The Future Of India’s Digital Economy Lies In Digital Infrastructure

The pandemic caused havoc to lives around the world. In addition to shifting the global order, the pandemic has also provided a boost to the ever-expanding digital infrastructure – a combination of data centers and interconnection services.  The pace of change continues to accelerate as organizations in India and around the world strive to adapt to the “new normal.” Digital technologies have enabled us to quickly adapt to new ways of working, learning, connecting with family and friends., and more. Recent months have highlighted the need for a powerful digital infrastructure that allows companies to cope with shifting customer needs, and to scale quickly.

Accelerate the Digital Economy in India

India has ambitious goals to become a $5 trillion economy by 2025, and “Digital India” initiatives are crucial to achieving that target.  Six years later after the Digital India initiative was announced by Prime Minister Modi, India is sharply accelerating “liftoff” phase of its digital journey. The pandemic showed us that digital connectivity is critical to business continuity in times of crisis.  This brings us to the crux of the issue – the country needs a much stronger digital infrastructure than what it currently has. Investing in digital infrastructure is estimated to have a 4x multiplier on GDP. With Covid-19 and the ensuing decentralization of industries, this figure could be even higher. The pandemic has accelerated digitalization of the economy, and digital infrastructure is the bedrock of this change.

According to a McKinsey report, core digital sectors such as IT and business process management, digital communication services, and electronics manufacturing could double India’s GDP level to $355 billion to $435 billion by 2025. Digital infrastructure has become indispensable to the functioning of the society. India can create USD 1 trillion of economic value using digital technology by 2025. Governments are working towards achieving smart city and health objectives, so enhancing digital infrastructure will be crucial to leveraging the latest technologies effectively for economic development. Data centers could play a crucial role worldwide due to surging online activity as well as the mass amounts of data they generate.

With the pandemic outbreak in 2020, the data center industry witnessed a pivotal shift. As the country moves towards a digitally empowered society, both data volume and digital consumption have increased. Organizations require a robust digital infrastructure to support present use cases like employees working from home, VC sessions for meetings and also prepare for the emerging use cases such as AI, Machine Learning, and IoT. In addition, the upcoming launch of India’s 5G network is expected to further accelerate this explosive growth.

The key priority: modernizing digital infrastructure

Working with global IT leaders across industries, we have found that the first step in achieving their digital transformation strategy is network optimization to overcome the inherent limitations architected into their legacy network architectures – building a digital foundation on the right architecture.

Many of our customers with legacy multi-protocol label switching (MPLS) networks are moving to modern software-defined and virtual network infrastructures to gain the agility and flexibility they need to reach these highly coveted goals. Digital leaders also require networks that are as on-demand and elastic as the services they are connecting to, whether it is cloud, SaaS or other digital platforms and applications. They need to be able to deploy network devices and bandwidth nearly instantaneously, close to users, data, applications, clouds or connected things.

For most organizations the IT architecture has flipped. The most important data for their business is not in the headquarters or even the branch office; it lives and evolves at the edge in mobile cell towers, utility substations, remote kiosks or monitoring devices — sometimes continents away from headquarters. The edge pumps out data that inspires innovation, drives revenue, provides insights for sound decisions, and ultimately, delivers greater business value.

Legacy IT infrastructures and network architectures back-haul data to corporate data centers for processing, analysis and interacting with public and/or private cloud services. However, delivering data to centralized compute or cloud capabilities far from its source has become impractical. The amount of data being produced at the edge is expanding exponentially and the speed requirements in which users or applications need to access data is accelerating.

In addition, traditional IT architectures are typically isolated silos that cannot benefit from rapidly growing partner ecosystems, while cloud-only architectures are hitting data management and egress challenges that block scaling application performance cost-effectively. The reality is neither of these approaches is getting to the core need – transforming IT architecture for new forms of engagement, partnership and digital service delivery.

According to Forrester, interconnection enables enterprises to move out of owned islands of data and into interconnected hubs of third-party services located at the “edge,” or at close physical proximity to the users of these services, is quickly becoming table stakes to achieving digital transformation.

Shaping digital infrastructure for the future

The importance of digital infrastructure has never been greater. In a few months, digital transformation has essentially evolved into years, and this trend is only going to accelerate. From the edge to multicloud, cloud-native technologies are expected to proliferate and get adopted faster in 2021 virtually across every infrastructure layer.

Using the right connectivity and networking infrastructure can allow Indian businesses to transform their IT infrastructure into a resilient and agile digital platform, which ensures security, performance and the right user experience.

As a result of the pandemic, the economy has accelerated its digitalization, and the backbone of this process is digital infrastructure. Leaders in business and technology who understand and embrace this will be better prepared to adapt to an ever-changing future.

(The author Manoj Paul is Managing Director, Equinix India and the views expressed in this article are his own)