Reliance Jio looks to heat up cloud business, sets sight on 10 mn MSMEs

Company plans to bring 5 million retailers and kirana stores on cloud

After disrupting the country’s telecom sector, Reliance Jio looks to heat up the cloud business. It plans to introduce cloud services to around 10 million micro, small and medium enterprises (MSMEs) and five million kirana stores over the next three years, according to sources close to the firm.

According to the government’s official figures, there are around 50 million MSMEs in the country. Currently, the client base for Jio’s cloud services app, JioCloud, is related to the firm’s telecom business. But going forward, MSMEs might be one of its largest customer bases. Companies such as Amazon Web Services (AWS) and Google have all been trying to get a lion’s share of this client base for the past five years. 

Jio recently launched its cloud services in partnership with Microsoft Technologies. JioCloud would benefit from the firm’s vast retail footprint and telecom network — the biggest in the country. Jio telecom, highly prevalent in Tier-III and rest of the towns, would push its cloud services in the months to come.

The firm would be able to reach out to potential customers in a way major companies such as AWS have also not been able to. “They already have the vendor and the on-ground executive network available,” said a source close to the company.

Also, in the run-up to the launch of its much-awaited e-commerce business ‘New Commerce’, JioCloud would bundle a whole set of services including JioGST, inventory management and others for its 10,500 retail stores and close to three million kirana stores, according to sources in the company.

“Kirana stores and small retail stores would all be brought online and provided with basic cloud services,” added the source.

Industry experts believe Reliance’s entry into the market will bring in cost efficiency to the sector, making it easier for more businesses to have a cloud presence. “The government provides subsidy to MSMEs for cloud (services), but most are unable to avail it because of the high cost of cloud offered by most big players,” said an industry expert who did not wish to be named.

In 2017, the Ministry of Micro, Small and Medium Enterprises announced a subsidy of up to Rs 1 lakh, or 60 per cent, for two years to encourage the firms to use cloud computing.

“The most formidable problem faced by MSMEs in India has been accessing technology and maintaining competitiveness,” said a report by the U K Sinha-led committee on MSMEs, released in June.

According to industry body Nasscom, cloud spending was about 6 per cent of the total information technology spending in India. Driven by high adoption levels, it expects the India cloud market to grow to $7.1 billion by 2022. 

“Like it did for Jio, Reliance providing the data centre infrastructure for Microsoft Cloud could potentially increase competition and options for MSMEs. And because Microsoft is a partner on technical front, the quality of cloud services will improve. Small players like MSMEs want basic services so Microsoft Cloud would be a good option,” the industry expert added.