SMEs to drive data centre demand in Gujarat

Gujarat has only four or five companies offering data centre facilities as of now, but the information technology industry in the state sees the small and medium enterprise (SME) segment as a major driver in attracting more players in the near future.

Indeed, Ahmedabad-based Sai InfoSystem Ltd (SIS) estimates that SMEs will be a major source of demand for its upcoming data centres business.

“So far we were not in data centres but we will start working on developing at least four data centres after November, which will cater to different geographical locations in India. We expect SMEs to emerge as a major source of demand, since they are the ones who need outsourcing of IT functions the most,” said Sunil Kakkad, chairman and managing director of SIS.

While the company is currently working on setting up data centres through the public private partnership (PPP) mode with Bharat Sanchar Nigam Ltd (BSNL) with a total capacity of 50,000 sq ft, SIS plans to grow this business.

“In the next 10 years, data centres have a revenue potential of Rs 2,000 crore for us,” added Kakkad.

According to Jagdeep Kochar, executive director, nCode Solutions, the IT division of Gujarat Narmada Valley Fertiliser Corporation Limited (GNFC), SMEs will drive the demand for data centres due to their size.

“SMEs are neither too small to avoid data management nor too big to afford their own infrastructure. Hence, they are the most likely to outsource data management, computing and IT infrastructure management to third party data centres,” said Kochar.

He added, “It is a known fact that the server is not utilised to 100 per cent, which is why it pays off to virtualise data management through third party data centres or cloud computing.”

Even among SMEs, it is firms in finance and banking – such as broking firms and co-operative banks – that will see more demand, apart from the manufacturing sector (such as pharmaceuticals and automobiles).

“Most of the demand is likely to come from the financial sector, since it has a huge server requirement. By outsourcing it to third party data centres, they can easily save up to 25 per cent of the IT infrastructure cost and grow faster,” said Jaimin Shah, president of Gujarat Electronics and Software Industries Association (GESIA).

On its part, nCode Solutions has also been offering data centre facilities to clients within Gujarat and outside, including several departments of the Gujarat government.