RIL deal could net Google Cloud $1b+ in revenues: Experts

NEW DELHI: Google Cloud could potentially earn over $1 billion in revenue through its deal with Reliance Jio, analysts said, among the largest such for the technology giant, which is aggressively taking on cloud rivals such as Amazon Web Services and Microsoft Azure.

Both the companies have not disclosed the financial terms of the deal or spelt out the timelines for its implementation.

But analysts peg the partnership as similar to Google's deal with Deutsche bank, which has been one of the largest so far for the US-based firm and is expected to be a billion-plus saving for the bank.

“The goal is to build a modern and AI-driven transformation platform that’s much needed at Reliance to power its digital ambitions. Think of this as a multi-billion-dollar extension of the original $4.5 billion investment,” said Ray Wang, founder of Constellation Research, Inc.

Last year, Alphabet Inc-owned Google earmarked $10 billion for investments in India and began by putting in $4.5 billion in Jio Platforms for a 7.73% stake. “The deal will rank among Google largest cloud deals, next to customers like Deutsche Bank. With that, you get an implicit sense of the scale,” said Tom Reuner, SVP, HFS Research.

There is no ballpark figure yet, but the best way to think about it is Google’s $4.5 billion investment in Reliance last year.

“With that you get a sense of the priority but also the depth of collaboration across the various businesses of both Reliance and Google,” Reuner said. The partnership, which is not only for 5G collaboration but also to transition legacy Reliance businesses like Retail and JioMart to the Cloud, also includes developing apps with Edge Computing, which is being touted as the technology of the future for cloud installations.

Naveen Mishra, Senior Research Director Analyst at Gartner, said the partnership will help Reliance in predicting the customer journey, modernising its operations, cross and upsell its customers across the whole ecosystem.

The first phase of the technology implementation is likely to be 5G and JioMart since they involve less legacy and are more tech driven, he said. “The legacy business is highly customised and the complexity there is huge. It is likely to become the last part of the journey,” Mishra said. He did not offer comment on the size of the deal but said it could potentially be over $1 billion given the size of Reliance but will depend on how the project is executed over the next few years. “I look at this as a multi-year execution…a minimum of 3-5 years.”