With the advent of 4G cellular networks, India saw a sudden spurt of mobile internet users. With accessible high-speed internet, people started consuming data for an entirely different purpose and the needs of these high-speed mobile internet users kept on increasing. As India got engulfed in the pandemic and state-permitted lockdowns, it led to a whole new boom of internet usage across the country. The rising digitalization revolution led to the rise in demand for auxiliary services, including data centres and other network infrastructures.
In order to get more insights about the trends in cloud adoption amongst businesses and to analyse the overall growth of cloud and data centres across the globe we talk to Sridhar Pinnapureddy (pictured below), CEO and Founder of Cloud4C.
Give us an idea about the scale and volume of the global data centre market. Which countries are currently in the forefront in this market?
According to a report by Gartner, data centres are expected to grow by 6% from 2020 to 2024. Despite positive figures, the industry was hit significantly in 2020 where the market declined by 10.3% as the pandemic slowed down cash flow and market investments.
However, we foresee that the global data centre market will recover and bounce back by the end of this year. In fact, the same report estimates that global end-user spending is expected to reach up to US$200 billion by the end of 2021, as the world slowly recovers from the pandemic.
Countries most competitive in the datacentre market include the U.S, U.K, Germany where in Asia; China, India and Japan take dominance of the market. These countries have the largest number of data centres located across its region, with more expected to grow in the near future. Building a data centre requires ample space, talent and resources where countries like the U.S, China and Japan are ready to be major players in the industry.
A rather more interesting global trend is in the rise of green data centres. Reports predict the green datacentre market value to reach a highly promising USD 140 billion by 2026, growing at 19.1% CAGR from today. Global data centre vendors are now delivering ECO modes which is the most energy-efficient UPS operating mode.
In addition, the rise in the adoption of AI and smart technologies to address cooling and power efficiency is greatly contributing to the green datacentre vision. At CtrlS too, we are fully committed to sustainable solutions, focusing on green energy investments and achieving fully carbon-neutral operations across all our data centres by this decade.
Please give us an instance of a sector that has increasingly ventured into the world of cloud technology during the pandemic.
Being present in 25 countries and 52 locations globally, we observed that there has been an increase of cloud adoption in the healthcare, education, banking and finance services, retail, power and energy, IT-Telecom, manufacturing, public sector industries to help them in their digital transformation journey. These industries are some of the most crucial during the pandemic and moving to cloud benefits all stakeholders including – the organization itself, employees, and customers. Hybrid cloud remains the most favorable type of cloud as it possesses the benefits of both the public and private cloud at a relatively more affordable cost. Cloud4C offers services tailored for clients in their specific industry to provide the utmost support for them as a prominent cloud player in the region.
What was the condition of the cloud services market before the pandemic and during it, across the globe and specifically in the APAC?
The APAC region consists of over 30 countries, with every country at different technology maturity stages – with some countries being more ready for cloud adoption. Before the pandemic, cloud seemed to be an option for many organisations, as adopting cloud can be costly.
Also previously, companies and regional markets approached cloud adoption as a strategy to enhance their competitiveness, becoming cost efficient and to enhance their overall business efficiency. However, the pandemic had transformed the ‘good to have’ mindset to a ‘must have’ one. Cloud adoption is an integral part for business and enterprises to ensure security and compliance, data protection and digital innovation.
As a result of the pandemic and enterprises seeing the importance of cloud, APAC is predicted to be the fastest-growing market digitally with a CAGR of 117% over the next three years, according to the APAC Digital Skills Index 2020. Based on the GlobalData report, the cloud-computing related services is also expected to grow at a compound annual growth of 19% for the next three years
For Southeast Asia particularly, it is eager to embrace cloud adoption this year to unlock strategic values and tap onto more business potential within the region. Singapore takes the lead here, especially with the government announcing plans and measures to help enterprises digitally transform. Similarly, many other governments in the region are implementing policies or strategies to encourage cloud adoption among businesses.
What are the prospects of the data centre industry in India and other similar fast developing markets?
India is one of the key emerging markets for data centres in APAC and has the potential to become a leading competitor to mature markets like Hong Kong and Singapore in the region. According to the National Association of Software and Service Companies (NASSCOM), investment in the global data centre market is expected to reach nearly US$200 billion per annum by 2025, and India is likely to account for 2.3 per cent of these total investments. Reports value the Indian data centre market size size to cross $4.5 billion, growing at a CAGR of over 4% during the period 2020-2025. The IaaS adoption as well is likely to grow at a CAGR of 20% between 2020 and 2025. Data localization, FDI, and tax incentives by state governments are all favorable factors for DC investments in the country. 5G, IoT, and Big Data though are at a nascent stage in India they are the potential drivers for increased DC investments as well… So, I see a positive growth environment for data centres overall in India.
The main drivers of data centre growth in India can be summarised as follows:
· Increasing digital adoption and high data consumption by a large population
· Smart phone devices affordability
· Large network of data and strong bandwidth enhancing data usage across a wider population
· Government policies including Digital India, data localisation policy and its consistent drive to enhance digital access for services
How can the current and the upcoming data centres across the globe and in the APAC survive the onslaught of the tough competition?
Being in the ever-changing tech industry, it is important to remain innovative in the offerings, services and solutions. Staying relevant in the industry and market also requires businesses to adapt to the needs of people. Hiring a strong research or analytics team helps to predict future technological advancements which may be the gamechanger for the business and all the stakeholder.
Excerpts of an email interaction with Ujal Nair