The data centre segment is an extremely capital intensive one and payback periods are long. Thus, even going forward, it is large players with deep pockets who will thrive in this space. While we already had large corporate players like Yotta and AdaniConnex operating in India, global companies like NTT, Equinix and Iron Mountain have entered the country via acquisition mode. In the cloud segment, AWS, Azure and Google have fuelled the underlying data centre industry creating a more customer centric approach.
“In the next 5-7 years, we will witness a heavy dose of investment in terms of capacity building. However, as more and more players come in, there are chances of supply exceeding demand,” says Sunil Gupta, Co-Founder & CEO, Yotta Infrastructure Solutions.
AWS, which has a 59% market share in 1H20 in the Cloud Infrastructure as a service (IaaS) market, is committed to heavily investing in India in the coming years. In November 2020, the firm announced its plans to launch AWS Asia Pacific (Hyderabad) Region by mid 2022. This will be the company’s second region in the country after the launch of the Mumbai Region in 2016. Higher fault tolerance, lower latency, addition of new Edge locations and AWS Direct Connect locations is a priority for the firm. More Direct Connect locations means more customers can transfer their data to AWS directly from their data centres through dedicated private network connections.
While the cloud infrastructure available in the country is top notch, it is adoption that needs to pick up.
“Our mission in India is to empower builders and businesses to build a better India and we want to be a force that moves India forward. Our strategy is not to acquire innovations, but to build it. We hire builders who look at customer experiences that are not working, then figure out how to reinvent those,” says Puneet Chandok, President, Commercial Business – AWS India & South Asia, AISPL.
When companies look for a cloud infrastructure partner, they are looking for one that can innovate with them. That’s exactly what a CLM firm like Icertis looks for. And “Contract Intelligence” is riding the same growth wave that the data centre industry is.
“The underlying impact of data governance and data residency regulation in India, underscores the need for an enterprise contract management system for all enterprises. The role of contracts in business processes is redefining the way companies do business,” says Monish Darda, Co-Founder & CTO, Icertis.
For Micron, a leading player in the memory and storage solutions space, it is the work-from-home culture and high e-commerce activity that have fuelled growth. Revenue for the Compute and Networking Business Unit was close to $2.6 billion, up 34% in Q2 of 2021. Enterprise demand has started to come back and the expectation is it will only strengthen as the year goes along. The company believes that even in the long term, AI and data-centric workloads will drive growth and memory and storage will become an increasing portion of server BOM cost.
“The opportunity for tapping intelligence from data is spurring unprecedented innovation within the technology arena. The challenge is to increase memory bandwidth and reduce latency of data delivery to compute to speed insight at scale.” says Anand Ramamoorthy, MD, Micron Technology (India).
Dell Technologies, which emerges as the top vendor in India in the mainstream server market with a revenue share of 40% as per IDC in Q4 2020 says it is going beyond physical servers to cater to the growing needs of its customers. Increasingly, with hyper-converged infrastructure based data centres, networking and 5G deployment, the software stack built on physical servers and its contribution to analytics is becoming immensely important. Dell Technologies is taking these trends into consideration and offering its clients cyber resilience, a simple journey to hybrid cloud and the ability to tailor their infrastructure to their needs. It’s even helping key data centre players design, build and scale their infrastructure.
“Data and monetization of data have become the key driver for digital transformation. This has made it essential for businesses to harness valuable insights from data. Our PoweEdge portfolio provides virtualization and the power needed to gain and act on real-time insights from data wherever it may reside – from core data centers to public clouds and edge locations,” says Alok Ohrie, President and MD, Dell Technologies India.
Systems Micro Clinic, which is a leading systems integrator, is expecting its business to grow 25% yoy. The firm has a large clientele spread across public sector banks, insurance companies, telecom companies, logistics, IT/ITES firms and pharma and healthcare companies. Even though India’s current data centre space is dominated by large players like Amazon and Google, there is plenty of opportunity to grow in the area of helping customers manage application workloads and infrastructure. ForHitachi Systems Micro Clinic, strategic collaboration is a key go-to-market strategy.
“India is poised to become the potential data centre hub of the world. More recently, the data centre industry is innovating to support customer business by offering infrastructure-as-a-service, storage-as-a-service and backup as a service. The growth of the industry will be driven by rapid adoption of IT services and Hybrid business models which encourage businesses to acquire data management capacities to handle huge volumes of data and government regulations,” says Anuj Gupta, CEO, Hitachi Systems Micro Clinic.
For Yotta Infrastructure, which is part of the Hiranandani group, the growth plan is to capture 20-25% market share in the next few years. The combined capabilities of a Developer Company (DevCo), Power Company (PowerCo), and Operating Company (OpCo) put Yotta in a unique position. The firm is focusing on scalability and spreading its footprint across the country. In fact, in addition to Mumbai, it’ll soon be operational in Chennai, Delhi and Kolkata. With a Rs. 7000 crore investment to set-up a 20-acre hyperscale park in Noida, an MoU with the West Bengal government and campuses in Chennai and Maharashtra, their expansion plans are set.
“The enterprise sector and startups both need everything-as-a-service. Most companies have moved away from colocation and there will be a demand for players who provide a whole range of cloud and managed services. The government has been supportive and MeitY is consulting with all stakeholders but ultimately majority of this sector’s requirements have to be catered to by the state governments and not the central government. They have already taken cognisance of our demands like land allocation, lower taxes and distribution of power at a cheaper rate,” says Sunil Gupta, Co-Founder & CEO, Yotta Infrastructure Solutions.
This speed of digitization is also impacting other businesses. For instance, it has fuelled insights-driven BPM solutions to help identify and reach customers across different platforms. NYSE listed Startek which employs over 18,000 people across 16 BPM centres in India believes that when the business processes run on a cloud, IT/ BPM providers can be more innovative and offer CX-as-a-Service with much lower CAPEX and OPEX.
“The cloudification of BPM makes the best use of virtualization to enable elasticity, security and improve economies of scale. We have migrated over 55% of our global workforce to the WFH model with maximum performance and AI-driven productivity controls,” says Aparup Sengupta, Executive Chairman and Global CEO, Startek.
In November 2020, MietY released a draft policy which will give the data centre sector – infrastructure status. However, some firms in this sector expect that the status won’t be awarded in the next five years. There are also challenges around having a skilled workforce and getting adequate investment to set up data centres especially for MSMEs and startups. But overall, both the private sector and the government have taken many steps in the right direction.