With close to 500 million internet users, India Inc. is on its course to generating over 2 million petabytes of data by 2020 driven by internet proliferation, digital initiatives and technology adoption. Now with the imminent push towards Data localization from the government and industry, the players are set to turn Hyperscale Datacenters into reality.
A rapidly expanding internet population, extensive proliferation of smart devices, and surging reliance on social media and e-commerce has sent the Indian economy on a new trajectory of growth. Rise of the internet population has impelled government, public and private services to move from the existing traditional service offerings to digital platforms. The NDA government made a strategic push towards a digitized nation with a number of initiatives, the likes of Digital India Platform and Smart Cities. Five years on, the vision of a digital and interconnected India is in full flow. To get a slight glimpse of where India is in its digitization journey, the data generated in India was about 40,000 petabytes in 2010, and this is expected to rise to approximately 2.3 million petabytes by 2020, numbers twice the global rate. In Last year, Google claimed that roughly 10 million new users joined the internet phenomenon every month across India. Incomprehensible amounts of data present an immense challenge, not just from the management point of view but ensuring the integrity of services and security of citizen information. This prompted the central government to emphasize the importance of increasing cloud and data center investment in the Indian market in budget 2018.
As per ResearchAndMarkets.com’s “Data Center Market in India – Industry Outlook and Forecast 2019-2024”, the India data center market is expected to touch approximately $4 billion by 2024, growing at CAGR of around 9% during 2018-2024. A number of Industry reports observe that India is on course to become the second-largest investor in the DC market and the fifth-largest DC market by 2050. Major cities like Mumbai, Bangalore, Noida and Hyderabad are witnessing heavy investment influx from local and international players in the market. The research also observes that the increasing use of high-performance infrastructure is leading to the growth of rack power density to an average of around 8-10 kW in the India data center market.
This spurt in growth of DC infrastructure had been largely due to the traditionally data intensive sectors like BFSI, Telecom, Governance and IT and ITES. However, the digital empowerment of consumers surging demand for online experiences and adoption of technologies like AI, RPA and IoT in business processes, sectors like Retail, Healthcare, Real Estate and Manufacturing have joined the list of big space holding customers for service providers. As Sridhar Pinnapureddy, Founder and CEO, CtrlS Datacenters explains, “90% of the world’s total data has been generated in the last three years. Factors that are driving the data explosion are social media adoption, smart mobile penetration (leading to usage of data on mobiles), the rapid deployment of cloud, IoT, and storage requirements.”
India’s datacenter service providers have a vital role to fulfil in this new phase of the economy. Growth across sectors is predominantly dependent on transformation of services to more agile, scalable and often more efficient digital platforms. Factors that are fuelling the need for business to take data seriously are digitization of functions and processes, growing demand for enhanced customer experience, different dynamics of sales and marketing in the online ecosystem. The same factors are today’s competitive edge for an enterprise, influenced by adoption of technologies like automation, analytics, machine learning, AI, chatbots, sensors, IoT devices and mobility. The span of digitization today starts from the source of the supply chain and ends at the customer’s doorstep. Sunil Gupta, Exec. Director, President and COO, Netmagic Solutions sums this up, “An organization’s dependence on data and their inclination towards optimization of business processes drives this demand while state initiatives like Digital India support them. A DC helps keep up with the real-time demands of an innovative company. It is also an important building block in the digital journey of an enterprise.”
An organization’s dependence on data and inclination towards optimization of business processes drives the demand while initiatives like Digital India support them. A DC helps keep up with real-time demands of an innovative company. It is also an important building block in the digital journey of an enterprise.”
Sunil Gupta, Exec. Director, President and COO, Netmagic Solutions
As per the ResearchAndMarkets.com.com study, Telangana is one of the leading cities in the Indian market, growing at the fastest CAGR of around 19% during the forecast period. The increasing initiatives by the state government in Telangana and Andhra Pradesh supporting facility service providers that are investing in datacenters across the state is contributing to the growth of this region. Hyderabad is the major city for datacenter operations with presence of over 10 facilities. Mumbai is the hub for facilities deployment by major companies such as AWS, Microsoft, Alibaba, and Google in the Indian market. CtrlS, NTT Netmagic, ITI Limited, and ST Telemedia GDC are among the major investors across the India data center market. The increasing demand for data management services from enterprise across sectors will drive the need for innovative infrastructure in the market in the coming years. The answer is Hyperscale facilities with the power capacities of over 50 MW. As per the report, the construction of such facilities is being undertaken by major operators in cities such as Mumbai, Bangalore, and Hyderabad.
Factors fuelling the dynamics of India’s datacenters
Adoption of cloud-based services is growing globally with a proportional demand for IaaS, SaaS, and PaaS among enterprise customers in India. Adoption of SaaS dominates the Indian market adding revenue of around $850 million in 2018. The increasing investments from global cloud providers and leading colocation providers are fueling the need for facilities of Tier IV standard in the market. Companies such as CtrlS, GPX Global Systems, and Pi Datacenters are investing in facilities of Tier IV category in the India data center market, as per the ResearchAndMarkets.com report. India’s public cloud services market is expected to reach $4.1 Bn by 2020 and the country is second only to China as the largest and fastest-growing cloud services market in the Asia-Pacific region.
Source: Cisco/ Mordor Intelligence
Going digital and tapping the power of data is the means to achieve to better internal functions and external delivery of services which is the mantra for better business for any organization today. “Digital transformation and innovation are today, extremely important in winning, serving, and retaining customers. Continued investment by the banking industry is a major reason,” Netmagic’s Sunil Gupta continues, “They are not only investing in primary DCs, but also in “near disaster recovery (DR)”, and “remote”. Another driver is manufacturing companies, who initially used captive DCs for SAP implementations. They have begun preferring third-party DCs when technology refresh cycles come up — when their older equipment has outlasted their useful life, they are migrating to managed service providers. Service providers generate efficiencies of scale and pass on those cost benefits to customers.”
The India data center market has multiple numbers of players participating in the competition across the country which has been a driving factor for innovation and better services. The steady development regarding IT infrastructure procurement, Greenfield, brownfield, and modular facility is creating lucrative opportunities for the leading players in the market. In fact, the growth in the DC market will be a growth opportunity for a number of other IT players in India. As the report finds out, The India data center market by electric infrastructure is segmented into UPS systems, generators, transfer switches & switchgear, Rack PDU, and other electrical infrastructure. UPS systems dominated the largest India market share in 2018, growing at a CAGR of more than 13% during the forecast period. The installation of large UPS systems that are capable of supplying MW power is kept in a centralized location to provide backup power for the entire facility during an outage in the India market. Diesel generators currently dominate over 95% of the market, where the use of gas generators is very low. The increasing construction of large facilities will lead to the adoption of medium- and high-voltage switchgear in the market over the next few years. The construction of large datacenters will lead to the adoption of rack PDUs with the capacity of over 10 kW in the India data center market after 2020.
Data localization will lead to explosion of data stored in the country and combined with adoption of cloud, IoT, analytics, and big data will help the growth of Indian datacenter industry. As a result the datacenter footprint is likely to cross 30 million square feet by 2025 from current 11 million square feet – that’s a whopping 300% growth. ”
Sridhar Pinnapureddy, Founder and CEO, CtrlS Datacenters
With initial recommendations on data privacy and management and a draft of the legislation on data protection titled Personal Data Protection Bill, 2018; India is on its way to having its own data protection regulations and liability for corporations. The entire ecosystem including tech companies, start-ups and industry bodies came out in support for a law to safeguard Indian customers customer information in a rapidly accelerating digital economy. Data localization, as Nikhil Rathi, President and CEO, WebWerks India explains, “is a bit like having a national internet, a splinter net. Rather than choosing the best, fastest, and cheapest providers to store data, the choice is limited to domestic providers who have little incentives to provide superior services due to the lack of competition. The consumer and the society at large will notice data localisation measures through the cost and the number of services available.”
How data localization will change the dynamics of the storage game? It will mandate all businesses, big or small, domestic and more importantly foreign to keep the data of Indian citizens in the country. This means that Big guns like Amazon, Apple, Microsoft and Alibaba will have no choice but to go with the infrastructure providers in India. This is expected to be a tremendous boost to not just expansion of data center facilities in Indian but the online economy itself. As CtrlS Dataceters’ Sridhar points out, “Data localization will mandate all the global multinationals operating in India to relocate and host the data in India. This will lead to explosion of data stored in the country. This combined with new adoption of technologies such as cloud, IoT, analytics, and big data etc will help the growth of Indian datacenter industry. As a result the datacenter footprint is likely to cross 30 million square feet by 2025 from the current 11 million square feet – that’s a whopping 300% growth.”
As per real estate and infrastructure consultancy Cushman and Wakefield, the size of digital population in India signals exponential growth of data generated by connected internet users and presents a huge potential demand and scope of expansion for DC infrastructure. Nikhil opines, “This will cause more data to be pushed to the edge and core datacenters and will drive the growth of commercial datacenters. Furthermore, the availability of shared resources including storage and access to common resources such as multiple carriers will propel this.” With data mandated to be stored in the country, domestic enterprises will increasingly adopt cloud infrastructure which signals a great opportunity for datacenter service providers. However, localization of data can have its costs, and in a country with a billion strong population challenges to be addressed include security, space, power and infrastructural issues. The introduction of support infrastructure will help reduce power consumption, water consumption, and carbon dioxide emissions will aid players a larger India data center market share.
Data Localization will cause more data to be pushed to the edge and core datacenters and will drive the growth of commercial datacenters. Furthermore, the availability of shared resources including storage and access to common resources such as multiple carriers will propel this. ”
Nikhil Rathi, President and CEO, WebWerks India
Today, datacenter players in India are investing in multiple innovations that enable flexible and scalable enterprise operations in the era of cloud, big data, IoT, and AI across industries. Mega infrastructures with best in class services and cost benefits to customers are the riding factors in the race to gain larger group of end-users in the market among SPs. As per Sridhar, “CIOs are always on the tenterhooks, as they have to deal with the unknown. If they are managing an in-house datacenter, they have to deal with issues such as power outages, network outages, malfunction of chillers/AC’s/fire protection equipment, generator sets etc. The core problems with regard to data management perspective for a CIO are Datacenter uptime, Energy efficiency, Round-the-clock management of datacenter, People and skill, Business Continuity, and Scalability. An able and available Data Center provider that takes care of all these aspects is the answer to such CIO headaches.”
WebWerks’ Nikhil elaborates on how having a datacenter service provider solves these issues. “The problems start with getting access to redundant infrastructure – Power & cooling. A commercial datacenter already has this high speed, redundant and instant availability of telecommunication. Also, fiber redundancy and high speed internet can be picked up at a datacenter through diverse paths and diverse carriers often not available in in-house datacenters. Transit and transport is an issue which is solved with a DC already have multiple carriers providing services inside through diverse backbones with high capacity such as 10G and 100G available which cannot be deployed in the CIO location Internet availability.” Nikhil continues, “Another challenge an SP can easily take care of is Cloud bursting where Core infrastructure in a datacenter can burst into public cloud providers when the need arises. And lastly, availability of on-demand resources like cloud, storage, compute etc. is easier in datacenters.”
In terms of security, it is unlikely that a single enterprise ever has the space or budget to go for security tools and framework that a service provider has in place. Having invincible cyber security measures in place is a core focus of the USP of their offerings to enterprises. Extensive physical security common for all customers ensures better quality of security that most individual businesses can afford. Sunil Gupta asserts, “All our services serve the end goal of providing machine-critical support to customers that host with us. We manage operating system databases, web servers, and provide security and disaster recovery services to our clients.”
| Major challenges faced by CIOs with On-Premise Datacenter | |
| Challenge(s) | How Datacenters help resolve the Challenge(s)? |
| Datacenter uptime management | By providing robust datacenter facilities such as a Tier-4 infrastructure with an uptime SLA of 99.995% |
| Energy efficiency management | Providing Industry lowest PUE of 1.45 helping customers reduce the power costs by as much as 30% |
| Round-the-clock management
of datacenter |
Datacenters provide round the clock monitoring and management teams to ensure the infrastructure and applications are managed at the datacenter |
| People and skill management | If the company outsources to a datacenter, a CIO does not require in-house resources, datacenter take care of the same. |
| Business Continuity Management | Datacenters provide a DR site at a different geography to ensure business continuity |
| Scalability Management | Datacenters are equipped to scale on demand and can cater to growing requirements of CIOs |
Source: CtrlS Datacenters
Growth above and beyond
India’s Data Centers are in a phase of unprecedented growth with limitless scope of expansion as digitization reaches more and more people and corporation, in turn churning out more data to be hosted. CtrlS Sridhar gives a glimpse of their future plans at CtrlS Datacenters, “With major customers across all major industry verticals, we are growing at 50% year on year. Hyperscale is the answer to India’s rising storage demands and we are planning three Hyperscale (Tier-4) datacenters in Hyderabad (2 Million Square Feet), Mumbai (1 Million Square Feet) and Chennai (1 Million Square Feet).”
The opportunity and scope for expansion is well put by Sunil Gupta for Netmagic’s plans, “The demand foreseen tomorrow is showing today. The core of NTT Com-Netmagic’s offering comprises IT infrastructure hosting services; but we are increasingly expanding the cloud business, which has been doubling in terms of revenue over the past couple of years. We recently inaugurated two hyper-scale data centres worth $144 Mn (INR 990 Cr) in Mumbai and Bengaluru with a total capacity of 13,600 sq m, which will scale up its data centre capacity by a whopping 70%. Such heavy investments are usually a barometer of the future demand that the company expects and how well its business has been doing over the years. Growth is unprecedented.”
Nikhil Rathi believes that Webwerks is ready to cater to the growing demand for data center space and future expectations of customers, “Our data centers are future-ready. We have scalable and flexible Infrastructure up to 200% of each Infrastructure for every enterprise customer and to further improve and adapt newer technology to further cater to any demands. Our expansions plans include building Data Centers in Bangalore, Chennai, and Hyderabad. We will plan to strategically deploy its new state of the art Infrastructure in these regions with scalable deployment in thousands of square feet floor space. Creating high-density data center will give a new wave for digital transformation in India and with creating job opportunities in these regions.”
India’s datacenter market is quickly adapting to new trends and advancements in aspects like power, cooling solutions, and pricing. As adoption of Green IT grows, enterprise service providers are on their way to building energy efficient mega datacenters with right sizing, enhanced system architecture and better design.
Cloud computing will have a greater effect moving forward which will lead to affordable datacenters hosting services for enterprises and startups. Hybrid solutions will continue to drive overall cloud adoption in the country. Trends such as co-location services or captive data centers will dominate the adoption by heavily regulated verticals that require strict data confidentiality such as BFSI, healthcare, and government departments.
With each sector having a different set of storage and hosting demand, CIOs need to carefully understand what type of infrastructure is most supportive of their business strategy and which service provider best suits their set of needs. But what can be said with certainty, India is on its course to becoming one of the major super powers in the information era. This push from the entire economy towards a better future will heavily rely on the ability to generate, analyze and leverage data. As the world’s second largest market migrates from brick and mortar to digitally empowered, Hyperscale Datacenters are on their way from being a buzz word to reality.
