Microsoft CEO Satya Nadella told Prime Minister Narendra Modi at their meeting in Silicon Valley on Sunday that the company would soon announce data centres in India that would focus on offering cloud services.

The company is planning three data centres in the country, two in the west and one in the south, Bhaskar Pramanik, chairman of Microsoft India, told TOI in an exclusive interaction.

“India is one of the first countries outside the US where we have made such big investments in data centres. It will be one of the largest footprints in terms of data centre capacity in India. It will have the highest levels of security and privacy. In terms of scale, scope and capability, we are going to change the way computing will happen here,” he said Some 125 companies have already signed up for trials on these data centres since July when Microsoft opened up the centres for private previews. The public launch is expected over the next few days.

There is a rush to build data centres in India. Amazon told TOI in June that they would establish multiple data centres in the country in 2016 with an investment of many millions of dollars.

These investments come as enterprises move more and more of their workloads o the cloud, rather than keep hem on internal servers, which is both capital intensive (requires real estate and purchase of expensive hardware and software) and operationally expensive (because of the need to hire an army of IT staff to maintain the systems and pay for expensive power and air-conditioning o cool the systems).

These elements of cloud also make it very attractive or small enterprises. For banks and government, data centres in India are essential because of regulations that prohibit the movement of many kinds of data that they deal with beyond the geographic boundaries of the country.

For Microsoft, the move is particularly significant because they have traditionally depended on selling proprietary software such as the Windows operating system and the Office suite. With data centres, it will also get to play in the hardware and services segments. “We can now address more than 80% of the $52 billion Indian IT industry (hardware, software and services). With only software, we were playing in a $4 billion market (Microsoft has a 30% share of that),” Pramanik said.

Newgen Software Technologies, a major Indian software product company that has more than 50 Indian banks among its customers, has been testing on Microsoft’s India cloud centre for several months. The company’s senior VP of technology Virender Jeet said it faced no hiccups in migrating to the cloud. “One of the best parts is that we could deploy non-Microsoft solutions (based on Linux, Oracle, MySQL) seamlessly on the platform,” he said.

Fortis Healthcare’s IT has been fully on the Microsoft Azure cloud, but in the Singa pore data centre, since 2013.The company’s CIO & head of strategic initiatives Varun Sood said performance, availability, scalability and flexibility all improved following that move; there was also a substantial decline in total operating cost. “With the India centre now, there’s a further improvement in performance. It’s also faster by 1530% because of the geographical proximity ,” he said.