E2E Networks Ltd - Listed small Cloud computing player

Stock Opportunities Untested - but worth a good look
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Article By Kesava Reddy, Chief Revenue Officer, E2E Networks Ltd.

From Article:
A key building block for GCC-driven manufacturing in India is the country’s rich talent pool in the AI/ML domain. India already produces 16% of global AI talent, placing it among the top three contributors in the world. The country’s technology workforce grew up in an internet/cloud-first world, and its ability to assemble solutions from combinations of legacy, cloud, and SaaS components is world-class.

Furthermore, to help this growth, India-born CSPs and Hyperscalers have rapidly built the Cloud GPU infrastructure and Machine Learning platforms needed for AI innovation. This is a crucial piece, as AI and ML technologies rely heavily on advanced Cloud GPUs and Cloud GPU Clusters, which provide the platform needed for training AI algorithms. GCCs are already leveraging this infrastructure, in addition to the incredible talent pool, in order to drive rapid innovation and build on the promise of Industry 4.0.

It appears with Launch of Tir Platform, they are also migrating up in value chain.

Disclousue: Invested.

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Tried comparing E2E Networks with its competitors using google bard. Results are as follwows:

Provider Strengths Weaknesses Focus Right to Win
E2E Networks Ltd * Competitive Pricing: 2.5-3x cheaper than Azure for core offerings. * Superior GPU Performance: Some users report better performance. * Agile Customer Support: Responsive and praised by users. * Focus on Indian market: Data centers in India, lower latency and better compliance. * Limited Service Portfolio: Focuses on core infrastructure. * Smaller Scale and Global Reach: Limited compared to Azure and AWS. * Newer Player: Less established track record. Core infrastructure services like compute, storage, and backup. Cost-conscious businesses, niche markets requiring high-performance GPUs, Indian companies prioritizing data residency.
Microsoft Azure * Widest Range of Services: Extensive ecosystem of IaaS, PaaS, SaaS, AI/ML, and more. * Global Reach and Scalability: Large network with high availability and reliability. * Mature Platform: Established player with proven track record. * Continuous Innovation: Microsoft constantly invests in Azure. * Higher Costs: Generally more expensive than E2E for basic services. * Complexity: Large offerings can be overwhelming for new users. * Learning Curve: Advanced features might require specialized skills. Broad range of services catering to diverse needs. Large enterprises, organizations requiring diverse cloud services, businesses needing global reach and high availability.
Amazon Web Services (AWS) * Vast Array of Services: Similar to Azure, caters to diverse needs. * Global Network with Data Centers in India: Ensures high availability and low latency. * Renowned for Security and Reliability. * Complex Pricing: Intricate and potentially higher than E2E for specific use cases. * Not Beginner-Friendly: Extensive offerings can be overwhelming. * Limited Free Tier: Smaller free tier compared to DigitalOcean. Broad range of services catering to diverse needs. Large enterprises, organizations requiring diverse cloud services, businesses prioritizing security and reliability.
Google Cloud Platform (GCP) * Renowned for Scalability and Security: Ideal for large workloads and AI/ML. * Competitive Pricing for Specific Workloads: Can be cheaper than Azure for specific use cases. * Strong Focus on AI/ML and Analytics Tools. * Not as Beginner-Friendly: Less intuitive interface than DigitalOcean. * Limited Data Centers in India: Potentially higher latency for local users. * Smaller Service Portfolio Compared to Azure and AWS. IaaS and PaaS offerings with strong focus on AI/ML and analytics tools. Organizations with heavy AI/ML workloads, businesses requiring high scalability and security, companies looking for specific, cost-effective solutions.
DigitalOcean * Simple and User-Friendly: Ideal for developers and startups. * Competitive Pricing Plans: Predictable costs. * Free Tier: Generous free tier for getting started. * Limited Service Portfolio: Primarily IaaS focused, lacks advanced offerings. * Data Centers Outside India: Higher latency for local users. * Limited Enterprise Features: May not be suitable for large businesses. IaaS offerings, primarily virtual machines and storage. Cost-conscious developers and startups, small businesses with simple cloud needs.
Ramco On-Demand Cloud * Indian-Based Provider: Competitive pricing and focus on local compliance. * Range of IaaS and PaaS Services: Caters to basic needs. * Managed Services and Support: Offers additional assistance. * Smaller Player: Limited global reach and scalability compared to AWS or Azure. * Limited Service Portfolio: Lacks advanced offerings like AI/ML. * Not as Beginner-Friendly: Interface might be less intuitive than DigitalOcean. IaaS and basic PaaS offerings. Indian businesses looking for cost-effective cloud solutions with local compliance, companies requiring basic IaaS and PaaS services.
Cloud4C * Flexible Pricing Models: Caters to diverse budgets and needs. * Hybrid Cloud Solutions: Blends cloud and on-premise infrastructure. * Managed Services and Support: Offers additional assistance. * Limited Reach and Scalability: Smaller player compared to major providers. * Limited Service Portfolio: Primarily IaaS focused, lacks advanced offerings. * Not as Established: Less proven track record than Azure or AWS. IaaS offerings, with some basic PaaS and hybrid cloud solutions. Businesses needing flexible pricing and hybrid cloud solutions, companies with existing on-premise infrastructure.
Hewlett Packard Enterprise (HPE) * Platform Offering HPC Solutions: Caters to high-performance computing needs. * AI-based Supercomputers: Offers advanced computing power. * Strong Legacy and Experience.
It means there are many Indian Comapnies provding cost effective services. So, migration in value curve is required for E2E Netwroks to succeed.
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Why smaller players like E2E networks will have edge over others - explained

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Now the market cap has crossed 1000 cr - hopefully it will be out of ASM.

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In simple terms- Tensoic built the Kan-Llama model and provided the training data.
E2E Networks provided the high-powered cloud platform with NVIDIA A100 GPUs to run the model. Xylem.AI provided their platform for deploying and running the model on E2E’s GPUs.The question arises whether Tir Platform of E2E network ( which also has AI/ML enhanced capabilities to run the model ) could also be used. It means E2E Networks has to further improve on capabilities, so all facilities are available to customer at one place.
Disclosure: Invested

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Disclousre: Invested

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I’ve seen CEO talk that they don’t aim to be the one stop shop for all cloud functionality. He’s said it on video.

It may look bad but it’s actually more far sighted as they are promoting avoidance of vendor lock-in and may get small parts of other projects running on other cloud providers.

What I actually would like is a referral program with free credits for referrer and referee. Although I don’t think they target individuals. And individuals are also not sticky. Further E2E does not provide the hobby size servers of 1-2 GB for the same reason.

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This article speaks out the opportunity in cloud computing field. Big Coprorate Houses ( Reliance, Tata, Adanai) are also joining fray. The Article states :

“Establishing infrastructure, acquiring thousands of GPUs, and setting up a server room may seem straightforward. There is no entry barrier there. However, the true challenge lies in software, sustaining and scaling these operations. Although numerous Indian startups may enter this domain, not all will thrive in the long run. Some are likely to face the heat and eventually be acquired by major players such as Tata, Reliance and Adani,” Trivedi predicts.

E2E Networks may have early mover advantage, however, competing with deep pocket hyperscaler could be a tough job. But, some solace can be extracted from the fact that pie size itself is increaring and there may be sufficuent space with like of E2E Networks.

Disclosure: Invested

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E2E networks- Data Center capacity expansion

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That is a 20% CAGR in capacity over the next 7 years

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Binswanger ANAROCK_DC Report_Aug 2022_Online.pdf (6.3 MB)
Have this old report:

As per this for E2E :

In Mar 2021, E2E had ~0.2 % of fixed assets of the Data Centre industry in India ( 26 / 12798.5), ~0.149% of installed capacity of the DC industry in India (1000 / 668 * 1000) and ~0.39% of the revenue of the DC industry (35 / 8976). Would love to have these numbers for today if anyone has access to it, plz share.

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Came across below article highlighting how other data center and cloud players in India are getting access of Nvidia GPUs.

https://www.ndtvprofit.com/business/nvidia-backs-little-known-yotta-in-biggest-bet-yet-on-ai-in-india

So nothing exclusive for E2E Networks when it comes to Nvidia partnership.

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The latest update from E2E networks

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In fact, after seeing the spotlight on Yotta in the NVIDIA event, I had a thought maybe Yotta may steal e2e’ s thunder by getting preferential treatment in allocation of Blackwell! :frowning:

Discl: invested and trying not to be biased

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An overview of India’s biggest AI bet by Bastion Research

https://x.com/bastionresearch/status/1770447310201266480?s=20

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Analogy

  • Manufacturing plant → datacenter
  • more capex → more datacenters → more revenue
  • workers → software engineer building the platform for customers.
  • currently high margins as less players in market.

Pros

  • early mover advantage.
  • building datacenters takes time ( time barrier for new players)
  • data localization is the future
  • booming Indian software companies/groups/ individuals will use E2E.

Cons

  • new players with deep pockets can disrupt.
  • only meant for small size companies.

Notes:
With current hype of datacenters, AI n semiconductors, valuations has no limit.

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List of Data centers companies in India (Listed in NSE or SME platform)

  1. E2E Networks Ltd- IAAS based company.
  2. ADC India Communications Ltd-
  3. Techno Electric & Engineering Company Ltd - Recently company has opened a new datacenter in chennai.

Please add on to this list, the companies into DATACENTER business in India.

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There are few companies which are going to benefit because of DATACENTER business growing in India like Blue Star Ltd.

  1. Blue Star Ltd -

Please do add companies which are going to benefit because of expansion of DATACENTER business in India.

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Sharing a few interesting videos that I came across regarding Data Centres.

Hope it helps.

dr.vikas

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