Featured image: A data centre in San Antonio, Texas. Credit: scobleizer/Flickr, CC BY 2.0.

Interesting story by The Ken (paywall) on the effects AWS, Azure and GCP will have in India once Amazon, Microsoft and Google turn their gaze this way.

Data centre companies at least have 30-35% margins.The bigger companies like Netmagic, CtrlS, Tata Comm and Reliance have data centres in India. They provide colocation services—they let other cloud providers run their servers in their data centres. They lease it to everyone—be it Amazon Web Services (AWS), Azure, Google,  E2E or even smaller companies. That is their cash cow.  Of course, this is in addition to private cloud (dedicated resources for end users) and public cloud (shared resources) they offer.

Business has been stellar for the last 10 years or so. Well, up until recently.

With the overall push to digitisation, from banking to government, global cloud firms have doubled-down on their investments. Microsoft set up three data centres in September 2015; AWS settled for two data centres in July 2016, and Google plans to debut this year. For an everyday business, the focus has shifted to a concept called Infrastructure-as-a-Service (IaaS)—where you pay for what you use—something that was being used only by core tech companies and IT services providers so far.

A few points on it:

1. I feel this awareness, the intensifying of competition, may not be as sudden or as recent as we think. I’m not sure about AWS and Azure but I remember using GCP in 2013 and they already had a credits system going, especially for small-scale developers. And even without that, it was still very cost-effective but more importantly it was the security it offered that cut it. But when I think of Indian cloud providers, security is the last thing that comes to mind (and uptime the second-last and UX the third).

2. Questions of data sovereignty and privacy are moot to me – the former because the bulk of data that moves around India that can’t be serviced by foreign IaaS providers is simply going to be self-hosted; the latter because there’s no reason to believe AWS/Azure/GCP will let my data be compromised. (Obviously I’m not factoring in NSA-level snooping because, even though it happened, the problem wasn’t the infrastructure.) Moreover, I’m also encouraged by Microsoft’s data trustee model it implemented in Germany cognisant of data sovereignty issues.

3. If I’m using AWS to run a small blog – like a static site – then it’s going to cost me about $10 a month and almost no technical work to keep it going (after setting it up). But the moment I scale up and start using more than one EC2 instance, and also start looking at things like ELB, WAF and VPCs to make my site more efficient, I will either have to be a developer myself or hire one. And if I’m hiring a developer, I’m likelier to find better talent that works with AWS or Azure than with any other service. So if an Indian company has to beat them, then it has to be PaaS-like with its offering to grow.

4. Because of the security issues outlined by The Ken, it’s curious to think small-scale cloud providers, such as those offering ‘packaged apps’ like WordPress, etc. to run individual blogs, etc., are only threatened by the likes of AWS/Azure/GCP. To me, they’re already under threat – if they already haven’t lost – if they’re not factoring in Digital Ocean, Vultr, Linode and even Bitnami (which provides a soup-to-nuts tour to deploy popular stacks like, say, LAMP using AWS). The Wire was launched on Digital Ocean for $10 a month.