10 -The (e)NTity

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MD:
SANJAY MIRCHANDANI

Microsoft has made into fine art the ability to make its senior management eat
their words. Two years ago Microsoft VP (Intercontinental Operations) Orlando Ayala told
DATAQUESt that “India will contribute $ 100 million (roughly Rs 350 crore then) to
the Microsoft bottomline by 1999. A year earlier, Microsoft is just shy of achieving the
then rupee equivalent. The India subsidiary of the Redmond giant ended the year at a
turnover of Rs 320 crore, a growth of 60 percent over previous year. Coming in a year that
actually witnessed a general slow-down in growth, the Microsoft figure speaks of the
domination the company is set to achieve in the Indian marketplace.

microso1.jpg (10690 bytes)For
Microsoft India the year was a year of building up its marketshare, its training, and its
channel partners. It was also the year when the company seriously leveraged on NT
successes worldwide to build its enterprise
ambitions. The ambition has clearly paid off in the case of NT, which has now become the
product competitors love to hate. Whether it is Novell at the SME segment, or SCO Unix at
the enterprise-level computing segment, the one product they all compare with is NT. On
the marketplace NT is slowly assuming the same proportions that Windows 95 has on the
desktop. NT shipped with a
phenomenal 48.5 percent of all servers that went into corporate India in the last fiscal.
Moreover, this share is only expected to rise sharply in the coming year. Growth here was
substantial as this was the first year that Microsoft seriously started selling NT in the
Indian
marketplace.

S T R A T E G Y

  • To make Microsoft the dominant platform of choice in the
    Indian enterprise market.

T A C T I C S

  • To position NT as the OS of choice from desktops to
    servers.
  • To facilitate enterprise application deployment on NT
    platforms.
  • To facilitate application development on Back Office
    server.

O B J E C T I V E S

  • To increase the share of NT in server & workstation
    shipment.
  • Penetrate the SME segment through price competitiveness
    with Netware.
  • To push SQL server on the NT wave.

P E R F O R M A N C E  H I G H L I G
H T S

  • Achieved a turnover of Rs 320 crore–a growth of 60
    percent.
  • Per capita productivity rise of 84 percent.

PRODUCTS AND SERVICES:
Packaged Software, Peripherals
* TECHNICAL COLLABORATION: Microsoft Corp., USA
* START-UP YEAR: 1989 * EMPLOYEES: 87 * Address: Paharpur Business Center,
21 Nehru Place, New Delhi 110019
* TEL: 6460694, 6460767 * FAX: 6474714 *
WEB SITE: www.microsoft.com

Though it has gained substantial market-and
mind-share, much of the NT gains have come in the middle corporate segment, defined as the
upper end of the SME segment. The company did manage to get some big orders, notably the
NT installation at Mahindra & Mahindra, but the big enterprises stayed firmly in the
Unix stable. The reason for this could lie with a perceived weakness on the part of NT to
be really scalable and fault-tolerant. The large enterprises are still not convinced about
NT’s ability to handle fault-tolerant and mission-critical applications. Similarly,
Microsoft is yet to make major inroads into the ‘small’ part of the SME segment.
Users here still prefer the file-and-print functionality of Novell NetWare. Microsoft was
banking on the early launch of NT 5.0 in the current year, but the company’s plans
have received a setback with the parent announcing that the NT launch will now be delayed
by at least a couple of months. With much of enterprise-strategy riding piggyback on NT,
the delay will affect performance this year.

Another hot-sell for Microsoft continued to be its
Office suite of software. With a dominant 85-percent marketshare, this has become the de
facto
standard for office applications. Sure, suites like Lotus SmartSuite and
WordPerfect are also around, but such has been Microsoft’s dominance of the suite
segment that it is like saying PC users have a choice of opting for an operating system
other than Windows.

The NT and Office success stories could not, however, be
repeated with its other enterprise package—SQL Server. The RDBMS market continued to
be firmly in the Oracle, Sybase, and Informix band, much as it was in the previous year.
This lack of success on Microsoft’s part could be attributed more to the fact that it
has yet to get application developer support for its products.

Another product that shared the same boat with SQL
Server was Microsoft Exchange. Here it has been clearly out-marketed, out-developed, and
out-maneuvered by Lotus Notes. Notes continued to dominate this market segment, and
Microsoft has not been able to put in the kind of marketing focus it would have liked on
this product. Exchange, however, is another wave waiting to be ridden. And Microsoft is
expected to make up on marketing in the current year.

microso2.jpg (19670 bytes)Another segment where Microsoft has made major inroads is in training. In the
last one year the company has gone about appointing authorized training centers, as it has
to face up to the reality of trained manpower on its platforms. This forced the company to
launch its SKILLS 2000 program worldwide as well as in India. Training on Microsoft
platforms is now being offered by a wide range of training institutes across the country.
In fact NIIT has already put up the curriculum on its web site and Aptech, too, is
expected to follow suit. The current shortage of Microsoft professionals is so acute that
MCPs (Microsoft Certified Professionals) draw salaries higher than the average even in the
US. The situation is much the same in India, with companies reporting a major shortage of
such professionals.

A significant development last year was Microsoft
Corp.’s announcement to open its third Software Development Center—second
outside the US—at Hyderabad. Through another 100-percent subsidiary, the company
expects it to be up and running by the end of the year with 25 software professionals
initially. To be connected to the main development center in the US, the India center will
focus on the interoperability of NT and BackOffice products with non-Microsoft platforms.

This year could well be spent on consolidating the gains
on NT, which really took off in the wake of its best sales effort—getting Bill Gates
to hardsell NT to the Indian market. With a server market share nearing 50 percent, it may
appear to be cosy for Microsoft. In fact it is not. For, in the current year, Indian
corporates are expected to scale into high-end applications such ERP. Secondly, with NT
5.0 delayed and NetWare 5.0 scheduled to be launched by September 1998, Novell will have
the aggression and the potential to upset the calculations of the Microsoft Mandarins.

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