Please share your observation on recent trends in the data centre market in India
Adoption of cloud and digital transformation initiatives taken by Indian enterprises and government has fuelled the growth of commercial data centres in India. Though the data centre business is growing around 10 per cent CAGR, the cloud business – especially the SaaS and PaaS component of it – is growing at 40 per cent CAGR, and this will touch 50 per cent in next two years. As the data centre simply provides power and space for the Hyper Scalers, the overall revenue of data centre companies would appear much smaller compared to the cloud service providers (CSPs) offering SaaS, PaaS and IaaS by 2024. High-quality data centres will continue to remain in demand as cloud service providers will continue to consume the majority of the space of data centres in Mumbai and Bangaluru. Though there are data centres coming up in other cities, for some reason, the first choice of Hyper Scalers and other large banks and enterprises for their data location still remains to be Mumbai and Bengaluru.
What have been some of the key milestones for ESDS in the past few years?
Acceptance of our ‘made in India’ cloud technology by Indian enterprises, banks and government organisations has been a significant game-changer for ESDS. Our patented cloud technology with real-time vertical auto-scaling has helped us to play a crucial role in enhancing the quality of life of 32 per cent Indian population, as they get connected to our cloud through some or the other government initiative or through the 310 banks hosted with us. Our technology has helped us to make digital transformation affordable for our customers, and their trust in our cloud technology has enabled us to multiply our bottom line every year for the last five years. An ethical business model with high growth potential guarantees many benefits to its customers, and that’s what ESDS is doing for the nation.
Any key trends among the customer base that you are observing? Please elaborate
At this point of time, it is the banks, government, mid-size manufacturing companies and the large MNCs who are focusing on automation and digital transformation. Our offerings revolve around customers who fit in these four categories, and we are amongst top three cloud service providers in India for these verticals. Other CSPs have got a lot of start-ups and new generation innovators on their cloud, that are doing a lot of innovation compared to start-ups of most of the Western countries. Lack of funding from investors and comparatively high cost of cloud technology is forcing these Caterpillars to end their journey long before they transform into Butterflies of the future. Hopefully, the funding situation will get better for start-ups in a year or two, and cloud prices of the MNC cloud players will come down to the level of Indian CSPs.
With the government’s push on digital initiatives and ESDS being already involved in several public sector projects, what opportunities do you further see?
ESDS has an aspiration to transform the lives of one billion people through its cloud-enabled technologies. The Central Government of India and various State Governments have shown their faith in ESDS, and we host more than 100 different government organisations on our cloud today. So far, we have been successful in touching the lives of the 380 million Indian population, and we hope to see this number touch one billion in the next five years. World’s largest IoT project is going live on our cloud, and most of the Smart Cities in India are either having their primary or secondary workloads running on our cloud. Many other G2C initiatives of states are also running on our cloud, and we are proud to see such a positive transformation happening across the country in the last few years. If India has to surpass GDP of Japan in next 6-7 years, then there’s a lot of work that needs to be done on all fronts and ESDS will play a crucial role in digital transformation of the country. Adoption of all the digital initiatives from the citizens will decide if we are able to become the third largest economy in the world in next 6-7 years. Marketing of all the digital initiatives to our people is going to be the biggest challenge in front of all of us.
The data centre market getting commoditised. How is ESDS positioning itself differently in the market?
Data center business became commoditised few years ago, but cloud adoption is fuelling the growth of SaaS, PaaS and IaaS services. Cloud is growing at 40 per cent CAGR, and it cannot be called a commodity business. There’s a lot of innovation continuously happening on SaaS, PaaS and IaaS offerings, and it will continue to occur for the next couple of years. IaaS may become a commodity sooner, but SaaS and PaaS will touch triple-digit growth at one point of time. All the next generation innovations like AI, ML, IoT, blockchain and analytics, are happening on cloud and eventually, a lot of SaaS and PaaS offerings will be launched by CSPs or their ISV partners to cater to the needs of the industry. Technology adoption in India happened a little late compared to the developed economies, but late adoption has also given an opportunity to us to do it right or do it in a much better way than the developed economies. The Indian banking sector is a good example, as our banks are far more secure compared to the banks outside. ESDS is the only CSP in India which can run all types of legacy applications on its cloud due to its patented vertical auto-scaling technology. Our eNlight Cloud Technology helps to cut down infrastructure requirement by upto 70 per cent, resulting in huge cost savings for our customers. Our Digital transformation initiative is for those customers who are not able to move to cloud or who don’t want to consider Cloud to cost of Cloud phobia.
With emerging technologies coming into the picture, how are you reskilling your partners to stay relevant in the market? Please elaborate on your channel initiatives
We have divided our partner business into three categories, viz, ISV partners, alliance partners and channel partners. Our ISV partners are also our technology partners, as they work on specialised applications focused for specific business use and we help them roll out a joint business offering for a good number of our customers. We let our ISV partners stay focused on their core competency, and we play the role of a catalyst to take away their platform and infrastructure related pains. Some of our ISV partners have suffered big time at the hands of multi-national CSPs, as their applications and technologies got replicated by those CSPs who launched their own SaaS offering and dumped the ISV partner.
ESDS doesn’t believe in such practices and that’s the reason more and more ISV partners are choosing ESDS as their trusted partner. Our large alliance partners – leading ITeS companies – who are playing a crucial role in transformation of the nation, have helped us to grow at 70 per cent last year. With the large orders we have received from these partners, we are expecting triple-digit growth for the next couple of years. Our channel business kicked-off a little late, but it is moving in the right direction. Channel partners in India got lured by other CSPs, but merely a year down the line, the multi-national CSPs have dumped these channel partners, and they don’t get any partner commission from them anymore. We have a very transparent business model for channel partners, and we continue to offer the same commission percentage throughout the lifetime of a customer contract. This partner centric strategy has taken some time for acceptance by channel partners, but they have now realised the benefits and have started moving their customers on our cloud platform.
What is your future roadmap in terms of offerings and business scaling?
At ESDS, we now talk about digital transformation, and we are giving the same message in the market. Cloud is going to be the foundation of every digital transformation initiative, so there is no doubt in customer’s mind about cloud. The biggest challenge in cloud adoption continues to be the legacy technologies or the enterprise applications which could not be moved on cloud. We know that organizations would not survive in future without Digital Transformation, but due to lack of a right DX partner, organisations are reluctant of taking any decisions. A lot of organisations are standing on this side of the river, scared of the unknown threats below the stream and waiting for a partner to help them cross. We are proactively reaching out to such customers and taking full ownership of platform migration, upgradation, application support, database support, and managed services along with security on all layers. We don’t call ourselves a CSP anymore, because what we are doing for our customers is far more than providing cloud services. We are their Digital Transformation partner, helping them to stay relevant in their business.
While we are growing at a brisk pace in India, we are also expanding outside the country. We have a strategy in place for expansion in 16 other countries and we have already opened our offices in four other countries. We have got an opportunity to digitally transform some of the countries in Middle East and Africa. We have seen India’s journey and we know what has made India successful, so we will be replicating best practices of India to positively transform the lives of people in the Middle East, Africa and the BIMSEC partners of India.