Enterprises outsource data centre operations to manage costs

• Digital transformation due to covid has forced corporates to move to third-party providers

Mumbai : Data centres in India are headed for a boom as enterprises increasingly outsource data services to third-party providers to save costs. Rapid digital transformation due to covid has forced corporates to move to third-party providers instead of having to manage the complexities associated with on-premise and owned data centres, industry experts said.

While enterprises have traditionally relied on on-premise data centres to support business operations, the increasing complexities and cost of creating and managing captive setups, and the availability of major cloud operators in India have prompted a move to the cloud, or rather third-party data centres. Now, organizations across verticals are looking for trusted partners that could not only support them with a reliable data centre infrastructure but also ensure seamless round-the-clock operations.

"Third-party data centres bring in resiliency in the form of high availability, low power usage effectiveness (PUE), carrier neutrality, interconnectivity, low latency, effective cooling, continuous availability of power, resilience in the form of quake-proof and flood-proof infrastructure, and the ability to scale rapidly, aligned with the needs of customers," said B.S. Rao, vice president, marketing, CtrlS Datacentres, a data centre company.

According to Sunil Gupta, co-founder and chief executive officer of data centre solutions provider Yotta Infrastructure, the pandemic has been a "major accelerator" of migration from captive data to third-party co-location facilities. "Amidst the pandemic-driven restrictions, enterprises were hit hard by inaccessibility, along with operational and manageability challenges in their captive setups," he said.

Co-location data centres are setups that allow multiple companies to rent server racks in the same 'server farm', along with other computing hardware like networking and storage, to host their workloads. With co-location, firms share the cost of power, cooling, communication and data centre floor space with other tenants. While they take their own servers and other equipment to a co-location facility, the service providers offer them power, cooling, bandwidth and security.

Co-location players also offer managed services to support business initiatives of enterprises.

Gupta said multi-tenant co-location "assures enterprises that their data centres will continue to operate uninterrupted at all times".

According to a Nasscom report from February, investments in the Indian data centre market are expected to reach about $5 billion by 2025. A May report by global real estate firm JLL predicted that the Indian data centre industry is expected to more than double to 1,007MW by 2023 from its existing capacity of 447MW.

According to Sanchit Vir Gogia, chief analyst, founder and CEO of Greyhound Research, the availability of high-speed internet, favourable policies and increased consumption of software-as-a-service (SaaS) solutions have led to the rapid growth of data centres in India.

Rajesh Dangi, the chief digital officer of IT infra provider NxtGen Infinite Datacentre, said large-scale adoption of digital-only channels and growing digital transformation have led enterprises to focus on innovating in their domains, and "de-risking" their tech investments by allowing third parties to handle the complexities of infrastructure management.

Jatinder Singh Pabla, senior vice president, sales, marketing and customer experience management at STT GDC India, pointed out that enterprises can benefit from economies of scale in colocation data centres. "Capacity is made available to customers on a consumption basis, which reduces their capital expenditure (CepEx) requirements. It also means that capacity is available when the customer needs it without waiting for multiple years of the self-build cycle," he said.

However, experts also warned that the move to third-party data centres will also require companies to step up due diligence regarding reliability, redundancy, resiliency and scalability. Vimal Kaw, who heads data centre services at global tech services provider NTT Limited, said that financial stability is "the most critical" as data centres are CapEx and OpEx heavy business.

Source : https://www.livemint.com/industry/infotech/enterprises-outsource-data-centre-operations-to-manage-costs-11639569505720.html