Microsoft eyes Government's move to cloud with local data centres

With Microsoft setting up three data centres in India, the Redmond (US)-based company is expected to get a leg-up in grabbing a bigger share of the Indian cloud computing business.

Globally, Microsoft has spent about $4.5 billion on setting up 19 data centres, as it accelerates its strategy to be a ‘mobile first, cloud first’ company. In 12 months, the company has expanded such centres from eight countries to 19, including Australia, Japan, China, and India.

Many believe in India this will allow Microsoft to target the government sector, which has so far been wary of adopting public cloud from third-party players. Company officials said when a contract would be up for discussion, this would give them an edge.

“I think we are better placed than competition, with local data centres here. We are the only multinational to have local data centres of this scale. This will address concerns over data sovereignty from a government perspective. For customers, it will mean improved latency. We have a huge edge over competition. Today, our competition cannot talk to the government,” said Karan Bajwa, managing director, Microsoft India. He said though the company hadn’t signed any memorandum of understanding with any government department, discussions had begun.

Bajwa added that for Microsoft, the cloud ecosystem had grown at a healthy pace. “From an ISV (independent software vendor) standpoint, we have seen 200 per cent growth on solutions built on our public cloud, our partner ecosystem has grown at more than 100 per cent, and our revenues have grown 160 per cent year-on-year. All these point to our growing revenues and ecosystem,” he said.

Alok Shende, founder and principal analyst, Ascentius Consulting, said, “Having local data centres will make a difference, but cloud adoption in India is only $400 million,” said.

Analysts at Gartner have predicted India’s cloud computing market would be $1.7 billion by 2018. Many domestic and telecom companies have data centres in India.

Other than the government sector, Microsoft is also eyeing banking and financial services and state-owned enterprises as potential customers for its data centres.

Microsoft has also announced the launch of a cloud decision framework for public sector companies, government departments and companies in the banking and financial services companies. This framework is in line with industry standards and guidelines of the Insurance Regulatory and Development Authority of India, the Institute for Development & Research in Banking Technology, etc.

Bajwa said, “The SME (small and medium enterprise) segment holds the biggest growth potential and now, they have the opportunity to consume information technology.”

He added Microsoft was ahead of competition in several areas. “The ecosystem we have created in India is the biggest differentiator for us. We have a partner ecosystem of 10,000 and 200,000 developers trained on Azure technology. Our investment on creating an ecosystem will be a differentiator,” he said.