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Will Reliance-Microsoft cloud tie-up pose threat to Amazon, Google in India?

Reliance has entered into a ten-year partnership with Microsoft. Jio will offer Microsoft solutions to small and medium enterprises at just Rs 1,500 per month as a package, including connectivity. Reliance will also set up data centres that would run Microsoft’s Azure platform. As part of the 10-year alliance, Jio will build data centres across India that will be hosted on Microsoft’s Azure cloud, Reliance Chairman Mukesh Ambani told shareholders at the company annual shareholders’ meeting on Monday.

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For micro, small and medium businesses, a bundle of connectivity, productivity and automation tools is typically priced between Rs 15,000 and Rs 20,000 per month, but Reliance and Microsoft would offer these applications along with connectivity for “one-tenth the cost starting at Rs 1,500 per month.

Ambani disrupted India’s telecoms industry in late 2016 when he launched Jio with free voice and cut-price data plans, pushing some rivals out of business and forcing others to match tariffs and consolidate in a crowded sector that once comprised more than 10 carriers.

Reliance’s foray into the cloud services market – essentially selling computer services such as website hosting & data storage – could intensify competition in an Indian market dominated by Amazon Web Services (AWS), say analysts.

Jio would provide free connectivity and cloud infrastructure to start-ups, Ambani said, adding the company would offer a “bundle of connectivity, productivity and automation tools” to micro, small and medium business for as little as 1,500 rupees ($21.05) a month

Rivals such as Amazon Web Services and Google offer similar services at multiple times that price, and technology analysts said Ambani’s move could spark a price war in the Indian cloud market, expected to grow at an average 23% annually over the next five years to touch $5.6 billion.