Flipkart switches to Microsoft to power its cloud as Nadella woos start-ups

India’s largest e-commerce marketplace Flipkart has opted to go with Microsoft’s Azure cloud computing platform, as it looks to use the software company's technologies to help scale its business.

The deal between the Redmond company was announced by Microsoft CEO Satya Nadella himself, during the course of a chat with Flipkart Group CEO Binny Bansal and Infosys co-founder Nandan Nilekani in Bengaluru on Monday.

Microsoft is trying to win favour from start-ups in India to utilise its Azure cloud service after failing to get them to build apps for its Windows 10 platform. It is also playing catch up with Amazon’s  Web Services, which has a lead over rivals in wooing Indian firms to host their applications on the cloud.

Getting India’s most successful start-up to endorse the Microsoft Azure platform could go a long way in bringing more start-ups and local companies to sign up for its services.

Flipkart wants to partner Microsoft as they are opening its own data centres to address the mobile-first nature of its service. Ahead of its Big Billion Days sale last October, the company’s new data centres, built to its own specifications, began handling the load from the millions of daily shoppers.

Flipkart said that it had opted for its own data centres since most services offered by cloud providers such as Microsoft, Google and Amazon were built for western enterprises and personal computers. With the majority of its traffic coming from mobile devices, the company said it made sense for a custom solution.

“We actually worked closely with our partner Intel to ensure they understand our application requirements, and then they along with our platform integrators defined our specifications. After that, we worked with OEM (original equipment manufacturers) vendors that built the hardware to our custom specification,” Ravi Garikipati, former head of engineering at Flipkart, had told Business Standard.

At the time, it might have seemed that Flipkart could go the Amazon Web Services way and open up its data centre service to third parties. However, under the leadership of new CEO Kalyan Krishnamurthy, the company seems to be redeploying its focus on the core e-commerce business and putting on hold growth of ancillary businesses.

Flipkart is struggling to raise fresh funds in order to battle Amazon in India, which has forced the company to look at ways to cut its losses. Investors too are losing confidence in the Indian e-commerce giant, with mutual fund investors Valic and Morgan Stanley marking down the valuation of Flipkart to just $5.58 billion, down from a peak of $15.2 billion.