Emerging technologies to complement the Digital Transformation

Digital Transformation is being built on hybrid cloud architectures as organizations increasingly depend upon distributed IT resources, including multi-cloud, edge, and cloud-adjacent storage. Each of these is location-sensitive and will perform best in low-latency and secure environments. Developing an agile, resilient, and distributed approach requires mastering connectivity and having enough network bandwidth. According to Deloitte, virtually all (97%) IT managers are planning to take a best-of-breed approach by distributing workloads across two or more clouds to boost resilience and support regulatory requirements.

IDC predicts that by 2022, the economy will remain on its digital destiny with 65% of global GDP digitized, driven by that expected $6.8 trillion of direct Digital Transformation investments for 2020–2023. Products, services, and experiences that are improved through digitally enhanced features and functions are much more desirable to markets and consumers. By 2023, direct digital technology investments are expected to be over 53% of all ICT investments. In contrast, nondigital ICT technology investments are contracting by 1.4% over this same period as more and more companies accelerate their digital transformation capability build outs.

Given the country’s rich network connectivity, cost advantage, availability of skilled labour, low climate risk and strong data protection laws, India is well-positioned to serve as a regional Data Centre hub in Asia and likely to attract significant Data Centre investments. We expect demand for Data Centre space requirement to increase by around 15- 18 million sq. ft. across the major cities in the next 4-5 years.

New business models are likely to emerge, including colocation services, pay-per-use utility models, built to suit, etc. Location and design, easy scalability, security, infrastructure, sustainable practices and reliable partner are the key determinants for Data Centre demand.

In India, a captive Data Centre still has the highest market share however the colocation service model is witnessing tremendous growth and is soon expected to be almost equal to captive data. An ambitious incentive scheme worth up to ₹12,000 crore is in the works to encourage companies to set up data centres in the country.

The government is targeting an investment of ₹3 lakh crore in the next five years as part of the hyperscale data centre scheme and is planning to provide between 3% and 4% of capital investment as an incentive to companies, along with real estate support and faster clearances. Government officials said the vision is to “make India a global data centre hub” and termed the scheme’s target as the largest so far in terms of expected investment in the country over a period of just five years.

Deepak Sahu, President & CEO, VARINDIA