kevin Peesker

At a time when Microsoft is in the news for a super app that it may be planning to compete with major rivals and striking a mega deal with Nintendo for ‘Call of Duty’, its worlwide president for small, medium, corporate and digital business Kevin Peesker spoke to Sourabh Lele and Nivedita Mookerji on what India means to the Redmond-headquartered tech giant. Edited excerpts:   
  

Things have been rough after the war in Ukraine, the geopolitical crisis, impending recession in the US and consumption going down. In that backdrop, how are things panning out for Microsoft?
 

At Microsoft, over the last number of decades, we have operated through every macroeconomic cycle that is thrown at us. Being part of the digital and technology environment means that inherently we are very adaptable and agile as an organization. We are very deliberate about assessing our strategy, looking at market conditions, market environment, and then determining how we will run our operations, structure our business. We are committed to continue investing in areas where we see growth and opportunity.
 

How much are you planning to invest in the Indian market?
 

I can't give a specific number. We have been growing in double digits in India, it has been a tremendous market for us with significant potential in the future. We have made considerable investments in India. Over the last 20 months, we have doubled our capacity for cloud technology in the country… I see a robust future…
 

There were reports after the Q1 results in October to suggest a correction in the Cloud business in India as employees shifted back to office. Your comments?
 

We demonstrated positive growth in Cloud. While people come back to work, we see they come back in a hybrid way. The nature of work has potentially shifted for the foreseeable future. That means Cloud is even more important, in terms of work and collaborative environment….
 

India is a price-sensitive market and when you're dealing with small and medium businesses, pricing becomes even more critical. Microsoft India recently hiked prices of its products and services. How do you explain that?
 

We are very conscious of our pricing strategy. Specifically in India and certain markets, we had a policy of pricing in local currency. We have subsequently shifted that because we saw a disaggregation of consistency in the markets and with the world being so global, that was deemed unfair for certain markets and overly fair for other markets. So we have made a policy change to align to US dollars to ensure consistency across markets.
 

You've been working closely with Microsoft chairman Satya Nadella. Have his India ties reflected in business?
 

Satya cares about each of the markets we operate in. He has a special affinity for India, and I know that he pays special attention to the work that we're doing here. We have nearly 20,000 employees, colleagues in India, therefore, it's an important market for us. The digitisation in India has been remarkable and Satya often talks about how India is leading in many aspects of building a digital fabric for the advancement of one of the world's largest populations. When it comes to thinking about the way in which we invest, the way in which we determine how we will partner with organisations, India is absolutely top of mind….
 

Recently, there were reports of layoffs at Microsoft. What is the scene in India?
 

I do not have that specific data in India. However, what we do on a regular basis is we determine where we will best apply our resources of both people and capital, and then make determinations on that. The current process that we've been undertaking is no different to what we've been undertaking over the last number of years.
 

Is there a hiring freeze globally in Microsoft right now?
 

Right now we are just determining where we best deploy our assets, deploy our people, and where we see opportunities for growth, we are investing in those opportunities.
 

What are the challenges that you have faced recently in India?
 

We see a robust base of talent in the marketplace here. The 500,000 engineers that graduate each year in the country is a great statement about the intellectual horsepower in the country. One of the biggest challenges around the world, regardless of the macro economic circumstances, has been access to talent. In India, we found a robust pool of talent and thus we have an employee base of 20,000 here. That’s something very beneficial to continue our engagement here.

Also, India is a good place to do business, the environment that has been built for connectivity provides an environment with 850 million people connected to the internet and 750 million using devices in their hands that are connected. …. I don't see any particular hindrance that would stop the ability for us to contribute to the Indian economy.
 

Do you see any concern around data protection and other legislations that India is proposing right now?
 

The privacy of data, both for consumers and for businesses, is critical. And it is one that we support working with every government to ensure that we're in alignment with their laws. … In India, I really have to compliment the government for listening to industry. … The latest draft is a very workable agreement…