Wait For It: The Coming India Edtech Market Shakeup

Rapid digitization is making India among the fastest-growing markets for public cloud services. 

Research firm IDC expects the total public cloud services market in India to reach USD13.5 billion by 2026, growing at a CAGR of 24% between 2021 and 2026. The growth potential of this market is also attracting competition and more nuanced offerings by cloud service providers to attract customers.

The earlier model of one-size-fits-all for the entire market is giving way to segmentation and resulting customization. So it's no surprise that the education tech (Edtech) sector is getting both attention and specific solutions from cloud service providers. After all, it is one of the fastest-growing digital segments, and its digitization has attracted VC funding at a record scale. 

Edtech attracted funding of USD4.7 billion in 2021. While the funding winter has impacted fundraises in 2022, it remains a large market. The concerns among the more than 4,000 EdTech startups in India are the cost, scalability, and security of their content, and not always in that order.

Underserved Edtech market

We can divide the Edtech startup offerings based on their primary customers. 

For example, those serving school students preparing for competitive exams for engineering schools like IITs form one segment. Those serving college students preparing for the civil services exam make another. 

Overall, Edtech serves a market of  200 million students in India. This large market is also seasonal, highly price-sensitive, and prone to content hacks. Even the Edtech offerings for competitive exams are highly prone to such hacks.

A recent survey by LEK Consulting showed that only 30% of parents were likely to renew their subscription to K-12 Edtech providers. The study uncovered dissatisfaction with the offerings and hinted at a slowdown in Edtech's growth. The deceleration would mean that the Edtech market would only become more cost sensitive. 

The survey also suggested that parents wanted more one-on-one problem-solving help from Edtechs. This ask requires a higher investment in facilities and live video applications and may push them to choose more than one cloud service provider.

Google has decided now is the time to push its Edtech play. Incumbents and leaders in cloud services like Amazon Web Services (AWS) and Microsoft are now facing competition from the world’s largest data company. 

Subscribing to Google play on Edtech

Google’s name brings perceptions and expectations for the customer. Almost every moment of our life is touched or interacts with a Google product. So when Google promises an enterprise offering, high brand recall is a given, defined by simpler, faster, and easier attributes.

In its first decade of existence, Google seized the search engine market and launched Maps, Mail, and Chrome. Search engines before Google, like Altavista, Lycos, and even Yahoo, had confusing and cluttered home pages full of content. Google redefined not just the outcome but also the clean single-brand design. 

Similarly, the ubiquitous Gmail is the default access point for most people working on the internet. Therefore, there is a very high expectation when Google approaches potential customers in the Edtech world with a cloud or storage proposition to run their core offering. 

Google’s approach is still being refined as we speak. It’s also a bit late to the party. Attributes such as scalability, security, simplicity, and lower costs are not exclusive to Google. Neither does the Google Cloud have the first mover advantage; Amazon and Microsoft have leads of several years over Google. As the late entrant, Google has to try harder. 

Based on a recent series of Edtech events, Google appears to be differentiating rapidly from the one-size-fits-all approach of its competitors. A sectoral approach to the Edtech segment itself is one differentiated approach. It means that Google is pitching to established or startups with more nuanced offerings after understanding the dynamics of the Edtech space. 

Sizing up what Edtechs want

The Ed-Tech space players have different requirements from other sectors, one being the seasonal variation in the usage of its applications. 

For instance, an Edtech offering papers for competitive exams will see a surge a few weeks before the exam. However, this surge will drop to zero after the exam. Hence, scalability at low pricing is critical for Edtech players. 

Second, as the content in Ed-tech moves towards video, there is a rising concern about piracy, downloads, and loss of content rights that gives a competitive edge. Third, live classes demand a very high level of specialization for cloud service providers as they are consumed over different devices and bandwidth speeds. Here, Google Cloud has the advantage of learnings from its service YouTube. 

Making learning safer, smarter

One of the advantages claimed by Google over other cloud service providers is security. 

Google owns almost every component of the internet access chain, from the chips to the server, fiber, and data center. In addition, Google is the largest manufacturer of purpose-built chips and servers. Hence, it can manage security not just at the software level but hardware as well. 

The ability to provide a high level of support through controlling the digital infrastructure is one of the strongest reasons for millions of small and medium businesses to run on Google suite. 

Google believes in a shared fate model, which implies that it works proactively with the customer to keep them educated about their options while sharing responsibility for security. 

Security is a necessary component and a key decision factor in the cloud. 

Another Google advantage lies in its analytics. It claims to be the only cloud provider that brings real-time analytics to its customers. Real-time analytics is beneficial in content planning, and promotion as Edtech companies can then know where the demand is coming from or what factors are driving it. It can help them leapfrog the competition much better while making the right content available at the right time — this can make a difference when converting a basic services customer into a paying one.

With lower growth and reduced funding happening at the same time, a review of existing technology cost is underway at most Edtech startups. This may be a good time for new competitors to upset the incumbents.

You can reach our CDOTrends India editor at [email protected].

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