plan to invest $1 billion in India’s Bharti Airtel Ltd. and their cooperation in the cloud space will accelerate the Mountain View, California-headquartered internet giant’s digital ambitions in one of its largest markets, making it a stronger competitor to Microsoft Corp. and Amazon Web Services.
That’s according to industry experts, who see the Google-Airtel deal as helping the Alphabet Inc. firm focus on small and medium businesses—a stronghold of the Indian telecom major.
“Clearly, Google is fighting this battle on the cloud. It is an extremely good business, but they are running behind both Microsoft and Amazon,” said Haresh Chawla, partner at private equity firm True North Co. “This is a way to get the Airtel commercial users onto the Google Cloud Platform. So it works for Google that way that they will try and pull many customers from the Airtel ecosystem into the Google Cloud.”
Airtel already serves over 2,000 large businesses and around 1 million small businesses in India. As these businesses digitise, it is a win-win for the cloud providers to have access to this user base, say analysts.
The two already have a partnership on cloud services. Last year, Bharti Airtel launched a broadband plan for small businesses and startups in partnership with Google Cloud and Cisco, in addition to an existing partnership for the G-Suite family of apps. As a cloud service provider, even without its Google and AWS partnerships, Airtel has long-standing customer engagements, commanding premier pricing from enterprises, according to analysts. But the SMB market is ripe for growth.
According to Canalys research, AWS has a 32% share of the cloud infrastructure market globally followed by Microsoft Azure at 21% and Google Cloud at 7%.
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Gartner projects the cloud market in India will grow at 31% compounded annually over the next five years to $16 billion by 2025, underlining the growth opportunity. Execution will be key, but if done right, this will be beneficial to Google Cloud in growing its business beyond the top 6-10 cities in India, said Naveen Mishra, senior director analyst at Gartner.
“With this investment, Google is trying to penetrate the SMB market by synergising its cloud and core offerings along with Airtel’s offerings in connectivity and data centre space,” said Akshara Bassi, research analyst at Counterpoint. She added that the Google-Airtel deal will allow the US firm to potentially bundle its services with leading internet providers in India —that’s both Reliance Jio and Airtel.
Naveen Mishra, senior director at Gartner, said that over the last two years, Airtel has been investing in building its multi-cloud portfolio, first with AWS and then Oracle. “Both of these are largely around Airtel building infrastructure and a joint go-to-market strategy…. This deal (with Google) will be especially beneficial in reaching the mid-market and SMB customers through Airtel, which it would not be able to do on its own.”
Vittal said that Airtel’s cloud strategy is three-pronged. “One is around our own public cloud, which is about partnering across the ecosystem and where we work closely with Google. There is our own private cloud for data that needs to be hosted in India. So, it’s not a competition in that sense. As working with hyper scalars is a top priority for us.”
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Airtel-Google partnership focuses on a shared vision: Gopal Vittal
Google already has an existing partnership with both Airtel and Reliance Jio in the cloud space. On being asked if Google’s partnership with both Jio and Airtel will lead to conflict of interest, Vittal said, “In India,
you need a multi-pronged approach to drive adoption of digital. Our partnership is really focused on driving mutually agreed objectives with a shared vision.”
The US-based Big Tech firm has lately been aggressive in the country—hiring top leadership and bulking up its sales teams.
Through its $10 billion India Digitisation Fund, Google has been acquiring diverse consumer facing digital businesses including the likes of InMobi-owned Roposo, which delivers news and media content on user’s smartphones, Glance—a short-video app, along with local Indic languages content app Dailyhunt.
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Google’s investment in Bharti Airtel is part of its big India push
It also put in a massive $4.5 billion for 7.7% stake in Jio Platforms last year. The company has also invested in DotPe, which offers a full-stack solution—from giving SMBs online presence to enabling ordering (in-store and remote), online payments and delivery.
