“Microsoft cloud business has grown 120%”

Microsoft is one of the leading cloud companies globally. In order to strengthen its cloud pitch, the company has expanded its data centre presence in 30 regions in various countries. Out of the 30 regions, three are in India which the company is using to woo various clients in the government, public sector as well as private enterprises. Dataquest spoke to Takeshi Numoto, Corporate Vice President, Cloud and Enterprise, Microsoft Corporation to know where Microsoft's cloud strategy is headed towards.

Which aspect of the business do you handle at Microsoft?

Takeshi Numoto, Corporate Vice President, Cloud and Enterprise, Microsoft Corporation

I am Takeshi Numoto, Vice President for Enterprise Business. Product enterprise is basically the division that's responsible for all Microsoft core application platforms and infrastructural products like Azure which is a public cloud service. Similarly Windows servers, SQL are also part of this business. Basically, Satya used to be the President of that division before he became CEO and I had a chance to work for him directly for a couple of years. This is growing at a really strong rate, both in the cloud and also in SQL. Azure grew in quarter Q3 at about 130% rate every year. This triple digit growth is reflective of our commitment. We've been seeing increase in the cloud business for a while. On the back of the tremendous growth and consumption we continue to expand around the world in terms of datacentre capacity. We have launched datacentres in three regions in India. We have launched datacentres in many regions including Canada, Korea and others. So we have a global footprint with 30 datacentres. We call them 30 regions. And our presence is basically two and half times stronger than what AWS has.

Microsoft launched its three datacentres last year in India. So, what is the momentum Microsoft has witnessed till now?
We have tried to address the data residency issue through our datacentres locally. I think overall we are taking quite a holistic approach, which we call 'trusted cloud'. This notion of earning trust for the use of technology is really key for us. Satya talks about it all the time. We are investing on trusted cloud so that we can win the customer trust. Our trusted cloud initiative is based on four key pillars.

The first pillar of our trusted cloud is security, as we all know that all discussions regarding cloud lead to severe security concerns. Microsoft operates at a large scale to see threats with any customer and keep these threats at bay. We identify the pattern of threats to protect other customers as well. In the case of Office 365 we have witnessed all sorts of phishing attacks. But our vast mechanism at work identifies the attacks. And it helps us to collectively protect everyone that we serve.

Other than security, our next pillar in the trusted cloud is privacy. With Microsoft platform your data truly belongs to you. Your data remains your property and is never used for any marketing purposes. It is not simply the technology at our end. Like when we support customers we make sure that only the right personnel can have the access to the customer data. All that customer data is verified in a proper way. So beyond just the technology piece, privacy often requires a lot of operational rigor. We are very proud to be the first cloud provider to have passed the certification for ISO 27018, which is a sort of an ISO standard around privacy. When a customer deletes data in the cloud, it really gets deleted permanently. We are the only cloud vendor to have attained this certification.

Thirdly, we spend a lot of energy on making sure that we have by far the broadest coverage of compliance. Whether it is the international standard ISO, just talked about, 27018 standard or other ISO standards on data security and privacy, we keep compliance on top of our agenda. We have complied to various standards such as HIPAA and PCI.

And the fourth pillar of our trusted cloud is transparency. We are extremely transparent on how we talk about, how we manage customer data and how our compliance certification covers different aspects of our service. For example, you can go to the Microsoft cloud trust centre. Across all of our services, whether the Azure or Office 365 or Dynamics CRM, you can know exactly what industry certification and compliance we have obtained. So, from the perspective of trust, we really focus on security, privacy, compliance and transparency.

What is your target in terms of customers; as of now we have seen a lot of momentum by Microsoft in the mid segment?
Microsoft has got strong presence across verticals – mid and large. It is probable that the mid ones are more publicised. Sometimes the big companies don’t want to disclose their IT environment. They want to remain silent on the technology deployment for competitive advantage to them. We respect their need to privacy and we don’t emphasise on that much. But you know, cloud is very much like internet. It impacts every segment, every industry. We are seeing a lot of good traction for our cloud business which is catalysing our growth with about 120% rate. In fact, 50% of top 100 BSE companies are already on Microsoft cloud in India.

Can you share figures of your Cloud market share along with customer names?
As per an IDC report, Microsoft currently has 30% market share in the cloud (overall) business and 46% in SAAS business. We are aiming for a 40% market share by the end of next fiscal year. Top 5 private sector banks, which include HDFC, ICICI Lombard, IDFC, Kotak Mahindra and Axis Bank, are our customers. Major Indian healthcare providers including Fortis Healthcare, Apollo Hospitals, AIIMS, L V Prasad Eye Institute (LVPEI) and Narayana Health use Microsoft cloud. India’s largest conglomerates like Reliance Capital, Essar Group, L&T, Mahindra & Mahindra Ltd, etc. have selected Microsoft Cloud for their digital transformation. Maharashtra Government has partnered with Microsoft to create its first smart village in Arisal.

Top 5 Indian ecommerce companies, which include PayTM, Snapdeal, and Pepperfry have started using Microsoft cloud. Other Indian start-ups such as Meru Cabs, JustDial and ISVs such as Zing HR, iBot, Miles Software, CloudCherry, Aspect and Shephertz are leveraging the true potential of Microsoft cloud. SIs and developers have started to build solutions to develop smart cities, accelerate e-governance and drive digital transformation with local cloud.

Opportunities in SMB segment are huge. Out of 1,50,000 SMB customer base in India, 25 – 30% are already on cloud.
Worldwide, over 80% of Fortune 500 companies are on Microsoft cloud. Most of them use multiple processes of services. They use Azure on Office 365, CRM online and Azure.

Today, the Microsoft cloud infrastructure supports over 1 billion customers across our enterprise and consumer services in 140 countries and supports 10 languages and 24 currencies supported by over 200 cloud services, over I million servers and over $15 B infrastructure investment

Security has been one of the prominent issues for everyone globally and there have been instances where you know hacks have happened in the largest and securest enterprises. How do you address the security part?

Security is one of things that no one would ever have faced. You have to be constantly vigilant to protect your environment while at the same time being productive and effective. It’s really important to have a really strong security posture. We are focused on helping customers maintain their appropriate posture in security. We typically talk about helping customer basically in the three things they need to be done for security. We talk about basically protecting, detecting and remediation.

Also, we have technology that helps monitor behavior. I'll give you an example of advanced threat analytics. It’s a product that we have. It basically learns user behavior by watching what you do. It allows organizations to protect, detect security challenges.

And what are the opportunities that you see in the government sector?
India’s ambitious digital infrastructure initiatives require more secure, open and flexible computing capability immediately if the Digital India vision is to become a reality. Microsoft’s cloud services through local datacenters, expertise and resources can not only support the government’s digital transformation but also advance innovation, security, and resiliency, thereby helping realize the country’s digital roadmap. Microsoft is helping a state to conduct elections in a transparent manner by installing cameras at every polling both. The Election Commission can keep a watch real time on the polling booths. Microsoft is involved in various government projects and doing implementations.

In a nutshell, if I may ask you, why would customers buy this idea of 'trusted cloud' from Microsoft?

I don't think Microsoft is trying to sell trusted cloud as an idea. It's all about the new initiative. Everybody that I talk to hasn't really shifted from why cloud to how cloud. Cloud is not a matter of choice but of time. Now the discussions are around as to when the customers are going to move to cloud and what applications would work best in the cloud. Trusted cloud is a way of us communicating the investments that we're making. We are doing this to help the customer understand how they can securely use applications in the cloud.