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A study of the entry of MNCs in India in the 1990's
Microsoft Corporation
Microsoft Corporation is a global technology corporation based in Redmond, Washington, that makes computer software, consumer devices, computers, and associated services. Microsoft provides intelligent cloud and intelligent edge digital transformation. Its purpose is to enable every individual and organisation on the earth to achieve greater success. In 1975, two childhood friends from Seattle, Bill Gates and Paul G. Allen, adapted BASIC, a famous mainframe computer programming language, for use on the Altair, an early personal computer (PC). Gates and Allen launched Microsoft not long after, naming it after the phrases microcomputer and software. They polished BASIC and created new programming languages over the following few years. In 1990, the firm opened a small office in Hyderabad, India. It was initially heavily backed by Microsoft's Redmond headquarters until Microsoft India began to work closely with the Indian government and business entities in India. Microsoft delivers its worldwide cloud services from local data centres in India to help Indian start-ups, enterprises, and government agencies speed their digital transformation. Microsoft was a key player in India's digital development. Cloud was at the heart of their vision for India's development. They collaborated with governments, as well as commercial and public organisations, to build cloud-based technology solutions that enabled India's whole economy become more digitally transformed. They assisted companies in reimagining how they combine people, data, and processes together to create value for consumers and sustain a competitive edge in a digital-first world. They supported businesses in changing into digital businesses by establishing new capabilities to better interact with consumers, empower workers, improve processes, and transform products
HOW DID MICROSOFT ENTER INDIA?
Bill Gates picked Hyderabad, the capital of the south Indian state of Andhra Pradesh, as the location for Microsoft's second software development centre outside the United States (the first being in Israel). Many people were startled by this because computer businesses generally set up shop in Bangalore, which is 500 kilometres south of Hyderabad. Hyderabad, the erstwhile capital of Indian rulers, was a backwater in contrast. Andhra Pradesh was one of India's poorest states, with more than 70% of its 73 million people living in rural communities. Still, Bill Gates stuck to his decision to enter India’s market by setting up a store in Hyderabad. This is because Bangalore was bursting at the seams, cars clogged the roads and power regularly failed. Real estate prices in Bangalore were sky rocketing. Companies often had to pay stock options to keep valued employees, but even then, retaining workers was a huge problem. Hyderabad, on the other hand, was just beginning to take off at the time. There were fewer traffic jams and one could rent a house in a good neighbourhood at half the price than one would in Bangalore. Newly minted software engineers typically worked for $3,500 a year, which was 15% below Bangalore scale. According to a survey by Nasscom, a software industry association, about one in four Indian software engineers was a native of Andhra Pradesh. Andhra Pradesh even had a very ambitious chief minister, Nara Chandrababu Naidu. Recognizing that Microsoft would attract more technology companies to Hyderabad, Naidu lobbied Gates hard when the multibillionaire visited India. He promised that Microsoft would receive favourable tax treatment, continuous power supply and 8 hectares of land reserved for their centre and, they kept their promises. Three main objectives of Microsoft when it came to India: To become an integral partner with the Indian government and the local corporate houses. To support the local IT scenario with customised solutions. To provide support to different aspects of society such as promoting IT education, youth innovation, women empowerment etc. It did not take long for Microsoft to expand its operations into different sectors of the Indian economy after it was taken up by the Indian government for its internal IT related operations. Many of the corporate houses also started depending on customised solutions provided by Microsoft, which included office automation, security services, cloud, and software development. Constant support from the Indian government and corporate housing aided Microsoft’s growth in the Indian market, and they soon became the go-to computer company in India.
INITIAL PROBLEMS MICROSOFT FACED IN INDIA
Microsoft did not face too many problems in the initial years since it had full support from the Indian government and corporate houses.
Microsoft developed different products or business models to suit the Indian market. As soon as Windows 98 came out, the scenario changed and most of the DOS based computer programs went graphical user based with Microsoft employees actively and quickly creating custom programs for the Indian government and corporate houses. With Windows XP, Microsoft captured almost all of India where almost all computer users switched to XP and some are even using it today much after the expiry of support to the outdated operating system.
- Cyber Security: Microsoft set up a Cyber Security Engagement Centre in Delhi to prevent public and private sector organisations from facing any piracy issues. Microsoft’s approach to cybersecurity in today’s cloud-centric world rests on three core functional areas: protect, detect, and respond. To support a comprehensive, cross-company and cross- industry approach to cybersecurity, Microsoft invests more than a billion dollars a year in security research, innovation, and development.
- Local Language Computing: For India to become truly digital, Microsoft needed to make technology accessible and productive for all, irrespective of the language they may speak or read. To break the language barrier, they started working with Indian languages and launched Project Bhasha in 1998 to accelerate computing in Indian languages. They now support text input in all 22 constitutionally recognized Indian languages across their products, and Windows interface-support in 12 languages.
HOW DID MICROSOFT ATTRACT CUSTOMERS?
Microsoft started catering to the needs of the Indian customers and introduced products that catered to their specific demands. They focused more on the government and the small business segment to grow its India revenues. Bill Gates dreamed of having Microsoft PCs on every desktop in India. MARKETING STRATEGY Due to having a wide product & service portfolio Microsoft used a mix of differentiated & undifferentiated targeting strategy. In office and Windows or overall, in operating systems, the population is homogenous and the target was every Indian having access to computers. They started rebranding its products & service to cater to the Indian market. The company underwent a turnaround to reposition itself as a value-based company meaning to enrich the life of the individuals. Microsoft often used a Market-oriented pricing strategy, Freemium pricing strategy, and Buy Only What You Use pricing strategy. Microsoft’s operating systems and several software were on top of the mind positioned in the market. Because of the brand value of Microsoft, any product it launched got a good positioning. ADVERTISING Microsoft’s main aim for advertising in India was to spread the awareness of technology. People didn’t know how to use the latest technology and also did not believe in the do-it-
yourself method. People running small businesses were either unaware of the existence of online services, or they simply didn't see how Microsoft could help them. One of the ways this issue was tackled was the set-up of an actual, big, blue bus from the capital city of Delhi to various parts of the country, to reach out to people and demonstrate how to solve their common problems. Other than this, they used mediums such as televisions, newspapers, banners, etc. to spread the word. Recently, with the rise of the digital world, they use Search Engine Marketing and Social Media Marketing for advertisement. COMPETITORS Microsoft Corporation’s primary competitors include some of the most prominent technology companies in the industry. The list includes well-known brands such as Apple, Google, IBM and Oracle, among others. Microsoft is also an important player in the hardware field. Its products include tablets designed to compete with similar devices made by other companies, such as Apple. The company makes a variety of computer accessories as well, which brings it in direct competition with several firms that specialise in this area, such as Logitech. Microsoft faces competitive pressures in all areas of its operations. The pressure comes from a diverse mix of technology companies, both large and small. CURRENT SITUATION Microsoft, just as any other company was impacted by the Coronavirus pandemic in 2020. But they have successfully been able to recover in the Indian market. From recovering from the impact of the pandemic to leveraging digital capabilities to respond to new market challenges, Microsoft’s businesses in India are reimagining ways to remain resilient in the new normal. For example, organisations have embraced digital tools to empower their people to continue collaborating and connecting. Microsoft CEO Satya Nadella said during the FY Q1 earnings call, that the next decade of economic performance for business in the Indian market, as well as the global market will be defined by the speed of their digital transformation. CONCLUSION Microsoft India has played a major role in the digital transformation of India. They have been persistent in the Indian market for over 30 years. Microsoft catered to the needs of the Indian consumers and innovated their products to meet the market’s demands, which largely contributed to their success in India. Their brilliant systems and policies catered to the needs of Indians and made them feel valued, which increased the good will of the company and now it become household name in India.
BIBLOGRAPHY
https://www.business-standard.com/article/companies/here-s-how-microsoft-is-planning-to- gr ow-its-india-revenues-117121900522_1.html https://economictimes.indiatimes.com/tech/software/india-incredibly-unique-valuable- market-microsoft-executives/articleshow/51668404.cms?from=mdr https://www.microsoft.com/en-in/about/india-story.aspx
