Google plans on investing a whopping $1 billion in its cloud collaboration with Bharti Airtel

Experts believe that Google’s $1 billion investment in Bharti Airtel and their cloud collaboration will expedite the Mountain View-based Internet giant’s digital goals in one of its major markets, India, and make it a stronger challenger to larger rivals Microsoft and AWS.

They went on to say that the partnership will help Google focus on the small and medium business (SMB) segment, which Airtel dominates.

“Google is fighting this battle on the cloud. It is an extremely good business, but they are running behind both Microsoft and Amazon,” said Haresh Chawla, partner at private equity firm True North Co. “This is a way to get the Airtel commercial users onto the Google Cloud Platform. So it works for Google that way that they will try and pull many customers from the Airtel ecosystem into the Google Cloud.”

In India, Airtel already serves over 2000 large firms and about one million small businesses. Analysts believe that having access to this user base as these enterprises digitize is a win-win situation for cloud providers.

They already have a cloud-services partnership. In addition to an existing agreement for the G Suite family of apps, Airtel announced a broadband plan for small businesses and startups last year in collaboration with Google Cloud and Cisco. Analysts claim that even without its Google and AWS relationships, Airtel has long-standing client engagements and commands premium pricing from businesses as a cloud service provider. However, the SMB sector is ready for expansion.

According to Canalys research, Amazon Web Services has a 32 percent share of the worldwide cloud infrastructure market, followed by Microsoft Azure at 21% and Google Cloud at 7%.

According to Gartner, the cloud industry in India will develop at a compound annual growth rate of 31% over the next five years, reaching $16 billion by 2025. According to Naveen Mishra, senior director analyst at Gartner, “execution will be essential,” but if done well, “this will benefit Google Cloud is increasing its business outside the top six to ten cities in India.”

She went on to say that the Airtel deal will allow Google to combine its services with India’s top internet providers, including Jio and Airtel.

“With this investment, Google is trying to penetrate the SMB market by synergizing its cloud and core offerings along with Airtel’s offerings in connectivity and data center space,” said Akshara Bassi, research analyst at Counterpoint.

According to Naveen Mishra, a senior director at Gartner, Airtel has been investing in growing its multi-cloud portfolio over the last two years, first with AWS and subsequently with Oracle. “Both of these are largely around Airtel building infrastructure and a joint go-to-market strategy. …This deal (with Google) will be especially beneficial in reaching the mid-market and SMB customers through Airtel, which it would not be able to do on its own”.

They claim that such collaborations will enhance telecom income streams from developing digital business prospects such as cloud computing, CPaas (communication platform as a service), IoT (internet of things), cybersecurity solutions, and OTT (over-the-top) subscriptions.

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