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Tech giant Microsoft is steadily expanding its footprint in India, focusing on driving advanced innovation and capitalising on the country’s vast engineering talent pool. Over the years, the company has been building talent to scale its cyber security, cloud, data processing, cognitive services, internet of things (IoT), data centres, and AI businesses and service offerings.
In 1990, the creator of Windows set up its first operations in the country. Three decades later, Microsoft India employs over 20,000 people across 10 cities, including Ahmedabad, Bengaluru, Chennai, Gurugram, Delhi, Noida, Kolkata, Mumbai, and Pune, with Hyderabad alone accounting for half the workforce at 10,000 employees.
Microsoft CEO Satya Nadella is touring India to further its expansion plan. Last week, he met with Telangana Chief Minister K Chandrashekar Rao in Hyderabad to discuss the state’s technology priorities, including AI, generative AI, and cloud development.
This was his second consecutive visit to India in a span of one year. During his visit earlier in February 2024, Nadella had said, “If the Indian economy is going to be, let’s say, $5 trillion, the AI-driven part of it could be something like, maybe, 10%; perhaps $500 billion.”
India, being one of the global leaders in adopting generative AI, is a key market for Microsoft. This is pretty much evident from the fact that ChatGPT has the second-largest user base in India. For the fiscal year ending March 30, Microsoft’s India business posted a 38.44% increase in net profit year-on-year, driven by the steady growth in cloud adoption and AI.
This week, OpenAI, in collaboration with the Telangana AI Mission (T-AIM), hosted a community event featuring Atty Eleti, member of technical staff at OpenAI, and Pragya Misra, OpenAI’s first Indian hire, where they discussed OpenAI’s potential in India. Like Microsoft, OpenAI is expected to establish its first office in India, likely in Hyderabad.
The Telangana government and Microsoft also signed a Memorandum of Understanding (MoU) at the Telangana Global AI Summit last year, launching the ADVANTA(I)GE TELANGANA initiative. Launched in February 2024, the ADVANTA(I)GE INDIA program aims to equip 2 million Indians with AI skills by 2025.
“India is one of the fastest-growing markets for Microsoft,” said Puneet Chandok, president of Microsoft India and South Asia. He added that their mission in India is to bring the best of Microsoft, including Microsoft Research in India, IDC, cloud, and AI, to customers and partners.
“IDC, which is our development centre, along with Cloud plus AI and Microsoft Research, has a massive presence in India – one of the largest outside the US. We’re bringing all of those capabilities together for our customers and working truly as one Microsoft,” he added.
Data Centre Expansion
Microsoft announced globally that it is projected to invest approximately $80 billion in FY 2025 to establish AI-enabled data centres for training AI models and deploying AI and cloud applications worldwide.
Hyderabad has long been Microsoft’s preferred city for building AI infrastructure and data centres in India. Microsoft Corporation (India) Private Limited recently purchased 25 acres of land for INR 181.25 crore in Mekaguda near Hyderabad. Last year, the company purchased 48 acres of land in Hyderabad for nearly INR 267 crore. The tech giant is expected to develop a new data centre on these plots.
The technology giant also acquired 16 acres of land in Pune from Viva Highways for INR 453 crore. Microsoft already operates data centres in Hyderabad and Pune, so it’s no surprise that the company is making major land acquisitions in these cities.
According to the company, data centres in the two regions currently employ 90 people. By the end of 2026, the company expects that 289 full-time employees and contractors will work across all operational facilities.
“Hyderabad and Pune have good infrastructure for IT, conducive policy environments, and are near talent corridors which makes them suitable for data centre investments. The demand for commercial real estate will increase, especially in the industrial and tech-related regions, further leading to increased land prices and enhancement of the infrastructure in the surrounding regions,” Devi Shankar, executive director of industrial, logistics and data centre at ANAROCK Capital, told AIM.
Moreover, building data centres in India aligns with the country’s mission of sovereign AI. These facilities will operate entirely within Indian borders, ensuring compliance with national laws on data privacy and security.
Bengaluru’s Talent
While Microsoft views Hyderabad as a city to expand its infrastructure, the tech giant sees Bengaluru as a hub to attract engineering talent.
During his recent visit to India, Microsoft AI chief Mustafa Suleyman referred to Microsoft’s AI teams in India, particularly those in Bengaluru and Hyderabad, as the strength of the company. According to him, these teams are where talented engineers and developers work on every layer of the company’s tech stack.
To further expand its presence in India, Microsoft opened an innovation hub in Bengaluru last year. Soon after, as an extension of the Bengaluru hub, the company launched the Customer Immersion Experience (CIE) in Gurugram to showcase AI-driven innovation.
Google, on the other hand, recently leased an enormous 5.5 lakh square feet of office space in Gurugram – one of the largest managed workspace deals in India.
In 2018, Microsoft consolidated its offices in Bengaluru, moving from three separate premises to a single campus on the Outer Ring Road near Bellandur. The new office, located at the Prestige Ferns Galaxy campus, spans 5.85 lakh square feet and can accommodate around 6,000 employees.
Microsoft’s journey in Hyderabad began with the establishment of its India Development Centre (IDC) back in 1998, and since then, it has grown exponentially. Besides, it also launched Project Bhasha in the same year to accelerate computing in Indian languages.
Today, the Hyderabad IDC is one of Microsoft’s largest R&D centres outside the US, sprawling over 54 acres with three buildings and a fourth one on the horizon.
Hyderabad’s Microsoft campus is not just about technology but also about sustainability and community. The campus features ‘magic water’, a nod to sustainable water management practices.
In 2021, the company opened its newest Microsoft IDC in Noida. The IDC features architecture inspired by the Taj Mahal, with ivory white tones, Mughal-style arches, and intricate jaali work.
The narrative of Microsoft in India is one of growth, innovation, and deep community ties. With Hyderabad and Bengaluru at the heart of this narrative, Microsoft is not just expanding its business but also investing in India’s human capital, sustainability, and digital infrastructure.
