With digitalisation steering the change in the post-COVID, cloud and everything-as-a-service are fast becoming the new normal. This has led to a massive demand for data centers. To keep up with the user demand and the increasing expectation of the enterprise users, data center companies have been evolving too, offering newer, better, and innovative offerings. Sridhar Pinnapureddy, Founder and CEO, CtrlS Datacenters Ltd shares more on how the pandemic has impacted data center business and the technology triggers. Excerpts:
COVID-19 has impacted the world in many ways. How has it affected the data center business?
COVID-19 has accelerated work from home and compelled businesses to re-look at their business continuity strategies. Also, consumers have switched from conventional media entertainment to over-the-top (OTT) platforms, schools and colleges have transitioned from physical classrooms to digital classrooms, and people have started using online services for shopping, banking, buying groceries, and medicines, etc. due to a combination of lockdowns and fear of contracting the infection. In the healthcare industry, telemedicine has replaced physical consulting, and there has been an increase in utilisation of cloud-based collaboration and conferencing facilities. Several businesses have moved their applications and infrastructure to either third-party colocation data centers or cloud ecosystems. The COVID-19-led change in consumer behavior increased adoption of online technologies, and changing business landscape comprising virtual classes and online delivery of both essential and non-essential items have fuelled the growth of the data center business.
The Indian data center industry is currently estimated to be anywhere between USD2 billion and USD3.5 billion, and is likely to cross USD8 billion by 2026.
Where does the Indian data center market stand vis-à-vis global markets?
The Indian data center industry, which is currently estimated to be anywhere between USD2 billion and USD3.5 billion, is likely to cross USD8 billion by 2026. The third-party data center footprint in the country stands at approximately six million square feet today and is pegged to cross 30 million square feet by 2026. We expect to increase our current footprint of 1.5 million square feet to 6 million square feet by 2024, powered by 600 MW of power. In a way, we are doubling the industry capacity.
We see the emergence of edge computing in addition to cloud deployments to support mission-critical activities that require a minimal delay in processing. How is the demand and adoption shaping up in India, and elsewhere?
It is important to understand the Indian demographic advantage. 60% of the Indian rural population comprises youth below the age of 40 years. About 830 million smartphone users are from rural areas, and deployment of the current 4G and upcoming 5G technology will drive digital consumption in rural India. Digital delivery of entertainment, healthcare, education, and goods, combined with smart cars, digital farming, smart homes, and rapid deployment of IoT and cloud-based services by SMEs in rural areas will give rise to edge data centers across tier-2, tier-3, and tier-4 cities in the country. These data centers will store content at the edge while minimising latency and enhancing the quality of experience. India will require about 25,000 edge data centers (large, small and micro) in the near future. We are planning to roll out 1,000+ data centers in varied phases in tier-2 and tier-3 cities.
India will need about 25,000 edge data centers (large, small and micro) in the near future. We plan to roll out 1,000+ centers in tier-2 and tier-3 cities.”
SMEs today are finding it difficult to create a balance between dealing with the lockdown-driven crisis, ensuring business continuity, and pushing for digital transformation. How do you look at this situation?
India is home to 64 million SMEs, which is close to 20% of the world’s base of small and medium enterprises. Over the last five decades, SMEs have emerged as a highly vibrant sector of the Indian economy.
Today, the majority of the SMEs are adopting cloud technologies in varied forms – SaaS, IaaS, and PaaS based on their current and future business needs. A few of them are modernising their legacy applications, while others are embarking on an end-to-end transformation. The cloud penetration is very low (under single digits), while only about one-third of SMEs are reported to own a website, of which 4% are said to be actively engaged in eCommerce. If 75% of the SMEs are digitalised and engage in e-commerce with Indian and overseas customers, they will have the potential to double the Indian GDP. This digitalisation will also lead to the growth of technologies such as cloud computing, edge computing, IoT, AI/ML, and analytics in rural and semi-urban India.
5G is expected to bring in unprecedented changes in business operations and propel Industry 4.0. With IoT and billions of devices getting connected over the cloud, do you see the role of data centers changing?
5G will revolutionise the way the internet is consumed across India, especially in areas where we do not have optic fiber cable (OFC) deployment. It will increase the use of mobile broadband and help smart factories connect and transact business, as well as enable the development of new-age applications. Besides, it will foster the usage of connected cars, connected healthcare, smart cities, smart retail, real-time banking and insurance, augmented and virtual reality, and large-scale deployment of connected devices (IoT). India will witness a growth of at least 20 billion IoT devices in the next five years, post COVID-19. This will lead to high growth of data across the country and data centers will be required to power the storage and make it available round the clock.
What about microdata centers? Is there a market for them?
Yes, microdata centers will basically be a subset of edge data centers requiring not more than 6KW of power. They will power applications at the edge with lower latency and energy utilisation. It is estimated that 30% of all edge data centers in India will be micro data centers, and the numbers will continue to vary depending on the adoption of technologies over the next decade.
If 75% of the SMEs are digitalised and engage in ecommerce with Indian and overseas customers, they will have the potential to double the Indian GDP
It is aptly said that ‘right’ technology is crucial to stay operational in the virtual world. How does one decide what is right and how can CtrlS help?
It would be appropriate to say that technology is the foundation of the virtual world. It enables online banking, digital classrooms, virtual office meetings through online collaboration tools, online entertainment in the form of OTTs, telemedicine, e-commerce, cloud (SaaS/IaaS/PaaS), and online gaming, among a host of other applications. At CtrlS and our group company Cloud4C, we have been helping 60 of the Fortune 500 multinationals to embark on a digital transformation journey through our colocation, cloud, digital transformation, and robotic process automation services across 25 countries and 50 locations. We stay committed to helping businesses embrace technology to evolve their strategies, address changing business models, and gain a competitive advantage in the market.
By Aanchal Ghatak