From new strategies to acquiring Nokia’s handset business, Microsoft has been in the news a lot recently. The Managing Director of Microsoft India Karan Bajwa talks to The Hindu on the impact of these transformations on its operations in the country, the challenges, and growth areas the technology giant is focussing on. Excerpts:

How have been the past few months with you heading the India operations of Microsoft?

It has been very exciting 10 months…. Most important thing, for me personally, is that I love the energy in this company. I love the fact that we are able to transform the engine at the pace that we are. It is a very amazing experience to go through. We have seen growth at a time when people out in the industry have called this period “uncertain”. So, overall very excited where I am and the growth we have achieved.

Where is the growth coming from?

From growth drivers perspective, at the core of whatever we are doing now is the transformation, which is our devices and services strategy. This plays out in forms of business initiatives and customer engagements. Cloud is sort of forming the core of our growth lever.

In devices, where we are conscious about the fact that we are a challenger, that is a very high focus area for us. From market segment standpoint, we are seeing very high growth in SMB and in mid-market businesses and stability on our large enterprise business.

In the public sector, given the uncertainty in the government space, particularly because of the elections, we have seen a lull period.

How is the transformation coming along? How much time do you think it would take to get Microsoft to be where it wants to be in terms of services and devices?

It is a continuous journey. We do not have a milestone in mind to say that this is it and we are done. On the services side, we are literally leading the play. In terms of cloud, the proportion of market share that we have far outweighs anybody else. Additionally, we are adding about 2,000 commercial customers per month on the cloud, which is a pretty good pace.

On the devices side, we are aware that we are the challengers. We are working on both first party as well as third party devices. Nokia coming in adds a strong push to our campaigns around the devices. We clearly understand the challenger position we are in.

We are excited about the fact that not only large multi-national OEMs (original equipment manufacturers) but also local OEMs such as Micromax and Xolo are coming on board for Windows Platform post the announcement that have been made around the platform being given royalty free for all form factors 9 inches and below in size. This adds a very different push and energy to how the OEMs are looking at the Windows Platform. These are exciting times. As I said, we want to grow this marketplace, but we don’t have an end state in the mind.

If you look at our aspiration around the customers, we anticipate that in the next 12 months we should acquire 25 million consumers in both devices and service.

What are the challenges that you think the company faces as it transforms?

Challenge is there, of course, when you transform a market place from customers who have been used to on premise software, taking them to a different model altogether...taking them to cloud, the transition in there mind is the first and the biggest barrier. There are questions like what is happening to my data. There are data privacy issues, data sovereignty issues… control of data, not been able to see your servers. There was a mindset barrier we had to cross. These were the question we were facing 18 months ago.

From that stage, incubation to mainstream, that has happened very fast. Now it is the question of continuing that journey. We have done well with commercial customers; we have to get across the mindset of the government customers. The government still has those concerns around data sovereignty, data privacy…that is the one barrier that we have to cross. Also, banking and financial services customers have the same issue. I won’t necessarily call it a challenge, but a milestone we need to cross before really scaled adoption of cloud happens across all categories of customers.

On the devices side, I have already said we are a challenger. We have to go a long way in terms of getting the right share of the marketplace from Windows standpoint. While Windows continues to be the dominant platform of the commercial side, the consumer side story is different, and that is where the challenge is. That is where we have to focus.

How will getting Nokia on board help?

Nokia really reinforces our whole devices and services strategy. It gives it a very strong flavour in terms of our ability to understand first party devices. Then once you have that experience of providing services on first party platforms, you really get a sense of how these services impact devices, so those experiences can be taken to third party devices as well. It really gives us a first-hand view of how services can light up devices.

Where do you see the biggest opportunity for the company for growth?

I see the largest opportunity in the small and medium business (SMB) segment. There I see the ability to literally leapfrog a generation of technology adoption. What happened in mobile industry a few years ago is exactly what can happen to cloud in SMB sector. They have very low legacy of technology, and here they can get world-class solutions and platforms without having to invest in the upfront capex that is required to acquire those technologies, talents, infrastructure and solutions. I feel that this is the biggest opportunity for us. SMB is the biggest market place.

What contribution do you see from services devices in terms of business and revenues?

I think what we should look at in the early days of these things is not the percentage contribution in revenue but how they are growing. Globally, we are seeing over 200 per cent year-on-year growth on >Azure . In India, it is more than that figure. It is these things that are exciting before we set our baseline expectations on what percentage of revenues have to come from services, what from devices. Services and devices, in a sense, are integrated, like I said we want to light up devices using services.

You talked about data security questions by customers being a challenge. When it comes to moving to Azure, a public cloud, are there apprehension still?

A lot of people started with questions on data security, but a lot of vertical segments have overcome those problems. The journey is now about scale.

We have customers like Fortis who have gone all out and announced they will shut down there data centres and move to the public cloud, and are working with us on Azure. There are also customers who want to go the cloud but maintain Hybrid environment — have public cloud as well as keep some stuff in private cloud.

These are customers who have overcome the barriers around data.

Then there are customers who are still going over the debates in there minds. Verticals such as banking and financial services and government are still going through those questions. In some verticals like banking and financial services, there is need for clarity on regulation.

Different people are at different stages in my view. But broadly, if you ask me, there are people who have taken leap of faith to move to public cloud.

Recently Sony announced shutting down of its PC business. Do you think going forward PC vertical will be dead and just smartphones and tablets would survive?

I believe both smartphones/tablets as well as PCs will continue to be in the market. I do not think PCs will disappear. Look at the penetration levels. PC shipments to India, this year, will be about 9.5-10 million and in China, it is still about 70 million. That gives you a sense of the penetration. Yes, we will not fill that entire gap by PCs only. There will be PCs, there will be smartphones, tablets and multiple form factors that will come in. The point is being able to take the platform across multiple form factors from the phone to the PC.

You also need to look at these devices from device meant for creation of content and devices meant for consumption of content, point of view. Creation of content will always remain a dominant need of people out there and for that PC as a form factor will continue to stay and grow.

>yuthika.b@thehindu.co.in

(This interview was originally published by >The Hindu on June 22, 2014)

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