Microsoft India is growing its cloud revenues in triple digits

During July-Sept quarter, the technology giant registered a 128% growth in commercial cloud sales

Microsoft India, which recently made public its decision to set up local data centres, is growing its cloud revenues in triple digits in the country. This is in line with the growth being registered by Microsoft Corp globally.

During the July-September quarter, technology giant, with its headquarters in the US, registered a 128 per cent growth in commercial cloud sales, and sales of services based on its Azure cloud platform rose 121 per cent globally.

The announcement to set up local data centres in India was made during Microsoft Corp CEO Satya Nadella’s recent visit to the country. The move is expected to cement the company’s stronghold in this space further, Karan Bajwa, Microsoft India’s managing director told Business Standard in an interview.

“Microsoft India’s cloud revenues are growing in triple digits, in line with the global numbers,” said Bajwa. “The opening up of data centres in the country opens up a large part of the market, which was earlier closed to us.”

Governments, state-owned entities, and banking and financial service firms, will be more comfortable using Microsoft’s cloud offerings now since their data can be hosted in India. “A certain set of customers were worried about where their data sits, others had questions about data sovereignty itself,” Bajwa said.

The data centres, will be set up in three Indian cities — the names of which are being kept a secret due to security reasons — and will come up by end of 2015. Bajwa claims that Microsoft is already the leader in this space in India.

Microsoft already has data centres spread across 100 locations across the world with a majority being in the US and Canada. In the Asia Pacific region, it has a footprint in Hong Kong and Singapore.

Companies such as IBM, Salesforce.com and Amazon Web Services are very actively targeting the Indian cloud market. However, rankings on the market share of these companies is not publicly available.

Soon after the Microsoft announcement, IBM too disclosed that it is establishing its first data centre in India, catering to cloud services. The centre, in Airoli on the outskirts of Mumbai, is part of a $1.2-billion investment drive by IBM in 15 cloud centers across the world which helps in increasing its cloud market share across the world.

According to market research firm Gartner, the public cloud services market in India will reach $638 million by the end of 2014, a rise of almost 34 per cent compared to 2013. The overall market size would be much larger since the Gartner research only makes projections about public cloud and not private cloud, which is very popular with large enterprises.

High rates of spending on cloud services in India are expected through 2018 when the market is expected to reach almost $2 billion, Gartner projects. Ed Anderson, research vice president at Gartner said that organisations in India see cloud services as a means to develop new applications and support a more effective use of IT budgets.

Volume of transactions is higher in the small and medium businesses segment since they don’t have legacy systems to migrate to the cloud, Bajwa said. Such companies also find it more cost effective to run their operations on public cloud as they save on capital expenditure. However, large enterprises are going for a “hybrid” model where they continue using their legacy IT systems but are adopting the cloud for capacity expansions or building new applications.