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Cloud giants race to set up data centers in India
30-06-2015

Digital India initiative, e-commerce and cloud growth make local data centers appealing


Four giant companies, Microsoft, Amazon, IBM and NTT Communications, are now racing to set up data centers in India.

Only some time ago setting up data centers in India was not considered viable because of power supply volatility and security reasons. Then came the news that India might be among the fastest growing e-commerce and cloud markets in the world. Besides, the Digital India initiative was announced by Government, and the need arose, especially of banking & financial services and government departments, to keep data within the geographic boundaries of India.

So now it's different. Microsoft says it will commission three "hyper-scale" data centres in India before the end of this year. "Microsoft has already started a private preview of these data centers with over 100 existing customers on board across different segments such as banking and financial institutions, government, manufacturing and start-ups," Microsoft India chairman Bhaskar Pramanik told Press Trust of India.

"They will be allowed to test it out over a three-month period. We will formally launch the services by the end of the calendar year," Pramanik added.

Microsoft will be targeting sensitive sectors including government sectors and financial services through these services.

"If the government has to address 1.2 billion citizens then it needs hyper-scale data centres at an affordable cost, with technology and flexibility," Pramanik said.

The tech giant has set up a number of initiatives around e-governance, education, last-mile access, the start-up ecosystems, smart cities and will continue to drive them going forward, he said, adding "having our own data centers will make it more real".

He said Microsoft India's cloud business is growing at over 105 per cent annually and with the establishment of the local data centers he expects to change the market.

"In a sense, we will be the market maker and get the Indian clients to move more to the cloud at a faster pace," Pramanik said.

From the beginning of July, customers will be able to do private previews of Microsoft's Azure cloud services. By next year, it will also offer the cloud version of Office 365, and cloud CRM (customer relationship management).

Amazon also in data center mode

Amazon will establish multiple data centers in India in 2016 with an investment of many millions of dollars, Andy Jassy, the head of Amazon Web Services (AWS) told Times of India.

Jassy said the investment could scale to billions of dollars as the region grows. "It is a very significant investment for us. We have grown very, very quickly in India. At this point we have tens of thousands of active customers in India, across enterprises, small to medium size businesses, and startups," he said. The number of active AWS customers in India: over 12,000

AWS is the pioneer in cloud infrastructure services and is the world's largest in the space, with revenue expected to be $6.2 billion in 2015, out of Amazon's overall revenue of over $90 billion (most revenues now come from the e-commerce business, but AWS is growing at 40-50% annually). Research firm Synergy estimates that AWS's revenue from cloud infrastructure services in the first quarter of this year was larger than the combined revenue of its four main competitors - IBM, Microsoft, Google and Salesforce.

AWS's customers in India include enterprises like Tata Motors, Future Group, Macmillan India, Manipal Global Education, and small enterprises and startups like Paytm, Freshdesk, InMobi , HackerEarth, Capillary Technologies, redBus, Hike and Ferns N Petals.

Tata Motors customer portals and its telematics systems, which lets fleet owners monitor all the vehicles in their fleet on a real time basis, are running on the AWS cloud. Jagdish Belwal, CIO of Tata Motors told TOI that AWS had helped the organization become more agile and "it has drastically increased our speed of experimentation and therefore, innovation." An India data centre, he said, would lead to many more companies adopting cloud.

Indian clients currently mostly use its Singapore data center.

IBM, NTT also in the competition

IBM established a data center in Mumbai offering cloud services late last year and a second is expected to be ready later this year. “Sectors like government and financial services prefer their data residing within the country” says IBM India Managing Director Vanitha Narayanan.

NTT Communications plans to invest $100 million in developing a new data center in Mumbai through its subsidiary Netmagic Solutions. NTT acquired Netmagic, a managed services provider, in 2012.

"The new data center coming up in Q3 2015 will be spread across 300,000 square feet and host up to 3,000 server racs with 20-28 MW energy capacity," said Sharad Sanghi, managing director and chief executive at Netmagic.

NTT is likely to announce global cloud services by the year end to facilitate multinational companies.

Google still not in the race

Google's investments in data centers in Asia are outside India. New investments will take Google's data center investments in Singapore to $500 million and in Taiwan to $600 million.

Based on stories in PTI, Times of India





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