Sovereign cloud is destination next for big tech firms

Larsen & Toubro Ltd aims to establish a sovereign cloud as part of its initiative to build data centres in the country, becoming the third homegrown company after Tata Consultancy Services Ltd and Bharti Airtel Ltd to set up computing infrastructure specifically for India.

- Shouvik Das

“Sovereign cloud is an area of major demand across the country. Today, it’s not just government bodies that are showing up as customers—demand is rising from regulated sectors such as financial services, while other areas such as healthcare and telecommunications have major clients because these are sectors that require data localization,” said Seema Ambastha, chief executive of Vyoma, L&T’s cloud and data centre business. “Overall, as we build our sovereign cloud offerings, we expect 50% of our net cloud business to be served by sovereign cloud customers.”

The sovereign cloud opportunity-or data centres storing and processing information within the confines of a country’s geographical borders-is expected to explode. Horizon Research predicts this market to surge nearly tenfold from about $2.3 billion in 2024 to $21 billion by 2033, growing at an annualized rate of 28%.

Indian companies join giants Microsoft and Google, which are also looking to create sovereign cloud offerings for enterprises in India.

On 3 August, Bharti Airtel launched Airtel Cloud for businesses. On 24 April, Tata Consultancy Services launched Sovereign Secure.

“TCS is not a rival for us - in fact, we have a strong, long-term partnership. We have a number of announcements in the pipeline, where we will be expanding our Azure cloud offerings within India,” said Puneet Chandok, president of Microsoft India and South Asia.