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The rise of India as a global power for the cloud and data center market
The rise of India as a global power may not be a new conversation, but it is certainly becoming more pronounced as the global markets evolve during these interesting times. Not only are global cloud players increasingly setting up shop and pouring capital in the country, but local players are also stepping up to the plate and demonstrating that they can do everything global players can and better.
With more and more local businesses turning to Cloud and leveraging data to chart their next phase of growth, India might just emerge as the next big playground for cloud unicorns. We take a closer look at the drivers of this growth, and what hurdles Indian players will need to address in growing their cloud market.
Setting the stage for Cloud success
India is ripe for “Cloud” growth, with digital transformation and the move to cloud being a no regret decision for local businesses. According to a report by BCG, India is one of the largest and fastest-growing public cloud markets in the APAC region, projected to chart trifold growth from US$2.6 billion to US$8 billion between 2018 and 2023.
More than ever, businesses are realizing the potential of emerging technologies such as artificial intelligence (AI), Internet of Things (IoT) and blockchain in automating processes, reshaping personalized experiences, and sparking new innovations. Their enthusiasm to go all in on digital is expected to grow cloud spending by 49% in 2023.
Powering intense competition in the business landscape are global cloud hyperscalers like Amazon Web Services and Google Cloud who have already made inroads in the country through hiring top tech talent and are setting their sights on building new availability zones and demonstrating their commitment to align with local security and compliance regulations.
Apart from the fierce adoption of cloud and emerging technologies amongst local businesses, strong support from India’s government has been critical in setting up the stage for its Cloud success. Programs such as Digital India, which aims to transform India into a digitally empowered society and supporting initiatives such as GI Cloud to optimize ICT spending are kindling both businesses and consumers’ digital readiness and embrace of cloud technologies, services, and experiences.
Making the climb to a new normal
COVID-19 has been a catalyst in ramping up the demand for cloud as private and public organizations increasingly turned to digital channels. This pivot to digital is also here to stay, as more businesses of all sizes and stripes are looking at leveraging intelligent solutions to tackle business-critical issues such as business continuity, resilience, and productivity. Over 60% of Indian companies have said that they’re planning to leverage cloud for digital innovation.
But perhaps what is more important is that businesses are looking at long term cloud infrastructure investments to build for their future, beyond plug and play cloud tools. With cloud as the new backbone of sustainable growth, businesses will not only be able to scale their services but also deliver innovative services and customer experiences.
Much like how Indonesia grew its digital economy with e-commerce players and unicorns, India is now home to promising cloud computing companies who are providing a range of SaaS, security and cloud business management solutions and looking at ways to cater to new demand and trends.
As the cloud ecosystem in India matures, we’re likely to see a new generation of local players that are “born in the cloud” emerge and grow to compete with mainstay cloud providers. To date, there is already a growing string of startups, with a valuation of over a billion dollars, joining the unicorn club including InMobi, Paytm and Ola.
Addressing local challenges to pull ahead of global counterparts
However, these efforts would be futile if India doesn’t address key challenges in its digital infrastructure and data governance, against the impacts of external forces such as an ongoing pandemic and increased competition from other markets with established cloud players
For example, the physical connectivity infrastructure or lack thereof in India is a key challenge. Without basic routers, fiber optic links and servers to provide access to technologies, there is a growing digital divide between India’s urban and rural populace which is slowing India down in its digital sprint. To resolve this issue, data center operators need to work with multiple telecommunication providers to explore best options to set up good WAN links, from making sure the infrastructure set up remains resilient, adaptable to change and capable of supporting the distribution of users, workloads and different demands of cities. This increased connectivity will also give rise to potentially new data centres, which will further support India’s growing Cloud market.
Robust data policies will be key in positioning India as an attractive and trusted location for global companies to invest in for their cloud needs.
Lastly, with transformation boiling down to not only technology but also talent, one more consideration for India would be to equip their existing pool of IT professionals with the relevant skill sets for cloud and improve their data management strategies.
India stands a real chance at rewriting history as the next big cloud player, with all the right conditions for its growth already in place, including a strong adoption of cloud technologies in its business ecosystem. To make its next big leap in becoming a global cloud player, it will just have to address local challenges in its digital infrastructure and data governance and provide an innovation sandbox for local players to unlock the full potential of Cloud.
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