Microsoft's Go to Market strategy for Azure in India

Raghu Vamsi PGP/017/35

Yasemin Oz IE/017/40
Shruti Mandal PGP/017/50
Group 4
Agenda:
Cloud Computing brief
Key drivers of Cloud computing
Risks associated with Cloud computing
Major player in the field of Cloud computing
All about Microsoft
Microsofts cloud strategy
Product offerings
Potential market segments in India
Challenges and risks in Indian markets
Microsoft advantage
Gartner hype cycle
Recommendations
Key Drivers
Cloud Computing / Key drivers
Risks
Covert large investment ->smaller variable operating expenses
Provide strategic advantages
Eliminate hiring cost
Reduced maintenance cost
Activation of per use fee
Reduce waste in capital employed and energy
Redeploy organizational resources to strategic ends
Privacy and
Data security
Customers feel
uncomfortable
Concerns about
safety of the data
- high
Legal issues
Physical
location
Depends on
government as
data could be
located outside
the country
Vendor Lock-in
Transition of
consumers to
move from one
cloud provider to
other, due to
various reasons
Delivery of technology resources which provide storage and
Processing capacity on demand as service.
Always available, paid for when consumed.
Basic cloud services
Major Cloud Computing Providers in
India
Email offerings
Hotmail
Microsoft Microsoft live services
Google Gmail
Yahoo mail
Customer Relationship Management
Salesforce.com software on demand
Pay per use model
Infrastructure as a service
Amazon: EC2 offering Elastic cloud
Computing power / highly scalable
AT&T
CA technologies
HP
Verizon
Software as a service
Microsoft
Google: Google Apps
Salesforce.com
Customer Relationship management
Softlayer(IBM), Dallas

Platform as a service
Google: Google App Engine
Building generic apps
Microsoft: AZURE
IBM Smart cloud
Openshift
Cloud foundry
Cloud bees
Virtual machines, servers, storage
Load balancers, network etc.
CRM, email, Virtual desktop
Communication, games
Execution runtime, database
Development tools, webserver
MS
DOS
Operati
ng
system
Window
s
Operatin
g
System
IPO
1986
1990
Entered
India
Founded: 1975
Timeline
Products:
Operating system software
Server application software
Business and consumer applications software
Software development tools
Search engine services
Internet and Intranet services
Video game consoles
Digital music entertainment devices
Entry into India:
Indian
Government
IT Industry
Local
developer
community
Academia
Entry into
India
Focus:
Become key IT player
Support growth of local IT industry
Partner enablement programs
Microsoft Unlimited potential program
Enhancing education, jobs & other
opportunities

Operating Segments:
Client
(Windows &
Windows live)
Server & Tools
Online
services
business
Microsoft
business
division
Entertainment
and Devices
division
Azure, Cloud computing platform was part of
Server & Tools

As of 2008:
Offices in 16 cities
Employees: 5000+

Revenue Business Model:
License based software model
Software licenses Single user
Volume licenses large enterprises
Microsofts Cloud Strategy:
G
o
v
e
r
n
i
n
g

P
r
i
n
c
i
p
l
e
s

Product to be offered in both
traditional + Cloud
Continue importance of
combining both models
that work in hybrid manner
Deliver seamless computing
experience various devices
Software + Services strategy
Product offerings:
Infrastructure and Platform
as a service
Software as a service
Offering as Subscription services - Desktop enable service
Microsofts SaaS strategy:
Business Productivity online suite
Productivity and collaboration tools (Office, Share point, Live meeting)
Pay per use model saving large firms from occurring computing costs

Competitor:
Google Apps offered packaged email and desktop productivity solution at
$50 per user / year

Service limited to set of developers, Community Technology Preview (CTP)
Positioning: Infrastructure ++ category


MICROSOFT ONLINE

MICROSOFT AZURE

Azure Value
Proposition:
Software writer absolved from managing machine
Provide documentation how to run and
Microsoft would manage the rest
Cloud application will be built on Azure
Utilize cloud database SQL Azure
Application services - AppFabric
Potential Market Segments In India
Government Large Enterprise
Small and Medium Business
Small and Medium Business
Improving speed , quality and accessibility
NeGP (National Governance Plan) :
27 Mission Mode Projects(MMPs)& 8
components
Cooperate, collaborate and integrate
information
Increase in IT infrastructure and
capabilities
New Millennium, New Services:
Internet Banking Tickect,online Pan and
Passport ,filing of Income tax returns and
paying property tax

Avg IT expenditure expected to grow
from $3 million 2009-10 by 8 % in
2010-11
But the enterprise were inherently in
flexible
Concerns were on data security and
vendor lock in
But the banking and financial service
vertical was the largest spender
averaging an annual spend of about
$8.5 million on IT


They didnt have in house expertise
nether capacity to invest in huge
infrastructure
It adaptation can solve there complex
business problems
Need to provide extremely reliable
and secure services
Awareness of government policies
that encourages SMBs to increasingly
adopt It solutions



Challenges and Risks In The Indian Market
Insecurities of
business owner as
Cloud computing
considered to be of
lower data integrity &
security
SMBs cost
factor and
Piracy
Inexpensive and available
labour force
Non
availability
of
affordable,
reliable
broadband
across
country
Microsoft Advantage
Application and
products as a horizontal
industry
Provided productivity
tools, email and chat
applications ,portals
and other services
across industries
Delivered both on
premise an cloud
offerings to customers
It could leverage the
reach of its partners
and channel resellers
to contact the end
customers
Had strong
relationship with the
Indian ISVs
What should be the focus on Microsoft Azure ?
Large enterprises
If so, what product strategy should it consider?
Should it build partnerships with ISVs and SMBs?
Should Microsoft follow a different strategy to target different industries?
Should pricing strategy be different from India to rest of the world?
Was India ready for this new form of delivery of IT services?
What about the infrastructure, such as broad band connectivity to enable cloud service?
Given high barriers to entry! Do you think consumers would be interested in shifting to cloud services?
According to Gartner, Cloud services would enter trough of disillusionment in Hype cycle. Your take?
Questions to ponder upon?
Recommendations:
Gartner Hype Cycle:
Azure to be introduced
Emphasize on Azure value proposition
Diversify revenue stream with hybrid business model
There should be more agility in products and services
offered
Benefits of leaner operating systems to be advertised
Focus should be on mainly Large enterprises, as SMB
markets is highly fragmented (to capture 10% of the SMB
market 350,000 customers need to be targeted)
Microsoft should build partnerships with ISVs
Increase awareness of IT solving complex business
problems
Applications and service without high capital
investment
Extremely reliable and secure services
Awareness of government policies
Leverage on existing relationships with Vendors
Pricing should be different for Indian markets compared
to rest of the world given price sensitivity of Indian
consumer.
Different pricing strategies to be followed for different
industries.

In brief: Threat of failing to deliver, what it is expected to do so.
Azure Pricing in India:
As azure was providing added benefits , its pricing should be Close to amazons pricing Model and leverage on Azure value
proposition.

Linux/Unix Usage Windows Usage Azure
Standard on Demand Instances
Small $0.095 per hr..

$0.12 per hr.

$0.095 per hr..
Large $0.38 per hr.

$0.48 per hr.

$0.38 per hr.
Extra Large $0.76 per hr.

$0.96 per hr.

$0.96 per hr.
High Memory on Demand Instances

Extra Large

$0.57 per hr.

$0.62 per hr.

$0.62 per hr.
Double Extra Large

$1.34 per hr.

$1.44 per hr.

$1.44 per hr.
Quadruple Extra Large

$2.68 per hr.

$2.88 per hr.

$2.88 per hr.
High CPU on Demand Instances
Medium $0.19 per hr. $0.29 per hr. $0.29 per hr.
Extra Large $0.76 per hr. $1.16 per hr. $1.16 per hr.
Thank you!