Microsoft India revenue rises 39% in FY23 on services boost

Microsoft Corp. India Pvt. Ltd, the company responsible for sales and marketing of Microsoft products in the country, saw its operating revenue rise 39% to ₹19,229 crore in the year ended 31 March from the previous year, according to its regulatory filing with the ministry of corporate affairs’ registrar of companies on Thursday.

Net profit for the year rose 30% to ₹649 crore, while employee benefit expenses increased 16.5% for the year to ₹1,411 crore.

Microsoft’s growth in the country has been largely driven by a rise in revenue from its services offerings, its financial filings sourced by Mint through business intelligence platform Tofler showed. Revenue from the sale of services grew 46.4% to ₹13,103 crore, up from ₹8,951 crore a year ago.

Revenue from products, including Microsoft’s Surface line of consumer and enterprise laptops and desktops, grew 28% to ₹4,508 crore from ₹3,519 crore a year ago.

The company’s overall growth in India comes off the back of rising demand for its cloud platform Azure and generative artificial intelligence (AI) services to enterprises. Industry stakeholders largely pointed to Microsoft holding approximately one-fifth of India’s cloud services market through its Azure platform and services, shortly behind market leader Amazon Web Services (AWS).

Business intelligence platform Course5i pegged Microsoft Azure to hold a 20.8% market share for cloud service providers in India at the end of last year.

In comparison, Amazon Web Services had 32.6% of the market in India, while third-placed Google Cloud Platform had a market share of 11.4%. Globally, too, Microsoft has been growing in stature as a cloud service provider.

An end-2022 market report by Bank of America pegged the company’s market share in the global cloud services provider market at 30%, second to AWS’s 55% share.

A query seeking comments from a Microsoft spokesperson in India went unanswered.

The company’s cloud adoption has received a boost in India through partnerships with Indian IT services companies. In February, Microsoft and Infosys expanded a strategic partnership for enterprise cloud deployment. Generative AI is also a nascent area for the company—earlier this week, India’s largest IT services provider, Tata Consultancy Services (TCS), announced a partnership with the company’s Azure AI platform to help expand its margin in a phase of industry-wide weakness.

However, while discretionary tech adoption has remained cautious, the likes of Microsoft, Amazon and Google are expected to benefit from enterprises seeing cloud spending as a priority area. In an interview last week, C. Vijayakumar, chief executive and managing director of HCL Technologies, said that cloud migration, along with data analytics and cyber security, “remain important priorities, and customers (are not) cutting down on these core areas."

As a result, cloud providers are also ramping up both private and public sector partnerships. Fellow big tech firm Google, on Thursday, announced a partnership with Centre-backed language data repository project Bhashini to build datasets for application development on its cloud platform. The company also underlined a generative AI partnership through its cloud platform, with Centre-backed e-commerce protocol Open Network for Digital Commerce (ONDC), to help boost farmer producer organizations directly approach consumer markets.