Big DataNews & Analysis

Build Vs Buy: Data Centres in India


Data centres in India mainly operate on two models. The first one is known as a captive data centre model, in which an organisation builds, operates, and manages its own data centre. The other is the outsourced or a “co-location “model, where organisations purchases data centre hosting services from external providers. Under this arrangement, the external provider offers power, security and cooling needs for the datacentre, while the customers use the leased space to deploy their servers.

Initially, captive data centres enjoyed a significant market share, but gradually, they have ceded their ground to third-party service providers. Third-party data centre service providers are tipping the scales in their favour with their value-added services, innovation, and high opportunity costs of real estate and electricity.

As a result, business verticals such as BFSI (banking, financial services, and insurance), telecom, retail, media and entertainment are increasingly leveraging third-party hosting functionalities over in-house data centre services.

The Increasing Demand for Data Centre Segments in India

Studies show that the Asia Pacific would be the fastest growing region, regarding large data centre segments, over the next five years. Today, APAC accounts for a quarter of the global data centre infrastructure expenditures, at $42 billion.

That said, China and India are the two major players set to exploit the market and fuel the growth in the APAC region. The data centre market in India was worth $4.5 billion in 2018 and is likely to reach $7 billion by the year 2020.

Another factor that is responsible for the growing data centre infrastructure needs is the size of the digital populations in the country, which is projected to reach up to 2.3 million petabytes by 2020.

Overall, the primary drivers of the data centre segment in India include:

·         The availability of ample real estate and competitive policies

·         Information and communications technology-aware population

·         The continuing growth of India’s internet penetration and mobile market

·         The disruption of the technology landscape by API-based analytics and AI to optimise, automate processes and enhance the customer experience

·         Investments by the government of India in large scale digitisation, under the Digital India Scheme

·     Rising social media consumption and IT penetration in the country with the introduction of 4G/LTE technology

BB  Building Your Own Data Centre – What it Takes?

Building an on-premise data centre in India would be comparatively easier for larger enterprises having extensive financial resources to cover all construction and fibre costs.

Also, companies would also need significant financial backing to be able to handle the influx of staffing, and IT needs such as around-the-clock infrastructure maintenance and monitoring. Overall, the idea of building an in-house data centre would be sensible in the long term for an established organisation with extensive amounts of data.

With their own data centre, businesses have the benefit of having total control over their data processes, operations, security needs and environment. Also, organisations have complete access and control of the entire premise, power, space and temperature.

On the flip side, however, businesses may have to tackle the following overheads with on-premise data centres:

·         High initial investment costs

·         Expensive scalability opportunities due to the installation of additional infrastructure

·         Challenges to providing constant air conditioning and power supply

·         Additional infrastructure requirements for disaster recovery

·         Significant resource maintenance costs

Outsourcing the Data Centre to a Reliable Data Centre Provider

All businesses require large amounts of data storage space. For example, companies would need to scale up in terms of server racks to ensure uninterrupted connectivity and uptime. Therefore, colocation data centre services can help satisfy your businesses data availability, storage and connectivity needs.

Renting or buying dedicated third-party data centre services comes with benefits such as:

·         Carrier-Neutral Connectivity

Reputable third-party data centre providers such as STT GDC India offer carrier-neutral connectivity. Therefore, organisations within the data centre environment can select the carrier service provider that aligns with their business and financial needs.

·  Minimised Total Cost of Ownership

By leasing in an external data centre facility, businesses would need a substantially lower cost of installation up front. Thus, companies can focus on managing their servers and networks more efficiently. Overall, colocation data centre services help companies to lower their total ownership costs and maximise productivity significantly.

· Scalability

As previously stated, when organisation go for building their own data centre, they can establish an economy of scale by maximising efficiency and minimising operational costs.  Even when organisations look to scale up their business, they wouldn’t have to make way for additional hardware purchases, installations and staffing requirements. Instead, they can seamlessly scale out additional server rack assemblies, as and when required at a colocation data centre facility.

·  Reach and Redundancy

Third-party data centre service providers offer businesses with multiple connectivity options when outsourcing. This functionality significantly reduces the potential for carrier failure and thus protects critical infrastructure and applications’ performance.

Also, the providers also offer multiple fibres or copper routes to extend the reach and reduce latency in information transfer. Overall, colocation data centres provide:

ü  Uninterrupted power supply

ü  Maximum uptime

ü  Data redundancy in terms of networks, bandwidth and storage allocation

· Security

Dedicated third-party data centre providers supply an around-the-clock security detail, complete with cutting-edge biometric logins and CCTV coverage at all access points. Together, these attributes help protect the server hardware from intrusions and possible physical harm, without incurring any financial liability on the client’s part.

Overall, colocation data centre facilities adhere to industry-standard norms of physical and data security including:

ü  Around-the-clock service and support

ü  Adherence to regulatory practices of data privacy, cybersecurity and financial implications including tax laws

ü  Ease of communication and secure accessibility to business-critical information

ü  Integration of artificial intelligence (AI) and machine learning and with the security suite

ü  IoT-enabled security solutions to achieve automation and efficiency

What Works Best for Your Organisation?

The choice between building and buying data centres in India depends upon your business requirements. Therefore, if your business has a significantly large user data generation and scalability requirements, opting for a colocation data centre will be a wise decision. Such an investment will not only be a viable long-term investment but will also help you focus on other crucial operational aspects of your business.

The bottom line, here, is that irrespective of the company’s size, it would be unwise to ignore the importance of having a dependable data centre. Whether it is a large organisation with extensive financial resources or a much smaller start-up, the decision to build or rent data centres in India should only be guided by the numbers and evidence, distinctive to each business.

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