Covid-19 Impact: Demand for data centers surge as remote working catches up!
The emergence of new business environment in the wake of Covid-19 is expected to boost cloud services and digitisation as companies overhaul their digital infrastructure to deal with new ways of working, they said. Demand for data centres has gone up as technologies for working remotely are playing a crucial role in keeping companies functional in a time of lockdown, industry executives said citing increasing number of enquiries being received by builders.
The emergence of new business environment in the wake of Covid-19 is expected to boost cloud services and digitisation as companies overhaul their digital infrastructure to deal with new ways of working, they said.
“Adaptation to cloud services is gaining pace, digitisation is accelerated and technology has come to the forefront in the way businesses and work are being carried out,” said Anshuman Magazine, chairman-India, South East Asia, Middle East & Africa, CBRE. “Enquiries for data centres have risen manifold based on data and network accessibility pattern companies are seeing during the lockdown.”
New learning among companies with respect to work-from-home (WFH) and data accessibility during the lockdown period has resulted in increasing enquiries for space and services at data centres and this trend is expected to gather further momentum. The Covid - 19 pandemic, lockdown and WFH have multiplied digital and online transactions, reflected in greater demand for collaborative tools like Zoom or usage of enterprise tools such as SAP or net banking.
Even on the consumer side, over-the-top or OTT platforms for entertainment such as Netflix and Hotstar require a robust and scalable data infrastructure as data traffic surges.
“There is a 30-35% increase in data centre capacity usage, and even after the situation returns to ‘normal’, the work style will continue to be data centre-driven and demand growth will continue,” said Niranjan Hiranandani, managing director, Hiranandani Group. “We are in negotiations with a large number of potential users, and we should be able to implement these once the lockdown is lifted and normalcy returns.” Hiranandani is planning to invest Rs 15,000 crore in the next few years in setting up data centres in Mumbai, Panvel and Chennai through the group’s new data centre business, Yotta.
Higher penetration of e-commerce, digital payments and widespread deployment of Big Data, apart from policy level push for data localisation, had already started spurring demand for data centres before Covid-19 struck. Sectors such as banking, financial services, logistics, transportation, e-commerce, media and entertainment, along with large-scale digitisation efforts within government, are driving the growth.
According to India’s Personal Data Protection Bill, 2019, users’ sensitive and critical data needs to be stored only in the country. Besides, mirror copies need to be stored here while processing data inside and outside India. The bill, introduced in the Lok Sabha in December 2019, imposed tough penalties on data breach, including 2-4% of total global turnover of the company or Rs 5-15 crore, whichever is higher.
May 08, 2020