“Connectivity and automation are critical for innovation”

By Sunil Gupta

Industries worldwide, shaken up by the pandemic, leaned on connectivity like never before as employees were confined in their homes and office grounds were off-limits. The world relied on the IT sector to facilitate businesses with an uninterrupted working environment for their distributed workforce. Indian IT industry stood as one of the key drivers in the country’s accelerated digital transformation. Undoubtedly, cloud adoption became a necessity for business continuity from being a choice for cost optimization or scalability.

Emerging technologies such as artificial intelligence (AI) and the internet of things (IoT) are being widely adopted and increasing business opportunities via data collection and analysis. There is already an impressive surge in customer data platforms (CDP) in order to collect well-curated data to operate optimally.

The technology industry has been bracing itself for 5G for a couple of years and the focus now is on providing high-performance connectivity solutions to enterprises and end-users. Another significant trend alongside 5G, edge computing has grown immensely in the COVID world as it is an efficient solution that optimizes technological interactions and reduces latency at the origin to enable real-time data consumption effectively. According to a report by International Data Corporation (IDC), the worldwide edge computing market will reach USD250.6 billion in 2024 with a CAGR of 12.5% over 2019 – 2024.

The industry concerns

Connectivity and automation are critical to bringing innovation in the digital world. Under current circumstances, demand for IT  services such as cloud migration, data analytics, applied intelligence, etc. is on the rise. Hence, the technology industry has been working under immense pressure to ensure seamless connectivity, stay accessible to the customers, maintain regulatory standards, and address evolving security threats.

The pandemic brought the IT sector to the center stage, and up against the challenge to bring the entire workforce online by scaling up the cloud, virtual training of the staff, and increased use of VPN to strengthen the company’s communication infrastructure. Security has been one of the biggest challenges faced by the IT sector as unsecured remote devices connected to the server are prone to cyberattacks.

With the increase in demand for cloud services, integrating these services with different applications is on a priority list for technology services providers. By 2025, Gartner estimates that 75% of enterprise data will be generated and utilized outside of the data centers. To deploy storage capabilities and power sources at the edge of the network will also emerge as a challenge for the technology team.

India is in dire need to grow its data center capacity due to the pandemic’s push towards cloud adoption and data migration to co-located data centers. Having said that, the growth of data centers is hindered by challenges around land costs, power availability, and sustainability.

The XaaS solution

Due to the rapid shift in cloud computing and spurred complexities in technology over the past couple of years, managed services providers have become a one-stop solution for tech enterprises to optimise and manage their entire IT infrastructure from managing CSPs to backups, network connectivity, disaster recovery, and security. The need to shift to a more flexible model has become critical for businesses. With XaaS, all cloud services are available at pay-per-use model allowing enterprises to avail these offerings at zero Capex investment and zero Opex commitment. The pandemic and the government’s push towards digitisation have accelerated the penetration of XaaS across Indian companies and the world.

As enterprises fast-track their digital transformation journey to gain competitive advantage, building a robust network infrastructure will be even more critical.

Research reports by IMARC suggest that the global XaaS market is expected to reach $344.3 billion by 2024, expanding at a CAGR of 24 percent during 2019-2024. The IT industry has also been working on security technologies to protect data such as hardware authentication for IoT devices, user behavior analytics (UBA) with the help of big data analytics, data loss prevention techniques like encryption, deep learning using AI/ML, and virtual security using cloud.

The pandemic forced the enterprises to accelerate digital transformation and deviate from the traditional workplace to innovate their operations and communication with employees and customers. To address these concerns, companies required work-from-anywhere services with secured connectivity and access to data and applications. Thus, it inevitably magnified the demand for cloud-based solutions like desktop-as-a-service. Virtual and graphics workstations also began to gain popularity. Simultaneously, it increased the demand for tech skilled resources.

The future outlook

As enterprises fast-track their digital transformation journey to gain a competitive advantage, building a robust network infrastructure will be even more critical. Remote working will be the standard in the future and instead of a temporary new normal, there will be a rise in demand for cloud services and security solutions. Even emerging use cases around AI, ML, and IoT will accelerate the demand for robust digital infrastructure. To drive innovative and profitable business models, enterprises will continue to align their business transformation efforts with adopting the public cloud platform. Everything-as-a-service will gradually become an imperative for a truly digital-native enterprise.

It is believed that 5G is the key to a strong, digital India. There is going to be massive propulsion behind 5G in the coming years with large companies already investing significantly to build their own 5G ecosystem. Riding on the 5G and IoT wave, edge computing is booming in India. Organizations will need to keep data closer to the origin for low latency, better connectivity, and real-time data consumption. These compact and self-operating data centers will support more unique use cases of digital transformation in the future.

There will also be an increase in the demand for data centers like never before. While India is currently home to 80+ third-party data centers, investments in the space have also grown exponentially with at least 10 new projects coming up on an annual basis. These investments are estimated to grow at 5% CAGR and reach USD4.6 billion per annum by 2025. Additionally, the JLL report predicts that in terms of power capacity (MW), the India data center capacity is expected to grow about three times to 1,078 MW by 2025. Currently, it stands at 375MW.

Gupta is Co-founder & CEO, Yotta Infrastructure