Microsoft Ventures Big Into The Indian Cloud Market

Microsoft ventures big into the Indian cloud market

On April 12, Microsoft announced its biggest collaboration in the cloud segment by working with India's AICTE (All India Council for Technical Education) to setup up its Live@Edu cloud solution at over 10,000 colleges in India. This could potentially bring 7.5 million new users to its cloud and can portend a big expansion in this market in the future. Though Microsoft claims it as a corporate social responsibility initiative as the solution is given for free, it is a smart business move that could open up a huge market for cloud computing.

Live@Edu, targeted at the growing education market, includes a hosted Exchange solution with Outlook live, 25GB Skydrive subscription for file storage and a suite of collaboration and office tools. It is already a leader in the US education market and closely competes with Google Apps for Education. However, in a single stroke this new venture could increase the user base by more than 30%.

For Microsoft, this venture could be a turning point as they have been constantly losing mindshare and marketshare in one of the fastest growing tech markets. In India, Google's applications have a much bigger brand name while Microsoft's ventures such as Bing, Zune and Windows Phone are almost non-existent. Moreover, Openoffice & Linux have built a strong user base in the student community while Apple is also making more inroads with the Mac and iPad at the upper end of the student segment. A good chunk of the remaining Microsoft users run pirated versions of Windows and Office. This requires Microsoft to battle hard to fight for survival.

Why India could be the next big battleground for cloud applications?

  1. The broadband penetration is rapidly growing and by 2015 India will host the third biggest Internet population in the world. Broadband is needed for most cloud applications and the rapid growth of broadband users provides a good scale for the cloud players.

  2. Software piracy is still rampant in India and application providers are fighting hard against the menace. By moving their application to the cloud, piracy could be curtailed to a great extent. This could increase the revenues of the leading software providers.

  3. Many Indian businesses are highly averse to big capital investments on technology. In addition to that, Indian technology market is still young & maturing, and there is very less number of legacy applications and solutions to worry about. This makes cloud apps more attractive as they require a very little initial outlay.

  4. India has a very young population compared to the other major technology markets – US, China, Japan, Europe and Korea. Given the rapid growth in this tech savvy young population that is increasingly getting prosperous, cloud players are seeing an opportunity to turbocharge their customer base by targeting education and fun centric apps.

  5. Indian consumers and even business users are more comfortable with using the smartphones than PCs and many Indians are expected to skip the PC revolution to directly move to the mobile devices. Given the limited processing power and durability of the mobile devices, mobile cloud applications become a necessity.

I expect to see other cloud players follow Microsoft and pay an increasing attention to the new opportunities offered by India's market.

By Balaji Viswanathan

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