Microsoft announces local data centres in india

It will give Microsoft a leg-up over competitors Google and Amazon in cloud services

Microsoft CEO Satya Nadella addresses a press conference in New Delhi (Pic: Sanjay Sharma)

On his maiden visit to India after taking over as Chief executive officer (CEO) of Microsoft Corp, Satya Nadella announced that the company would set up local data centres in the country.  Microsoft will offer cloud services from its Azure and Office 365 stacks to local business and government clients. The move is expected to give Microsoft a leg-up over competitors Google and Amazon.com, which offer similar cloud and office productivity suites to businesses.

Data centres in India will enable access to customers in banking and financial services, as well as the central and state governments, which are restrained by regulations that require data to be hosted within the country. New initiatives of the government such as Digital India, smart cities and the financial inclusion scheme-Jan Dhan Yojana, offer significant opportunity for hosting data and cloud services.  Microsoft’s centres in three cities will be operational by the end of 2015.

“There can't be a mobile first world without a cloud first world,” Nadella said at a press conference here.

The Hyderabad-born 47-year-old Nadella, who took over as the third CEO of Microsoft earlier this year, added that the company’s cloud business in India grew over 100 per cent.

Having local data centres is part of a global strategy, which is being “started from India.” Nadella said India already had 250 million smartphones and the number was only going to grow. And the cloud is necessary to connect all the touchpoints and rivitalise “productivity”.

This was in line with Microsoft’s strategy of ‘cloud first and mobile first’ as defined by Nadella, said Sumanta Mukherjee, principal analyst at Delhi-based CyberMedia Research.

“They have realised that in the long term the personal computer business is not a high growth area, which could cause a dent in their Windows revenues. So, they are pushing aggressively on the cloud solution and trying to offer an end-to-end solution complete with hosting and productivity suites to grow their revenues,” Mukherjee added.

The problem of the financial services segment of not being able to move to the cloud because of data security mandates gets ‘liberated’ with this feature. Also, it created an additional comfort factor for companies even though it might not be mandatory for them to store data locally, Mukherjee said.  Nadella arrived in the country last week. He has been touring all the key offices of the company, including Bangalore, Hyderabad and New Delhi, over the last few days.  In New Delhi on Tuesday, apart from the launch event, Nadella addressed school children along with Union Minister for Human Resource Development Smriti Irani and was a part of a Nasscom event on its 10,000 startups programme.

“Youngsters gave us the mandate and we want to reach out to all those who are unheard,” Irani said. She added the government would look to scale up India’s employment potential and would launch the Rashtriya Avishkar Abhiyan to set up innovation labs that students could access. The government will collaborate with industry to fund the initiatives.

Microsoft is also slated to announce the next version of its Windows operating system on Wednesday. Windows 9, which has been codenamed Threshold, is expected to have a single code that will work across personal computers, phones, tablets as well as the Xbox. Microsoft is also rumoured to provide a free upgrade of Windows 9 to existing users of Windows 8.

Forrester analyst James Staten said in an email that Windows 9 was a key release in Microsoft's journey to align the phone, laptop, tablet and XBox to the same runtime. “User eyeballs have been shifting to mobiles and that has raised the priority of iOS and Android and weakened the priority of Windows.”

By allowing developers to build their applications once and only tweak the user interface a little bit to get users across the entire Microsoft ecosystem potentially reverses this “deprioritisation” trend. “This is also the reason Google has been working to align its ecosystem around Android L and Chrome,” Staten added.