In the wake of the Covid-19 pandemic, as companies scrambled to enable work from home arrangements, software giant Microsoft made a play to shore up its cloud business in India. It reached out to audit firms KPMG, Deloitte, PricewaterhouseCoopers, and Ernst & Young, otherwise known as the Big Four. Microsoft’s offer was simple—they could offer Teams, its collaboration and productivity tool, to their clients at almost no cost.
“Amazon Web Services (AWS) missed the bus in taking its collaborative tools like Chime to the mass market,” a senior executive who worked with AWS in the past told The Ken.
For AWS, which has long held sway over the Indian cloud services market, it was only the latest shot fired across its bow. Competitors, hungry for its market share, are looking to chip away at its empire, bit by bit. And what an empire it is.
By allowing businesses to essentially rent computing infrastructure on demand, AWS became India’s cloud platform of choice years before it officially entered the country in 2016. According to multiple industry executives, its cloud platform is the easiest to use and also has the most familiarity within the developer community.
Today, AWS counts most Indian unicorns unicorns Unicorns Startups valued north of $1 billion —everyone from hotel chain OYO to Disney-owned OTT platform Hotstar and foodtech player Swiggy—as clients. Research firm Gartner has consistently ranked AWS as the undisputed leader in the space, with its revenues crossing $580 million in 2018. Industry executives estimate it earned around $700-800 million in 2019.
Indeed, if India’s cloud services industry—estimated to be worth $8 billion by 2023—was a race, AWS was fastest out of the blocks. But this isn’t a 100-metre sprint, so much as a marathon. And in a longer race, it isn’t about starting fast but sustaining a steady pace. And with competitors like Google Cloud and Microsoft Azure hot on its tail, AWS’ lead isn’t as secure as it once was.
While AWS’ revenue continues to grow 30-50% year on year, according to two former senior AWS executives, revenue from new clients has not been increasing at the same rate.
Consider this: In 2018, the year AWS cracked $580 million in revenue, the contribution from new customers was $15 million, said a former senior AWS executive. Less than 3% of its overall business. The vast majority of its revenue was from AWS mining more from its existing customer base.
AWS must now keep its existing users loyal, while also adding the next wave of customers, including enterprise businesses, if it is to maintain its current lead.
