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Bharti Airtel Ltd has announced its sovereign cloud offering amid growing focus among Indian enterprises on securing sensitive data. With the Monday announcement, India's second-largest telecom operator by market share taps into a market dominated by US tech giants such as Microsoft Corp. and Amazon Web Services (AWS).
Airtel enters cloud war to keep data within Indian borders
Bharti Airtel Ltd has announced its sovereign cloud offering amid growing focus among Indian enterprises on securing sensitive data.
With the Monday announcement, India's second-largest telecom operator by market share taps into a market dominated by US tech giants such as Microsoft Corp. and Amazon Web Services (AWS).
In India, too, companies such as Google, the Hiranandani group's Yotta Infrastructure, Tata Consultancy Services (TCS), and E2E Networks are vying for a share of the market.
Sovereign cloud refers to a digital platform based entirely within the country to store and process data and run applications. From the code base to the physical data centres, everything is located fully in India.
Bharti Airtel vice-chairman and managing director Gopal Vittal said Airtel's sovereign cloud offering would be a differentiator in the market as it can reduce cloud spending for enterprises by 30-40%, because of the fact that, as a telecom operator, it offers both its network and cloud to its customers.
“The network combined with the cloud has a very strong value proposition because that's what enables us to reduce the total cost of ownership,” Vittal said at a press conference on Monday in New Delhi.
“If you were to take the network separately and the cloud separately, your cost of ownership jumps up and the reason we are able to save 30 to 40% of cost for people moving their workloads to us is simply because of the capacity to bundle these two disparate things and bring it together, which is in any case mission critical for any cloud application,” he added.
Airtel Cloud will be housed under Airtel's digital arm, Xtelify.
Vittal said the challenge with the cloud today is that it's not sovereign and not regulated. “So a lot of the data doesn't sit in India. The second is that the cost of moving to the cloud is high, and so we've solved these problems by launching a telco-grade cloud.”
Digital infrastructure market
On 2 June, Mint reported that India's push for a digital infrastructure isolated from global networks is fuelling a boom in sovereign cloud services, creating a multi-billion-dollar opportunity for local tech players. Lately, companies such as TCS and Google's India unit are emerging as early movers in this area.Currently, the adoption of sovereign cloud services is also being led by the government entities, Mint had reported.
At the heart of Airtel's sovereign cloud offering is its data centre subsidiary, Nxtra, which hosts cloud and storage requirements.
While Vittal did not specify the revenue targets from the sovereign cloud opportunity, he said Airtel's sovereign cloud is specifically designed to address challenges faced by regulated entities like banks and insurance companies, which are often unable to place their data on public clouds due to strict data localization requirements.
“This is not a one-quarter or two-quarter situation. This is a long gate, but it's really the start point of Airtel demonstrating its capabilities to be in a very, very different space,” Vittal said.
To be sure, the telecom operator talked about its plans to launch sovereign cloud at an earnings call in May. It said it had done roundtables across the country to explain to its customers about telco-grade cloud and how it can benefit them.
"Airtel offering sovereign cloud is strategic given that telecom operators are looking to increase their piece of the enterprise segment. This is important for them as their enterprise revenue is hovering around 15-20% and a widening portfolio can help increase the same," said Faisal Kawoosa, chief analyst at Techarc, a technology market research and consulting firm.
The launch also assumes significance as the company saw its top line fall 2.7% year-on-year to ₹5,315 crore in the March quarter in its business-to-business (B2B) segment—Airtel Business. It was also because it shed its low-margin wholesale business.
However, in the B2B segment, Airtel has been doubling down on offering a suite of products to enterprises, including cloud technologies, the Internet of Things (IoT), and communications platform-as-a-service (CPaaS).
Airtel Business contributes 11% to total revenue.
When asked about entering the consumer (B2C) market with cloud storage services, Vittal said the company has no plans to do so.
In May, Bharti Airtel partnered with Google to offer 100GB of Google One cloud storage at no cost for six months to its postpaid and Airtel Wi-Fi users.
AI integration
On plans to come up with its own large language models (LLMs), Vittal said: “We would much rather use the public LLMs that are already there and combine that with small language models relevant for the kind of business that we run and make it much sharper.”In July, Airtel partnered with generative AI platform Perplexity to offer 12-month Perplexity Pro subscription free of cost to all its 360 million customers.
On Monday, Airtel also launched an AI-powered, future-ready software platform that will help telcos worldwide eliminate complexity, improve customer experience, lower churn, and raise average revenue per user (Arpu).
The company also signed three global partnerships with Singtel, Globe Telecom, and Airtel Africa.
Airtel said its solution includes a converged data engine for AI-led insights and intelligence at scale, a Workforce platform for real-time task streamlining, and an experience platform for managing every element of a telco's customer journey.
Source: LiveMint
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