Fuelling India’s growth as a datacentre hub

Interconnectivity technologies are key to creating more computing power and storage, enabling the country to meet its growing data management needs

Over the last few years, India has solidified its position as a datacentre hub, with several hyper scalers and service providers building new datacentres to address the growing demand for the capacity and the ability to offer a low-latency experience.

The sector is moving from strength to strength with the country’s growing data consumption, and the COVID-19-led digital transformation of enterprises, coupled with increasing cloud adoption, leading to the evolution of the datacentre industry in the country.

Cloud is a significant part of the digital transformation of enterprises across all sizes and is one of the key factors fuelling growth.

Several hyper scalers have recently either set up or expanded datacentre operations in the country. For instance, Microsoft announced its intent to establish its latest datacentre region in Hyderabad, adding to its existing network of three regions in India across Pune, Mumbai, and Chennai. Similarly, Amazon Web Services launched its second infrastructure region in Hyderabad last year, with plans to invest an estimated USD 4.4 billion in India by 2030.

According to a recent study by JLL, the country’s datacentre capacity is expected to double from 637 MW in H1 2022 to 1318 MW by 2024. The industry is likely to grow from USD 385 million in 2021 to USD 1.2 billion by 2024, says the same JLL report.

Indian service providers are already taking steps to deploy innovative DCI to provide a reliable and scalable network connecting users to digital content.

As the Indian consumer matures and demands best-in-class digital experience, there has been a significant increase in the number of edge datacentres. India’s public sector company, Railtel announced recently that it would be building edge datacentres at 102 locations in tier 2 and tier 3 cities. The Government of Uttar Pradesh has also signed an agreement to build edge datacentres at 750 locations in the state. Service providers are also investing in building a network of edge datacentres. Airtel added a datacentre in East India in 2022 to its existing 12 large and 120 edge facilities across the country. This growth in edge datacentres is also the result of the growing 5G ecosystem in India.

India’s burgeoning digital economy

A key reason for this growth is the country’s expanding digital economy. There has been a massive increase in data consumption, with estimates predicting India’s mobile data traffic to increase to over 49 gigabytes per subscriber per month in 2027.

The launch of 5G services last year and the growing 5G coverage imply that data consumption is likely to continue growing over the next few years. 5G will also enable several path-breaking and high-bandwidth use cases like Industry 4.0, smart city applications, connected vehicles and remote surgery, further increasing the demand for capacity and low latency to provide a superior customer experience.

The pandemic has also accelerated the digital transformation of enterprises across different industry verticals. Cloud is a significant part of the digital transformation of enterprises across all sizes and is one of the key factors fuelling growth. The consumption of cloud-based applications and services is only going to increase over the next few years as more and more enterprises adopt a cloud-first or cloud-progressive approach. Overall. The public cloud services market in India is likely to reach USD 17.8 billion by 2027, growing at a CAGR of 23.4% from 2022 to 2027, according to IDC. Government initiatives like Digital India have also contributed to the growth of the datacentre industry in the country.

Need for high-performance datacentre interconnect

Cloud-based services have witnessed a massive jump as they allow enterprises to quickly and easily process and acquire insights from the influx of data. However, managing a hybrid and multi-cloud infrastructure is increasingly complex as the influx of data being transported in and out of the cloud continues to grow.

As more and more Indian businesses adopt a multi and hybrid-cloud approach, connectivity requirements are bound to increase and will require best-in-class interconnection. Enterprises are also looking for flexibility and agility in provisioning the bandwidth. Today, businesses need to work with network, colocation, and cloud providers to ensure a high-performing interconnection. Typically, they are required to make a long-term commitment with a higher monthly cost. This is a problem because it is hard to predict how the connectivity requirements will evolve over a period of time.

DCIs can turn any datacentre into a living organism of scalable performance that can respond to the exploding need for data, without creating a new centre.

Datacenter Interconnect or DCI offers a way to create more computing power and storage by allowing service providers to tap into the physical and virtual resources of other datacentres they are interconnected with. Essentially, interconnectivity technologies turn any connected datacentre into a living organism of scalable performance that can respond to the exploding need for data, without having to create a new physical centre. Beyond saving dollars on real estate, electricity and cooling costs, such technologies also ensure greater security, as operators can create network connectivity between their distributed datacentres for disaster recovery. The right DCI platform helps enterprises streamline operations and ensure a world-class customer experience.

India has already established itself as a key datacentre hub. Now with digital transformation moving at breakneck speeds and the continued adoption of the cloud, the India datacentre sector is well on its way to boost this growth momentum. Indian service providers are already taking steps to deploy innovative DCI to provide a reliable and scalable network connecting users to digital content. Datacentres are a pillar of growth for India’s digital economy, supporting the surging demands for video, data and cloud-based content and services.

By Vikram Anand

The author is a Senior Director with Ciena India.

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