Rajneesh De, Consulting Editor, APAC News Network
Most Indian enterprises, from the large ones to those in the mid-market, have undergone some form of digital transformation especially post the pandemic. This digital transformation journey has primarily been led by the cloud driven approach. In fact most enterprises today have adopted a hybrid multi cloud strategy.
Nearly 88% Indian enterprises today acknowledge that cloud technology is a critical enabler for their digital transformation. Especially with the biggies like AWS, Microsoft Azure and Google dominating the market, the public cloud services sector in India has been growing at close to 30% in the last few years.
In the Infrastructure-as-a-service (IaaS), these three cloud provider biggies have dominated the show among enterprises. Selecting the right cloud computing platform from these three has been subjective for these enterprise CIOs. Normally the CIOs have depended on the following criteria for selecting their preferred cloud provider.
- Find a reliable cloud computing platform. While all three of AWS, Microsoft Azure and Google are reliable names, CIOs need to emphasize on security and check feedbacks from enterprises similar in nature.
- Evaluate stability. CIOs must check whether regular releases, continuous performance, dispersed platforms, and load balancing are available from their selected cloud provider.
- Compare pricing. CIOs must compare the ratio between the cost of running an in-house server versus the available resources of an enterprise cloud
- Look for standardized service. The CIOs must check if the cloud service provider offers cost-effective bundles of apps and the resources. Bundled services can save 40% over buying individual services such as IaaS, SaaS, and other digital products.
- Evaluate flexibility. Lastly CIOs must check for a flexible and adaptable cloud computing platform that boosts growth and scalability.
Tracking the Market Share
The India public cloud services market, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS), revenue totalled $6.2 bn for 2022, as per IDC. The overall India public cloud services market is expected to touch $17.8 bn by 2027, translating into a CAGR of 23.4% for 2022-27. SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS in 2022, with the top two cloud service providers AWS and Azure holding more than 50% of the India public cloud services market. Add Google to the mix and the three biggies would have more than 60% of the market share.
More precisely, AWS is currently the market leader in India and Microsoft Azure and Google (GCP) are the second- and third-largest providers. AWS’s market share in India currently stands at 32.6%, while Azure’s market share is 20.8% while Google’s market share is 11.4%.
While each cloud provider presents an interesting business model, the spotlight has been primarily on the hybrid cloud strategy of the 3lbiggies – Microsoft AZure, AWS and Google. Microsoft launched its hybrid cloud Azure Stack in 2017, followed by Amazon coming out with its hybrid cloud offering called AWS Outposts in 2018. In 2019, Google cloud announced its hybrid cloud offering Cloud Services Platform.
Amazon Web Services (AWS): The Cloud Leader
India is a key market for AWS. No wonder, as AWS with 32.6% leads the public cloud market share in India. Outside of the US, AWS has its largest footprint in India. The obvious impact is the large scale enterprise adoption in this country. One trigger has been the launch of the AWS Asia Pacific (Mumbai) Region in June 2016, and since then there has been tremendous growth in the number of AWS adopters in this region.
The India region was a significant catalyst in supporting the rapidly growing AWS enterprise customer base in India. It offered these customers a faster service, and allowed them to keep data locally to satisfy any data sovereignty requirements. The strategy of helping customers to onboard and offboard fast and in optimized budgets has made AWS a compelling draw in the Indian cloud computing domain.
AWS today has 175 + services and it spans storage, compute, databases, networking, AI/ML, analytics, IoT, security and mobility. The paradigm of discussion with customers has also changed—what used to revolve largely around storage, compute or databases has today witnessed enterprise consumers consuming AWS in India across the breadth of its offerings.
The core for Amazon is its AI foundation model service called Bedrock that was introduced in April. This service initially supported models from AI21, Anthropic, and Stability AI, along with Amazon Titan models. Subsequently, the range of supported models has expanded to include Cohere, Anthropic Claude 2, and Stability AI SDXL 1.0 models.
To understand this AWS business model in its entirety, it would make sense to understand Amazon’s nomenclature system. Any geography with multiple datacenters is called a Zone, while Region is one encapsulated area constituted of few Zones. A particular Region will have all its service deliveries simultaneously. There are 22 such Regions across the globe and 69 Availability Zones with 3 of them being in India.
There are two big reasons encouraging enterprise CIOs to move to cloud especially during the pandemic. The first reason is the concept of business continuity in the face of disasters that have not been seen before. Enterprises who thought they were well prepared for disasters realized they were not so prepared after all during the pandemic, as people could not get to the data centers, and as lockdowns extended to multiple states, they could not access their disaster recovery sites either.
The second reason is that customers are not keen to undertake physical meetings, and therefore transactions had to move to fully digital or at least “phygital”. This in turn required reconfiguring customer journeys on the fly, rethinking rules engines and forecasting tools that had not been built for such drastic and unprecedented events, and even rethinking KPIs.
India is one of AWS’s largest regions in the long term and no wonder therefore that it counts prominent enterprises like Tata Motors, HDFC Life Insurance, Shaadi.com, NDTV, and Druva among its customers. Amazon is seeing a great adoption of cloud services from both startups and large enterprises in India, claiming that 90% of the top 100 Indian startups use AWS.
Practo incidentally connects 60 million patients to 200,000 doctors from 10,000 hospitals. Shaadi.com, on the other hand, uses capabilities such as AI and machine learning from AWS to analyze 67 billion event records to make 4 million matches. HDFC Standard Life has developed a digital platform off AWS called Atom, where all the digital workloads are being uploaded.
Other enterprises like Hotstar, Freshworks, NDTV, Times Now, Malayala Manorama, Bombay Stock Exchange, Bajaj Finance and Bajaj Capital, Aditya Birla Capital have also put workloads off AWS. Take Titan Industries or Tata Motors, they have put all their digital business, their digital properties off AWS, doing some interesting stuff around telemetry and IOT. AWS has also achieved full Cloud Service Provider empanelment by the MeitY long back.
E-commerce logistics player Delhivery is an example of how analytics is being built on AWS. Its business model involves routing packages between their various warehouses and to the end customers. There are SLAs involved, as well as delivery times and penalties involved. Policybazaar.com is using AI/ ML through Amazon Polly. Haptik is using AWS for personalizing the experience, using AI/ML services. redBus, the largest bus ticketing platform in the country, is using Amazon SageMaker, the managed platform for developers and data scientists to manage algorithms and frameworks.
PayU, one of the largest payment gateways in the country, uses Amazon Aurora, which in turn is one of the fastest growing database services in AWS history. They also use analytics services. Vistara has built most of its digital properties on AWS. Future Group, Brigade Group are using AWS on some of their mission critical business application like SAP. L&T Infotech has one of the largest deployments of SAP in the world today; that sits on AWS. Kent RO has shifted from Microsoft Dynamics to AWS. Aditya Birla Group is building their analytics platform on AWS.
AWS also has a strong partner network called the Amazon Partner Network that has thousands of partners from across the globe. Over the last few years, AWS added over 10,000 new partners to the APN. Over 60% of APN Partners are headquartered outside the United States. Outside of US, India has seen the largest growth in number of partners.
Microsoft Azure: Close #2 with Growing Clout
Microsoft Azure, the #2 in India with 20.8% market share, is a platform of interoperable cloud computing services, including open-source, standards-based technologies and proprietary solutions from Microsoft and other companies. Azure’s billing structure is based on resource consumption, not reserved capacity. Pricing varies between different types of services, storage types, and the physical location from which the Azure instances are hosted.
Azure offers traditional cloud offerings such as virtual machines, object storage, and content delivery networks (CDNs) besides services such as Azure Kubernetes Services, Azure Blockchain Services, Azure Digital Twins, Azure IoT Suite, HDInsight, Azure Redis Cache, Azure Cosmos DB, Azure Search and Azure Media Services among others.
Add to it the ITeS 360 Solution specifically targeted for the Indian market. This is a separate business unit housed inside large IT services players; it in turn helps those IT companies in selling the entire stack of Microsoft offerings ranging from AI solutions to business applications over the cloud to their customers spread across the globe.
While AWS leads the cloud market share, Microsoft Azure has taken the lead in integrating generative AI applications, thanks to its special partnership with OpenAI. To add to this Microsoft Azure also has a partnership with Meta whereby they provide Llama 2 on Azure cloud which gives them an edge in the market.
Microsoft’s Azure AI service has undergone significant upgrades to enhance the efficiency and user-friendliness of cloud computing for enterprise users. This service includes Azure AI Studio, Provisioned Throughput Model, and plug-ins for integrating external data sources. TheContent Safety feature can detect harmful content from images and texts. Considering the market revenue growth, it becomes evident that Microsoft Azure has bagged the lead in the generative AI advantage within its cloud platform
As part of its Azure GTM strategy, Microsoft primarily follows a One Commercial Partner model. The One Commercial model allows all ISVs and start-ups and other solution providers to use Microsoft Azure as the foundation and build solutions and products on top of it. Microsoft helps these ISVs in selling and marketing the solutions. The model is a win win for all stakeholders—Microsoft, the partners and the enterprise.
The One Commercial Partner has two teams – one that is focused on tech and supporting Partners as they build the applications and a second team that is involved in selling with Partners. To further incentivize and popularize this model, even Microsoft salespersons are paid up to 10% of the Partner’s annual contract value when they co-sell qualified Azure-based partner solutions.
What this partner led model has done is it helped Microsoft map the specific needs of the customers across multiple verticals and then identify the gaps with relevant cloud-based solutions. Nearly 95% of the cloud revenue is being generated through this partner ecosystem. Microsoft currently supports over 5,000 start-ups in India with programs including Microsoft Accelerator. It also adds 100 start-ups to BizSpark every month. Microsoft has over 9,000 cloud partners across more than 250 cities in India to help enterprise customers in their digital transformation journey.
Microsoft works with several partner accelerators: Gennext with Reliance for telecom, retail and energy; Sandbox with Deshpande Foundation for social enterprise; ISDI Ace with ISDI for design; Brigade Leap with Brigade in real estate and IoT; AP Fintech Valley with Andhra Pradesh government; KPMG, ICICI Bank and Mahindra Finance for fintech; Smart City Accelerator with Ashoka University and Dalmia Cement for smart cities; Wipro for Microsoft Energy Data Services; T-HUB Accelerator with the Telengana T-Hub for health tech and clean tech among others. In addition, Microsoft is also associated with 24 other third-party accelerators in India.
Thanks to the co-selling initiative, Microsoft today dominates the cloud deployment scenario across India Inc. from BFSI, government, automotive, education to IT/ITeS. Microsoft Cloud is currently preferred by public sector banks that represent 81.4% of the total market cap of the sector. Out of the 12 largest banks in India, 10 are on Microsoft Azure. These include the State Bank of India, HDFC Bank, ICICI Bank, Kotak Bank, Yes Bank, Axis Bank, Bank of Baroda, IndusInd Bank among others who use Microsoft Cloud solutions.
BankChain, a blockchain consortium of 30 banks, is running today exclusively on Microsoft Azure blockchain platform. There are innovative applications on top of Azure for near real-time cross-border remittance at near zero cost, real-time peer-to-peer transfer systems with automated reconciliation, end-to-end loan syndication process management, vendor onboarding, NDA processing, and vendor rating among others.
Microsoft’s cloud forays have helped it penetrate into the Digital India program too. It was the first global cloud provider to be empaneled by MEITY as a cloud service provider enabling it to work with all the 29 states of India, of which over 10 use Microsoft Cloud services. Microsoft Azure powers multiple state government departments across areas such as municipal corporations of Ghaziabad and Kanpur, RERA in Maharashtra and Uttar Pradesh, as well as the Andhra Pradesh Regional Transport Authority.
Office 365 is being used by 2,100 employees of the Maharashtra Industrial Development Corporation. The state governments of Andhra Pradesh and Karnataka are, on the other hand, using the power of AI and cloud with Cortana Intelligence Suite to drive citizen services and digital inclusion.
Microsoft’s Cloud services power the automotive sector market leaders across commercial vehicles, passenger vehicles, as well as two and three-wheeler manufacturers. Customers such as Tata Motors and Hero Motocorp, among others have deployed Microsoft Azure and Office 365 for increased productivity and faster product development cycles. The Institute of Driving and Traffic Research (IDTR)—a joint venture between the Department of Transport of State Governments and Maruti Suzuki piloted HAMS to monitor the training of drivers and improve their driving skills. HAMS is a Microsoft Research product and works on an intelligent edge device inside the car and Microsoft Azure cloud, uses visual AI to monitor the drivers as well as their driving.
Microsoft rolled out the Edu-Cloud program, in which over 400 educational institutes across India embraced cloud-based productivity and collaborative experiences for the students and educators. Subsequently, Microsoft launched CloudSpark program to enable research and academic institutions to move their high-end and complex workloads like High Performance Computing and Virtual Labs onto the cloud to provide hyper-scale functionalities to their existing infrastructure. The top five Indian IT/ITeS companies are alsp using a diverse portfolio of Microsoft Cloud solutions and other services on Azure to transform their own organizations and create cutting edge solutions for their customers.
Google Cloud Platform: On a Catch-up Mission with the Leaders
Like other geographies, in India too Google lags behind AWS and Microsoft Azure in the cloud marketshare stakes. However with 11.8% market share, Google is doing a fast catch up with the leaders. The Google Cloud Platform (GCP) has somehow been left behind till now and has struggled to sell its services to enterprises in India as effectively as AWS and Microsoft have done. AWS had the first-mover advantage in the public cloud domain. On the other hand, Azure had the advantage of Microsoft being an incumbent player in almost all organisations across the globe.
Though Google Cloud trails Amazon and Microsoft in the cloud infrastructure market, Google Cloud has emerged as the leader in cloud AI services. The overarching approach therefore for Google sales strategy in India has been to start conversation with customers to sell their analytics services and then offer ML. What we are seeing in India is the sales cycle starts with analytics and goes into core infrastructure computing, and networking services. The spate of acquisitions done by Google in the last two years has helped it bolster its cloud portfolio also in the Indian market.
The acquisition of Israeli startup Alooma helped Google migrate its customers to cloud. Alooma was already integrated with Google Ads, Google Analytics, Cloud Spanner, and BigQuery. The acquisitions of Elastifile, a provider of scalable enterprise storage for the Cloud and data analytics company Looker for $2.6 billion also helped Google in its cloud venture.
Google launched its first cloud data centres in India in 2017, across three data centres in Mumbai, housing separate cloud availability zone. The public cloud services market in India has been speculated to be doing a good business with the company expecting it to triple year on year in the coming years. The data centre has seen a huge spike in its customer base.
Google Cloud’s route-to-market strategy has been driven through partnerships with system integrators, resellers, technology partners, managed services providers and distribution partners in India. In addition, Google’s expansion strategy in India is driven by adoption of multi-cloud strategies by large companies and with a push of its new open cloud platform, Anthos.
The launch of Anthos, the hybrid multi cloud solution has been a positive push for Google’s cloud campaign. This has come as a major step for the whole growth strategy. This is an attractive proposition for enterprise CIOs who do not want to move all their data into the public cloud. This, in turn helps Google acquire more customers. Anthos is built on top of Kubernetes and Istio and this makes installation easy drawing more users.
Google also took the cloud battle to AWS and Microsoft through its recent partnership with Airtel. The partnership enabled Airtel to offer G Suite to small and medium-sized businesses as part of the telco’s ICT portfolio. With Airtel currently serving 2,500 large businesses and over 500,000 small and medium-sized businesses and startups in the country, this move was a big thing for Google in the cloud domain.
Retail, media and entertainment, and gaming are segments where Google has witnessed demand from businesses and start-ups. Financial services and Insurance is a segment where Google has seen an uptick in its cloud offerings, more so around insurance and manufacturing. Google has also partnered with Coursera to launch a series of on-demand GCP training offerings. Google’s new IoT device management services Cloud IoT Core has seen adoption in India, but is still in its early days.
To organize data from the siloed systems across the entire organization and make it easily accessible to all employees, Tata Steel is using Cloud Search and plans to scale it to more than one million documents and 28 disparate enterprise content sources including ERP and SharePoint. It also leveraging Google Cloud Platform (GCP) services like Google Cloud Storage and BigQuery to build its data lake and enterprise data warehouse so they can take advantage of advanced analytics and machine learning. The digital loan-approval app from L&T Financial Services too runs on GCP. L&T Financial also felt G Suite to be a far better collaborative tool to help staff work together efficiently.
