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How Increased Adoption of IoT and Cloud Services is Creating Opportunities for Colocation Providers in India

The 451 Research report, Data at the Edge: The Impact of Cloud and IoT on Datacenter Location and Demand, was developed based on responses from 700 IT decision makers across the U.S., Western Europe, China and India.

Dhiren Pandya, Director Business Development, Cloud and Colocation, India

In a previous post Understanding and Capitalizing on Regional Differences in Cloud and IoT Adoption my colleague, John Curran explored some of the key differences between cloud services and Internet of Things adoption rates, and their impact on colocation providers, across these regions. In this post, I want to focus on the findings as they relate specifically to India.

Through my role with Vertiv, the market leader in data center power and cooling critical infrastructure in India, I have good visibility into colocation and cloud services market trends, as well as societal trends, in the region. In reviewing the report, I was curious to see how my perception of the market would align with the responses of IT decision makers, particularly in regard to a couple of major developments that I see shaping the Indian colocation market.

Critical Infrastructure for the Smart Cities Mission – Colocation Data Centers on the rise

First, in 2015, the Indian government, through the Ministry of Urban Development, launched the Smart Cities Mission. This public-private partnership is an urban renewal and retrofitting program with the goal of implementing smart city technology in more than 100 cities across the country.

The impetus for this initiative was both increasing urbanization and economic expansion. In India, we have a relatively young population that is migrating to urban areas. The Smart Cities Mission, which relies heavily on IoT technologies, is an effort to increase safety, reduce congestion and improve services for urban residents while also sparking economic development by increasing investments and productivity. Already approx. 20 cities have implemented smart cities programs through the Smart Cities Mission. I would expect this initiative to spur Internet of Things development across the private sector as well.

Other developments are also driving India’s digital transformation, including the move to a cashless economy and the rapid growth in e-commerce. In addition, the Reserve Bank of India (RBI) recently notified banks and financial institutions that they need to store all data domestically, shifting workloads from outside the country to inside and increasing the demand on local data centers.

The Convergence of Colocation and Cloud Services – Increased demands for Data Center Space

This brings me to my second point. With the explosive growth in data and digital applications, combined with increased adoption of cloud services, India’s cloud and colocation market demand has increased significantly and the market has become more dynamic and more sophisticated.

Where not too long ago, it might have taken four years to fill a 30 MW colocation data center, today we are seeing that same size facility filling up within a year. That has attracted investments by global colocation providers who have made multiple acquisitions in India in the last year. One of the effects of this consolidation has been something of a convergence of cloud and colocation. Cloud providers are increasingly using colocation to expand their reach while colocation companies are adopting cloud services to improve their competitive position.

So, did the 451 Research report confirm my observations? To a large degree it did. Here are some of the key findings that caught my eye:

  • India was second only to Italy as the country that had the highest percentage of workloads running off-premises (61 percent). In addition, IT decision makers in India were the most sensitive to cloud location, with 80 percent specifying the location of their cloud deployments.
  • When considering both broad deployments and trial/test programs, China and India were the leaders in IoT adoption. Seventy-five percent of Indian respondents had deployed IoT broadly or in a trial, just slightly behind China at 76 percent.
  • India was identified as the country with the greatest IoT impact on IT workloads. In two years, 62 percent of survey participants from India project that more than 50 percent of their data center and/or cloud capacity will be used to support IoT initiatives.
  • While 78 percent of Indian enterprises participating in the survey currently store IoT data on-premises, this figure is projected to drop to just 44 percent in a year as data moves off-premises. India was the highest among all regions in planning to use colocation as an IoT data storage environment in the future (57 percent).

With strong government support for IoT and digitization initiatives, an influx of global colocation providers, and IT decision makers seeking to move data from on-premises to colocation data centers, India represents a significant opportunity for colocation providers, particularly those that have added cloud services. Vertiv is committed to helping colo and cloud providers, and the enterprises they serve, capitalize on these opportunities. To learn more, read the full report Data at the Edge: The Impact of Cloud and IoT on Datacenter Location and Demand.

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