The Indian data centre space has been growing by leaps and bounds, especially in the wake of the Covid-19 pandemic. This rapid growth has been fuelled by the adoption of cutting-edge technologies such as artificial intelligence (AI) and big data analytics, coupled with central and state government initiatives. Further, the ongoing transformation of enterprises towards digital technologies such as the cloud has triggered an increase in the demand for data centre services. Together, these factors are expected to accelerate growth in the Indian data centre space. As per industry reports, India’s data centre footprint, which currently stands at around 11 million square (sq.) feet, is expected to increase to about 30 million sq. feet by 2030 and could cross 100 million sq. feet by 2060, comprising 5,000 edge data centres across the country.
A look at how new technologies as well as digitalisation initiatives by enterprises and the government are driving growth in the data centre domain…
Role of new technologies
Today, cutting-edge technologies such as AI, big data analytics, internet of things (IoT), machine learning (ML) are becoming increasingly important tools in data centre operations. With the help of AI, data centre operators can improve monitoring of operations. Further, AI enables data centre operators to monitor server performance and network congestion and helps reduce downtime by predicting outages.
For ensuring critical uptime and increasing performance levels, AI-based systems can use data from smart sensors to analyse energy efficiency, track power levels and monitor server performance; and set temperature points in a data centre, evaluate cooling equipment and fix energy inefficiencies. Recently, Google highlighted the benefits of using AI in improving the energy efficiency of its data centre. Within barely 18 months, Google’s AI-powered system ensured 40 per cent reduction in cooling energy consumption. This represents a 15 per cent decline in its overall power usage effectiveness overheads.
Data centres also use AI-based cybersecurity systems, which analyse incoming and outgoing data, detect malware as well as provide data protection. As an advanced arm of AI, ML scrutinises and pinpoints patterns in huge stacks of data. In this manner, it can optimise all aspects of data centre operations such as designing and planning, managing information technology (IT) workloads, uptime maintenance and cost control.
Going forward, emerging use cases around AI and ML will accelerate the demand for a robust digital infrastructure such as multitenant hyperscale data centres. Moreover, a growing number of data centre operators will deploy automation tools within their premises for creating smart data centres, offering features such as remote operating system installation, intelligent metrics, firmware updates, network and storage configuration.
The government has also been actively working to scale up the data centre infrastructure in the country. Under the Digital India initiative, it had launched Project MeghRaj, which aims to establish 33 data centres and cloud infrastructure for offering e-governance services. Today, 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. Further, the government entered into partnerships with cloud service providers such as Amazon Web Services and Reliance for cloud computing services.
However, the most important step undertaken to expand data centre infrastructure in the country remains issuing of the draft Data Centre Policy in November 2020, which aims to establish India as a global data centre hub. Some of the key proposals floated under the draft policy issued by the Ministry of Electronics and Information Technology (MeitY) are granting of infrastructure status to the data centre space; single-window clearance mechanism for the establishment of data centres; pre-provisioned data centre parks with internal infrastructure for the “plug-and-play” model for operators; encouraging joint ventures and foreign investments in the sector; and providing incentives for local manufacturing and procurement of IT and non-IT equipment, etc. The policy, which is yet to be approved, will prove to be a game changer for the expansion of India’s data centre space.
Recently, MeitY announced that it is planning to launch a scheme or policy on hyperscale data centres that would look at incentivising investments in these data centres in India. The scheme/policy would look at promoting a tenfold growth in the hyperscale data centre space.
Apart from the central government, several state governments too have started providing incentives for the establishment of data centres. For instance, the governments of Maharashtra, Gujarat, Telangana, Uttar Pradesh and Haryana are providing fiscal and other benefits for setting up data centre parks. The benefits being provided by these governments range from subsidies on land, power, or other infrastructure, tax or duty waivers, grant of infrastructure/industry status, classification as essential service, etc. Further, the Maharashtra,, Tamil Nadu and Uttar Pradesh governments have signed multiple MoUs with various data centre operators/ developers to build hyperscale data centre campuses in their states.
Going forward, state governments’ efforts to incentivise the establishment of data centres, coupled with the implementation of a national policy on data centres will give a much-needed fillip to the Indian data centre space.
Data centres for smart cities
The smart cities domain remains another key growth driver for data centres. The huge amount of data generated across the smart city ecosystem requires intelligent data centres. These data centres abstract, store and share data from multiple sources in a structured format. For instance, during the ongoing Covid-19 pandemic, the Surat Smart City used its in-house data centre to store data collected through different sources. It also developed a user manual for employees to adhere to the hosting requirements of the server. In a bid to protect the data, the Surat Municipal Corporation signed an MoU with third parties, including private hospitals to ensure that personal data was being used only after anonymising it to ensure data privacy. However, a key issue with data centres in smart cities is that data centre requirements vary from city to city, depending on the amount of data that is likely to be generated and transferred daily. Therefore, industry experts believe that targeted data centres for some smart cities would take the form of single hyperscale data centres, which may be sufficient to serve as a hub for the entire city, while for some others, they take the form of edge data centres or micro data centres. In short, data centres for smart cities must be aligned with the specific requirements of each city.
At present, smaller cities will generally benefit from more advanced data centres, with which companies can better reach users with minimal latency. However, as IoT devices such as autonomous vehicles gain adoption, edge data centres, which are flexible enough to meet the changing usage requirements, will need to be deployed, especially in smaller markets where it is simply cost prohibitive to build a new facility when needed.
Enterprises driving demand
Additionally, enterprises across the country seem to be driving up the demand for data centres, in a bid to move towards greater cloudification. Usually, there are three models under cloud computing, one is the public cloud wherein business applications run completely in a third-party data centre; the second is private cloud where individual companies operate their own data centres; and the third is hybrid cloud, which is a mix of the above two.
Today, an increasing number of enterprises across industry verticals are looking to transform into digital-first businesses with a natural progression towards increased cloud-led innovation. As a result, industry experts predict that around 40 per cent of new enterprise applications in India are likely to be cloud-native by 2022. Further, a study by IBM projects that enterprise spending on cloud systems in India will increase 49 per cent by 2023. This growth would fuel the demand for data centres across the country.
The key enterprise verticals that would be at the forefront in this regard would be banking, financial services and insurance (BFSI), manufacturing, retail as well as new markets such as education that are currently engaged in online streaming of large volumes of data services. For instance, data centres are helping BFSI enterprises to process data near generation points, thereby minimising the requirement to transfer data to a public cloud and making it more secure. In the online retail sector, companies such as Amazon, Flipkart, BigBasket and Grofers are using data centres to deliver uninterrupted services, ensure proper functioning of websites and enable retailers to identify the most in-demand products using analytical tools. Meanwhile, in the manufacturing sector, data centres are playing a significant role in automating routine manufacturing functions and improving support services.
By Kuhu Singh Abbhi