Microsoft India’s window of opportunity

Before Anant Maheshwari, 46, took over as the president of Microsoft India in September 2016, he had the customary meeting with Satya Nadella, Microsoft’s chief executive officer. During the meeting, Maheshwari put forth a disclosure that he knew nothing about the stuff that Microsoft did. “I wasn’t from the industry and didn’t know the products and systems and all that,” Maheshwari said when he met Fortune India at Microsoft’s Mumbai office on a crisp winter morning. “Satya’s answer was something that really warmed my heart.”

Nadella, chosen by Fortune as Businessperson of the Year for 2019 for the new direction in which he has steered the U.S.-based tech giant, told Maheshwari that him being an outsider may actually be an asset since he wouldn’t need to unlearn anything, but learn a lot. Maheshwari, a former McKinsey consultant, who was president, Honeywell India, immediately before joining Microsoft, describes the Redmond, Virginia-based corporation’s new culture as one of ‘Learn it All’, rather than ‘Know it All’.

It has been three-and-a-half years, and Maheshwari’s interpretation of Nadella’s philosophy and implementation of Microsoft’s new business playbook have paid off. The India outpost of the third most-valued corporation in the world (as on January 20, 2020) saw its best financial year ever with revenues in the year ended June 30, 2019, reportedly crossing $1 billion.

In addition to its traditional focus on large enterprises and government clients, Microsoft is playing the role of a tech evangelist and venture capitalist for budding startups in India. Simultaneously, it is rubbing shoulders with the big daddy of India’s telecom and digital services space—Mukesh Ambani-led Reliance Jio—to create an ecosystem that combines Jio’s physical reach and Microsoft’s technology solutions spanning cloud, data, artificial intelligence (AI), and business applications for a modern workplace

Days before Nadella’s visit to India, Microsoft set up its third India Development Centre in the National Capital Region. In an interview, Maheshwari explains why Microsoft’s Indian operations are an important catalyst to the global behemoth’s future growth, and will continue to be so. Edited excerpts:

What have been the key changes since you took over the top job at Microsoft India?

A lot of what we are doing at Microsoft in India at present is a culmination of the work that was set in motion by Satya around five years back. The broad pillars of this global playbook are a focus on business-to-business (B2B) enterprise, empowering every person and organisation to achieve more, and culture and people transformation. Satya clearly says that you don’t join Microsoft to be cool but to make others look cool. Consequently, every enterprise—large, medium, small, private, and public—is recognising the value of partnering with Microsoft. An additional imperative that we drove sustainably in India is something we call ‘New New New’—a focus on new customers, new solutions for both existing and new customers, and new business models.

Could you elaborate on this strategy?

The new customers for us are the unicorns and startups. Microsoft was traditionally working with medium to large businesses, governments, and industry. I don’t think we were present in the startup ecosystem in a clear manner. Second is new solutions. Most of the companies in our peer group have one strong product or solution. We are present in multiple areas—we can provide a modern workplace, do core applications, work on data and AI, and do more with business applications like CRM (customer relationship management) and ERP (enterprise resource planning). There was a time when most of our customers were using one or maybe two of our solutions. It was important to bring the power of all four solution areas to customers. And then we have new business models. We created a model called ITES 360 wherein we repivoted the way we worked with IT-enabled services companies in India. Earlier, we used to work with these system integrators in India to empower them in their own business and partnered with them to serve other companies globally. The connection between these two activities wasn’t very well established earlier. A culmination of these efforts was the last financial year [ended June 30, 2019] being the best ever for Microsoft in India.

How are you engaging with the startup ecosystem in India?

We realised we have specialised capabilities for working with startups in all three stages of their growth—at the seed stage, in the growing-up phase, and when they are mature and looking to pivot to a new level of growth. We can come in with our M12 venture fund and the startup pod that we created to engage with this community. We give them our engineering capability; we bring our entire One Commercial Partner organisation to give them access to Microsoft’s 40,000-strong sales and marketing professionals around the world and help open doors for new businesses. Larger enterprises want to work with startups but don’t want to work with every small company that walks through their doors. If they come with us, then there is a level of trust that is established since if the startup is on Azure (Microsoft’s cloud platform), potential clients are confident about the level of data security. Then when these startups begin to grow larger, we engage with them through their lifecycle and after they reach a certain stage, we treat them as our enterprise clients. While we simultaneously worked with smaller startups and unicorns, we focussed more on the latter to begin with since the rest of the startup ecosystem looks up to them as a lighthouse.

Which are some of the unicorns that you have worked with?

Our partnerships that are most talked about are with companies like Flipkart, InMobi, and Ola. We worked with them over the last two-and-a-half years and helped their business models pivot. After that we had nearly 50 other startups come through to us once they saw the kind of work we did with these three.

What are the key imperatives before Microsoft in India in 2020 and beyond?

The aspect of trust around technology has become very important in India and globally. Second, AI is not a buzzword anymore. We are already working with 700 companies to build use cases for AI in India. These emerging trends will require a lot of skilling. We are working with agencies like the NITI Aayog, the Ministry of Electronics and Information Technology, and the Central Board of Secondary Education to build these capabilities across educational institutes. On the business front, while we will continue to do what we have been doing with enterprises and startups more deeply, there will be a lot of focus on small and medium businesses (SMBs). Kaizala is a great example of a business productivity tool useful for modern workplaces in an economy that is led by social media chat. We will also do a lot of unique stuff in India through strategic partnerships of the kind that we have with Jio. Microsoft and Jio are fully aligned in our long-term mission of empowering India’s digital transformation, which has not taken deep roots among India’s SMBs yet. Jio is a company focussed on the mass of India and they understand the consumer. Microsoft will bring all its technology, cloud capability, solutions, engineering, and global experience to create customised offerings for different customer segments and deploy them at scale. Jio has announced that they will be building two new data centres in India and these will be fully on Azure.

Since small Indian firms are very cost conscious, how will these new technology offerings work from the point of view of pricing?

We have to think of it as a solution and not a product. We believe that if we can do the intelligent cloud in India at a huge scale, the per unit cost goes down dramatically. Getting the combination of Jio’s and Microsoft’s capabilities together allows for a bundle of solutions that have a net total cost for the customer that is lower than buying these products and solutions piecemeal.

There is a lot of focus on data privacy and security in India. What is Microsoft’s stand on this?

Microsoft’s global philosophy on trust is well known. We were among the founding partners of the GDPR (General Data Protection Regulation) in Europe. We have been very strong on data privacy, transparency, compliance, and security. In fact, that is the value proposition of our platforms. It is always the customers’ data and they continue to own it. In India, we have been a part of Nasscom’s (National Association of Software and Services Companies) representation to the government and offered the same point of view. The larger point is to have clarity on the law of the land. I am sure there will be some nuances that will be different from other laws around the world. But greater similarities between the regulations in India and other countries globally would allow for multinational companies to move faster with the whole process. We respect that... India, being one of the largest generators of data globally, will have a strong point of view about the personal data of Indians and we will definitely engage in that conversation.

Does the current economic slowdown in India pose a challenge for Microsoft when it comes to attracting new clients and growing its business here?

I believe at a time like this the seeds of digital transformation that a company has sown earlier will distinguish folks who continue to accelerate versus those that face a wall. Companies that have invested in digital capabilities over the last two to five years have multiple ways to manage demand signals, communicating with and empowering customers and employees, and create a more agile organisation. The current situation creates a lot of opportunities for us as companies see a few of their peers that have invested in digital technologies do well and race ahead. The BFSI (banking, financial services, and insurance) sector is a good example of this. Many companies are facing stress in this sector, but there are a few that are becoming world leaders in what they are doing.

This story was originally published in the March 2020 edition of the magazine.