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Is Microsoft Plotting Coup against Amazon in India?

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Microsoft eyeing Ola’s cloud business

Recent media reports have indicated that Microsoft (MSFT) could invest up to $100 million in Ola, India’s homegrown Uber rival. Besides betting on the future of India’s ride-hailing industry, which is worth about $10 billion, Microsoft could be targeting Ola’s cloud computing business. Ola currently runs its applications on Amazon’s (AMZN) cloud platform, Amazon Web Services (or AWS). Microsoft wants Ola to defect to its Azure cloud platform. Microsoft reported that Azure revenue growth accelerated to 97% in the June quarter from 93% growth in the March quarter.

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Amazon could be its own liability in the cloud race

In the race to dominate the cloud computing market, Microsoft is trying to deploy multiple tactics to try to outdo the competition. Amazon’s sprawling business interest could be aiding Microsoft’s cloud competition in markets like India.

For example, Amazon’s e-commerce and digital video competitors in these markets could be reluctant to run their applications on AWS. This scenario could be creating room for Microsoft to mount stronger competition against Amazon in emerging markets. Amazon’s Indian competitor Flipkart uses Microsoft’s Azure.

Microsoft’s startup backing has more to it

Microsoft earlier this year backed a $1.4 billion funding round for Flipkart. China’s (MCHI) Tencent, Japan’s (EWJ) SoftBank, and eBay (EBAY) also participated. Microsoft is now eyeing a stake in Ola.

According to Gartner, India’s public cloud market will be worth more than $4.1 billion by 2020 from about $1.3 billion in 2016, as shown in the chart above.

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