It has long been known that data is the most important commodity in today’s world. While individual packets of data do not have much value, their aggregate value grows exponentially. It basically rules the world and data centers act as the essential cores that enable its movement.
According to rating agency ICRA, India is expected to add 4,900-5,000 MW of data center capacity over the next six years with an investment of about Rs 1.50 million. Rising demand has prompted Indian companies such as Hiranandani Group and Adani Group to enter into joint ventures with EdgeConnex and Reliance Group. Even independent consumers like Amazon and Microsoft have started investing heavily in Indian data centers.
Meanwhile, Japan-based company NTT Data has had a presence in the country for some time and continues to expand. “We have a very large data center presence in India and NTT DATA is very interested and optimistic about India,” said Tanvir Khan, Chief Digital Officer (CDO) at NTT DATA.
This is also reflected in the presence of NTT DATA’s workforce in India, which is the second largest after its home base in Japan. With India’s growing business potential, the company continues to increase its workforce in the country.
Khan added that the company sees India as a huge market for data centers and IT services. “India is going to have huge computing needs and as we move forward, India is one of our largest supply bases,” he said.
“Although we serve APAC, Europe and North America, India remains a preferred location due to talent, availability, scalability and cost advantages,” he said.
India broke the record for the world’s highest mobile data consumption per user in 2019, with the average monthly mobile data consumption per user reaching 16.4 GB in 2022. According to a Deloitte report, that number is projected to triple to about 54 GB per month by 2028, even as 5G rollout continues and internet penetration increases. This will only increase the importance of data centers in the country.
“The main drivers behind the digital explosion in India are the proliferation of internet and mobile devices, the government’s push towards e-governance/Digital India, the adoption of new technologies (cloud computing, IoT, 5G, etc.) and the growing user base for social media and gaming, e-commerce and OTT platforms,” said Anupama Reddy, vice president and co-group leader, Corporate Ratings, ICRA.
ICRA expects the sector to see capacity increase six-fold over the next six years, with Mumbai, Hyderabad and NCR accounting for 70-75 percent of installed data center capacity.
But beyond the data center-based offerings, NTT DATA’s Khan said India is spearheading the company’s software efforts. “We see a lot of innovation coming from the teams in India. I think the Indian innovation mentality is showing leadership in this area,” he added.
Khan explained that while the company is largely organized outside of Japan into three regions including Asia Pacific, Europe and North America, North America is heavily dependent on India for “development”.
“Companies in Asia Pacific and Europe are realizing that the advantage North America has historically had is largely due to access to the vast talent pool in India. As a result, the Asia-Pacific region and Europe are also increasingly focusing on India.”
“The Indian market is even more relevant under the current circumstances”
Rising interest rates, inflation, pressures on the banking sector and geopolitical scenarios have made it clear that the world is on the brink of a possible recession and the West is in the thick of it. However, many reports suggest that recessionary pressures may be hitting India the least.
Bloomberg’s Recession Meter in April mentioned that India will not experience a recession, while countries like the UK have a 75 percent chance of recession and the US 65 percent. In China, on the other hand, the probability of a recession was 12 percent.
“China has had years of growth. As a market, India is very attractive for international companies and the country is now entering a period of hyper growth,” said Khan. He added that India has become more attractive as a market amid global economic uncertainties.
“The global economy is either in or on the brink of recession in most parts of the western world. Cost considerations are therefore again in the foreground. And if you look at the costs today, there are only two big levers: automation and offshoring,” said NTT DATA’s CDO.
Khan stressed that there is no better destination for offshoring than India. “Over the next year or so, the dependence of international players like us on India will only increase.”
$3.6 billion R&D investment, quantum technology
The Japan-based conglomerate has a market capitalization of over $20 billion as of May 2023 and has grown its international business by more than 20 percent CAGR since 2007 by providing a wide range of services and consulting. But NTT DATA also has a strong focus on emerging technologies, investing $3.6 billion annually in R&D.
“We spent $3.6 billion on R&D and worked on four to five technologies. With a third of the world’s internet traffic going through our data centers and undersea cables, and with us providing a lot of computing power, quantum computing is clearly one of the technologies we’re investing in,” revealed Khan.
According to a McKinsey report, the size of the quantum technology market will be $106 billion by 2040.
Khan said quantum technology will bring two things to the fore: raw computing power and compute-intensive use cases. “Nowadays there are many use cases, but you need a supercomputer and there are very few organizations that have access to it. Quantum technology will open up new avenues, particularly in healthcare and biotechnology, where complex, large and deep simulations need to be performed.”
But how close are we to the age of quantum computers? “Before quantum computing, there is pseudo-quantum computing, which simulates quantum computing. We will have to go through this phase in order to get to the higher order – to real quantum computing. Additionally, supercooling is needed for quantum computing, and that will be a big part of the tent,” Khan explained.
He said within a decade, before anything significant happens on the quantum front, humanity could see instances of pseudo-quantum computing that will provide huge computational power for use cases like biotechnology.
It’s fair to say that until November 2022, artificial intelligence (AI) had largely captured human imagination only in fiction. OpenAI’s public launch of ChatGPT was the biggest turning point that made AI accessible to everyone.
Tanvir Khan has been involved in AI for several years and has at least five patents in this area. He knows a thing or two about the technology. “Right now the concerns are real because people don’t know what form it (AI) will take. But ultimately, all technologies have pros and cons,” he commented on the current paranoia grasping AI.
“When there was the photocopier, people thought every kid would print money and go to the store. While innovations like this led to some piracy, good and evil tend to balance out over time,” Khan added.
He opined that humanity is currently in a hype cycle and the future is unknown. “Nobody knows the power of generative AI and maybe the expectations are higher than they will be,” he surmised.
BW Businessworld asked Khan if AI skills will be a priority for companies around the world by 2023. “AI is used as a collective term. But it has three parts: cognitive or deep learning, machine learning (ML) and natural language processing (NLP).”
Khan explained that due to deep learning’s complexity and fewer use cases, not many would engage with it. “But machine learning has become ubiquitous, and every kid who codes has aspects of machine learning tools that they use. And NLP has gotten so mainstream that people don’t call it a new category of technology anymore,” he said.
He added that as humanity advances with generative AI and training large language models, people will need to acquire these skills, or organizations will need to step up to train people. “So we have to keep educating ourselves,” Khan concluded.
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