Microsoft’s Go-to-market Strategy for Azure in India

Description

The case is set in mid-2009, about six months before the scheduled worldwide launch of Microsoft Azure. The group director of cloud computing for Microsoft India was considering the pros and cons of launching Azure simultaneously in India with the rest of the world. Cloud computing was a paradigm shift in the information technology (IT) industry that fundamentally changed how software and services were delivered to an end-user’s desktop. Cloud computing enabled shared resources — software, hardware, and information — to be provided to consumers on demand, charging them based on usage. Azure was Microsoft’s offering in this space, providing software and infrastructure as a service, and was also a platform to develop new applications on a pay-per-use model. Microsoft had always made its products available to users in the traditional license model, and Azure would be a paradigm shift not only in terms of technology but also in terms of the business model.The director had to decide whether the nascent Indian market was ready to adopt this new technology and business model, and which segments to target. There were many reasons why the Indian market looked very lucrative, including presence of a strong IT development community, increasing IT adoption across Indian industries, and presence of a very big potential customer base in terms of small and medium enterprises. Conversely, there were concerns such as poor current IT adoption, rampant piracy, low availability of infrastructure in India (such as electricity and broadband penetration), and the “do-it-for-me” attitude of Indian businesspeople, which meant significant initial costs in terms of time and effort required to increase awareness.

Learning Objective

This case is written to expose students to the decision-making process of launching a new technology in an emerging economy using a new business model, as well as to help them appreciate the trade-offs in such a process. It helps students recognize the strategic gains of introducing a product or service in a market that might be slow in delivering return on investment (due to high upfront investments required from the firm and unpredictable adoption in the targeted local market), but that has a significant part to play in influencing its adoption across other markets. The case can facilitate a discussion on how to segment the market and how to protect existing businesses from cannibalization from a new product, as well as the basics of channel management. This is a qualitative case, not a quantitative one; hence, the focus would not be to produce a perfect solution but to help students analyze the current situation and formulate a justifiable plan. The case also provides insights into the Indian IT industry, which has been widely credited as the main reason for the success and growth of the Indian economy over the last 25 years. The case can be used in an information technology course, a marketing course, or a strategy course.

Keywords

Business Model cloud computing India Ivey/ISB Licensing Target Market