Indian cloud sector generates startup as well as big tech interest

The Indian startup ecosystem is growing at a fast pace and there is a demand for cloud adoption, but rising costs impact the demand for services. The cloud industry in India is resilient, and it has shown a growth of over 23%, which is amongst the highest in the world. This has encouraged many Indian companies to offer cloud services. In fact, there are many such firms offering services to various state governments in India.

Of course, consumer demand for cloud has been bringing in some of the largest cloud providers to India’s shores. Microsoft is the second largest market holder globally and in India. The company just announced competitive prices. Amazon Web Services (AWS) launched its second data-cluster region in Hyderabad last year. In July, Dr. Reddy’s Laboratories Limited (Dr. Reddy’s), the Indian multinational pharmaceutical company based in Hyderabad, chose AWS as its preferred cloud provider. As part of the collaboration, the company has migrated it’s SAP platform entirely on to AWS.

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AWS recently announced its plans to invest INR 1,05,600 crores (US $12.7 billion) into cloud infrastructure in India by 2030 to meet growing customer demand for cloud services in India. According to the tech giant, this investment is estimated to contribute INR 1,94,700 crores (US $23.3 billion) to India’s total GDP by 2030.

Meanwhile, Google, the third-largest provider, completed the integration of the Indian government’s cloud storage service into Android.

We have observed a lot of interest amongst Indian companies especially, those in the growth stage and those that are keen to maintain cost advantages in terms of services and they are open to cloud services as they see value in the whole proposition. This move will lower the costs and grow the Indian IT industry

Sridhar Seshadri, CEO and Co-Founder, Spotflock Technologies Private Limited

However, the Indian cloud pie is quite big and smaller companies can get a fair share too. India’s overall public cloud services market is projected to hit US $13 billion by 2026, expanding at a CAGR of 23.1% in 2021-26, according to research firm IDC. The market’s revenue totaled US $ 2.8 billion for the first half of 2022.

The Indian government’s recent announcement of incentives for Indian Cloud companies is being welcomed by the sector. In March, the Union Minister of State for Science and Technology, Rajeev Chandrashekar in a Twitter Spaces interaction, said that the government is planning an incentive scheme to help domestic cloud technology companies and startups tackle the domination of Microsoft, Amazon and Google in this space.

According to Sridhar Seshadri, CEO and Co-Founder, Spotflock Technologies Private Limited, “The Minister’s announcement is encouraging for the domestic cloud industry, as it will not only be cost-effective but the cost of hosting will reduce for the Indian companies. This will lead to further adoption of this service by a large set of Indian companies.”

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“Our experience has shown that a large number of smaller companies are keen to move on to the cloud as they find it more convenient and there are economies of scale that they can leverage as they compete with global companies. It is not only the private sector that will benefit from cloud adoption but public sector undertakings will also reap the benefits.”

“We have observed a lot of interest amongst Indian companies especially, those in the growth stage and those that are keen to maintain cost advantages in terms of services and they are open to cloud services as they see value in the whole proposition. This move will lower the costs and grow the Indian IT industry.”