Harsh Jagnani, Vice President, ICRA Limited

The last few years have witnessed an explosion in data generation driven by multiple factors such as greater automation of services, increasing migration to online models, deeper penetration of faster and smarter devices, and improved data coverage and average speed of broadband. In today's increasingly connected world, not just the large corporates but even small and medium enterprises (SMEs) are increasing the use of computers and Internet in their businesses. Copious amount of data is being generated, stored, and analyzed every minute. This data affords many benefits, some of which are - more services which can be offered, faster, more efficient delivery of services, and better understanding of patterns which can make organisations more efficient. With such data generation emerges the need for big data centers.

Earlier the prevalent model was private data center, wherein the data generator would house the infrastructure for storing data, in other terms, an in-house data center. This requires significant upfront investments, which become infeasible especially for SMEs and start-ups. As is seen in case of many industries, growth in scale leads to outsourcing of the supporting infrastructure. A case in point is the branching out of the independent telecom tower industry from the telecom industry. Similarly, third-party data center has grown as a separate industry and refers to infrastructure providers that allow data generators to house their data in leased space.

Migration to a third-party data center immediately frees up real estate - in many cases very expensive real estate - for a company. In addition also third-party data centers give the benefit of economies of scale, distributing costs across a large number of users, which in turn helps them build 
high-end security provisions and redundancies to meet emergencies. Consequently, these data centers are even capable of hosting critical services with significant assurance of timely data availability with utmost security

Increasing use of cloud computing too has pushed the growth of third-party data center services. Cloud computing brings device-and location-independence, which enables users to access systems using a web browser regardless of their location or what device they use (e.g., a personal computer or a mobile phone). As infrastructure is off-site (such as third-party data center) and accessed via the Internet, users can connect from anywhere. Cloud computing and storage solutions provide users and enterprises with various capabilities to store and process their data in third-party data centers.

The Government of India's drive toward increasing digitization, expanding broadband coverage to villages, improving financial inclusion through Aadhar-linked programs, etc., is creating significant amount of data; there is need for sizeable investments in creating data center capacities. Witnessing the significant demand going forward, investments in data center space have been rising. Some of the key players in the data center industry include NetMagic Solutions Private Limited, Reliance ADAG group, Tata Communications Limited, BSNL Limited, and Bharti Airtel Limited.


 

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