Data centres are witnessing a series of technology advancements. Emerging technologies such as artificial intelligence (AI), internet of things (IoT), cloud computing and edge computing are transforming the operational capacity of data centres and making them more agile, secure and efficient.

According to CRISIL insights, India’s data centre capacity, which stood at 360 MW in 2020, is expected to increase more than threefold to reach 1,100-1,200 MW by financial year 2025. Demand for these data centres is growing among enterprises across sectors. According to a recent report, the Indian data centre market size will reach $1.5 billion by 2022. This will be driven by increasing data storage demands from sectors such as banking, financial services and insurance (BFSI), manufacturing, retail, telecom and IT.

A look at some of the technologies, their use cases in data centres and their adoption in large enterprises…


IoT enables a data centre to become more flexible by providing the automation it needs. With the help of algorithmically managed IoT devices, everyday tasks at the data centre such as patching, monitoring, updating, scheduling and configuration can all be managed remotely. IoT devices help data centre operators in managing servers with minimal energy, thus making them more environmentally friendly. Further, with the explosion of IoT edge devices in the market, massive amounts of data is being generated every day. To this end, data centres have become more important in terms of bringing out the real potential of IoT edge devices.


While the deployment of 5G is not expected this year, its potential use cases would start reshaping industries and the biggest beneficiary would be the data centre market. 5G roll-out would witness the emergence of several edge data centres and take data nearer to the point of consumption. New 5G use cases such as connected cars and sensor-based transactions would require data centres that can serve up massive amounts of time-critical data.


With the help of AI, data centre operators can improve monitoring of operations. AI complements security incidents and event management (SIEM) systems, as it can analyse incidents and inputs from multiple systems. It then devises an appropriate incident response system. For instance,

when several events per second are logged, AI-based systems can identify the malicious traffic from false positives, thereby helping data centre administrators in countering cybersecurity threats.

Further, AI helps data centre operators in:

  • Addressing security and malware issues: Data centres use AI-based cybersecurity systems, which analyse incoming and outgoing data, detect malware as well as provide data protection.
  • Conserving energy: In order to reduce energy consumption, AI-based systems can set temperature points in a data centre, evaluate cooling equipment and fix energy inefficiencies.
  • Reducing downtime: Not only does AI help monitor server performance and network congestion, it also helps in reducing downtime by predicting outages.

Cloud computing

Of late, cloud computing has emerged as one of the most cost-effective technologies for data centres. This is because cloud computing has eased the pressure off traditional data centres by providing virtual infrastructure for off-premises computing. When compared to traditional data centres, cloud data centres offer increased performance and efficiency. According to industry reports, in 2019, the annual expenditure of enterprises on cloud infrastructure services was more than they had spent on physical data centre hardware. In addition, over half of the total servers sold were deployed at cloud providers’ data centres.

Edge computing

With the help of edge computing, organisations are moving part of their data processing to the periphery to improve network performance, decrease data traffic and reduce latency. With its growing uptake, enterprises are expected to gravitate towards a more distributed data centre infrastructure, setting up a large number of smaller data centres near highly populated areas such as cities as well as deploying micro data centres at the base of telecom towers and other important nodes in the existing wireless networks. The growth of edge computing is also leading to the development of local data centres, which makes local data processing more secure.

Requirement of fibre

Fibre is essential for addressing data centre requirements and for ensuring link quality. Besides, the equipment responsible for transmission of signals relies on data centre fibre, as fibre cable is the only network infrastructure solution that can support data rates of 50G and beyond. Further, fibre is being deployed for data centre architecture as it offers greater bandwidth and error-free transmission over longer distances. These cables are also resistant to noise (electromagnetic interference/radio frequency interference).


The significance of data centres has only seen an uptick as companies aim to keep their business functional and promote remote working. Enterprises across industries are fast adopting public clouds for various workloads. To this end, all hyperscale cloud providers are setting up availability zones, which has led to a tremendous demand for data centres.


The BFSI sector has started leveraging the benefits of edge data centres. With the help of these centres, data in the BFSI sector is processed near the generation points. This minimises the requirement to transfer data to a public cloud and makes it more secure. Containerised data centres are well suited to address the needs of the banking industry.


The demand for data centres in the retail sector has been gaining traction on the back of point of-sale systems, online payments and e-commerce. Enterprises in the retail sector have been making optimum use of data centre solutions to enhance their business operations. As online retail continues to expand, companies such as Amazon, Flipkart, BigBasket and Grofers require reliable data centres to deliver uninterrupted online services. These data centres ensure proper functioning of websites and enable retailers to identify the most in-demand products and the localities demanding additional delivery slots using analytical tools. Further, Schneider Electric is linking corporate offices, networks and data centres to power corporate data centres. These data centres are programmed to process retail orders and transactions from stores, websites and warehouses.


With the help of industrial IoT, data in the manufacturing sector is collected at end points such as sensors and actuators that monitor machines in real time. To this end, data centres are being increasingly used to consolidate the data generated from these operations and integrate diverse manufacturing services. Furthermore, these data centres can predict failure upon data analysis. In fact, data centres are playing a significant role in automating routine manufacturing functions and improving support services.

Government initiatives

Government initiatives such as Digital India and the emphasis on data protection are expected to increase the volume of data and, in turn, drive the demand for data centres. Further, the government is increasingly relying on data centres to support government-to-citizen delivery platforms such as the National e-Governance Plan, e-visa, National CSR Data portal and e-Aadhaar.

In November 2020, the Ministry of Electronics and Information Technology’s (MeitY) e-governance division issued the draft Data Centre Policy, 2020. According to the draft, the government will work towards providing infrastructure status for the data centre sector on a par with other sectors. The Uttar Pradesh government announced plans to set up the state’s first data centre in Greater Noida with an estimated investment of over Rs 6 billion. According to industry sources, the facility will be built on 20 acres of land.

Making smart cities smarter

The success of a smart city would depend primarily on the robustness of its supporting infrastructure. To this end, a data centre with uptime reliability and scalability for effective functioning would be paramount. Going forward, edge data centres will form an integral part of the entire physical infrastructure and serve as a data storage and processing platform. Without  robust data centre infrastructure, the data gathered throughout the city by smart technologies would lose its value. This makes a high-tier data centre crucial. Moreover, with rising data security threats, the onus of safeguarding data and ensuring its encryption will be on the data centre industry.