Amazon Web Services (AWS) has committed US $2.77 billion (INR 20,761 Crores) to strengthen its cloud infrastructure services in India. Amazon’s cloud computing arm will use this money to launch a new cluster of data centers in Telangana, Hyderabad.
“Happy to announce the largest Foreign Direct Investment (FDI) in the history of Telangana! After a series of meetings, AWS has finalized an investment of Rs 207.61 bn ($ 2.77 bn) to set up multiple data centers in Telangana. The @AWSCloud Hyderabad Region is expected to be launched by mid-2022,” tweeted Telangana state minister for information technology and industries, KT Rama Rao (KTR).
Within its lexicon, AWS identifies its data centers cluster as Availability Zones. AWS set-up two data centers in Mumbai in 2016. It added another data center in Mumbai last year. Across the Asia Pacific, AWS already has 26 Availability Zones spanning India, Australia, Greater China, Japan, Korea, and Singapore.
The investment will further enable AWS’s position as a leader in India. AWS currently has around 30% market share of India’s cloud service market, followed by Microsoft’s Azure.
AWS leases server space and bandwidth to enterprises of all sizes with cloud computing capabilities. This allows businesses to accelerate their digital transformation goals without building up their in-house servers or data centers.
Growing cloud services market in India
Over the last few years, Indian enterprises are quickly embracing cloud computing services to upsurge agility, deliver innovations, and modernize their infrastructure. With businesses focusing on well-carved out cloud strategy in the wake of the digital transformation rush, there is a bigger emphasis on getting experts on-board who have the experience to help organizations prepare for a new tomorrow. (See: Bharti Airtel gears up for digital transformation opportunities and IBM to split into two companies for better cloud opportunity)
The pandemic-induced work-from-environment has made the market even more lucrative, and cloud players are taking strong initiatives to strengthen their presence in India. These fast-evolving dynamics have made India one of the biggest and fastest-growing cloud services markets in the Asia Pacific, which is likely to touch $10 billion in another five years. Industry body NASSCOM projects that the market will grow to $7.1 billion by even 2022. (See: Technology trends for businesses in 2020)
The top players dominating the Indian market include Microsoft, Amazon, IBM, Google Cloud, and Nutanix. Amongst all, Amazon and Microsoft are leading the market and intensely vying to be the market leader in India’s cloud services market. While AWS’s position at the top is indisputable, both Azure and Google are growing at a remarkable rate, posing a threat to Amazon’s dominance in the cloud services space.
Early this year, Amazon and Bharti Airtel, India’s leading telecom player, entered into a strategic collaboration to deliver cloud computing solutions to enterprises. The partnership was formed to combat a similar engagement announced by Microsoft and Reliance Jio to provide enterprise cloud solutions powered by Microsoft Azure.
AWS had the first-mover advantage as it started its operations seven years earlier than many of its competitors. It gave Amazon an opportunity to get its offerings tested and make it more functionally rich as compared to the others.
In August 2019, Amazon inaugurated its biggest campus globally in Hyderabad, which supports 15000 employees. Through its AWS Academy and AWS Educate initiatives, AWS has also been providing ready-to-teach curriculum to higher universities in India to upskill local developers, students young IT professionals.
AWS’s client in India includes Ashok Leyland, Aditya Birla Capital, Axis Bank, Bajaj Capital, ClearTax, Dream11, Druva, Edelweiss, Edunext, Extramarks, Freshworks, HDFC Life, Mahindra Electric, Ola, Oyo, Policybazaar, Quantela, RBL Bank, redBus, Sharda University, Swiggy, Tata Sky, YuppTV, Zerodha, and several others.
AWS registered a 29% year-on-year growth in revenue to posting $10.8 billion in revenue in the second quarter of 2020.