Monday, June 24, 2024

Despite push for AI, India’s spending on cloud services falls below global average, says Tech News

India’s Cloud Revenue Expected to Reach $9.9 Billion in 2024

The data says India’s revenues from cloud should hit $9.9 billion in 2024, accounting for 1.4 per cent of the global

India’s expenditure on cloud is far behind the global average despite the country’s push towards digitization and keeping pace with new technologies like artificial intelligence.

The good news is that companies, global and Indian, are stepping up investment in building large cloud infrastructure and data centers to meet what they see is burgeoning demand.

According to Statista Market Insights, the global average spend on public cloud service per employee in CY2024 is projected to be $196.80. Compared to that in India, average expenditure per employee on public cloud service is expected to be only $17.53 — one-eleventh of the global average. Countries with which India competes on the global business stage have higher expenditures on cloud service per employee. Brazil’s has been estimated at $68.26, Malaysia’s at $107.50, and Mexico’s at $123.70.

India’s is marginally higher than that of Vietnam — $14.32, according to projections by Statista for CY2024.

The data says India’s revenues from cloud should hit $9.9 billion in 2024, accounting for 1.4 per cent of the global. The bulk of the expenditure is projected to be in the US, which would account for $330 billion, touching nearly half the global revenues from public cloud, while China is far behind with a 10 per cent share. The shares Brazil, Vietnam, Mexico, and Malaysia in the total are much smaller than India’s.

Looking at it from another perspective, given the data collected from those in the cloud infrastructure business in India and their internal investor presentation, per capita expenditure each year on cloud in India, they assess, is $5 as against the global average of $68. Per capita expenditure in the US is $809 while that in China is at $41. Their assumption is that the Indian cloud market in CY2023 was $5 billion.

However, Indian and global companies are aggressively building public infrastructure to support cloud. According to JLL, a real estate consultancy company, an additional capacity of 693 Mw of data centers will be added between the second half of 2023 and the second half of 2026, which would entail an additional 8.8 million square feet. And 77 per cent of the new capacity would be in Chennai and Mumbai. And this, they say, will require an additional investment of $4.4 billion only for real estate and creating the data center infrastructure.

Clearly big investment has been announced. Amazon Web Services announced last year it would invest $12.7 billion by 2030 for building cloud service infrastructure. In January this year Adani Group signed an agreement with the Maharashtra government to invest ~50,000 crore in the next 10 years to build 1 Gw of hyperscale infrastructure in the state.

CrtlS Datacenters is investing $2 billion in the next six years to expand in India and Southeast Asia.

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