BSNL IDCs: Success and Security

In comparison to the US, data centers in India are in a state of infancy. A bulk of India’s cloud business runs on data centers owned and operated by the companies like Amazon, Microsoft, Google, etc; and they show no interest in mobilizing their servers to locations outside the US.

While it poses some amount of data security risk for many Indian companies availing cloud services, it downplays India’s significance as a major data center market. If the Indian market gathers volume in hosting data centers, the US majors may knock on India’s doors.

BSNL’s step of rolling out as many as 6 Internet Data Centers (IDCs) in India to offer among various services the cloud has a strategic significance in terms of changing cloud data center market dynamics.

A Futuristic Move

BSNL unveiled these 6 data centers jointly with Dimension Data through which it plans to offer managed co-locations, managed hosting and cloud services. “It is a significant step in terms of moving to cloud. Unlike the cloud providers, who have their data centers outside India, the BSNL IDCs will allow enterprises and business to move to cloud with their data stored in India,” says Kiran Bhagwanani, CEO, Dimension Data.


Indian companies are worried about the security of their data stored in foreign servers, and might like to avail such services. Possibly, the government, which is the biggest buyer of technology, is a possible target among others. “There is risk involved in every new platform. But BSNL IDCs are designed to deliver secured services to customers through its co-location, hosting, and cloud services. Initial targets for these data center are government departments which are moving to cloud,” says Bhagwanani.

To illustrate the envisioned success of such services in India, BSNL IDCs have bagged 2 government clients – Employees Provident Fund Organization (EPFO) and Punjab Treasuries and a large PSU, Indian Oil Corporation (IOCL). Since government organizations account for huge IT spend, it would be notable misses for the global cloud providers.

Smarting from such losses, it is likely that cloud providers like Amazon, Microsoft, Google, etc, would consider setting up data centers in India to be a part of the action. In addition, the launch of IDCs by BSNL is expected to initiate a business battle among various telecos like airtel, Tata Teleservices, Reliance, etc.

“These IDCs will enhance BSNL’s comprehensive service portfolio to meet the communications and IT needs of a large medium as well as small business enterprises in India. It will facilitate various organizations to quickly induct IT-enabled services within their organization without the hassles of setting up and maintaining their own data centers,” shares Kapil Sibal, union telecom minister, Government of India while unveiling one of the six data centers in Faridabad.

Seismic Thinking

Without exaggeration, the thought behind setting up data centers in 6 different locations (like Mumbai, Faridabad, Ahmedabad, Jaipur, Ludhiana, and Ghaziabad) in 3 seismic zones also deserves attention. The reason, as BSNL and Dimension Data claim, is to offer customers seamless services even in the event of a disaster.

“Since the data centers are located in 3 seismic zones, the data centers will be able to offer disaster recovery and business continuity service,” regards VM Sundaram, head, network and security, Dimension Data. Sundaram was instrumental in designing the BSNL data center.

As more service providers jump into this space, they will extend the thought and set up data centers in multiple locations, so that companies are able to avail business continuity services from a disaster recovery site located in a different seismic zone. Experts believe that choosing a location for a data center is equally significant.

BSNL IDCs are said to meet business requirements of Indian enterprises. Ability to offer disaster recovery and business continuity services is said to have a major say in a data center service provider’s success. Also, it is too early to speculate on the success of IDCs in India as much depends on meeting the CIO or customer expectations in terms of security, cost and easy of use. “Scaling up to the next level brings challenges even to the large enterprises which want to expand their IT set up on a third party data center. But the new IDCs have been designed with the growing requirements of a company. IDCs allow the companies to scale,” regards Sundaram.

IDCs: Furthering the Data Center Market

While IDCs are not new, it is critical to become a service provider that boasts to compete with its global counterparts. Who can forget the hue and cry over BlackBerry email services? Despite government’s pressure on RIM to install its email servers in India, there is hardly any action.

 In addition, the times are critical as the various research agencies expect the data center market to grow in the coming years. According to CMR, the Indian Data Center Services market is expected to grow at a 23% CAGR over the 3 years and will touch `28,00 crore in 2012. Similarly, Gartner sees a considerable rise in the data center market. According to Gartner, the data center colocation and hosting market in India is estimated to reach $609.1 mn in 2012. The market will experience consistent growth through 2016 when the market is forecast to total $1.3bn. Well, the growth in the businesses across different industires is expected to give it a major boost. CIOs are planning to converge their existing data centers into the virtualized environments. It opens a wide territory of growth. So as said, the cloud in India was largely dependent on the mercy of data centers outside India. The growth projections are falling in line as the demand for low cost, reliable services is growing from the mid market. Also in the enterprise segment, the increased focus on data center efficiency, agility, reliability, and cost optimization in India has led to a few interesting changes.

Indian IDCs, ready to offer cloud services, with their ability to entice a huge business from the public and evolving private sector will perhaps put pressure on the global internet giants to set up their data centers in India. “Organizations can have the satisfaction of having their data stored within India, when they opt for cloud services from BSNL IDCs, it leaves no space for Indian companies to act against the alleged misuse of their data happening through third party data center located in foreign territories where Indian law does not apply,” adds Bhagwanani.

BSNL’s IDCs will open up a new space in the Indian data center market. Since services would not like to miss the pie from public and private enterprises, it is probable to see a surge in such services from telecos and cloud hosting providers, etc. But will Amazons, Microsofts, and Googles of the world set up data centers in India? It remains to be seen.


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