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Last week, Google revealed the plan for significant geographical expansion of its Google Cloud Platform by announcing eight new Google Cloud Regions, including one in Mumbai. A region is a specific geographical location where a Google cloud customer can run his resources. A region has multiple zones. Google’s Mumbai region will have three zones.
With this, Google has expanded its presence to eight new geographies—three in Asia Pacific, one in the US, one in Latin America and three in Europe. It presently has five regions—three in the US, one each in Europe and Asia. This is a significant expansion for the company.
All the new regions will be operational in 2017. “With more than one billion end users, Google Cloud has gained significant traction in India and across the world,” Google said in a statement. The statement said major brands like Wipro, Ashok Leyland, Smartshift by Mahindra & Mahindra, Dainik Bhaskar Group and INshorts.com are some Indian brands that use Google Cloud Platform.
Google is the last among the top cloud providers to join the cloud wave in India. The Google announcement came three months after Amazon Web Services announced opening up of its 13th cloud region in India. Amazon has three edge locations—Mumbai, Chennai and Delhi. Some large Amazon accounts that it announced at the time of the launch include Ola Cabs, NDTV, Redbus. Tata Motors, Hotstar, and MacMillan India.
AWS and Google followed the path taken by the other two large players, IBM and Microsoft. The Google announcement has come exactly a year after Microsoft made public “going live” of three of its data centers in India—in Mumbai, Pune and Chennai—ahead of schedule. That is the time when IBM too had announced opening up of its Chennai data center. Though IBM had a private data center in Mumbai, the Chennai data center was the first ‘public’ cloud data center for the company in India.
With the Google announcement, India is now an independent cloud region for all the four large cloud players, who, according to research firm, Synergy Research Group, hold 55% of the global cloud infrastructure market.
Understanding the rush
Why the rush for opening up of data centers in India? And why now?
“By expanding to new regions, we deliver higher performance to customers. In fact, our recent expansion in Oregon resulted in up to 80% improvement in latency for customers. We look forward to welcoming customers to our new Cloud Regions as they become publicly available throughout 2017,” said Brian Stevens, Vice President, Google Cloud, announcing the new regions.
Performance, or reducing latency, is, of course, the textbook reason for being close to the customer. With the world’s one big bright spot, becoming a major cloud market, it was logical for the major players to establish their data centers here.
Earlier, IBM and Microsoft, in their announcements too, had explicitly talked of performance.
“Businesses that deal with large amounts of data,” Microsoft had said, “will benefit from data replication in multiple regions within India for backup and recovery, reduced network distance, lower latency, and the option of a private connection to the cloud.” IBM too had echoed the same. “The Chennai data center will support India’s growing customer demand for in-country cloud solutions with faster network speeds, improving performance and reach,” IBM had said in its announcement. AWS said many of its existing customer and prospective new customers, asked it “to locate infrastructure in India so they can enjoy even lower latency to their end users in India.”
But there are more tactical reasons too.
Regulation is one. As the cloud model becomes more mature and rugged, the industries that were skeptical of the model are now having a relook at it. But many of those industries are highly regulated. In India, banking data and much of the government data, are, by law, required to be stored in India. These industries can never work with a provider whose data center is outside India.
Microsoft announcement was quite explicit about its sensitivity to that need. “With the local cloud services, regulated industries such as BFSI, government departments and state-owned enterprises will now be able to leverage public cloud services and be able to take advantage of local data residency,” it said. “With a local onramp to IBM Cloud, Indian customers, especially those in regulated industries, gain more flexibility to store and compute data within the country,” said IBM. AWS too said the local data center can “satisfy any data sovereignty requirements they (the customers) may have”
In addition to these reasons, there are two new distinct opportunities for cloud providers in India. The first is the Digital India program that the central government is rolling out. It will, in a matter of time, require a lot of data storage, and will have to look at cloud for that. Second is the start-up ecosystem in India.
“As India’s startup community continues to grow, Cloud Platform provides the full stack of services to build, test and deploy their applications,” Google said in a statement. Earlier, IBM and Microsoft too have explicitly targeted this segment. IBM data center announcement was actually accompanied by the announcement to launch techstartup.in, a startup community platform, in association with NASSCOM. Microsoft has done similar programs with iSPIRT, another platform that works to help those startups that are building IP from India.
The current set of players who operate data centers in Indian soil include a mix of Indian and foreign companies. It is dominated by the carrier and connectivity service providers such as BSNL, Airtel, Tata Communications and Reliance as well as managed services players such as Sify. Pure play players include NetMagic, Control-S, Go4Hosting. NTT Commuications, which now owns NetMagic and Ricoh India are two foreign IT players which have significant presence in data center services market in India.
It may be noted here that in the recently released World Economic Forum’s Global Competitiveness Report 2016-17, India’s ranking in ten of the twelve parameters, including macroeconomic environment, goods market efficiency, infrastructure, financial markets etc have improved significantly. The only area where it still remains a laggard is technological readiness. A lot of that is to do with lack of local technology infrastructure.
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