Amazon triples Cloud services earnings from India to Rs 21.47 billion

Profits of the cloud services entities grew by over 10 times in the same period

US retail giant Amazon more than tripled its earnings to Rs 21.47 billion from cloud and data hosting services in India, while profits surged by more than 10 times to Rs 1.16 billion in the year that ended March 2018. 

Amazon Data Services India Pvt Ltd, which is into the business of data storage, protection, safety and recovery, and web hosting, posted a revenue of Rs 9.45 billion in FY18, while making a profit of Rs 879 million.

On the other hand, Amazon Internet Services Pvt Ltd, which is a reseller of Amazon Web Services (AWS) in India, posted a revenue of Rs 12.06 billion, while making a profit of Rs 285 million, showed documents filed with the Registrar of Companies that were sourced from Paper.vc.  

In FY17, Amazon Data India Services had posted a revenue of Rs 2.4 billion and a profit of Rs 221 million, while Amazon Internet Services posted a revenue of Rs 3.9 billion at a loss of Rs 109 million. 

The combined earnings of both entities in FY18 represent a more than three-fold year-on-year growth in revenues and over ten-fold year-on-year growth in profits. The massive growth comes at a time when Amazon is doubling down on growing its cloud offerings in India, besides its core e-commerce business. 

Even globally, AWS, the company's cloud computing division, is a money making machine for the technology giant. In the quarter that ended September 2018, Amazon reported $6.7 billion in revenues from AWS, a growth of 46 per cent. Amazon's overall revenues in the quarter grew by 29 per cent to $56.6 billion.

In December 2017, Amazon announced that AWS had been empanelled by the Ministry of Electronics and Information Technology (MeitY) to provide cloud services to the Indian government and its various departments. This was seen as a major step for the company to tap into the growing need for data storage in India.

Apart from the government, Amazon has also focused on winning contracts from several large private companies to host their data on its servers, along with value-added services, including analytics, artificial intelligence and machine learning. Analysts say that Amazon is currently leading the pack among its peers Microsoft and Google in providing cloud services in India. 

Amazon currently has just one data centre in India, which is located in Mumbai, while rival Microsoft has three. The government's push to localise data storage by companies within the geographic bounds of the country is expected to give even more stimulus to the industry to set up data centres here.

In late 2016, Amazon infused Rs 13.8 billion into its data services business in India, largely seen as an investment to expand local cloud capacity as the Indian government and entities such as the Reserve Bank of India (RBI) began showing signs of mandating local data storage. For now, only the RBI has mandated local storage of transaction data by banks and other players in the digital payment space.