Rising Tide: India's Data Center Opportunity
Most places on Earth flood. Rivers overflow their banks. Dams rupture. Ice melts in the mountains. Storms and tsunamis cause sea surges that send thundering walls of water decimating everything in their path.
Thankfully, the majority take days to develop – giving the affected time to prepare and evacuate.
But there’s another flood on the way. This time, it’s of our own making.
Welcome to the digital flood, where wave after wave of data crashes onto our shores, it is the prepared that will survive – and then prosper.
The capacity demands of big data analytics, mobile, the Internet of Things (IoT) and video are creating an unprecedented bandwidth deluge, putting further strain on networks and creating opportunities for the ready.
“We believe the outsourcing and driving of Clouds will nestle itself in India over the next decade in a similar way that software development, call centers and BPOs did in the last decade,” said Bill Barney, CEO of Reliance Communications (Enterprise) & Global Cloud Xchange. “This will drive huge growth in the Cloud and Data Center space across India. It’s critical we further enhance the end points of our network with state-of-the-art capabilities to ensure we are prepared to meet explosive new demands ahead.”
But it’s not just the web that’s evolving; it is us, and how we use, consume and interact with it. The proof is in the numbers: In 2003, user-generated content overwhelmed existing filters. By 2011, social data began to overwhelm social filters. Today, we have the flood.
Take video alone: by 2019, it will take over five million years to watch the video that crosses global IP networks each month. Every second, nearly a million minutes will be sent across the Net. Video will account for 80 percent of all consumer Internet traffic, up from 64 percent in 2014.
We are also traversing the waters of the Asian Century, where dominance of regional politics, commerce and culture will displace the American Century. According to Asian Development Bank, an additional three billion Asians will enjoy living standards similar to their European counterparts by 2050.
Not long ago, the chatter around the bar was that it would be China that dominated this new reality. That was until India’s Prime Minister Narendra Modi took aim at two game-changing projects he hopes will position his country at the helm of global affairs.
The first: ’20th Century India’ future-proofs infrastructure by ramping up power, road, rail, port and airport builds, while establishing manufacturing hubs to employ the tens of millions entering the job market each year and spending on housing and other social programs.
But it’s Modi’s ’21st century project’ – a marked departure from his predecessors, who were unwilling or unable to roll out the aggressive reforms needed to open up the world’s largest democracy to its vast potential – that has tech leaders salivating.
The blueprint calls for the world’s fastest growing major economy to drive innovation through the digital economy. This will happen in tandem with Digital India, a roadmap that will connect the entire country online. “We want to have one mission: to take the nation forward – digitally and economically,” Modi said when unveiling the plan.
In September, Modi paid a breathlessly reported trip to Silicon Valley to promote Digital India as digital barons played cheerleader to his aspirations.
Facebook’s Mark Zuckerberg embraced him like a returning uncle from war. Rupert Murdoch tweeted that Modi is India’s “best leader with best policies since independence.” Billionaire, Time 100 Most Influential People in the world alum, and Facebook COO Sheryl Sandberg changed her profile in honor of his trip.
It is for good reason. Facebook, Yahoo, Google, Twitter, Instagram and YouTube and other strategic OTTs are steering towards the type of Indian growth that keep advertising revenues high and stock prices on upward trajectories.
It’s India and not the Middle Kingdom and its dramatic slowdown that provides this opportunity.
“Earlier, India had to try very hard to make a place for itself in the world. Now, the world is courting India,” Modi said during one stop where he lavished praise on Indian diaspora successes in Silicon Valley.
India, or Bharat to the locals, is one of the fastest growing tech spots globally, with the Data Center services market expected to grow by 30 percent per year until 2019. The evidence for growing demand can be found in the handbags and pockets of its 1.25 billion people – half of which are 25-years-old or younger.
The Republic was already home to the second largest Internet market of 354 million by the second quarter of 2015, a 17 percent spike in six short months. Its percentage of mobile traffic users is second globally and eCommerce is surging.
WELCOME TO THE DIGITAL FLOOD, WHERE WAVE AFTER WAVE OF DATA CRASHES ONTO OUR SHORES, IT IS THE PREPARED THAT WILL SURVIVE – AND THEN PROSPER.
As companies increasingly move to the Cloud, regulatory compliance becomes imperative. Cost, reliability, improved user experience, and most importantly, anticipated regulatory changes will push Data Centers closer to localized markets. After all, the data has to live somewhere.
A week after Modi was holding court in sunny California, research outfit Gartner was holding its own symposium in Goa, the former Portuguese colony on the Arabian Sea known for its 16th-century churches, spice plantations and boho-chic hotels lining the pounding surf of its honey melon beaches.
Beyond the palm-fringed curtain, Gartner Research Director Aman Munglani laid out how India’s once nascent Data Center infrastructure market will reach $2 billion this year, up from $600 million in 2012.
“Mobile and the proliferation of data are having a dramatic impact, and pressuring the supporting infrastructure and operations (I&O) upstream on servers, storage, networking, facilities and IT operations,” said Munglani.
Munglani warned of the need for solutions to be delivered more quickly as surging growth would not excuse the current lengthy waits of up to “12 months for infrastructure to come online.”
Data centers have some major changes in store, particularly virtualized workloads and ongoing enterprise transition to the Cloud and increased bandwidth to deliver the agility necessary to accommodate shifting traffic patterns.
The message is clear: Netflix alone takes up 40 percent of the US Internet. The video flood accounts for 70 percent of net growth globally and it’s already on India’s shores. To efficiently channel streaming video you need infrastructure.
“The growth is universal, but we are easily the best equipped to take it on. We have a subsea fiber network of almost 73,000 kilometers spanning the globe connecting into an Indian fiber network, which connects us through our Data Centers to the vast majority of India’s mobile and fixed market,” said Braham Singh, Senior Vice President of Product Development at Reliance Communications (Enterprise) & Global Cloud Xchange. “And we have the peering arrangement with the eyeball ISPs including our own vast footprint to connect content to the eyeballs. It’s not about the rack space, it’s about connectivity. The Data Centers are only a means to an end, it’s the connectivity where we differentiate ourselves from competition.”
Reliance and subsidiary Global Cloud Xchange were already the largest owner of Cloud computing facilities in India. Its 10 Data Centers fibered together with the largest terrestrial fiber network in the country and the world’s largest private subsea cable infrastructure made sure of that. So did India’s largest network of Tier III+ Data Centers and Internet- connected PoPs.
Then the Mumbai-based firm, announced it expanded its Data Center campuses in Mumbai and in Bangalore, doubling space and increasing power by 300 percent.
“Government regulations make it difficult for many to get into the market. We don’t have this problem and can deliver eyeballs to foreign businesses wanting to capitalize on the India opportunity through our Data Centers, next-gen network and Cloud infrastructure,” said Singh, a 30-year veteran of the telecom industry who is leading RCOM and GCX’s product development and Data Center expansion initiatives.
“More fiber, more Data Centers and more power is the Indian mantra. A few years ago Indian telcos were scrambling overseas to engender growth. Today, India is the sweet spot.” –– by Cain Nunns