An Edge Datacenter, also known as an edge computing facility, is a decentralized computing facility located physically closer to the sources of data and the end-users it serves. Unlike traditional centralized datacenters, which are often situated in larger urban areas, edge datacenters are strategically placed near where data is generated and consumed. The primary purpose of edge datacenters is to reduce latency, improve response times, and enhance the performance of applications and services that require real-time data processing.
Key Driving Factors for Edge Datacenters
The demand for edge datacenters in the Indian market is driven by factors such as the proliferation of IoT devices, 5G deployments, the rise of social media and content streaming adoption in tier 2 and tier 3 markets, giving rise to low latency requirements.
In today’s hyper-connected world, businesses and individuals are creating enormous amounts of data. With everything going virtual, apart from cloud businesses, sectors such as health, retail, education, gaming, social media, and on-demand entertainment too have seen a tremendous surge. This growing digital penetration requires faster and real-time processing.
Notably, the deployment of 5G networks is a major driver of the demand for edge datacenters. The intrinsic requirements of 5G technology for lower latency and higher bandwidth to enable its full potential to necessitate the support of edge datacenters, which can process data locally and alleviate the backhaul traffic to core datacenters. The integration of 5G and edge datacenters serves as a symbiotic relationship that enhances the capabilities and potential of both technologies, with ultra-low latency being a key affinity.
Moreover, regulatory compliance concerning data localization and geo-mapping underscores the necessity for edge datacenters to conform to the specific regulations of the jurisdictions in which they operate. In light of India’s data localization laws mandating certain types of stored data within national borders, decentralized edge datacenters ensure that data originating from a specific country remains within the confines of that country. This requirement may introduce complexity to data management and necessitate an increased number of edge datacenters to comply with diverse data localization rules.
Difference between Hyperscale Datacenters and Edge Datacenters
Hyperscale Datacenter | Edge Datacenter |
Handful location with massive capital | Can be spread across multiple locations, not so capital intensive |
Located at a central location with around 10,000 sq. ft. space | Located closer to the end-user and smaller in capacity and space |
Centralized data leads to delay in processing | Edge provides faster response time and improves user experience by reducing latency. |
Growing Demand for Edge Datacenter as a Service
There is a growing demand for Edge Datacenters as a Service, which offers businesses and organizations the opportunity to leverage edge datacenters capabilities without the burden of constructing and managing dedicated edge infrastructure. By providing edge computing resources and services on a subscription or pay-as-you-go basis, this model facilitates easier access to the benefits of edge datacenters, eliminating the need for substantial upfront investments and the associated capital-intensive endeavors.
Key verticals driving the adoption of edge datacenter solutions encompass various sectors, including IT and Telecom, BFSI, Healthcare & Life Sciences, Manufacturing, Government, Automotive, Gaming & Entertainment, and Retail & e-commerce.
Why India Needs Edge Datacenters
In the Indian context, the necessity for Edge Datacenters is underscored by the demands of certain applications reliant on real-time data processing with ultra-low network latency, necessitating prompt responses to data points or business requirements.
Emerging business use cases predicated on technologies such as 5G, IoT, Blockchain, Content Delivery Network (CDN), real-time video streaming & analytics, interactive online gaming, connected factories, smart cities, smart homes, autonomous vehicles, remote online healthcare, online shopping, and multi-party video conferencing necessitate the capabilities of Edge Datacenters and Edge computing. These next-generation technologies and business use cases mandate network latency ranging from 1 to 5 milliseconds (ms) to meet higher performance standards.
Favorable Market Scenario
- According to PWC, the global market for edge datacenters is expected to nearly triple to $13.5 billion in 2024 from $4 billion in 2017, thanks to the potential for these smaller, locally located datacenters to reduce latency, overcome intermittent connections and store and compute data close to the end user.
- By filtering the data close to the source, edge datacenters can help close the potential 64 zettabyte gap between global datacenter traffic and useable data created. Between 2023 and 2037, the IDC’s Global DataSphere projection expects the world’s data volume to double, forecasting 192 trillion gigabytes of data to be generated globally in 2025 alone.
- Although in 2023, less than 10% of business data was created and processed at the edge of the network, Gartner suggest that figure will rise to 75% by 2025.
Why Businesses Need to Leverage Edge Datacenters to Expand Their Footprint in India
A few key reasons why moving to edge datacenters located in Tier 2 and Tier 3 cities might make fiscal and operational sense.
- As Tier 2 and Tier 3 cities in India witness a surge in digital adoption, driven by factors like improved internet connectivity, government initiatives, and the proliferation of smartphones, the demand for data services will skyrocket.
- Businesses moving to these new markets have understood the importance of robust data infrastructure and they will prefer an edge datacenter that will improve user experience and reduce latency for new found consumers in these markets.
- Tier 2 and Tier 3 cities offer cost-effective solutions with lower operating expenses around real estate, manpower and maintenance.
- Smaller cities may offer solutions for setting up green datacenters.
- Many States offer incentives and supportive policies for the datacenter industry, which will eventually help in reducing the business operating expenses.
- The implementation of Edge Datacenters will significantly contribute to the development of the Edge ecosystem within the city. These datacenters will facilitate efficient and optimized network connectivity by centralizing the aggregation of IP transit bandwidth, peering, and IX connectivity, thereby effectively reducing overall latencies.
Moreover, this initiative is expected to result in a reduction of IP Transit costs for ISP providers, and ultimately, provide end users with expedited broadband access.
India is already the 13th largest datacenter market in the world with 138 datacenters and this will continue to grow in the future, fueled by the growth of edge datacenters across Tier 2 and Tier 3 cities.
Gaurav Babbar
The author is Vice President - Edge Hyperscalers & Networks at CtrlS Datacenters. With a deep understanding on Edge Ecosystem, Integrated Telecom Business Operations, Wireless Communications and Internet Ecosystem, he is a strategic thinker and is actively contributing to build next generation digital infrastructure.
marketing@ctrls.in