India's Reliance Industries, which is the owner of telecom Jio, announced on Monday that it has signed a 10-year partnership with Microsoft Azure.
The partnership poses a direct challenge to rival hyperscale cloud providers Amazon Web Services and Google, while also posing a threat to Reliance Jio's competitors. Reliance Jio, which launched three years ago, is locked into competition with Bharti Airtel and Vodafone Idea to win over subscribers in India.
As part of the alliance, Jio will build data centers—consisting of next-generation compute, storage and networking capabilities— across India that will be hosted on Microsoft Azure's cloud. The first two data centers, which can house IT equipment consuming up to 7.5 megawatts of power, are being set up in the states of Gujarat and Maharashtra and are expected to be online next year.
"Jio is delighted to partner with Microsoft in our efforts to further deepen the use of technology on scale to all Indians,” said Mukesh Ambani, chairman and managing director of Reliance Industries, in a statement. “This is a unique and first-of-its-kind partnership that brings the capabilities of two large companies focused on creating significant value to Indian enterprises—small and large.
"By working together to develop innovative and affordable cloud-enabled digital solutions built around Jio’s world-class digital infrastructure and Microsoft’s Azure cloud platform, we will accelerate the digitization of the Indian economy and make Indian businesses globally competitive. This will be a showcase to the world to demonstrate tech-enabled value creation that is both exponential and inclusive.”
Speaking to shareholders at Reliance's annual meeting, Ambani said Jio would provide free connectivity and cloud infrastructure to startups, according to a story by Reuters. Reliance will offer a bundle that includes connectivity, productivity and automation tools to small and medium businesses for $21.05 a month, according to Reuters.
Reliance is offering Azure cloud services at rock bottom prices, which could spark a cloud war with Google and AWS in India, according to Reuters.
The partnership allows Reliance Jio to develop specific applications and services for the Indian market, including startups. Reliance said that small and medium businesses in India will have access to a range of cloud-based productivity, collaboration and business applications including Office 365, enabling them to compete more effectively in the Indian marketplace.
Large companies will be able to speed up their digital transformations by using new Jio solutions that work with Microsoft offerings that are already being used today.
“We have an incredible opportunity to apply advances in technology to help organizations across India innovate and grow,” said Microsoft CEO Satya Nadella, in a statement. “The combination of Jio’s leading connectivity and digital solutions with Azure, Azure AI and Office 365 will bring powerful tools and platforms for compute, storage, productivity and more to millions of businesses in the country.”
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Last month, Microsoft announced a cloud deal with AT&T that was reportedly worth billions. During its fourth quarter earnings last month, Microsoft said its cloud revenue, which includes Azure and other elements, grew 64% in the latest quarter compared to the previous year. Microsoft reported revenue of $33.72 billion for its fiscal fourth quarter 2019, an increase of 12% compared to the same quarter the previous year.