On Cloud 15,000

Microsoft, the traditionally packaged software giant, could be getting a big
chunk of its revenue from services. Provided its decision to fly with the cloud
succeeds.

The company is now offering all its products under three categories--Software
as a Service, Platform as a Service, and Infrastructure as a Service.

Before he starts to explain what Microsoft on the cloud really means, and how
it will translate into an advantage for its customers, Vikas Arora, group
director, Cloud Services at Microsoft says, This is one of the biggest bets we
are making in our entire history.

Though the company has been offering services for the last 3 to 4 years, that
was in specific technologies for specific businesses, and more tactical than
strategic. The company has now decided that each and every one of its products
will now be available on the cloud.

There are several reasons why the cloud model makes sense for users. The
biggest reason, of course, was the cash crunch that the business world saw in
the last 12-18 months, and there the cloud-based pay-as-you-use or the
pay-as-you-grow model makes a lot of business sense.

The second reason is that computing is no more desktop or notebook centric.
It is happening across all sorts of platform and devices including set top
boxes, TV, game consoles, smartphones, netbooks, and so on, where offering
products in the cloud makes more sense.

According to Arora, response to Microsofts cloud offerings in the Indian
market has been very positive. From the SaaS basket of Microsoft, customers get
all products of Exchange, Share Point, and Live Meeting.

Within just a few months of our launch, we already have 600 customers (with
15,000 seat) from small medium and large enterprises. Plus we have over 4,000
trials going on.

Besides these numbers what seems to really excite Arora is the fact that
quite a few of Microsofts cloud customers were not even using IT. That is the
promise of the cloud. Globally there are 2 mn Microsoft users who are on the
cloud, including big names like Glaxo and Coca Cola.

Similarly, for the Platform as a Service (PaaS) Microsoft offers its Windows,
the SQL and the Azure, and charges customers on the basis of CPU utilization or
GB (memory) usage. In the first phase, besides key customers, the company is in
the process of getting its 400 plus ISVs and 22,000 developers (who basically
develop and sell solutions on this to end users) on board. We want all our ISVs
to migrate to cloud for their customers, adds Arora.

PaaS seems to be more acceptable for applications that require very high
computing horse power not throughout but maybe 5-8 times in a year. Arora gives
the example of 3M, a design organization that has moved to Microsofts PaaS, for
instance.

Or, for a web-based external interface campaign like a Diwali offer or the
news sites covering the IPL scandal, where there will be seasonal spikes, you
need a big robust infrastructure only during the spike. Arora claims that 4,000
applications have been built on this so far, and more than 20,000 developers
have downloaded the kit.

In the Infrastructure as a Service (IaaS) space, Microsoft builds clouds for
its customers. For instance, some of Indias large telecom operators like BSNL,
Airtel or Reliance, or a data center like NetMagic have got their own cloud on
which they offer services to their customers.

It is not that everybody has dumped the on-promise software (buy a certain
number of licenses to be installed on a certain number of machines in the
organization) and jumped onto the cloud model. The current market scenario is a
hybrid model, where users have some applications on the cloud and some
on-premise. The mix could always be changing. And that is our strategy too, we
make it very flexible for the customers.

Arora believes that by the year 2015 India will be a $1.1 bn market, and
Microsofts share in that will be a couple of hundred million dollars, at
least.

Out of Microsofts approximately Rs 3,000 crore revenue from the Indian
market last year (2008-09), roughly 5% came from online services. Lets see how
this ratio changes, as more clouds gather.

Ibrahim Ahmed

ibrahima@cybermedia.co.in