Microsoft India: The Game Changers

Monopoly is a word that has often been used for Microsoft in the world of business. Since more than three decades back when Bill Gates pioneered Windows (many critics still pan it as a bad Steve Jobs ripoff), Microsoft has been the de-facto OS on every foreseeable screen on this planet. And the history thereafter has been littered with Microsoft crushing competitors and monopolizing a particular domain. The battle for the browser in the late 90s when Internet Explorer edged out Netscape Navigator is a typical example.

The irony is that Microsoft’s own thunder has been stolen by the new benchmark of monopoly (it goes by the name Google). Google Android for handheld devices has earned itself the distinction of being this era’s most popular interface between man and machine. And this increasingly is a game Microsoft is losing out.

This was precisely the reason the $87 billion software major purchased more than one year back Nokia’s mobile phone division for $7.2bn ; nonetheless Microsoft has but a 3% sliver of the global market for handsets. No wonder therefore that just ahead of the launch of Windows 10, Microsoft CEO Satya Nadella outlined a gameplan for the handheld era.

Nadella announced a triple-point action plan. Firstly, Windows 10 was projected to be versatile enough to operate on every kind of device to get one “unifying experience”, as he put it. Second, the company has some clever software applications and platforms up its sleeve to enhance efficiency in new ways, a play for tech-savvy usage at the market’s upper end. And lastly, it aims to set up a ‘smart cloud’, presumably with enough memory space and processor power to wirelessly enable heavy-duty applications.

While the jury is still out on whether this will restore Microsoft’s monopoly in an increasingly Google-fied world, the fact (and this even the stringent Microsoft bashers cannot deny) of the matter is Microsoft has not just redefined its own paradigm but if it succeeds could possibly re-shape the entire world of technology.

Microsoft India: FY15 Bird’s Eye View

With Satya Nadella at the helm, Microsoft India continues to be an important cog in the company’s overall wheel. Microsoft India continued its growth momentum during the fiscal 2015 in the Indian market with a solid 19% growth. The global leadership continues to bet big on India and with Nadella’s growing focus on India (especially after the meet with PM Modi in San Jose) has helped the company renew its focus with big investments in the country that will help Microsoft to double its business from different verticals including the government. Eyeing a big chunk of government business in India, Microsoft earlier last year announced an investment of Rs 1,400 crore to set up three datacenters in India.

Microsoft will therefore be able to provide data storage within the country for various government and other organizations. The move is expected to provide an edge over the other software vendors who are still exploring opportunities to set up datacenters in India. The datacenters are expected to help the company to expand its Azure business in India.

Microsoft CEO Satya Nadella

Besides, the company grew its software revenues in the country and maintained its leadership position as the software vendor in the Indian market. According to Gartner, Microsoft maintained its #1 position in software revenues in India, accounting for 25% of the overall sales in 2014. The company earned more than $1 bn from the software business alone. Since April 2013, the company has been manufacturing, replicating, marketing, and selling Microsoft software retail products and services in India.

“The share of marketing support services has declined from 87% of revenue in the year ended March 2013 to 4% in the current year,” the company said in the filing. Microsoft is trying to sell its cloud services and offerings in India and has bagged a lot of customers from mid to large companies for various cloud offerings, including Office 365.

But while the company has been aggressively pushing its cloud platform Azure in India, experts feel it still has a long way to go before it catches up to nimbler rival Amazon Web Services, which has had immense success bringing small and medium enterprises on board in the country. But its investment in three datacenters is going to give a boost to its cloud business in India. There are already encouraging signs of cloud adoption for Microsoft India as it claims to register tripledigit growth in the country. This is in line with the growth being registered by Microsoft Corp globally.

In the last one year, Microsoft India partnered with the Government of India for various projects. A major project it bagged was from the Surat Municipal Corporation to transform Surat into a smart city. Further, it launched Edu Cloud, a cloud computing-based offering to enhance digital learning and teaching in schools and higher education institutions. This is expected to benefit 10 lakh teachers and 60 lakh students in 1,500 institutes.

Karan Bajwa Managing Director Microsoft India

"Our strategy continues to be what we had announced about two years ago; this is about 'devices and services'. And that vision and mission is unchanged."  

Besides, the company introduced unlimited OneDrive storage for all Office 365 subscribers, entered a strategic partnership with Dropbox, launched Skype for Business, and introduced Xbox One for its broad fan base in India in September 2014. Microsoft’s India strategy is centered around the untapped SMB and SME class for its Office 365 and other offerings. It has got an early success and is one of the leading cloud providers for the mid-and small segments today in India. Microsoft India has yet to resuscitate the Windows business. It is hoping big on Windows 10 but doubts persist among industry observers and analysts.

Even though Windows sales were stable in FY15 after the XP refresh, the company kept on pushing Windows 8.1 along with Office to entice consumers and revive sales. However, its biggest bet now is on Windows 10 which is being launched in July 2015. With the changed revenue model for the upcoming Windows, it aims to garner significant customer interest.

Key Strategic Areas

Karan Bajwa, MD, Microsoft India sounds buoyed by the overall positive sentiments in India. “Our strategy continues to be what we had announced about two years ago; this is about ‘devices and services’. And that vision and mission is unchanged.” He claims that Microsoft’s strategy makes it unique: there are vendors who are in devices and some others who are in services; but there’s none other than Microsoft who straddles the two. “So our belief is that our customers are interested in looking at their high-valued activity, and our role is to provide them the devices and services which help them do that,” adds Bajwa.

Not just rhetorics, Bajwa is willing to walk the talk and justifies how Microsoft has been successfully courting different segments with its strategic offerings. One major focus area seems to be the SMBs. The technology adoption by SMBs has been very low in India primarily because of the complexity of technology. But the new world of the cloud, especially Office 365 from Microsoft seems to have removed that barrier. You can now have Microsoft Office 365 delivered to you as a service at your desktop, on your mobile, tablet or on any other device.

TRACKING MICROSOFT INDIA GROWTH Notwithstanding the global tumult, Microsoft India has been maintaining a steady growth in high teens

Adds Bajwa, “I have already seen a 2X growth in the last 12-24 months in terms of our engagement with SMBs. We are now able to connect to a large number of SMBs as we further mainstream the cloud.” What has made this possible to a large extent is that Microsoft has been able to gather a large ecosystem of ISVs for business relevant solutions for SMBs. The company has rightly identified that the need of the hour is to provide SMBs with customization but with minimal intervention.

The bigger challenge for Microsoft, Bajwa admits, though is the last mile. It is not possible for ISVs to connect with the SMBs, as they do not have an adequately large sales force; neither do they have enough marketing muscles. “We are therefore working to create programs for cloud solution partner (CSP) that in turn would help to create an ecosystem that will aggregate these SIs or ISVs and provide access to customers; this in turn will help to bridge the last mile.” This strategy seems to be in sync with Nadella’s belief that India has the opportunity to leapfrog to cloud-based technologies, especially in the SMB segment to take advantage of the huge cost reduction.

The government is another significant target segment for Microsoft. Digital India will also play an important role in this area. While Microsoft in India already boasts of large projects like Department of Information Technology, Maharashtra, Urban Administration development Department, Government of Madhya Pradesh, Public Service Mission, Government of Madhya Pradesh and Department of Health Services, Government of Gujarat, the launch of the three local datacenters to be operational in sometime will entirely change the ballgame here. Data sovereignty and security, the two aspects that prevent government from hosting apps and services in datacenters in other geographies, would subsequently be taken care of. This in turn would bolster Microsoft’s cloud business in India. “We cannot say that we also have a cloud. Microsoft believes in that we lead the cloud,” asserts Bajwa.

With the local datacenters Microsoft is looking to provide all the services around cloud, besides conforming to all regulatory compliance around it. The data of India will be staying in India only and will be adhering to the Indian laws. Consequently, there is already traction in the state sector. Microsoft is working on helping state governments so that state board results can be made available on the Azure cloud. It is also in talk with three states to launch local data centers.

And lastly the key strategic area seems to revolve around the ‘devices and services’ initiative. Reiterating what Nadella has said globally, Bajwa maintains that “If Android wins, it does not mean that Microsoft loses. It is after all about the services Microsoft offers.” He also believes that Windows 10 opens up new opportunity. In fact, Windows 10 will be a focus area for Microsoft in the year 2016. “There is huge excitement about Windows 10 across the customer space, consumer enterprise and the developer space.”

Cloud for SMBs

Srikanth Karnakota, Country Head, Server and Cloud Platform, Microsoft India agrees on the increasing SMB uptake. In fact, he informs that Microsoft’s main intent is to Improve IT for SMBs, as mid size companies already have invested in some form of IT infrastructure. According to him, SMB IT adoption is happening on both levels--horizontal and vertical. Sometimes the customer is interested in vertical solutions and these normally come from independent ISVs while Azure offers the horizontal solutions.

Depending on these two scenarios, SMBs are looking for to take apps on public cloud offerings or they are going to embrace an ISV solution. And it is precisely here that Microsoft cloud service brings uniqueness to the table. “Microsoft has a very strong product line both on public and private cloud and that plays as the biggest differentiator for us. Hybrid cloud is the biggest differentiator for customers as more critical applications are moving to the cloud,” reminds Karnakota.

This increasing focus on the cloud leads to a more important question. What happens to the on-prem software business, especially since it still contributes a lion’s share of Microsoft revenues. Is there a possibility of cannibalization? The answer, according to Karnakota, is both yes and no.

Srikanth Karnakota, Country Head, Server and Cloud Platform, Microsoft India

"Microsoft has a very strong product line both on public and private cloud and that plays as the biggest differentiator for us. Hybrid cloud is the biggest differentiator for customers as more critical applications are moving to the cloud"

According to him, growth is happening on both fronts – on-prem and cloud. Cloud platform just cannot help wipe out on-prem. “For example, data on cloud is not possible on SQL server. And the biggest premise of our growing on-premise story is that SQL is the fastest growing database in the country, with 51 % of the market share and by the end of year we will attain 54%,” justifies Karnakota.

At the same time he believes, that the lion’s share of revenues will come from the cloud model in next three years. In fact, he is sticking his neck out and predicting that cloud revenue share will be higher than that of on-prem in the next few years. Out of the present cloud customers, 90% are those who had used SQL and Window and this indicates of a co-existence in the future. Also the fact that globally for Microsoft, cloud revenue accounts for $24bn while SQL Revenue accounts for $8bn offers further reiteration.

“Microsoft cloud is very comprehensive. We cater to every class. It is the customer world which is changing and not Microsoft. We just need to put an effort to help this transition happen. Every cloud scenario or cloud platform is about new innovation and where you see the higher growth. Cloud is therefore opening more revenues but also helping people expand their IT,” asserts Karnakota.

Meetul Patel General Manager Small & Mid-Market Solutions & Partners, Microsoft India

"We are the only company that caters to everyone. In fact, we are only vendor in the country to have on-prem, pure cloud and hybrid cloud, And to enable customers to leverage on all the models, we operate    through our  partners"  

Evolving Partner Ecosystem

This increasing focus on the SMBs with cloud offerings obviates the need to build a strong partner ecosystem. With 10,000 partners, Meetul Patel, GM, Small & Mid-Market Solutions & Partners, Microsoft India claims to have the biggest partner ecosystem. “We are the only company that caters to everyone. In fact, we are only vendor in the country to have on-prem , pure cloud and hybrid Cloud. And to enable customers to leverage on all the models, we operate through our partners,” reiterates Patel.

The choice and development of partners and how they deal with the customers is guided by certain choices. Affordability is at the core—after all partners need to be developing apps and selling them and thereby monetize their customers. And the customers should afford to pick up the solutions according to their own choice. And Microsoft needs to ensure the mutual interest is maintained. With partners and their thrust towards cloud selling, Microsoft’s mantra is to invest, and not to push. “It is not only about selling the cloud, but it is also about consumption. We have put both Office 365 and Azure in the spare so that partners can make money. Our job is finally to enable partner to sell to the customers,” adds Patel.

HOW MICROSOFT OPERATES

The bottomline, according to Patel, is that Microsoft has created new partner types as well as offering customers the choice of channel at the same time. It has created cloud service providers for tier 2 cities and helping these partners in marketing, in co-op funding and in sharing Microsoft assets. The overall aim is to rejuvenate the entrepreneurial spirit of the partners.

What this has done is also to change the profiles of the partners or the nature of their businesses. SI and ISV base of more than 60% has shifted and in the next years, the rest will be there, informs Karnakota. There are different models these ISVs and partners are following. ISV white labeling is being offered at a very low level. Selling cloud platform has also gone marginally up. One can sell it as a service on Azure by ISVs. One can also provide unlimited usage. Customer lead in most of these cases is being generated by Microsoft.

And Microsoft intends to help partners to resell from the cloud platform from Indian local data centre, which is going to be functional soon. “Existing customers have the discretion wherever they want to go. And accordingly, we are investing our energies,” adds Karnakota.

Samik Roy Director and Business Head Microsoft Dynamics (Applications) Business, Microsoft India

"Our partners are either product specialists or they could be industry specialists or even segment specialists. Microsoft survives on channel and our model is fundamentally not about fulfillment."

The Software Leadership

The increasing focus on SMBs and the debate over the co-existence of both on-prem and cloud models should not deter anyone from seeing Microsoft’s overall position in the enterprise software market in India. Samik Roy, Director and Country Head - Microsoft Dynamics (Applications) Business, Microsoft India breaks up the customer segments to better track Microsoft’s progress over the years as an enterprise software vendor.

In growth terms, Microsoft has topped amongst SMBs in the last three years and continues to do so in 2015; in mid-market, while it was #2 in the last three years, it slipped to #3 in 2015; it is the reverse in large enterprise where Microsoft has climbed to #2 in 2015 from #3 in the last three years. In terms of the customer base too, similar results might be reflected. It is #1 in SMBs in 2015 and will remain so next year; it will be #2 in enterprise next year from #3 in 2015, while in mid-market it will be going south to #3 from #2 in 2015.

There are four focus areas for software—retail, Navision, CRM and CRM Online. As part of the overall sales productivity suite Microsoft showcases all of CRM Online, Office 365, Yammer, Skype to customers. In terms of competitive replacements (incubation model), there have been several cases especially SAP replacements.

Alok Lall, Director, Microsoft Office Division, Microsoft India

"Customers think cloud can be more beneficial. It is about, what is in your cloud? We provide the best customer experience on cloud. Datacenter is the edge of our cloud function. For example, MS Cloud platform provides email storage from 50GB to unlimited"

While 93% of the retail customers originally came from the unorganized sector and therefore involved greenfield deployments , the rest came were either replacements or co-existing solutions. According to Roy, Microsoft offers every sort of retail solutions including digital management, catalog management, some of its marquee customers included Bombay Dyeing, Titan, Airtel, Mother Dairy, Aditya Birla Retail, SSIPL, Wildcraft (all retail works on Microsoft).

CUSTOMER TESTIMONIALS
Department of information technology, Maharashtra
Urban Administration Development Department, Government of Madhya Pradesh
Public Service Missio, Government of Madhya Pradesh
Department of Health Services, Government of Gujarat

For Navision, Microsoft has over 1000 customers. On the other hand, for both CRM on-prem and CRM online the adoption is primarily happening in IT, BPO, government, banking and financial services. While both are in Gartner’s top quadrant, Roy reveals aninteresting information contrary to popular perception.

“Not a single of the CRM on-prem customers has migrated to CRM Online. So instead of existing replacements, the count of net new customers for CRM online is very high. It is mainly the new age companies, that have failed with competitive CRM solutions that are coming on the CRM online fold,” he informs. This reasserts Karnakota’s premise that cloud cannot cannibalize on-prem, at least not in the near future.

For its entire software portfolio too, partners are the key mode of business for Microsoft. Unlike another popular trend, Microsoft is not working with the likes of Wipro TCS, Infosys or Accenture as a partner. When quizzed on this, Roy explains “Why we do not work with Wipro and TCS is because over a period of time we have observed that they are mainly service partners and that is just not suitable for our business model. Our partners are either product specialists or they could be industry specialists or even segment specialists. Microsoft survives on channel and our model is fundamentally not about fulfillment. Partner competencies have to be managed well, and if done properly then support is not mandatory. Our CCM team helps surveying these partners.”

UNRAVELING MICROSOFT ENTERPRISE SOFTWARE STACK

Not just walking against the trend, this is a bold statement definitely which Microsoft reasserts by offering partners 60 % of the partner fee and keeping 40% itself, provided there is no discount. Microsoft has a P seller program that keeps its partners happy. “Our fundamental principle is that our partners should not clash with each other; so we have partners who do AX only, partners who do NAV only, we have partners who CRM On-prem only and we have partners who do CRM Online only.” For CRM online, Microsoft has 30 born in the cloud partners managing separately Office 365 and Azure, and there are 20 MS Cloud partners not doing Dynamics.

CUSTOMER TESTIMONIALS

Democratization Through Office 365

Cloud is the best democratizer as far as both enterprises and SMBs are concerned feels Alok Lall, Director, Microsoft Office Division, Microsoft India and Microsoft provides a complete product that acts as a catalyst for this democratization process. Microsoft has been in business of cloud for the last six years. Reiterating Karnakota and Roy, he also feels that the online version (cloud) is growing more faster than on premise.

In fact, Lall feels that the licensing regime (often criticized by many) has been more helpful for Microsoft on the cloud than on prem. Precisely because licensing has given the customers more flexibility. “Customers think cloud can be more beneficial. It is about, what is in your Cloud? We provide the best customer experience on cloud. Datacenter is the edge of our cloud function. For example, MS Cloud platform provides email storage from 50GB to unlimited,” reiterates Lall.

Office 365 has been one of the best examples of cloud. Microsoft has been to into Office 365 for more than three years and businesses irrespective of their sizes have been enamored by Office 365. The lion’s share of O365 revenues comes from the enterprise (Tata motors is one of the best deployment examples) but SMBs form the major customers. Office 365 is turning out to be a game changer for SMBs majorly.

Reinforcing what Bajwa feels, Lall adds that having a local data center in India will further change the ballgame in favor of Microsoft. Once the India datacenter is live, the Office 365 customer base is going to swell further. Customers across verticals are already moving to Office 365 and that includes large banks. Government institutions that are today concerned about data residencies will also be moving into the fold. Digital India too, Lall believes, would give Microsoft more room.

Lall adds that even traditional partners are gradually pivoting towards O365 partnership. Microsoft is helping them out by investing more than $60,000 to improve their infrastructure. He feels that partners bring flavor to Office 365and illustrates with one example where Manupatra Legal App has been adopted by Office 365.

Commercial cloud services launch from local data centers

Microsoft announced the availability of Microsoft Azure services via local datacenter regions in India. As the first public cloud provider from India, Microsoft has opened three new regions – Central India in Pune, South India in Chennai, and West India in Mumbai. Governments, large businesses, small and medium businesses (SMBs) and citizens can use the massive computing power now available locally to fuel India’s inclusive growth, spur innovation and accelerate digital transformation.

In the words of Bhaskar Pramanik, Chairman, Microsoft India, “The Microsoft cloud in India will transform the way computing is done in the country. The hyper-scale cloud will empower governments, businesses and users and offer enough computing power that will support all their existing workloads. We are happy to partner with Government and businesses to make the Microsoft cloud work for India and for Indians.”

Bhaskar Pramanik, Chairman, Microsoft India

Built on foundational principles of security, privacy & control, compliance and transparency, Microsoft cloud services are designed to enable individuals and organizations to achieve more.

In addition to the Microsoft Azure services launched, Office 365 services are slated for availability in October 2015, with Dynamics CRM Online services to follow in the first half of 2016.

Millions of users in India are already using Microsoft cloud services leading to the cloud business growing by more than 100 percent year on year over the past two years. With the local cloud services, regulated industries such as BFSI, government departments and state-owned enterprises will now be able to leverage public cloud services and be able to take advantage of local data residency. In addition, businesses that deal with large amounts of data e.g. media companies, will benefit from data replication in multiple regions within India for backup and recovery, reduced network distance, lower latency, and the option of a private connection to the cloud.

In addition,

• Startups and SMBs will gain a competitive advantage with enterprise-grade technology to help them innovate and grow their business to a global scale.

• Education Sector will witness transformational digital learning. Just one offering, Microsoft Edu-Cloud, is expected to benefit 10 lakh teachers and 60 lakh students across 1500 institutes over the next 18 months from local Microsoft Cloud.

• Developers, IT Professionals, ISVs and Partner ecosystem will see newer opportunities and innovative business models. From providing cloud assessment to cloud roadmap creation; from writing new cloud ready applications to migrating existing workloads to cloud; locally delivered cloud services will help hosters, ISVs and partners scale their business using the cloud.

Building the Intelligent Cloud

As one of the largest cloud operators in the world, Microsoft has invested more than $15 billion in building a resilient cloud infrastructure and cloud services that deliver higher availability and security, while lowering overall costs. Microsoft cloud infrastructure currently includes more than 100 datacenters located in over 40 countries, and the company is continuing to rapidly build capacity to serve customers worldwide.

“Enterprise-grade performance, flexibility and hybrid capability, openness and trustworthiness are differentiating factors of the Microsoft cloud. In addition, comprehensive higher-level business services enable new business possibilities for customers,” said Tyler Bryson, General Manager, Marketing and Operations, Microsoft India.

Microsoft’s Local Cloud Momentum

In the preparation to launch of cloud services from local datacenters, Microsoft created a special private preview program to allow early customers a preview into using the new local cloud services. This has seen significant interest from BFSI, government departments and organizations, ISVs, ecommerce organizations and startups with participation from over125 customers. Organizations such as Mahindra, , Robert Bosch, Honeywell, Kotak Life, Bajaj Finserve, Medi Assist, Fortis Healthcare, Narayana Health, AIIMS, , Haryana State Electronics Development Corporation, MIDC, TN ePDS, Rediff, Meru Cabs, Sony Corporation, Aspect Software, Gupshup Technologies, NanoBi Data and Analytics, Ideal Invent Technologies, and many leading Indian banks have been using Microsoft local cloud services under this private preview program.

Opportunities Around Windows 10

Nothing illustrates the Microsoft strategy of devices and services better than Windows 10. And Vineet Durani, Director-Windows Business, Microsoft India feels that Windows 10 also opens up a lot of possibilities from the channel perspective.

“One new capability we bring with Windows 10 is that every time you have a have a new update, it is related to somewhat enhancing your hardware capabilities. This in turn allows everyone to make money in the channel ecosystem,” asserts Durani. He cites the example of the new technology called Windows HELLO, with built-in biometric capabilities, such as fingerprints, face recognition etc. And channel partners can have more capabilities with such technologies around Windows 10 now.

Regarding the debate on physical distribution vis-à-vis online distribution, Microsoft is all for democratization of technology. And that, Durani asserts means the co-existence of both. “The core belief is that as a brand we are democratizing technology. The access to technology has to be democratized that allows people easy access.” For every one dollar Microsoft makes its partner ecosystem makes $7-8 and that includes every partner-- not only the channel partners, but even consulting partners like Infosys.

The Microsoft stance seems to be that the channel needs to learn to sell what the customer wants. Sheer cost of retails is very high and that in turn makes online staggering in matters of growth. Online can only help the channel bring customers faster into its fold. Because of the discrete nature of our country, online seems to work very well. For example, Micromax Canvas Laptab was introduced and first sold through online (Amazon) and 52% buyers were in tier 3 cities, illustrates Durani.

“We are moving on to an omni channel world. You need physical retail, you need online, you also need big boxes. We need a combination of affordability, availability and comfort from a customer point of view.” Smart retailers sell better value. Channel partners too have figured out this value proposition and they too should get smarter with online which can help increase their businesses only. He admits price cannibalization is a challenge and assures that Microsoft is doing all it can to ensure a level playing field.

Durani also mentions the addition in the hardware ecosystem of Microsoft Authroised Refurbishers like Sriram Eco Raksha (RenewIT) and My Returns IT. While this is a part of a green initiative, it also opens new opportunities in tier 2 and tier 3 cities.

Ajey Mehta, Director, Microsoft Mobile Devices, Microsoft India

"We are focusing on the offerings for business segments with enhanced security features. For example, Outlook on Windows 10 phones has a great enhanced look."

Mobility For All

The other important piece of the Microsoft ‘devices and services’ strategy is the Microsoft Mobile Devices division, spawned out of the $7.2bn acquisition of Nokia’s phone division two years back. Ajey Mehta, Director, Microsoft Mobile Devices, Microsoft India reiterates that Microsoft plays a very important role in developing personal computing. “Mobility is about the mobility of experience, it is not just about mobility of devices. It is across all products with Windows 10 specially,” he adds.

For mobile devices, Microsoft is approaching the market through three customer segments. These include Windows fans being targeted with the Microsoft flagship devices, business customers being targeted with devices strong on management and value seekers targeted with devices at affordable prices like the Lumia 535.

For value seekers, the device price range will be having the10-12k upper limit, business customers are offered all price segments while Windows fans are being offered the high end devices. The biggest opportunity at the moment is from the business segment where SMBs continue to be the focus. “We are focusing on the offerings for business segments with enhanced security features. For example, Outlook on Windows 10 phones has a great enhanced look,” informs Mehta.

Talking about Windows 10, Mehta also informs that it will be the cornerstone of all the three phone segments. While the flagship devices will obviously be enhanced by Windows 10, it will be provided even in the value seeker category. “It is about the experience again. We will provide apps and services of Windows 10 even on feature phones though Windows 10 itself will not be available on feature phones. We will provide windows 10 experience in the value seeker category on smartphones at an affordable price tag.”

While Microsoft always has a strong IT distribution ecosystem, the Mobile Devices division is leveraging on the erstwhile Nokia partner network to bolster its telecom distribution ecosystem. “Distribution partner is our strength, distribution will only be strengthened whether it is in Nokia or Microsoft Mobile devices. We have built this ecosystem over years. We have retained this partner ecosystem from Nokia.” HCL is the main Microsoft distribution partner in the rural parts while there are other regional distributors in urban areas.

Mehta also stresses on the need to maintain an online and physical distribution balance. “Every channel is important to us if it helps us reach the target group. We ensure and try that there is minimal conflict. Offline channel is important, we know its strength and that is where our trust lies. We ensure that profitability of channel is never compromised.”

He admits that Microsoft cannot dictate prices but it tries its best to ensure price hygiene. If price hygiene is maintained every channel starts playing an important role. Online business too will then attain equilibrium and then then pricing will become static.