29 June 2016 08:01:25 IST

Amazon opens data centres in India

Security guards stand at the reception desk of the Amazon India office in Bengaluru, India, August 14, 2015. E-commerce giant Amazon.com is taking lessons learnt from its daily battles with India's choked roads and cramped cities to some of its largest developed markets, exporting a model of cheaper deliveries and reduced warehousing costs. Picture taken August 14, 2015. To match AMAZON.COM-INDIA/LOGISTICS REUTERS/Abhishek N. Chinnappa

"Data centre will help accelerate growth"

As a part of its commitment to invest $5 billion in India, Amazon on Tuesday launched its first set of India data centres in Mumbai to cater to cloud computing services here unleashing a new race for the top cloud provider position in India.

The data centres are part of Amazon’s cloud services division called the Amazon Web Services (AWS). In a conversation with BusinessLine , the company said it is spending ‘tens of millions of dollars’ in setting up data centres as India is already one of the largest cloud computing market for Amazon.

“We have 75,000 customers in India of the one million active customers globally. The data centre launch here will help accelerate that growth,” Shane Owenby, managing director-APAC, AWS, told BusinessLine .

Globally, AWS is by far the largest cloud computing player in the infrastructure-as-a-service space. According to Gartner, AWS is the overwhelming market share leader, with over 10 times more cloud IaaS compute capacity in use than the aggregate total of the other 14 providers in this Magic Quadrant.

Gartner predicts the Indian data centre infrastructure market will total $2 billion in 2016, a 5.2 per cent increase from 2015.

But why is Amazon so late in bringing its data centres to India? The company wanted to ensure it maintains a high bar for region development, Owenby said. “To get that level of quality, each country poses its own set of challenges. And we have to work through a number of those challenges for all the countries we deploy including India.”

Experts believe that Amazon’s data centre launch could’ve made it lose ground to rivals Microsoft and IBM. Microsoft already has three data centres, IBM has two, while several others like Japan’s NTT also have large data centre operations in India.

Microsoft, for example, says its cloud services are growing over 100 per cent year over year in India and the growth has accelerated even further since it launched its cloud data centres in last September.

“Twelve months ago, we were almost zero with Azure adoption in BFSI segment in India. Today, you name the bank and we are working on one or more initiatives,” said Peter Gartenberg, GM (enterprise partner group) Microsoft India, talking about the impact it’s had with its local data centres so far.

Experts believe an early start by Microsoft has given it an edge.

“AWS is a tad late to the market. Global players (like Microsoft, IBM and NTT’s Netmagic) and regional players like (CtrlS and NextGen) have already made their presence felt in the country over the past year by either announcing India Data Centres or their intent to invest increasingly. The most notable of these have been by IBM and Microsoft who have spent considerable resources trying to outdo each other on back of their local and regional investments,” said Sanchit Gogia, CEO of Greyhound Research.

However, AWS is still more popular among the Indian start-ups than large enterprises, where Microsoft and IBM have deeper connect.

“We are of the firm opinion that AWS will have to make solid changes to their DNA of catering primarily to the start-up audience. Selling to enterprise customers in India, particularly BFSI and Government, will require AWS to think and behave differently and use best practices from the likes of IBM who have over the years championed enterprise sales,” Gogia said.

Focus on enterprises “It is a matter of focus,” said Owenby. “We had a team here for a while and we know that those start-ups have been growing significantly. However, now we have an increased focus on the enterprise. Much of the enterprise IT spend in India comes out of BFSI and telco. Those are two key sectors that we are going to continue to progress our relationships and our successes in.”

AWS has started hiring aggressively to target enterprise customers in India. Amazon India already has 45,000 employees in India, with AWS team rapidly growing.

“We expect significant growth in the market here, which is why we are spending significant amounts of money to invest here to be able to grow,” Owenby said.