The demand for massive data centers close to consumers will increase rapidly as cloud services proliferate and data traffic increases. Yet, they will not emerge everywhere. Just having cheap renewables-based electricity is not enough, as is shown by Singapore and Dubai becoming attractive sites. A whole eco-system is needed.
“There is major demand coming from IT-enabled service providers, online portals, e-commerce companies, stock brokerages, and insurance firms,” said Sunil Gupta, president and chief operating officer at Netmagic Solutions, a data centre company which was acquired by Japan’s NTT in January 2012. “But the ecosystem does not encourage setting up own centres.”
The ecosystem Gupta refers to is hampered by unpredictable power supply, patchy internet connectivity, limited bandwidth and unreliable optical fibre connectivity between different parts of the country. When companies want their systems operating at nearly 100%, infrastructure breakdowns of the sort that India regularly witnesses are simply not acceptable.
Moreover, unlike Singapore, India does not have a data security privacy law, which is vital for companies and governments.
“Singapore offers an ideal combination of reliable infrastructure, a skilled workforce and a commitment to transparent and business-friendly regulations” is how Google explains its choice of the city. Oracle cites “excellent telecommunications infrastructure and efficient, well-qualified manpower”.
Much like India set up software technology parks to nurture its IT services and BPO industry, Singapore is setting up a 13-hectare Data Center Park and inviting companies from across the world. It already has some 20 data centre hubs and offers tax and other incentives.