Microsoft eyes emerging markets on cloud

BARCELONA--Software-as-a-service (SaaS) is a key component in Microsoft's core strategy to help sustain Microsoft Office's market dominance in Asia's emerging economies, according to company executives.

Geoff Thomas, Microsoft's Asia sales general manager of communications sector, told ZDNet Asia in an interview the mass population in Asia's large emerging markets such as India, typically cannot afford to privately own PCs.

The software giant hopes to address this issue by making public Internet kiosks available for use. And to help make this a compelling option for consumers, Microsoft this week introduced a service offering it calls, Online Desktop.

Announced Tuesday with India's telecommunication services provider Bharti Airtel, the service aims to provide a virtual personal desktop from the kiosk, allowing Airtel users to access documents, files and other features from these kiosks via a cloud-based version of Windows.

The partners hope the new service will help boost India's PC and broadband penetration. Features offered on the Online Desktop include 5GB of cloud-based storage and anti-virus data protection.

Thomas noted that while the region's emerging markets yield lower ARPU (average revenues per user) for service providers, the sheer proportion of untapped subscribers presents large potential for vendors.

The initiative is in line with Microsoft's cloud momentum in recent months, encompassing a SaaS strategy the software vendor coins "software plus services". Microsoft had talked about making available a cloud-based OS, as well as a Web version of its Office suite.

Thomas said the SaaS delivery model will help make Office available to small and midsize businesses (SMBs) in the region at a lower price point. "The Internet is a great equalizer, allowing these markets access to the same software," he said.

John Zanni, Microsoft general manager for worldwide software plus services industry, said cloud-based applications are also appealing for developed markets.

"The premise is the same--low upfront investment and cost shared among users," Zanni said.

In Asia's mature IT markets such as Singapore, thinner Web versions of traditional applications are also appropriate for the "deskless" worker, he said. This is why the next version of Office will include features that allow data to be exchanged via the cloud more easily, he added.

According to Zanni, Microsoft is seeing "double digit" growth in the adoption of its Web products. In some developing markets, this figure has hit triple digits, he said.

Victoria Ho of ZDNet Asia reported from Mobile World Congress 2009 in Barcelona, Spain.