How Data Centres Helped India Deal With Demonetisation

The increase in digitisation of the processes led to huge demand of storage, especially from BFSI, telecom, and IT/ITES sectors. These sectors were unable to fulfil the sudden and huge demand of storage from their existing infrastructure, and hence they were looking at data centre providers.

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In November 2016, the Government of India announced it would demonetize the Rs 500 and Rs 1,000 banknotes of the Mahatma Gandhi Series. The bold move of swiftly taking the notes out of circulation set off a chain reaction of events that led to a period of uncertainty and chaos throughout the nation. Now that the dust has settled and life has returned to normal in most cities, we examine how data centres were central in ensuring that across the country, the average person could still go about their lives with minimal disruption.

Fast growth in digital

Government statistics say digital transactions have increased between 400 to 1,000 percent with a huge growth in business from Rs 52 crore to Rs 191 crore. The surge in data traffic has in turn increased investment in data centres, with data centre players increasing their data capabilities and capacities. The Internet & Mobile Association of India has estimated India’s data centre business will touch $4.5 billion by 2018, which makes it the second largest in the Asia Pacific region.

At a recent event, Srinivas Muppaneni, CIO of Andhra Pradesh State Cooperative Bank and Telangana State Cooperative Bank, spoke about the importance of data centres especially post demonetisation. He asserted: “Demonetisation has forced many banks including ours to provide digital service in villages. For instance, post demonetisation many villages in Telangana state have gone digital.”

The increase in digitisation of the processes led to huge demand of storage, especially from BFSI (banking, financial services and insurance), telecom, and IT/ITES sectors. These sectors were unable to fulfil the sudden and huge demand of storage from their existing infrastructure, and hence they were looking at data centre providers.

Muppaneni shared his bank’s experience. He said, “Being from the BFSI sector, post demonetisation, we were worried whether our existing infrastructure would be able to handle the huge digital transactions or would our systems crash?”

Storage demands

Today, industries are looking at a place where massive amounts of data can be stored and utilized with security and efficiency. Hence, it is crucial for today’s data centres to have the right storage, processing and security capabilities. According to Muppaneni, data centres in India are not yet ready to handle the huge data traffic and there are very few data centres located in India. He asserted: “Data centres in India are not yet ready to take up the increased data volumes and being from a BFSI sector, due to security norms, we cannot host our data in the data centres that do not have a physical presence in India. Hence localization of huge data centres, with all the required storage, processing and security capabilities is vital.”

Demonetisation had an adverse effect on many businesses, but for data centre players, business has been good as there has been an increase in data traffic, usage of network infrastructure and storage space. The data centre players are realizing the importance of the Indian market, and they are trying to fulfil the demand of Indian companies. However, demand is still outstripping supply.

Some experts in the industry have told us we are currently at a stage whereby the need for more data centres in India is a cause for concern. So what could be done? For starters, State Governments would do well to emulate the Telangana State Government by coming out with a data centre policy which encourages more data centres to be set up by ensuring the entire process is free from bureaucratic red tape, and also ensuring the availability of power and connectivity. Existing data centres should be refurbished and upgraded, data centre practitioners educated and trained with a comprehensive framework in mind and finally, data centres should be audited and certified as to meeting key standards.


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Datacenters datacenter demonetization

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