Indian data center industry is witnessing meteoric growth


Governments around the world want companies to store data in the data centers inside the country’s border so that the data of its citizens remain within the country’s sovereignty. Park Place Technologies is a company that optimizes data center and networking Uptime and performance worldwide via a comprehensive portfolio of IT services and products. We interacted with Mohammed Atif, Director of Business Development, India, Park Place Technologies to know about India’s potential as a data center hub, new developments and trends in data centers and many more. 

Read the full interaction here: 

TimesTech: What are your thoughts on India’s potential as a data center hub?

Atif: The Indian data center market is expected to grow at a CAGR of 8 % over the forecast period 2021 to 2026. The rapid adoption of cloud-based business operations has encouraged businesses to acquire data management capacities to handle huge volumes of data that are being generated. The increased proliferation of online shopping due to the availability of user-friendly interfaces, high-speed internet, and smart devices such as smartphones, tablets, laptops, etc. is expected to drive the market in the future. The demonetization drive of 2016 has played a pivotal role in the transformation of financial transactions and led to the foundation of electronic payments. Moreover, tremendous growth in the use of debit cards due to push provided through the RuPay cards under the Pradhan Mantri Jan Dhan Yojana and increased number of POS terminals, and various incentives provided by the government and merchants for digital payments had helped India to move towards a cashless economy in the medium and long term. It has increased the dependency of consumers on technology and is expected to propel the development of data centers in India. Proximity to fiber landing stations and uninterrupted and reliable power supply is some of the crucial factors considered for Internet penetration. Therefore, the major portion of the overall investments from local and global companies is mainly in cities like Mumbai, Hyderabad, Bangalore, and Chennai.

TimesTech: How does the lack of a data privacy law affect Indian data centers?

Atif: News is making rounds about Data Privacy around the world, and especially in India, where many users have started fleeing in bulk from a widely used messaging app to other (well-known own) apps. The apparent exodus is due to one of the policy updates, which asks them to ‘Either Agree and Continue’ or ‘Disagree and leave the app’ soon. While the users in the EU are enjoying the app with no such policy update, it has become a strong concern for users in India. The panic would not have come into being if we had a data protection law like GDPR. At present, there are no such data protection acts in India. The only existing act is the Information Technology Act, 2000 (IT Act), which gives grieved individuals a right to compensation for improper disclosure of personal information. It is not so that such acts have not been thought about in the country. The Personal Data Protection Bill, 2019 (“PDPB”) was introduced in Lok Sabha by the Minister of Electronics and Information Technology – to provide protection of privacy of individuals relating to their Personal Data, and to establish a Data Protection Authority of India for the said purposes and the matters concerning the personal data of an individual. The bill was clearly a step in the right direction. However, due to insufficient information, the bill is still pending. 

TimesTech: What new developments have you noticed in the Indian data center industry?

Atif: The Indian data center industry is witnessing meteoric growth. A large and still growing internet userbase, the explosion of data and the creation of a conducive atmosphere via the government’s Digital India mission has transformed India into a fast-growing data center hub. Amidst all this, the most exciting fact is that this industry is at the very beginning of a larger growth journey. A report on the Indian data center market by Arizton Advisory and Intelligence estimates that the industry will grow at a CAGR of 12 percent until 2026. This growth will be fuelled by several trends and technologies. Here are the ones we expect will continue to impact across 2022. As enterprises adapt to a shifting technology landscape, they will accelerate migration from captive to multi-tenant data centers. As a result, the data center industry is likely to witness increasing adoption of ‘As-a-service’ solutions by enterprises. High scalability and high-quality infrastructure will be the primary drivers of this adoption. According to a JLL report, the colocation data center industry in India is expected to double by 2023, from the current 499 megawatts (MW) to 1008 megawatts (MW). In a nod to its massive spill-over effects, the real estate sector is preparing for a requirement of over five million square feet of space to meet this demand. India’s strategic importance in APAC’s digital ecosystem, availability of high bandwidth speed, low power tariffs, state-of-the-art infrastructure, and the presence of hyper-scale form the perfect recipe to create and sustain India’s growth as a data center hub. Moreover, as we move through 2022, solution delivery models like as-a-service, pay-per-use and built-to-suit will emerge and acquire greater market share.

 TimesTech: What are the obstacles that the Indian data center sector is facing?

Atif: The data center industry in India is booming. Unfortunately, the data centers in India have failed to keep pace with the burgeoning demand for data storage, processing, and management. Their inability to operate at optimal efficiency hampers the quality of their service and wastes precious resources.

· Ineffective Monitoring of Assets – A data center houses several assets: applications, connecting cables, storage units, cooling systems and so on. With so many complex systems working simultaneously, it becomes cumbersome for data center managers and operators to monitor and report the key performance metrics in near real-time. In the absence of real-time reporting, data center operators take manual readings. A manual reading taken a few days back does not hold much relevance for a data center where workload, consumption and temperature fluctuate widely every couple of hours.

 · Excessive Energy Consumption – With data traffic doubling every four years, the situation can reach unmanageable levels soon. Data centers need to implement drastic measures to bring down energy consumption to acceptable levels and do their bit in reducing carbon footprint.

 · Poor Staff Productivity – In many data centers, manual reporting systems are used. These systems require the staff to spend a great deal of time logging activities into spreadsheets. Such tasks hamper the productivity of data center operators and prevent them from focusing on other vital aspects of data center management. Replacing traditionally used manual systems with automated systems can help data center personnel work with higher efficiency. They can spend time on strategic decision-making and improving their offering

  • Growing Security Concerns – Data centers in India store, manage and process massive chunks of data. Being a trove of valuable enterprise information, data center facilities are vulnerable to security risks. One of the biggest threats comes from people-this can be their own employees, third-party users accessing the network or privileged users such as IT admins.

TimesTech: Semiconductors are the heart of electronic equipment, but India does not manufacture them. How does it affect data centers, which are all about data storage and processing?

Atif: While India has done well in terms of chip design and electronics manufacturing, there have been challenges in setting up of Semiconductor Wafer Fabrication (FAB) units for a long time. The digital age has propelled the world into consuming electronics at an unprecedented scale. There will be worldwide shipments of devices — PCs, tablets, and mobile phones — totaling 2.2 billion units in 2019. All these gadgets require semiconductor chips to function, and economies with a large production of these chips have benefited the most in terms of enhancing their GDP. The Centre has notified its new policy to promote the manufacturing and refining of semiconductor chips within the country. The government hopes to see local production starting as soon as the next 2-3 years. The government had also announced a $10-billion package to incentivize companies to set up production in India last week, which will be spread over six years to boost chip production as well.

The scheme aims to attract investments for setting up Compound Semiconductors/Silicon Photonics (SiPh)/Sensors (including MEMS) Fabs and Semiconductor ATMP/OSAT facilities in the country to strengthen the electronics manufacturing ecosystem and help establish a trusted electronics value chain in the areas of application of these fabrication and packaging technologies, the government said in its gazette notification. This will boost the future growth of the data centers in India.

TimesTech: How is data center hardware maintenance pursued? How efficient and cost-effective is it?

Atif: Data centers have been around for decades, and they’ve held military secrets, transferred essential information in commerce and banking, and even our private and personal data. Data centers in airports make the world go round. Data center maintenance has come a long way. We know that over time, computers began performing numerous important business tasks. As more corporate data assets migrated to the data center, downtime due to equipment dysfunction became a serious threat to business growth and profitability. Those who were manufacturers of data center equipment realized the need for an active maintenance program to assure the operational quality of their products. The introduction of annual maintenance contracts provided data center owners with peace of mind with the benefit of improved levels of service.

Developing hardware maintenance strategies may be a somewhat new requirement for IT managers. In many cases, companies have long depended on the OEMs for support and, when extended warranties got too expensive, would turn to a hardware refresh. This made maintenance tactics unimportant as the entire process was a straightforward endeavour. The industry is changing. IT managers face increased fiscal pressure to get the job done as inexpensively as possible. At the same time, third-party hardware maintenance options have become more pervasive, providing cost-efficient alternatives to traditional OEM support. As more IT managers explore alternatives to OEM maintenance plans, organizations need to start developing long-term hardware maintenance strategies that can guide operations moving forward. These steps can help IT leaders get started in developing an ongoing support framework.

Many third-party hardware maintenance providers can cut costs by as much as 40 to 60 percent compared to OEM extended warranties. Getting OEM support from a third-party maintenance partner can help IT managers maintain more systems or reduce their operating budget. This can prove invaluable as more IT teams find ways to create value through their legacy hardware. Older infrastructure often plays a critical role in businesses because the system can host applications that do not translate into cloud environments. Furthermore, many storage and server solutions can meet performance requirements well beyond the initial OEM warranty, making cost-efficient support solutions valuable because they let IT managers avoid unnecessary capital expenses and free fiscal space for innovative projects instead of hardware refreshes. While the promise of reduced costs seems attractive, it may appear too good to be true. One way to get past this disbelief is to understand how dedicated support providers can offer their services at such a low price compared to OEMs. Three reasons why maintenance providers can get by with such low prices

TimesTech: Role of emerging technologies like AI/ML in the growing data center sector?

Atif: Artificial Intelligence (AI) has been around for quite some time now, disrupting businesses and sectors with its capabilities to boost performance and bring in operational efficacies. The data center industry is no exception. In today’s time, data holds a huge significance for any organization, and what is equally important is managing that data effectively. Once filtered and crunched, the harvested data proves vital to making strategic business decisions for companies. Hence, companies are investing in advanced automation tools for data processing and migrating to hyper-scale data centers to upgrade their IT infrastructure. The explosion of data in recent years has led hyperscale to innovate and deploy AI technologies in their facilities to handle tasks autonomously. The use of automation technologies in data centers is hardly new. For example, Google has explained the use of DeepMind AI for cooling. However, companies are yet to leverage AI/ML to the fullest. Factors such as distrust in technology have obstructed many organizations to take a leap toward AI. While the most known use cases for AI deployment in data centers are temperature control and predictive maintenance, AI’s potential to enhance the efficiency of a data center infrastructure is far more than widely known. Let’s look at some use cases of AI in data centers that will change the future of the industry. Automated technologies in data centers promise less human intervention in regular and repetitive tasks. It frees up staff from mundane activities such as storage optimization, cooling distribution, security settings and so on and allows them time to focus on more critical issues. It not only achieves greater efficiencies but also reduces the risk of human errors while handling complex and diverse workloads. Automation is creating a pathway for data centers to go from reactive to preventative, leading to predictive.