Global firms are expanding in India by setting up local data centres as banks, among their largest customers, are insisting that data on the cloud of their customers and their financial transactions be located within the country.While there is no regulation that mandates such data be on cloud centres locally, banks maintain it is needed for data security. They are also of the view that it is better to be prepared for any changes in the law.
“Bankers want to remain on the safer side in the foreseeable future... and keep the data inside the country and eventually, if the regulator changes its mind, they will be in a safer position rather than on the wrong side of regulation,” said Shiv Kumar Bhasin, chief technology officer at State Bank of India, India’s largest bank. “If data security breach happens on foreign land, there will lesser law and order control. (However), if it is in the Indian premises, a lot of times, if anything happens disclosure will happen with transparency.”
He added that “there has not been a regulatory pressure and the Reserve Bank of India has only said that customer data should not be compromised”.
India does not yet have a data protection law despite an explosion of data in the public domain due to rising adoption of the internet in the country.
The public cloud services market in India would grow 43% to $1.9 billion in 2017, according to Gartner’s latest estimates in October. The major driver for adoption was to be in infrastructure as a service or data storage segment.
India is emerging as a big market for global players such as Google, Amazon Web Services, Alibaba, and Microsoft to invest in local data centres to tap the growing opportunity from Indian firms to host their applications on the cloud.
Business software maker Oracle said last month it would open a local data centre in the country, primarily to tap banks and financial services organisations.
Microsoft, which already has local data centres for its cloud-based solutions such as Dynamics 365, an application that combines employee resource management and customer relationship management, said data infrastructure in India is giving it an edge.
“When we talk about local data centres, they go to the level of not only security but also the residency of data,” said Samik Roy, country head-Dynamics at Microsoft India. “We can conform to the Irda, RBI regulations and a good number of banks, wealth management, asset management (companies) have adopted our cloud process and they are very stringent when it comes to security.”
Amit Kumar, the cloud leader at IBM India/South Asia, said local data storage facility has certainly been helpful. “The financial services sector is highly regulated, and it sure helps to have a data centre in India since it takes care of the data security and control aspect for these organisations.”
