SANTA CLARA,CA/USA – FEBRUARY 1, 2014: Microsoft corporate building in Santa Clara, California. Microsoft is a multinational corporation that develops, supports and sells computer software and services.

Larsen & Toubro (L&T) is a name that is well-known in the Indian market. Not only is it among the top five construction companies in the world, but the Mumbai-headquartered multinational conglomerate has business interests in engineering, construction, manufacturing, technology, and financial services. Microsoft is another behemoth that needs no introduction, and now, the two titans have entered into an alliance.

L&T and Microsoft India have announced that they have signed a Memorandum of Understanding (MoU), following which they will work together to develop a cloud offering for regulated sectors. This offering is set to empower customers with infrastructure and cloud computing services.

A Memorandum of Understanding (MoU) is an agreement between two (or more) parties. In this case, the parties are L&T and Microsoft India, and the MoU can be enforced in a court of law (in India) when it fulfills the provisions of the Indian Contract Act, 1872.

Both L&T and Microsoft have their strengths, and their combined strength will be used to utilize digital services as a key factor for economic growth. Both L&T and Microsoft will set up a joint governance group to define future platform designs, investments, and commercial or business models to service the emerging technology requirements of the regulated sectors.

L&T and Microsoft are good choices for the partnership, especially since the world’s second-largest internet market is “at the cusp of enormous cloud adoption,” according to S.N. Subrahmanyan, CEO & MD, L&T. The time is ripe as well, especially since the public cloud services market in India is expected to reach $10.8 billion by 2025. The demand for cloud computing is rising as well.

Microsoft is known to address the requirements of the public sector and regulated industries worldwide. L&T, on the other hand, uses technology and innovation for sustainable growth. With the partnership, L&T aims to accelerate the transition to hybrid cloud for large customers in regulated sectors while simultaneously maintaining the highest benchmarks of compliance, security, and governance.

For now, the MoU will focus on engaging customers in the Indian jurisdiction, and later, this may expand to other jurisdictions as both companies may consider possible partnership structures in the future.

Additionally, both companies will be engaging with a set of large customers (which shall be defined) in regulated sectors to develop architectures and roadmaps to modernize their traditional data centers to potentially hybrid models.

This is not the first time Microsoft and L&T have joined forces. Earlier, L&T Technology Services had expanded its collaboration with Microsoft to offer eco-friendly solutions for the transformation of the workplace. Later last year, they had teamed up again to offer industrial-based IoT-based smart solutions.