MS foresees incremental growth opportunity

GURAGAON, INDIA: Despite most IT majors going slow on their partner expansion plans, Microsoft is betting big time on the same segment to drive growth for them.

Sharing the learnings from last year when they unveiled the plan to tap into sub-distribution and for resellers to drive growth in India Rajesh Kumar, Director Marketing—SMB, Microsoft said, “We have made huge strides in the reselling segment and at the moment we are witnessing a 60 percent YoY growth here. We have witnessed incremental demand with the customers and with the help of our sub-distributors we have managed to provide a unique value proposition to our customers.”

Throwing light on the sub-distribution spread in India he added, “From last year when we started off, we now have 40 sub-distis across the country. The model has worked well for our partners also since our credit terms works well for them and they are able to offer value additions to their set of partners. Our prime target segment is the SME segment, which is a huge opportunity.

According to our estimates there are around 4 million SME's in India at the moment. Since the market in the segment is in nascent stages, these clients need a lot of hand-holding and it is not possible for us to provide a direct touch to all of them. That is where our sub-distributor partners come into picture. We act as a consultant to our SD's by training their point people.”

Sharing how SD partners are helping them he added, “For the last mile it is obvious that the reseller channels make sense. But for this community software is intangible and plus they need high level of engagement. That is where the SD partners come in handy since they have the local knowledge and reach, and when we train them they help us in spreading the message and getting the engagement with the last mile channel. This model has really worked well for us, recent reports that we have show that one out of every four resellers sells Microsoft in the country.”

While most hardware vendors are banking on the B and C-class cities to drive the next round of their growth story, Microsoft is cautiously optimistic. Stating the reason for the caution Kumar said, “These locations are definitely on the growth curve but they require a different type of handling. We are at the moment learning how to position software in these markets as the way of doing and perceiving things is different in these centers. Having said that what I can tell you is that we are seeing growth but we do not expect a huge upsurge happening from these cities for us very soon.”

Discussing the work that the company has put in its fight against piracy and other initiatives to push original software Kumar elaborated, “More than 50 percent people do not realize that they have pirated software. We are working hard to change the perception of people. We are looking at creating economic value for our partners and even people.”

Talking about plans to increase partner base Kumar added, “At the moment we have about 40 sub-distribution partners and we are looking at taking the figure up to 60 or 65 by June 2010. It is no longer about adding a new bunch of people, but the emphasis is more about the ability to service newer markets.”

Sharing the learning of dealing with the sub-distribution partners he said, “The learnings were a lot. While we have to manage these partners like our sub-distributors the training levels are the same that we would give to a channel partner.”

Talking about the plans for the year ahead Kumar said, “SMB business is real and rife, it is a $2billion opportunity and we feel that channels are the way to reach, engage and monetize this. And to take a lead in that we are looking at ramping up our channel base by 45 to 50 percent in the next year.”