Indian cloud companies to storm local skies with low-cost advantage

Time of India

a day ago

Indian corporates are building muscle to challenge bigger global rivals in the fast-growing cloud market, with offerings that store data applications and related infrastructure within the country, referred to as
sovereign cloud
. These homegrown firms are underlining lower costs as their biggest advantage against the foreign competitors.
Bharti Airtel
's Xtelify, Reliance's JioCloud for SMEs,
Tata Communications
' Vayu, and Yotta's Shakti are tailored for local enterprises, especially in public sector and other regulated industries. And they are aiming to take on hyperscalers
Microsoft Azure
,
Amazon Web Services
(AWS) and Google Cloud Platform, positioning themselves as affordable and secure alternatives with cost savings of 30%-50% over the global giants. Hyperscalers are large cloud providers offering massive computing resources and infrastructure.
However, factors such as limited technology depth, lack of ecosystem maturity, and high migration costs from the global cloud providers are limiting the ambitious growth plans of the Indian companies, say experts. They added that interoperability between cloud providers is almost non-existent, making migration costly and technically complex.
"The emergence of indigenous cloud platforms represents a market response to India's sovereign cloud policy framework, creating domestic alternatives for regulated sectors," said Jitesh Karlekar, director-research at real estate research and advisory firm JLL. "However, these nascent providers will need to rapidly build technical sophistication, security credentials, and operational scale to effectively compete with established global platforms."
According to an IDC study, 15-20% of Indian companies are adopters of some sovereign cloud solution for ensuring compliance and security of their core applications and data. "Sovereign cloud is still in the early stages with little adoption in India," said Rajiv Ranjan, associate director, cloud and AI at research firm IDC India. "A key reason for not migrating to sovereign cloud could be higher costs and the risks associated with migrating applications which might be time consuming and cause business disruptions."
He added that enterprises in the banking, financial services and insurance (BFSI) space need to be also fully confident with adequate security and compliance norms being met with the domestic offerings.
Meanwhile, hyperscalers have rapidly grown their footprint in India through pacts with mobile phone operators. In 2019, Microsoft signed a 10-year deal with telecom market leader Reliance Jio for co-development of affordable cloud-based solutions, particularly targeted towards SMEs and startups. For its free consumer cloud storage, Jio has netted over 35 million active users.
A year later, second-ranked telco Bharti Airtel signed a deal with AWS to develop differentiated Airtel Cloud products. It also tied up with Google Cloud the same year to offer G-Suite services such as Gmail, and Google Docs to SMEs.
According to a study by policy body Centre for Internet and Digital Economy, India's $8.3 billion cloud market revenue is dominated by international vendors, with Microsoft (27%) and AWS (15%) together having a 42% share, with all other competitors, including Salesforce and SAP, having shares of less than 5% each. In the pure infrastructure space, Microsoft Azure, AWS and Google Cloud have a combined 87% market share.
Bharti Airtel on Monday launched its sovereign cloud, with its vice chairman, Gopal Vittal, stressing that the telco's offering will lead to cost savings of 30-40% over rivals due to its mix of network and cloud services.
However, the Centre for Internet and Digital Economy study on the competitive landscape in the Indian cloud market showed new entrants are struggling to match the free cloud credits and startup support offered by global hyperscalers.
The global companies provide large sums in cloud credits and access to accelerator programs, giving them a strong edge in customer acquisition, said industry experts. In contrast, local firms often restrict credits to a small circle of existing clients and face difficulty competing for cloud-native startups.
However, Indian providers are attracting small and mid-sized businesses by offering 30-70% cost savings and greater billing transparency, areas where hyperscalers fall short due to complex pricing and poor cost visibility, the study showed. The global rivals with technical strength though are better equipped to forecast and manage cloud costs, offering better expense visibility to their clients, compared with their smaller rivals.