What Nadella's appointment could mean for Microsoft India

The new Microsoft chief's appointment could further boost the profile of its R&D centre in his hometown.

With Hyderabad's golden boy of the hour, Satya Nadella, rising to the top of the heap at Microsoft, it's only a matter of time before the company's India ops begin to attract more attention, as this article implies.

First off, the company has been doing pretty well here. While Microsoft does not break up country figures, Cyber Media (India) reports Dataquest saying that MS's India wing grew by 13 percent in fiscal 2013 to approximately $1 billion, mostly from flogging enterprise products and services.

Dataquest also said that the revenue of Microsoft’s Enterprise Partner Group (EPG) grew more than 250% and the real star here was MS's cloud platform, Azure, where it added over 15,000 customers and 1,500 of them monthly on an average, propelling the product’s revenue by an impressive 150 percent over last year. Not to be outdone, the company’s Windows server data centre revenue also jumped by an identical rate.  

 India may be moribund at an anemic 5 percent GDP growth rate, but companies like Microsoft will hardly be impacted by the existing slowdown. After all, they sell goods that are relatively inelastic at a time when technology-enabled processes have become crucial to any reasonably sized business enterprise. The article points out that data suggests "emerging markets returning to double-digit growth of 10%, driving nearly $740 billion or 35% of worldwide IT revenues and, for the first time, more than 60% of worldwide IT spending growth." 

Nadella’s appointment will also pump up the profile of Microsoft’s Hyderabad-based India Development Center (MSIDC) which was set up in 1998. It has quickly mushroomed to become one of Microsoft’s largest R&D centres outside Redmond and caters to Microsoft Business Solutions (MBS), Microsoft Office Division (MOD), Cloud and Enterprise Group, Online Services Division (OSD) and Windows.

Naturally, this hasn’t escaped the attention of Nadella. When he was senior vice-president, R&D, Online Services Division (OSD), he apparently observed that "…the innovations from our Hyderabad team are already having significant impact on our US, UK, Canada, Australia and India products."

The article also quotes Ravi Venkatesan, former chairman of Microsoft India and venture partner, Unitus Seed Fund who thinks that the Development Centre’s profile under Nadella is only going to increase. "The India development centre might get the spotlight and might be marked for more important missions for the company. The new CEO will make use of the resource potential available there, potential that remains underleveraged now…most of all, given Satya’s understanding of technology, I hope he sees India as an innovation lab."