Bezos’ India visit and a billion-dollar business ⁠— many reasons why Microsoft may have had to retract Satya Nadella’s statement on India’s new citizenship law

Microsoft CEO Satya Nadella flip flops on his stance against India's Citizenship Amendment Act (CAA)Business Insider India


  • Satya Nadella was reportedly calling India’s new citizenship law ‘bad’ and ‘sad’ but soon issued a more diplomatic official statement on Twitter.
  • Nadella flip-flop on the issue could owe to the fact that one of Microsoft’s primary contenders, Amazon CEO Jeff Bezos, is scheduled to meet India’s Prime Minister Narendra Modi tomorrow.
  • India’s importance for Microsoft is also growing as it hit the $1 billion mark in revenue last year and expanding collaborations with the government.
Within hours of calling the Citizenship Amendment Act ‘bad’ and ‘sad’, Microsoft CEO Satya Nadella decided to take a more diplomatic approach.

Aside from the big bucks at stake in one of the world’s fastest-growing economies, Nadella may have to rethink his critique of the Indian government’s policies given his rival, Amazon’s top boss Jeff Bezos, is headed to India to meet none other than the country’s Prime Minister Narendra Modi.

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Since his initial statements, some followers of the Bhartiya Janata Party (BJP) on Twitter have been calling for a boycott of Microsoft products.

Considering India’s importance for Microsoft, it’s understandable that he chose to flip-flop on his statement.


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India’s importance for Microsoft
Last year, Microsoft India reported more than $1 billion in revenue, according to business intelligence platform Tofler. However, Microsoft’s billion-dollar business in India also faces intense competition. The company grew 13% last year but just a year earlier, the revenue had clocked a 12% drop.

According to analysts, a lot of the company’s growth comes from enterprise solutions — the like expansion of its cloud business, Azure, and Office 365. Even Anant Maheshwari, president of Microsoft India, admits that more than 50% of the company’s revenue comes from cloud and cloud-based services.

However, the company has roughly a third of India’s estimated $3 billion cloud market despite being an early mover ⁠— Microsoft set up its first data centres in India in 2015 a year before Amazon Web Services.

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The day before Bezos meets Modi
Nadella’s appraisal of India’s Citizenship Amendment Act also came a day before his rival Bezos is set to meet the country’s Prime Minister.

Indian government has repeatedly said that it is looking to make big investments in digital infrastructure and that would be a big opportunity for the likes of Microsoft, Amazon, Google and the likes.

Politicians are a sensitive lot, particularly in India. Nadella’s criticism at this juncture may allow the government to take a more charitable view of Microsoft’s rival Amazon for future opportunities.

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In the US, an anti-Amazon smear campaign was spread around Washington D.C. that reportedly was one of the primary reasons why the Bezos-owned cloud service lost the Joint Enterprise Defence Infrastructure ( JEDI) contract to Microsoft.

Microsoft’s other engagements with the Indian government
Last year, Microsoft announced the ‘Digital Governance Tech Tour’ to help skill government officials in charge of IT services across the country.

“Microsoft’s first-of-its-kind Digital Governance Tech Tour for government officials reiterates our commitment to be a trusted partner to the government by enabling and empowering officials to do more with technology in service of the citizens,” said Maheshwari at the time.

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In a collaboration between the Indian government and the French government, Microsoft and other global tech giants — like Google, Facebook and Amazon — have helped set up the PaRis Artificial Intelligence Research (PRAIRIE) institute.

In education, Microsoft is also helping the state government of Andhra Pradesh lower the rate of dropouts by trying to determine predictive patterns — the reasons behind why students leave school without completing their degree.

Microsoft also has its fingers dipped in water management and urban planning when it comes to setting up smart cities, like Surat in Gujarat.

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It’s is also working with NITI Aayog on a pilot project for the early detection of diabetic retinopathy as well as with ICRISAT to develop an ‘AI sowing app’ to help farmers determine the best time to plant their crops.

With so much at stake, it’s understandable why Satya Nadella decided to take a more centred stand on the issue of CAA rather than weigh heavy one side.

Microsoft’s other investments beyond core business
The American tech giant’s also partnered with Reliance Jio. Reliance said it would offer Microsoft cloud services to small and medium enterprises through its telecommunications network, Jio. In addition, it would set up data centres that would run Microsoft’s Azure cloud computing platform.

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The American tech giant is also giving Indian startups a push. Last year, it announced a new venture fund, M12 to invest to help emerging business ideas grow.

“Microsoft has been playing a vital role in shaping and nurturing the startup community in India and across the world... We remain excited about India’s entrepreneurial startup potential and will continue to accelerate it as a growth engine for the economy,” explained Maheshwari.

See also:
There are 20 million reasons for Jeff Bezos’ likely personal appearance at Amazon’s mega event in India tomorrow
Satya Nadella answers call to speak on CAA, 'I think what’s happening is sad. It’s just bad.'
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