Japanese technology services provider NTT Ltd recently announced the launch of its new Global Data Centres (GDC) divisions which include Americas, APAC, EMEA and India. In an interview, Sharad Sanghi, CEO, global data centres and cloud infrastructure (India) NTT, discussed how this impacts NTT-Netmagic (Netmagic was acquired by NTT in 2012) and why the Indian data centre ecosystem is now attracting big investments and global tech interest. Edited excerpts:
How does the creation of this India division translate for the brand NTT-Netmagic?
The objective is to unify the service offerings for NTT customers from contractual, supply chain, procurement and design perspective across the regional businesses in giving clients flexibility across geographies while providing localized expertise. Obviously, NTT, which will be investing over $7 billion in the new divisions, will allocate a significant part of the investment to the Indian business.
As the only country allocated an entire division, it also gives us access to best practices across the world. It would further convert to faster approvals for establishing new data centres, which require $100-150 million investments, as well as investments in upgrading existing data centres. Data centres are the core business for us unlike many peers in this space and while we are better known as Netmagic in India, the NTT association also gives us access to their global clients.
Lately, the data centre business in India has seen participants such as Reliance Industries, Adani Group and the Hiranandani Group entering this space while hyperscale providers like AWS, Microsoft Azure, Google Cloud, etc. have been on spree to announce multiple B2B partnerships. Why this sudden uptick in interest?
While the digital services and allied market was already growing rapidly in India, the Reserve Bank of India’s move in 2018 to push for data localization prompted many global MNCs to expand their presence rapidly in the country. I believe, every client wants to be closer to the end customer, especially with 5G coming, so this boom would have happened anyway. While many (hyperscale cloud providers) have been announcing partnerships for productivity solutions to small and medium enterprises (SMBs), we have such partnerships for our enterprise clients, and we continue to address all other markets through our partner ecosystem.
Edge nodes, or last-mile data centres, are the next big trend in data centre technology. How is NTT-Netmagic participating here?
We are exploring this space but data centres are very capital-intensive businesses; so, it makes sense to be based out of major cities where you get the best power supply and connectivity. That way, the overhead costs are distributed across a larger facility and smaller markets may not attract enough customer base. However, a lot of these investments will make sense once 5G is rolled out. Businesses will have actual use cases through augmented reality and virtual reality-based applications which would require the processing backbone to be located closer. It will take another two years for this market to mature subject to 5G services being rolled out by next year.
From a regulatory perspective, do you see any additional need for the government to intervene in order to create a stronger ecosystem for data centres?
The cloud empanelment initiative has enabled us to participate in a lot of state and central government led cloud projects apart from the smart cities initiative. The government has done a great job of improving the power infrastructure in the country although there is room for improvement. As long as there is a level-playing field, we are fine. We are India’s first carrier-neutral data centre and every data provider is present on our facility. So, for us, it is very important for the telecom industry to remain vibrant as enterprise connectivity also depends on these large operators. When a large telco went out of business some time back, there was enough time and choice in the market to transition but the next time it happens, it will have a larger impact on the enterprise connectivity ecosystem.