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Why Microsoft teaming up with Reliance Jio is a threat to Amazon and Google in India

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Sahil Mohan Guptahttp://warpcore.live%20
Sahil Gupta is the founder and editor of warpcore. He has spent his entire career in mainstream media including stints at Gadgets 360, BGR India, India Today and more recently the Times of India Group where he led international franchise publications like Gizmodo India, PCMag India, TechRadar India and TechSpot India. Apart from having deep insight into consumer electronics trends and tech, he's also a music aficionado and pioneered the concept of thematic indie music events in New Delhi, India's capital. warpcore is a culmination of his career which has been spent on the intersection of technology and music.

A couple of weeks ago when Microsoft CEO Satya Nadella was visiting India, he hosted a fireside chat with India’s richest man Mukesh Ambani, the managing director and chairman of Reliance Industries, the parent organisation behind India’s largest telecom operator Jio. At this fireside chat, they announced a big partnership between Microsoft’s Cloud unit called Azure and Reliance’s Jio telco for the next decade. This collaboration makes total sense and is also potentially a huge threat to the future ambitions of Amazon and Google in India. 

What they can do with this partnership: 

  • Microsoft’s xCloud, game streaming service is supposedly going to go prime time later this year. It has been built on the bedrock of Microsoft’s Azure cloud computing platform which is globally number 2, behind Amazon Web Services (AWS).
  •  For success in India, xCloud will need the strong support of a telecom partner and there is no-one better in India than Reliance Jio which became the largest operator in the country last year. 
  • Reliance also has its optic fiber-based broadband network which will be crucial for triple-A gaming in India, especially if it is powered through a game streaming service. 

Why is this important for Microsoft: 

  • Satya Nadella before he became the CEO of Microsoft was the head of the Azure cloud unit. He’s successfully pivoted Microsoft towards the cloud and it is one the fastest growing cloud businesses and fast catching up to AWS. Getting huge partnerships like the one with Reliance will be key towards overtaking Amazon which is still the market leader by a huge margin. 
  • For Microsoft’s Xbox unit, cloud-based gaming is the future as its Xbox One Series X console will likely be its last hardware-based product. India is a key market for both gaming and the cloud as it has the users. Collaborating with the biggest telecom operator in India means a leg up on Google and Amazon. Google’s Stadia is yet to show up in India while there are rumours rampant stating that Amazon is also working on a game streaming service. 
  • With the new Xbox consoles coming in Reliance could also be a potential offline partner for distribution and sales. The previous Xbox was launched exclusively in partnership with Amazon and it failed as people couldn’t either buy the console or games offline. This time around they could offer more options in a bid to directly take on the PlayStation 5. 

Why is this important for Reliance:

  • Reliance is betting big on online and offline retail in a bid to take on the likes of Amazon and Flipkart in India. It needs the technology and cloud computing infrastructure which is what Microsoft is perfectly positioned to provide. 
  • Reliance and Microsoft also have a long-standing relationship for Microsoft Office based applications which also is a flow in. Microsoft is a champion in the productivity space with CRM tools from Dynamics, Yammer and even developer-centric stuff like GitHub and Xmarin could help transform the aging yet thriving Indian major Reliance into a digital company in the truest way possible. 
  • If Jio becomes the exclusive telecom operator that provides services like xCloud, then from a long term point of view this could be a strategic boon as it will add a game streaming service on top of the diverse set of content it is already providing its users. 
  • Reliance dabbled with selling its own smartphones but the truest form of success it has only found in its 4G enabled feature phones. If it returns to selling smartphones, it could potentially have some Microsoft services preloaded which could make its offerings more wholesome. 

What does this mean for Google and Amazon? 

  • For Amazon, this is bad news as this Indian government has become very protectionist. It has gone back on its word on the FDI rules for online platforms and now the competition commission of India is also investigating platforms like Flipkart and Amazon for anticompetitive practices. While this is happening, Indian’s richest man Mukesh Ambani is preparing to jump into the e-commerce space seemingly with the help of Microsoft. 
  • For Google and Amazon, this is also a loss of potentially large clients in the cloud computing and business tools space. Google Cloud and GSuite apps would have made inroads in the Reliance umbrella. Similarly, AWS could have been a natural partner for the entire Reliance family of companies. That now seems to be going Microsoft’s way. 
  • Amazon and Google are perhaps the only companies that are positioned to take on Microsoft in cloud gaming. Amazon owns Twitch which is a service that streams video game play through as, while Google’s YouTube also does apart from its new gaming streaming service Stadia. Microsoft has the whole widget — Windows PCs are the best place for playing serious games, Xbox is right up there with Sony PlayStation when it comes down to consoles and soon xCloud will add game streaming — and now it will happen in India through the biggest and most sophisticated telecom network in the world’s second-most populous country and second-largest mobile phone market. 
  • Google’s Chromebooks and Pixel smartphones haven’t taken-off in India. It just happens, 2020 is also the year Microsoft is making a return to the smartphone space with the Surface Duo twin-screen phone. It is also the year where many Surface-based devices are expected to launch. A Microsoft tango with Jio could help Microsoft’s products make a leap in India, something that’s not happened before. 

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