It can’t be a coincidence that the top three executives leave Microsoft India within six months. Is the leadership shake-out at the headquarters at Redmond reverberating here or is the India business in need of an overhaul?
It’s a fair question but you need to look at each exit separately. Srini Koppulu [managing director, India Development Centre, Hyderabad] left after being at Microsoft for 23 years. He decided to do something in education. Rajan Anandan [managing director, Microsoft India] quit due to personal reasons. I’m leaving because I’ve achieved for the company all that I had set out to — $1 billion in revenue, 5,000 employees, and the status as one of the most respected multinationals in India.
Is it again mere coincidence that the day you announced your decision, the US media reported that CEO Steve Ballmer was “cleaning the house” after Bob Muglia (head of the Server and Tools business) quit?
[Smirks] Do you think India is so [up] there that when Steve Ballmer decides to clean the house, he chooses Srini, Rajan and me? All the changes in the US have been on the product side. Steve and Bob couldn’t agree on the strategy for the Server and Tools business.
I came to do certain things, and I’ve done them. I will not be doing something similar for a while.
Under your leadership, the churn (employee turnover) was pretty high, both at the top (three country managers in seven years) and in the ranks. What have you left undone?
These are unconnected dots. Until 9-12 months ago our churn was in single digits. Now it’s in double digits. It has increased but is far lower than what you see in the IT industry. I am sure the new leadership will take measures to increase retention.
What is left undone? My biggest regret is that I won’t be part of the big wave that’s going to hit India in the next 18 months when the IT industry will undergo a profound change. Connectivity will dramatically improve. India will go from seven million broadband customers to 700 million. Low-cost access devices will abound; you’ll see smartphones costing less than $100. And you have cloud computing driving IT adoption.
Weren’t you slow in seeing that in India the first computing device would be a cellphone or a tablet?
If you go back and check what [CTO] Craig Mundie and I have been saying publicly, it’s that in India the first computing device will be the cellphone; the second will be the TV and the third will be the PC. Microsoft, due to its history, is fundamentally a PC company, then a TV company [due to its gaming business] and then a phone company. Frankly, we have a big challenge in emerging markets. I wish we had responded to innovation sooner. But Microsoft acts decisively when the time comes. Now Steve gets it. We couldn’t have done anything differently in India; it’s difficult for one geography to do so in a multinational corporation.
One of the criticisms of the leadership in India has been that it’s driven too much by the quarterly target, with a shot-gun approach, and no long-term vision. What is your opinion on that?
Any organisation tends to focus largely on a one-year horizon. We are not perfect, but the glass is more than half full. We could have done several things better. But look at our growth rate; even half through this financial year we are ahead of the market and [our] budget.
There seems to be much angst among developers at the India Development Centre about the quality of innovation in India. For instance, the new growth drivers for Microsoft — Kinect, Zune, Windows Phone — have no engineering presence here. Why?
That’s probably true. And that’s because you typically innovate where the market is. The gaming market is negligible here. That will soon change as with Kinect, the company is redefining gaming, making it available to a larger audience.
Your Original Equipment Manufacturer (OEM)/partner alignment was in a mess. Have you corrected it because Google will now start engaging with OEMs for its Chrome operating system and Microsoft has added competition?
That was a big issue and we managed to massively correct it in the last six months. In the quest for growth, we made wrong decisions in selecting our partners. As a chairman I don’t get directly involved with many issues, but I was deeply engaged with this. Eight out of 10 OEM partners will say they feel better about how business is transacted today.
What is your book about? Did you manage a million dollar deal from the publisher?
Of 800 operating in India, I’ve found 20 MNCs who have built a relevant sized business here. For most of them, India accounts for less than two percent of their global revenue and it doesn’t own a product platform. Only 20 companies, across all sectors, have married Indian entrepreneurship with global scale, and research and development. The single biggest reason is the CEO mindset. For most of them, India is important in the medium to the long term. The book is about why these 20 companies are different.
There’s no million dollar deal in business books. I am told if they sell 10,000 copies they are considered ‘solid’; more than 100,000 is a breakthrough.
Where are you headed after that?
I am contemplating things like whether we can build a world class undergraduate university in India. I am exploring ideas in food security where a breakthrough would be needed and I can bring value. I am not ruling out joining private equity either. At the end of it all, I may realise that the biggest difference can be made by being the CEO of a company and I’ll do that.