“Latency is very much the new currency”

How has COVID-19 impacted the data centre business?

All areas of business and private life rely more heavily today than ever before on digital applications. These have proven their worth in recent months, finding their place in our professional and personal lives. But beyond the virtual desktop and video streaming, specific sectors are also taking leaps ahead with digital applications and services, ranging from e-health to very sophisticated logistics and mobility applications, and on to the finance sector. Access to the cloud, and cloud-based services, is becoming increasingly important for businesses – so data centres need to ensure that they are extremely well connected to be able to support the demands of their customers to reach a wide and diverse range of local, and global, cloud players.

How have data centres evolved during the last decade? What have been the key drivers?

We need to go back a bit earlier: Until the emergence of the iPhone in 2007, there was considerably less dependence on the distance between data centres and users. But with the advent of the mobile internet, a new form of internet access demanded increasing infrastructure to feed a new generation of services to a willing world. Networks, especially content and applications, needed to get closer to the user. Thus, they needed to be connected with more data centres, and data centres needed to be connected with each other. This has been a continual development – building out to the very edge of the internet and bringing digital content and applications as close as possible to the user. Reducing latency remains essential to today’s and tomorrow’s applications. This means that the combination of high-performance interconnectivity and proximity to people and business continues to drive innovation in digital infrastructure. Latency is very much the new currency.

“The combination of high-performance interconnectivity and proximity to people and business continues to drive innovation in digital infrastructure.”

We are seeing the emergence of edge computing, in addition to cloud deployments, to support mission-critical activities that require a minimal delay in processing. What is the trend in demand and adoption in India and elsewhere?

As I said, latency is the new currency of our time: As latency requirements get lower and lower, it becomes more and more important to bring interconnection services as close to people and businesses as possible – in India and the rest of the world. Therefore, edge computing is essential for today’s needs and demands, both from a private user’s perspective as well as from a business perspective. One example of this for enterprises is being able to connect directly to the Microsoft 365 cloud, in order to reduce the latency and therefore enjoy optimised performance of the Microsoft 365 applications.

“Businesses are beginning to understand the importance of latency, which means the door is open for data centre development closer to the edge.”

In addition, the recent developments in the provision of internet connectivity through low-earth orbit (LEO) satellites are yet another step in pushing out the frontier to the very edge. By offering internet connectivity to the satellite network providers – for example, by themselves being connected to an internet exchange – data centres in India will be able to participate in this development, opening up new markets in more remote regions of the subcontinent in the process.

We see that businesses are beginning to understand the importance of latency for the performance of their business activities, which means the door is open for data centre development closer to the edge.

We are already in the environment of 4G LTE and waiting for 5G. How do you see the role of data centres changing with the 5G coming in?

5G offers enormous potential for a range of industrial and economic sectors. A prominent example is connected factories in the wake of Industry 4.0. There are high hopes for 5G, mainly for improving the wireless networking of machines and production facilities, as the technology can cope with significantly more participants per radio cell than other systems. However, network coverage is crucial for industrial benefits, and sufficient network coverage is the major challenge here. Large cities and metropolitan areas are initially favoured for expansion and large plants are often located in rural areas. This has given rise to the need to build plants’ own 5G networks, which are connected to the cloud via edge computing and corresponding data centres. In industrially strong regions where 5G network coverage is already reliable, edge data centres ensure that data can be processed directly on-site, keeping latency as low as possible. Thus, these edge data centres are here to stay.

“In industrially strong regions where 5G network coverage is already reliable, edge data centres ensure that data can be processed directly on site.”

What is happening to data centres as we move towards trends like low-latency apps?

Besides using the latest – and therefore fastest and most reliable – technology in data centres, it is inevitable that data centres are interconnected with one another. The more interconnected data centres there are operating within close proximity to one another, the greater the interconnectivity gravity becomes, attracting more and more networks that want to access and participate in the increasingly dense ecosystem of what is becoming a new digital hub. This enables the development of local interconnection ecosystems to support the region in question with low-latency connectivity. Gone are the days when centralised data centres or cloud infrastructure on one continent can serve the needs of people and business on another.

Are our data centres adapting well to VMs, cloud workloads, modularisation, solar-powered servers and localisation?

Since DE-CIX, as an operator of internet exchanges, is only a tenant in data centres, I cannot fully answer this question. However, what I can confirm is that the presence of the DE-CIX interconnection platform in a data centre increases the attractiveness of the data centre dramatically in terms of connectivity and performance.

What about data sovereignty? Can it be dealt with at the data centre level?

For the digitalisation of enterprise value chains, data sovereignty plays a very important role. For this reason, we brought to life the concept of a closed user group (CUG) at the DE-CIX Internet Exchanges. Industries today are in the grip of digital transformation. Businesses are shifting from monolithic, on-premise IT systems to platform-based models in which companies take part in ecosystems to share data and intelligence, and assemble solutions with third-party components. While cloud solutions facilitate data storage and handling, interconnection platforms are crucial for the one-to-many or many-to-many data exchange needed along data value chains.

Be it the automotive, healthcare, financial services or retail industry, connectivity needs are increasing, and this very often involves connectivity to a certain, defined partner universe. The CUG makes this possible, with compliance requirements baked in and with optimised security as a result of bypassing the public internet –and, in so doing, enabling an enterprise to have full sovereignty over their data journey.

By Shubhendu Parth

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