NTT Data Very Keen On India’s Burgeoning Market, Says CDO Tanvir Khan

It’s been long established that data is the most important commodity in today’s world. While individual packets of data aren’t of much value, aggregated, their value exponentially grows. It pretty much runs the world and data centres act like the quintessential nuclei facilitating their movement.

According to credit rating agency ICRA, 4,900-5,000 MW of data centre capacity involving investments of about Rs 1.50 lakh crore is likely to be added in the next six years in India. The increasing demand has driven Indian entities such as the Hiranandani Group, the Adani Group, to enter JVs with EdgeConnex, the Reliance Group. Even captive consumers such as Amazon and Microsoft have begun investing heavily in Indian data centres.

Meanwhile, Japan-based NTT DATA has been present in the country for a while and continues to expand. “We have a very large data centre presence in India and NTT DATA is very interested and bullish on India,” said Tanvir Khan, chief digital officer (CDO) at NTT DATA Services.

This is reflected in the presence of NTT DATA’s employee base in India as well, which is second only to its home base, Japan. Given the growing business proposition of India, the company continues to add to its headcount in the country.

Khan added that the company views India to be a huge data centre and IT services market. “Compute needs of India is going to be huge and as this evolves, it's one of our single largest delivery locations,” he said.

“While we are servicing APAC, Europe and North America, India still continues to be a preferred location for talent, availability, scalability and cost advantage,” he said.

India reached the landmark of highest wireless data consumption per user in the world in 2019, with the average monthly wireless data consumption per user reaching 16.4GB in 2022. A Deloitte report suggests that this figure is projected to triple to about 54GB per month by 2028, even as 5G rollouts continue and internet penetration grows. This is only going to drive up the relevance of data centres in the country.

“The key triggers for digital explosion in India are the increasing internet and mobile penetration, the Government’s thrust on e-governance/digital India, adoption of new technologies (cloud computing, IoT, 5G, etc), growing userbase for social media, gaming, e-commerce and OTT platforms,” said Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA.

ICRA expects the sector to see a six-fold increase in capacities in the next six years, with Mumbai, Hyderabad and NCR accounting for 70-75 per cent of the installed data centre capacity.

But beyond data centre-based offerings, NTT DATA’s Khan said India leads the company’s software efforts. “We are seeing a lot of innovation coming out of teams in India. I think the Indian mindset of innovation is showing leadership in that space,” he added.

Khan explained while the company is largely organised outside Japan in three regions including Asia-Pacific, Europe and North America, North America has been very reliant on India in terms of ‘development’. 

“Asia-Pacific and Europe’s businesses are realising that the advantage North America has had in the past is basically because of access to the large talent pool in India. So, Asia-Pacific and Europe are also focusing more and more on India.”

‘India Market Even More Relevant Under Current Circumstances’ 

Rising interest rates, inflation, pressures on the banking sector and geopolitical scenarios have made it evident that the world is on the cusp of a possible recession and the West is at the heart of it. But many reports suggest that recessionary pressures could affect India the least.

Bloomberg’s Recession Metre in April mentioned that India will not experience any recession while countries such as the UK will have a recession probability of 75 per cent and the US 65 per cent. Meanwhile, China had a recession probability to the tune of 12 per cent.

“China has had its years of growth. As a market, India is very attractive for international companies and the country is entering into a hyper-growth phase now,” said Khan. He added that India has become more attractive as a market against the backdrop of global economic uncertainties.

“Global economy is either in or heading into a recession in most of the western world. So, cost considerations have once again become supreme. And when you look at cost today, there are only two major levers: automation and offshoring,” the NTT DATA Services CDO said.

Khan emphasised that there was no better destination for offshoring than India. “In the next year or so, the dependence of international players like us is only going to increase on India.”

$3.6 Billion R&D Investment, Quantum Technology

The Japan-based conglomerate has a market capitalisation of over USD 20 billion in May 2023 and it has grown its international business by more than 20 per cent CAGR since 2007 by delivering a whole gamut of services and consulting. But NTT DATA also focuses heavily on emerging technologies and invests USD 3.6 billion in annual R&D investment.

“We spent USD 3.6 billion in R&D, working on four to five technologies. Since a third of the world’s internet traffic travels through our data centres and submarine cables and we provide a lot of compute, Quantum computing is clearly one of the technologies we invest in,” Khan revealed.

According to a McKinsey report, the size of quantum technology market will be USD 106 billion by 2040.

Khan said quantum technology will bring to the fore two things: raw processing power and compute-intensive use cases. “Today, there are a lot of use cases but you need a supercomputer and there are very few organisations with access to those. Quantum technology will open avenues, especially, for healthcare and biotechnology, where you have to run complex, large and deep simulations.”  

But how close are we to the era of quantum computers? “Before quantum computing, there is pseudo-quantum computing, which simulates quantum computing. We will have to go through this phase to get to the order of higher magnitude – to true quantum computing. Moreover, supercooling is needed for quantum computers and that is going to be a long pole in the tent,” Khan explained.

He said within a decade humanity could see instances of pseudo-quantum computing which will bring large computing power to use cases like biotechnology before anything substantial comes along on the quantum front.

On AI

It would be fair to say that artificial intelligence (AI) had largely captured human imagination only in fiction until November 2022. The public rollout of OpenAI’s ChatGPT was the biggest turning point that brought AI to everybody.

Having dabbled in AI for several years and with at least five patents to his name in the space, Tanvir Khan knows a thing or two about the technology. “Right now, the concerns are real because people do not know what shape it is (AI) going to take. But eventually, all technologies have pluses and minuses,” he commented on the current paranoia engulfing AI.

“When the photocopier came, people thought every kid was going to be printing money and going to the store. While innovations like that did lead to some piracy, good and bad tend to balance themselves over time,” Khan added.

He opined that humanity was currently in a hype cycle and the future was unknown. “Nobody knows what is the power of Generative AI and maybe the expectations are higher than what it’s going to be,” he surmised.

BW Businessworld asked Khan if AI skills will have a premium on them at organisations across the globe from 2023 onwards. “AI is used as a catch-all term. But there are three parts to it: cognitive or deep learning, machine learning (ML) and natural language processing (NLP).”

Khan explained due to the complexities involved with deep learning and fewer use cases, not many would dabble in it. “But machine learning has become all-pervasive, and every kid that's doing any programming has got aspects of machine learning tools that they use. And NLP has got so much into the mainstream that people have stopped even referring to that as a new technology category,” he said.

He added that as humanity progresses with generative AI and training large language models, people will have to acquire these skills or organisations will have to step up to train people. “So, constant re-skilling is something that we always have to do,” Khan concluded.

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