New laws may help India grow data center capacity beyond 2%: Intel India MD

On October 12, semiconductor manufacturer Intel signed a memorandum of understanding (MoU) with Gurugram-based contract manufacturer VVDN Technologies. The deal will see Intel supply its reference designs and chips to VVDN to locally manufacture 5G radios for the telecom sector, connected sensors for the manufacturing sector, cameras for smart surveillance, and more. This, according to Santhosh Viswanathan, managing director, sales and marketing at Intel India, is an early sign of the potential that India holds in the enterprise segment for technology suppliers such as Intel.

“Building data centre capacity in India is a key aspect of the enterprise business that we have to start thinking about. There are 800 million people in India who are on the internet, and this is leading to a massive amount of data being generated from all across the market. But, India still has less than 2% of the world’s data centre capacity. This presents a huge opportunity,” said Viswanathan, who replaced Prakash Mallya in this role in January this year.

Data centres, a pivotal piece of the enterprise technology puzzle, marks a steadily growing segment in India. According to a September 27 report by commercial real estate firm JLL India, an increasing amount of data usage in financial services, entertainment and retail domains, coupled with a rise in the number of cloud service providers, is expected to grow India’s realised data centre capacity to 1318MW (megawatt) by 2024.

According to Viswanathan, the growth of this capacity could be key to India playing a more important business role for companies such as Intel — and the adoption of adequate policies in this regard could be key.

“Some of the legislative efforts, such as the Data Protection Bill, will help build a demand to localise the data. This creates a big opportunity for data centre growth, and for India to grow bigger than 2% of the world’s capacity,” he said.

The now-scrapped Data Protection Bill is expected to be replaced by a new law, which Union minister of state for information technology (IT) Rajeev Chandrasekhar has confirmed to be unveiled soon. The new legislation is expected to offer a holistic overview of regulating technology usage in India, including how data could be localised in the country.

Viswanathan also highlighted that India already has the ‘mass’ of data — a key indicator for rising demand of the data centre sector. This puts India at an advantageous position in comparison to other countries with greater data centre capacities, but lesser data density.

“A key shift needs to happen for India to make business sense. Some of the efforts, such as Make in India, and other policy-level efforts, are steps in the right direction. But, India needs to have a position among the top information and communications technology (ICT) spenders of the world. The key question now is to see how infrastructure keeps pace. This is mostly a function of time for the policy shifts to happen, and given how big an ICT market in India is, the opportunity should also reflect on us as well,” he said. 

Viswanathan also added that a growing demand for data centres will also go hand in hand with the local manufacturing industry as well, in order to create a robust ecosystem. “We are signing up local partners to build local designs based on our reference designs. We also need private partnerships to grow in India, which is going to help create the right business ecosystem in the country,” he said.

Citing VVDN as an example, Viswanathan added that a growth in local demand for chips in the country will come from “enterprise data centres, client devices, and even the telecom sector, to create a balanced supply chain”.

He added that Intel is already offering its early partners in the country reference designs for enterprise and consumer products, and early access to technologies — and a few companies are already beginning to manufacture based on Intel designs, locally.

“We already offer form factor reference designs (FFRDs) to companies in India, and we’re very much open to doing this. We’re also hoping that once the market matures, more companies would want to come in and use our reference designs to build products in India,” he said.