India’s First Full Fledged Cloud Infrastructure Offering

Tata Communications, India’s leading service provider, announced an expansion of their cloud offerings, making it the first comprehensive India based cloud solution available for customers. Today, they announced the addition of Instacompute and Instaoffice to their list of offerings. The launch marks the company’s expansion in the cloud space to deliver self-service, pay-as-you-use IT application and data center infrastructure services. Since I closely watch the Indian market, I thought I will dig a bit more into their offering.

Status of Cloud Computing in India

India is the outsourcing capital of the world but when it comes to offering cloud services, its record is spotty at the best. There are some really cool companies in the application space (CloudAve’s current sponsor Zoho has their entire development team there) and platforms space (Orangescape comes to my mind here) but they are a very small fraction of the services market in India. Even though the Indian outsourcing giants keep making noise about infrastructure services, they are cloud washing at the best and, till now, there was not a single provider who offered Amazon EC2 kind of services in India. Partly, it is due to the fact that infrastructure services are capital intensive and also due to the unreliable infrastructure (like electricity, network, etc.) in India.

The potential for Infrastructure market in India is huge. To give you an idea, India has 1.4 million developers, over 11000 system integrators and more than 1300 independent software vendors (source: Outsourceportfolio.com) along with millions of other businesses of all sizes and shapes trying to take advantage of IT in the growing economy. They all want to take advantage of zero capital cloud infrastructure services. Moreover, Indian regulators are unpredictable and they recommend Indian businesses to store the data inside the country’s borders. Clearly, India is desperately looking for a home grown infrastructure services provider.

Tata Communications offers India’s home grown infrastructure services

With today’s announcement, the long wait for many users in India is over. By offering a metered on demand service like Amazon EC2, Tata Communications is catering to the needs of both SMEs and big enterprises. Their new compute and storage service, called Instacompute, comes with free load balancers, firewall, public IP address, etc.. They have an aggressive pricing strategy which could potentially help them compete with Amazon Web Services in the international market.

Their other offering, called Instaoffice, is just a repackaging of Google Apps. From Tata Communications point of view, this allows them to sell full cloud stack to their customers. For Google, they are a good channel partner who can help push Google Apps deeper into the Indian market. So, there is nothing interesting in this part of the announcement.

The positive and negative

The positive side of this announcement is that Indian customers get an infrastructure service offering hosted in India. It not only solves their problem of having to deal with foreign exchange issues, it will also help them be compliant to any government regulations (present and future). The aggressive pricing will also help them with substantial cost savings. The fact that it is offered by a well established Indian telecom provider adds some reliability to the offerings. The biggest hit will be on the small Indian webhosts who offer shared hosting and dedicated servers to the local market, followed by Amazon EC2 (assuming they have a decent sized customer base from India).

The negative side comes from the international angle. During the outsourcing boom, there were many well publicized news about employees of the outsourcing firms abusing the business data of their customers. The possibility for such security and privacy problems from the insiders will hinder their growth in the international market. Moreover, there is always the big danger of Indian government forcing their hands into users data (I am sure people wouldn’t have forgotten the compromise RIM made with Indian government on giving access to users’ data) and this threat will also keep international customers away from Tata Communications IaaS offering.

Conclusion

Irrespective of the negative side to this story, I am pretty excited because such a service was very much needed in the Indian market. This also has a potential to kindle some level of innovation among the Indian youth. They can just take their idea, test on the Instacompute cloud for few Rupees and take it to market if it is successful. This is a welcome development from the Indian market point of view and I am hoping to see few other players joining the marketplace in the future. An increased competition is not only good for Indian customers, it will also force the hands of players like AWS, Rackspace, etc on pricing.