The Indian subcontinent is fast becoming the hotbed of cloud computing. At the Azure Conference hosted at Pune in March 2015, Bhaskar Pramanik, chairman of Microsoft India shared the plans of setting up three data centers in India. Close on the heels, Amazon announced that it is all set to launch India region this year. IBM’s SoftLayer is already in the process of setting up its India data center in Mumbai. India, which has been the home of global outsourcing giants like Tata Consultancy Services, Cognizant Technology Solutions, Infosys, and Wipro is witnessing the rise of billion-dollar startups. According to YourStory, a well-known media company that tracks the startup ecosystem in India, startups in the country have raised over $3.5 billion deals just in the first of half of 2015. Swiggy, PeperTap, Grofers, Simplilearn, Lookup, FirstCry, Holachef , Porter, Instalivly , UrbanClap and Jugnoo are some of the fastest growing startups that have raised funding twice within the first half of 2015. During the last two years, Indian startup ecosystem has witnessed quite a few high profile acquisitions. Bitzer Mobile acquisition by Oracle, Little Eye Labs acquisition by Facebook and Yahoo’s acquisition of Bookpad made the headlines. ZipDial was snapped up by Twitter earlier this year. A majority of these startups rely on the cloud for their infrastructure. From Amazon to Microsoft to IBM to Google, every cloud player is eyeing for a slice of the pie. According to Zinnov Management Consulting, a leading market research and analyst firm in India, the cloud market in India will grow at 45% CAGR to $14.8 billion in 2020. The study estimates that the private cloud market will increase to $7.4–7.6 billion in 2020. The public cloud market is expected to grow to an almost of equivalent size at $7.0–7.4 billion in 2020.
Digital India is one of the pet initiatives of Narendra Modi, PM of India. The vision of Digital India is to have inclusive growth in areas of electronic services, products, and manufacturing. Some of the key projects of this initiative include a secure digital locker for the citizens, an eSign framework that would allow citizens to digitally sign documents, and broader availability of WiFi in smaller towns and villages. This ambitious project opens up doors for multinational technology companies to partner with the Indian government. To effectively pitch their cloud platforms, these companies need to have local presence of their infrastructure.
Amazon already enjoys a decent traction in India. It has a vibrant ecosystem that includes partners that have built cloud practices and Independent Software Vendors. The AWS Consulting Partners in India include Accenture, Blazeclan, Frontier, Intelligrape, Minjar, Progressive, PWC, SaaSforce, SD2labs, Team Computers, Wipro, and many others.
A majority of the AWS customers host their applications in the ap-southeast–1 region hosted in Singapore. Enterprises that need dedicated connectivity rely on Tata Communications for configuring AWS Direct Connect. AWS tests the waters by first setting up edge locations before deciding on the full-blown regions. In July 2013, Amazon announced the availability of two edge locations in Chennai and Mumbai in India that serve as Point of Presence (POP) for its CDN and DNS services. These edge locations in India currently support all CloudFront and Route 53 capabilities, including delivery of websites (including dynamic content), live and on-demand streaming media, and security features like custom SSL certificates. Though AWS never discloses the actual location of the data centers, it is widely believed Amazon has partnered with Tata Communications to host its infrastructure. With two years of presence in India, AWS is now confident of running the dedicated region. The company might expand its existing footprint in Chennai and Mumbai for setting up its India region.
Microsoft is not far behind in terms of Azure adoption in India. With over two decades of local presence, Microsoft Corporation has established itself as a trusted partner of global system integrators, enterprises, and the government. The state government of Maharashtra is using Microsoft Azure for the digitisation of land records. Fortis Hospitals, one of the leading hospitals in India is in the process of shutting down its data centers to move all core systems, including hospital information systems, accounts, and billing, to Microsoft Azure. Microsoft Ventures, an accelerator set up by Microsoft in Bangalore focuses on mentoring and supporting startups. A majority of the graduating startups built their products and services on Azure.
Factors such as vibrant startup ecosystem, the presence of global system integrators and enterprises combined with tech-savvy government put India on the global map. Top cloud providers are moving fast in tapping the opportunities in India.
One section of the industry that gets impacted by these new investments from Amazon and Microsoft are the local data center providers. Netmagic, Reliance, Tata Communications, Ctrl-S, and other players thrive on the data sovereignty and data residency policies defined by the public sector and government agencies. AWS and Azure will snatch the business right under the nose of these incumbent players. But this phenomenon is not unique to India. Every hosting provider is fighting a battle with the agile, self-service cloud providers.