Ever seen a sprint event in the Olympics? There’s an interesting thing about these races and especially the 400-meter races. The athlete who is ahead or leads in the first 100 meters doesn’t necessarily win at the end. Mostly, the one reaching the finish line first is the athlete who doesn’t look to rush from the very beginning. It’s the athlete who builds up the pace and gradually increases the speed and gives its best in the final 100 meters. Sometimes, a similar situation evolves in the corporate world between a market leader and a competitor.
Looking at Reliance Jio and Airtel, one would reckon a similar situation. We’re telling you all this because Airtel has just bagged a strategic partnership deal with Amazon Web Services. This is in response to Jio’s partnership with Microsoft that happened last year. Under this partnership, Airtel and AWS will try to innovate the cloud services and cater to the Airtel’s corporate customers and small and medium-sized businesses. But, is this deal really fruitful? Read on to find out.
What’s in This Partnership?
While Jio has garnered so many investments in the recent past, the entire telecom sector was struggling to exist (with only Airtel being a slight exception). Many had started to think that soon we’ll see a monopoly in the Indian telecom sector. But then came this news about Airtel’s strategic partnership with AWS and other telecom companies that may have had a sigh of relief. However, the AGR dues case is still ongoing in the Supreme Court, and the hearing will now take place on 14th August.
The basic question is, why did Airtel and Amazon Web Services enter into this partnership in the first place? So, the fact is that Airtel serves over 2500 large business clients and over 10 lakh small and medium-sized businesses, and now, it would pitch the services of AWS to them. In monetary terms, this is about grabbing a share from an opportunity that’s worth $8 billion! Yes, that’s right. The Indian public cloud market, which was worth $2.6 billion in 2018, is expected to reach $8 billion in 2023. So, Airtel and Amazon will try to grab the most of it competing with Jio and Azure (by Microsoft).
It is important to note that India’s public cloud market stands at 3rd position as of now in the Asia-Pacific region. It is just next to Australia and Japan. Also, in the Indian public cloud market, Amazon Web Services is the market leader, while Microsoft Azure and Google Cloud Platform (GCP) follow. On the other hand, in the Indian Telecom space, Reliance Jio is currently the market leader (in terms of consumer base), followed by Airtel. However, it’s quite probable that being an older player, Airtel serves more number of businesses than Jio.
So, coming back to where we started from, this is a sort of 400m sprint where only the final 100 meters decide the winner. There is no doubt that Jio took an early lead, but the latest news shows that the race is not over yet. As Airtel would initially act as a channel partner for AWS and the partnership would evolve over time, it will be interesting to see the competition between the teams of Jio-Azure and Airtel-AWS. However, which of them would emerge as a winner, we’ll have to wait and watch.