Microsoft CEO Nadella to woo India Inc with tech to drive e-transformation

When, five years ago, Satya Nadella visited India for the first time after taking office as chief executive officer (CEO) of Microsoft, the company was in some disarray while the financials were under stress.

A lot has changed since then. His focused execution on enterprise cloud has driven Microsoft’s market cap to grow nearly five-fold to cross the $1-trillion mark.

Nadella, born in Hyderabad, is visiting the country this week for three days to woo enterprises as well as the government at a time when India has become a very important strategic market for the company.

However, coming on the heels of his controversial comment on India’s amended citizenship law, and coinciding with US President Donald Trump’s maiden visit to India, there has been a lot of speculation about what he is planning to do.

While some have suggested a large IT deal could be on the anvil, there are also murmurs of a larger government deal or strategic partnership. The company, which is eyeing digital transformation opportunities worth $100 billion, sees Amazon and Google as its major competitors in India, according to the people familiar with Microsoft’s India strategy.

In FY19, Microsoft India chalked up Rs 7,301 crore in revenue, a growth rate of 13 per cent, while its net profit grew to Rs 386 crore at 8 per cent, as the firm continues to expand its cloud business Azure, and Office 365 product suite.

“What an amazing five-year journey and transformation from a ‘rookie’ CEO to the planet’s top-performing corporate leader,” said Ravi Gururaj, an entrepreneur and president of TiE Bangalore who met Nadella when the latter visited India after becoming Microsoft CEO.

“He (Nadella) boldly redirected focus from potentially massive market opportunities such as the smartphone segment, the app ecosystem, consumer search and digital media streaming,” said Gururaj.

Nadella’s trip is expected to focus on evangelising Microsoft’s platforms and tools to the developer and influencer communities, and building relationships with large enterprise customers.

“I suspect he will, behind closed doors, subtly communicate Microsoft’s perspective on the policies India is formulating on personal data protection and privacy, digital intermediaries, and data localisation,” added Gururaj.

Among its large partnerships, it counts the ones with Tata Consultancy Services, HCL Technologies, Reliance Jio, and business-to-business marketplace Udaan. The company also counts a large number of large, medium, and small enterprises and thousands of start-ups in the country as customers.

“India is one of Microsoft’s top-performing markets globally. The way it has been able to move into enterprises through Office 365 and expanding partnerships with SaaS-based companies is commendable as is their engagement with developers,” said Sanchit Vir Gogia, chief analyst and CEO, Greyhound Research.

Earlier this month, Microsoft announced opening a development centre in Noida, its first in the country after the ones in Hyderabad and Bengaluru. Coming just ahead of his visit, some industry executives say the investment is also politically important, given that UP (where Noida is) and the Central government are ruled by the same party, the Bharatiya Janata Party.  

The larger focus of Nadella’s visit is expected to be on building trust with its existing business partners and the larger community.

“The expectation (from Nadella’s visit) is that the company will continue to double down on the investments made in India, especially in areas that will enhance the adoption of data analytics, artificial intelligence, Internet of Things, cognitive services, machine learning and developing smart cities,” said Ankur Pahwa, partner and national leader, e-commerce and consumer internet, EY India.

The firm has a huge focus on AI, start-ups, and the developer community. It announced the launch of its GitHub India office earlier this month. GitHub, bought by Microsoft for $7.5 billion in 2018, is the largest repository of open source.

At the end of the day, all eyes will be on how Nadella engages with the government, given that Amazon CEO Jeff Bezos wasn’t granted an audience with Prime Minister Narendra Modi or any other central government minister.

Industry executives describe Nadella as “very thoughtful, charming, and warm”. “What is helping Microsoft penetrate the India market at such a deeper level is that compared to Bezos, Nadella has a better relationship with the Indian government,” said a person with knowledge about Microsoft’s strategy.