Reliance-Microsoft cloud tie-up a threat to established tech bigwigs in India

Reliance-Microsoft cloud tie-up a threat to established tech bigwigs in India
Satya Nadella says the tie-up will put a focus on India's small and medium businesses.

Mumbai/Colombo - Jio to build data centres across country that will be hosted on Azure cloud

By Reuters

Published: Mon 12 Aug 2019, 9:32 PM

Last updated: Mon 12 Aug 2019, 11:35 PM

India's Reliance Industries on Monday announced a partnership with Microsoft's Azure cloud platform, in a move that deepens the offerings of its Jio telecoms unit while posing a direct challenge to rival cloud services providers such as and Alphabet's Google.
As part of the 10-year alliance, Jio will build data centres across India that will be hosted on Microsoft's Azure cloud, Reliance chairman Mukesh Ambani told shareholders at the company annual shareholders' meeting.
"We now have the capability to develop truly India-native solutions, including speech recognition and natural language understanding for all major Indian languages and dialects," said Ambani, Asia's richest man with a net worth of $46.2 billion according to Forbes.
Reliance's foray into the cloud services market - essentially selling computer services such as website hosting and data storage - could intensify competition in an Indian market dominated by Amazon Web Services, say analysts.
On Monday, addressing Reliance shareholders via a recorded video message, Microsoft's Indian-born chief executive Satya Nadella said: "Together, we will offer comprehensive technology solutions - from compute and storage, to connectivity and productivity - to small and medium businesses everywhere in the country."
"Other cloud players like AWS and Google will have to come up with new, perhaps cheaper pricing models for India," said Satyajit Sinha, an analyst at tech consultancy Counterpoint.
Amazon's cloud services unit declined to comment on the matter. Google did not immediately respond to a request for comment.
Ambani has always dubbed Jio a technology company, and used it to launch Internet-enabled devices, deliver entertainment services, build fibre broadband and develop other offerings.
The Reliance-Microsoft partnership could help Jio extend its services to India's booming start-up ecosystem.
Jio would provide free connectivity and cloud infrastructure to startups, Ambani said, adding the company would offer a "bundle of connectivity, productivity and automation tools" to micro, small and medium business for as little as Rs1,500 ($21.05) a month.
"This pricing of elementary services is really the rock bottom price," said Naveen Mishra, of tech researcher Gartner.
Rivals such as Amazon Web Services and Google offer similar services at multiple times that price, and technology analysts said Ambani's move could spark a price war in the Indian cloud market, expected to grow at an average 23 per cent annually over the next five years to touch $5.6 billion.
"We definitely will reassess whether we should keep using AWS or something else, because storage is a huge cost," said Aprameya Radhakrishna, the founder and CEO of Vokal, an audio-video knowledge-sharing platform similar to Quora.
"India is a price conscious nation in general and anything which is competing on price will definitely get attention."
Reliance's big push into cloud services also comes as India, one of the world's fastest-growing Web services markets, is framing a data privacy law, drafts of which have emphasized storage of key consumer data locally.
The country's central bank has also asked foreign firms such as Mastercard and Visa to store payments data solely in India.
"Companies that have a fairly mature IT adoption or those that are playing with a lot of Indian consumer data, they might prefer to move to [Reliance] because this data is guaranteed to be stored locally," said Krishna Iyer, an independent technology advisor who was previously a senior executive at cloud services firm Akamai Technologies.

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