Increased shift towards digital is fuelling an already hot data centre industry in India

Data centres have been at the epicentre of this massive shift to digital which was experienced across many industries. Experts suggest this digitisation is most likely to continue, thereby increasing the dependence on data and cloud services.

Currently, home to more than 80 third party data centers, India is witnessing significant investments by domestic and global data center companies owing to the incentives announced by the government. According to a NASSCOM report titled, 'India- The Next Datacentre Hub', there are 25 operational projects, 20 under development projects, 20 announced projects and five planned projects in the country.

According to Rachit Mohan, Head, Data Center Advisory - India, JLL, the Indian DC industry is expected to more than double to 1007 MW by 2023 from its existing capacity of 447 MW.

What's driving the demand?

Pandemic: The catalyst

As per Nokia Mobile Broadband India Traffic Index, overall data usage increased by 36% in 2020 due to increased usage of smartphones and fixed wireless access. Principally, this digital connectivity was provided by India's 447 Megawatt of co-location data centre capacity and telecom network.

While 2020 was a challenging year for businesses, five years' worth of digital growth was witnessed happening in a matter of months. Digitisation became an integral part of businesses, enabling not only smooth functioning but also facilitating continuity of entire economies, according to Milind Kulkarni, SVP Corporate Strategy, Government Relationship, Digital & IT, STT GDC India.

With the pandemic creating a massive migration of critical business applications towards the cloud to facilitate remote working, many enterprises are having to move on from traditional infrastructure to meet the demands of an increasingly digital business world.

"To deal with the distributed workforce, enterprises need to put cloud resources closer to the user to address latency issues and security requirements without compromising performance. Notably, the need for hybrid multicloud solutions is evident across global enterprises," Manoj Paul, Managing Director, Equinix India.

JLL's Rachit Mohan believes that Cloud migration is expected to increase in 2021 due to flexibility and security, lower costs and higher performance. The increasing data usage driven by social media activity, online gaming and streaming entertainment is likely to drive the need for more edge data centers in locations beyond the metros.

IT infra upgrade

As enterprises continue to evolve in their digital transformation journeys, there's increasing adoption of emerging technologies such as AI, ML, 5G and IoT. These workloads deal with massive amounts of data and require huge storage, scalability, flexibility, and Hyper Performance Computing (HPC) capabilities.

"It requires large CapEx and skilled resources to build these capabilities in an on-premise environment. Realising this, more and more enterprises are turning to third-party data center companies that can provide hyper scale infrastructure, managed services, HPC capabilities, security and disaster recovery and a host of application-layer solutions on an OpEx model," said Manish Israni, EVP & CIO - Yotta Infrastructure.

"Large enterprises have been pushed to significantly upgrade their IT infrastructure to address increased digital usage. Enterprises have been upgrading their IT infrastructure by adopting hybrid models, given their budget constraints. However, going ahead, competitiveness and digital readiness will drive the up-gradation of IT infrastructure," said Mohan.

Data localisation

The Government of India is supporting data centres' growth through a push for data centre infrastructure development, through MeITY's Data Center Policy.

"The data localization initiatives by the government, to ensure data of Indian consumers are stored on servers in India, will also have a cascading impact on data centre demand. Multi-cloud/hybrid cloud is the key to innovate in this dynamic environment," Rajiv Sodhi, Chief Operating Officer, Microsoft India.

Source : https://cio.economictimes.indiatimes.com/news/data-center/increased-shift-towards-digital-is-fuelling-an-already-hot-data-centre-industry-in-india/86602903