The pandemic has forced people to work from home, due to restrictions in people movement.
This has also led organisations to migrate to cloud and there is an increase in the demand for data centres in India.
But the question is what the driving demand of DC’s in India is and how sustainable is the growth?
This was discussed in the panel discussion at W.Media’s Digital Week South Asia edition titled ‘What is driving demand of data centres in India – Internal or outsourcing’. Moderated by NK Singh, Founder & CEO, Data centre Guru. The panellists included Vinod Nair, Service Head of Data centre Operations, HDFC Ergo. Dhaval Pandya, CIO, Piramal Enterprises Limited and Suppan Saravanamuthu, Director of Operations – APAC Iron Mountain Data Centres.
Impact of DC growth
“There has been a drastic increase in the demand for data centres during the pandemic, with people working from home the pandemic has accelerated the process of digital transformation. Many organisations have also decided to shift to cloud”, said Vinod Nair.
He further added that while some organisations had planned on migrating to cloud while the others migrated due to the COVID19 pandemic.
Moving to the cloud has to be a systematic approach and there are multiple factors that need to be looked at in order to build a data centre.
“The digital transformation weave has been around for a while and most companies have already decided on their digital transformation paths. Most companies are looking forward to adapting the new edge technologies which include AI, Machine learning and others”, said Dhaval Pandya, CIO Piramal Enterprises Limited.
He further added that most companies’ plan was to move to cloud and the COVID19 pandemic has accelerated the process of moving applications to cloud which were not available on cloud earlier.
Applications which were managed by the companies earlier, organisations realised that due to the restriction in the movement it would be better if applications were shifted to cloud and as a result of which companies are evaluating their journeys of migrating to cloud and adapting systematic approach for the same.
“Security is one factor that has been pushing down the adaptation of cloud, but today with various security options and companies adapting to security the process of transitioning to cloud has become easier. More data centre players are entering the market, investors are partnering and looking at new ways of establishing data centres”, pointed out Pandya.
“Due to the COVID19 pandemic there has been deeper penetration of internet within India a lot of people are working from home which has increased the usage of data. Netflix in India reported that they have 2 million new accounts in the first three months of 2020.
The rise of the OTT platform and increased usage of data has led to the increase in the demand of data centres in India” said Saravanamuthu.
He further added that a lot of MNC’s are looking for space in India for building data centres. Iron Mountains has also collaborated with WebWorks to build data centres in Mumbai, Chennai, Hyderabad and Bangalore.
“There is a huge usage of the internet through social media and cloud services because of which MNC’s are showing interest to build data centres in India. Our global customers are also recusing to start the footprint in India due to the increase in cloud computing.
The cloud is really moving up due to the main initiatives such as the digital India project which can give more data storage. Additionally, the data localization law which the RBI is giving us, we have to keep all the data within India itself; we cannot bring the data across the country. These are some of the key points which bring MNC’s to build data centre in India”, said Saravanamuthu.
He further added that data localization is important. IoT, RBI, mandate payments. These can consume more data and we can boost the data usage in India.
The consumption of the internet in rural areas is increasing. Previously they were using .0.3GB per month and now they are using around 30 GB per month. Such factors will play an important role in increasing the data usage in India.
Consumer pull
“It’s a myth that only the BFSI sectors are looking forward to migration to cloud operations but even the production manufacturing industries are looking forward to migration to cloud. These industries are also looking forward to adapting AI, machine learning and other advanced technologies in order to ensure business growth”, said Vinod Nair.
He further added that in the current times technology has become the backbone of businesses. The way in which the vision building and strategy making has been taking place across all organisations for digitaisaion. It is not only limited to the BFSI market but customers across the globe are looking forward to the emerging market.
Various other business domains are adapting to the new technologies and majority of the organisations have moved to cloud. The requirements, security aspects and other factors together bring a technology to the latest platform.
Sustainable growth
“There is a steep rise in the demand and in the industry right now. In any new venture there is a rise and then there will be a stable growth which would mean that the demand is here to stay but the rate of demand might keep changing.
The contributing factors to it include the government’s focus towards digital India which would lead new ventures to come in the market adopting the new technologies present in the consumer space, there would also be smaller pockets of DCs .
Second is the economy moving towards an ecosystem driven engagement which means companies are tying up with related or unrelated companies for example mobile wallets or e-commerce aggregators are tying up with different players in related or unrelated organisations to provide the consumers with new experiences.
The third one is the OTT platforms, today even though a lot of people are working from home out of compulsion, organisations have identified people who would continue to work from home even in the future which means there will be a sustained pressure on applications, telecom pipes and the OTT platforms in order to engage people working from home”, said Pandya.
He further added that organisations could also adopt different business models to enter the market and the demand looks like a sustainable one but at a reduced scale.