Enterprise data centers to increase by 4-5% per annum over the next few years: DatacenterDynamics’ Nick Parfitt

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Mumbai: Cloud and Digital transformation are the two mega trends that moving upward across industries and segments. However, those mega trends are highly dependent and driven by data centers, which also means growing demands of data centers and the entire ecosystem of tech infrastructure and technology companies and service providers.

In this interview, Nick Parfitt, Senior Global Analyst of DatacenterDynamics talks to Pankaj Maru of TechHerald.in about the data center demands, trends and services, the data center business and its growth in India, the data privacy legislation and its impact on the demands of data centers and also discusses about the not so spoken concept of ‘green data centers’ and shares his forecast on the data center market over the next few years.

Edited excerpts…

Q1. Businesses in India and across Asia are adopting digital in a big way, which has given rise to huge demands for data centers and related services. Given this scenario, are you seeing that these businesses are looking at any specific type of data centers and related services for business needs, which probably wasn’t the case in the past? Has the data center concept and related technologies changed in today’s cloud and digital era?
Nick Parfitt: Yes, things are changing but the changes as I read them are more that rather than having to choose between different data infrastructure options, businesses are increasing able to construct a portfolio of options to best suit their requirements. Thus, hybrid IT arises from the need to combine the benefits of keeping some in-house capacity while accessing public cloud as well. You refer to ‘cloud’ but there are a number of variants of cloud and the latest – multi-cloud – will take this principle further – choice between not just the form of cloud but the services and providers accessed from within it. Data infrastructure options (in-house data center, co-location, outsourced hosting, clouds) have adapted to each other as new technologies and competitors have arisen. This is an ongoing and dynamic process. The data center concept is moving from enterprise towards co-location as co-location providers move to offering services beyond their original space-power-connectivity-security proposition – cloud pathways, inter-connectivity, access to business communities, direct access to services.

Q2. India is seeing a mega trend of digital transformation among the government, as well as traditional large and mid size businesses along with small and startups that are driving their businesses digitally. But from data center business perspective, what kind of growth, investment and demands can we see in the Indian market?
Nick Parfitt: There is some consensus that the growth will be in larger third-party data centers and that hyperscale facilities will enable the continuing growth of cloud in India. India is likely to follow the paradigm of earlier-established markets by migration from enterprise data centers into co-location and outsourcing facilities and towards cloud. The question mark very much concerns how Edge computing will work out and the requirements it will make on existing data center and cloud infrastructure as well as on requirements for storage and networks.

Q3. Post the GDPR, countries like India and other are considering to bring in legislation on data privacy and local hosting and storing of data. Do you think this legal aspect of the digital and data front will also play a crucial role in pushing the demands of data centers in India and other Asian countries?
Nick Parfitt: It is likely that increased legislation dealing with data protection and data sovereignty will require more data centers to be located in the legislatures where the data is collected and the sources live. This means more data on Indian citizens will need to be key in India but conversely it may impact India’s key BPM & business support sectors, the export dollars and the employment they represent. At the moment, the situation is working itself out while a standard across nations is established.

Q4.In the late 90s and early 2000, there was a lot of buzz around the ‘green data centers’ concept and it was one of the focus areas for many data center infrastructure companies and technology providers then. But today we hardly hear about ‘green data centers.’ So was that green concept was mere a marketing gimmick back then or in today’s time the concept has lost its relevance or has been ignored now?
Nick Parfitt: No, I think the drivers behind ‘green’ are still sound and relevant – power is the major operating cost in data centers so anything that is effectively green can save considerably on operating costs. Add to that the environmental and social importance of going green and the proposition is still relevant. Estimates suggest that data centers will require an increasing proportion of the world’s electricity in the near future – one estimate suggests 20% by 2025.

One reason we don’t hear so much about ‘green’ data centers is that they are increasingly the default option i.e. you need to justify why you are not green rather than why you are. Most of the major global cloud providers and many of the major co-location players are relying more on renewable power sources, locating in places where they can access these and doing so fairly publicly. PUE measurements (of efficient energy use in a data center) are a key component of data center SLAs. I think also that cloud is major difference between now and 2010-11 and the option of cloud replacing smaller, less energy efficient data centers can reduce the surge in data center energy consumption – last year’s LBNL report suggested cloud as a major factor in braking growth in the energy consumption of the United States, the world’s largest data center market.

Q5. Digital is being claimed to be eco-friendly in many ways. However, the fact of the matter is after the pollution emitted from thermal plants, chemical and manufacturing industries and vehicles, data centers are the prime culprits in heat emission and releasing greenhouse gases, but hardly ever the IT sector which heavily relies on datacentres is blamed for the environmental impact. What’s your take on this?
Nick Parfitt: I think there is awareness of the energy consumption of the IT sector and data centers within that. The IT sector tends to be less visible than industries (and in India, the cement industry is a major contributor of carbon), aircraft or cars. But data centers have long been aware of their energy consumption and therefore their carbon footprint because power is the major operating costs and as governments across the world identify high energy users, data centers have been a focus. The industry has a good track record in a number of areas – using power from renewable sources, improving the efficiency of operations and of equipment, using natural air cooling where possible, recycling heat to other buildings in colder climates, reducing the energy embodied in equipment and construction.

The industry’s ability to self-correct is due largely to the fact that data centers are very highly monitored buildings and, as the saying goes ‘if you don’t monitor you cannot manage’. While there is attention paid to the consumption side of IT, there is less data on, for example, the number of vehicle journeys replaced by the ability to download books, music or groceries online, or, in the future, by the ability to experience a place via virtual reality rather than physically traveling there.

Q6. What’s your forecast on the number of data centers that will be required over the next few years in the entire Asia Pacific region? Can you share any forecast on the data center market?
Nick Parfitt: We estimate that the number of enterprise data centers will rise a little over the next few years, by 4-5% per annum. Co-location, hosting and other data center services will rise faster by 12%-13% while cloud facilities will rise by as much as 19%-20%.

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