Companies have been connecting directly to cloud providers around the world for some time, through a connection that is separate from the internet connection they subscribe to. But some companies have gone a step further, connecting directly to multiple cloud providers through a single link, essentially cutting off a major part of their internet use. For this, you need what’s called a cloud exchange, which is connected to multiple cloud providers at the same time. So essentially they connect to a part of the public internet, through a dedicated private link, arguably making cloud operators a kind of highly reliable LAN resource. We spoke to Manoj Paul, Managing Director of GPX Global Systems, a large data centre company that has started to offer one such cloud exchange in Mumbai.

An edited version of the interaction follows. All emphasis ours.

MediaNama: What is a cloud exchange? How are they different from internet exchanges?

GPX has interconnects with Google, AWS, and other cloud service providers. What happens in a cloud is when an enterprise wants to connect to these platforms, they have to do it through the internet. However, many enterprises do not like that for multiple reasons. Internet access to cloud is not secure sometimes, you don’t know if data is going securely. On top of that, access is not very reliable all the time. Some applications don’t connect unless there’s a secure and reliable connection.

What we try to do is connect Paytm, Hotstar and other enterprises through dedicated lines to our data centres. Instead of going through the internet, they connect directly through us. These are dedicated lines that are not shared. Enterprises have been getting these dedicated lines to individual cloud providers. But enterprises are now working with multiple cloud providers. 

What we’re trying to do with a cloud exchange is get a single link to connect enterprises to all these cloud providers with a single link. Uptime is critical when you’re working with the cloud, and cloud exchanges with dedicated links help that.

Internet exchanges on the other hand are mainly for connecting content providers like Facebook, Netflix and YouTube to internet service providers. 

MediaNama: So cloud exchanges sit on top of the public internet? 

On the side of it. So instead of an internet connection, they connect directly to the cloud provider on a leased line connection. 

Doing this is cheaper than using an internet connection too. Getting a 1Gbps connection directly to cloud service providers through a cloud exchange is cheaper than getting an internet connection of the same bandwidth. In fact, cloud service providers offer their services at a lower cost for customers who connect to them through dedicated lines as opposed to the internet

How we are different is that we have gotten the cloud services in the same data centre connected locally. In other cases, Google would be in one building, AWS in another, and we’d have to buy expensive and potentially unreliable links to connect those different providers. Here we can just use a single LAN cable to connect all data centres to the customer.

MediaNama: So cloud services providers pay more to ISPs for customers peering through the public internet?

When cloud providers connect through the internet, both the customers and the provider themselves have to pay the internet connection costs. When, let’s say, TCS connects to AWS directly, it takes away the premium charged by the ISP for both Amazon and TCS. So it’s a big win-win.

MediaNama: India has notoriously bad internet infrastructure within the country. What role do you play in easing that pressure?

Till some time back, most content was sourced from outside India. GPX started data centre operations in 2012, focusing on being a true carrier-neutral data centre. This encouraged many international content and cloud providers to come to India, because reliability was very critical for them. If I come to India as a cloud provider and there is downtime, that leads to a loss of confidence.

If you are an ISP now and you want to connect to a major content provider, you can do that by connecting to an exchange [like the ones GPX data centres connect to]. Before, the same ISP would have to buy international bandwidth. If a 1Gbps line to a content provider now costs Rs 10,000, the same content at that bandwidth would cost something like Rs 2.5 lakh when purchased by buying international bandwidth.

The amount of savings that these ISPs are seeing are passed on to the end customer by reducing prices and increasing data caps. As far as GPX is concerned, we enabled international content providers to come to India and created an ecosystem for 130 ISPs.

Cost has come down, reliability has gone up, and end users get better performance at a lower cost. We ourselves don’t have an internet exchange, so we have four internet exchanges with points of presence at our data centres. We are the only data centre to have 15 terabits of data flowing through our networks.

MediaNama: I’m guessing this is a product that enterprises wouldn’t need in a country with reliable and robust internet infrastructure. Do you expect demand for this service to remain as telcos and ISP networks get better over time?

Cloud exchanges’ requirement will only grow. The way we see it, in India, where people prefer higher value for money, it’s expected that most Indian enterprises would have a multi-cloud strategy to save on costs. And bandwidth is one of those costs. Even with improvements in internet quality, that will still be a higher cost. And internet per se can never be as reliable as a dedicated connection. Cloud exchanges been very popular in other parts of the world, and I’m sure India will be the same.

During the COVID-19 pandemic, many enterprises had their own in-house server infrastructure, but the technical team was not able to go there and fix problems. Since we are an essential service, clients that have their servers in our data centres continue to get support, whereas enterprises with in-house data centres would have to connect through a VPN to their own internal network, which might be unreliable.

We believe that cloud exchanges will get accelerated after the lockdown.

MediaNama: What is the surge you have seen in data use during the pandemic?

We see several customers upgrading their network. We do not see the data flowing between our customers [for privacy reasons]. But in our discussions with them, we see that they’re observing a 30–40% increase in traffic. We have had many ISPs taking new internet exchange ports, upgrading their 1Gbps ports to 3Gbps ports and so on.

So the traffic has increased, and many service providers have really come to us with their plans of big growth. There is a large CDN player that is going to grow 100% over the next six months, more than the growth in their last two years — that is the quantum of growth we are seeing.

MediaNama: Were you prepared for that kind of surge in data?

We focus on edge data centres, not core data centres. This means that the most popular content is always ready to be served very efficiently, while less popular content can still be fetched from core servers. So even a 100% growth in data use would have been manageable. 

We feel that COVID-19 is going to see in-house data centres move to cloud exchanges. We’re also seeing that videoconferencing is growing, which also needs servers that need data centres.

MediaNama: This video call [where we are doing the interview], by the way, is being routed through the US instead of through India.

Yesterday, we closed one of the largest video conference providers in the world that was not available in a very big way in India. And we are trying to see how we can get them on board in spite of the lockdown. It’ll take a couple months to go live because we’ll need a lot of testing. 

MediaNama: Since you do hosting as well, do you see more demand due to the Data Protection Bill? Do enterprise clients have more interest in geo-fencing their data?

Lots of discussions and RFPs are going on, but people are still taking a wait-and-watch approach in terms of what is needed, and what they need to localise. 

MediaNama: The TRAI had a consultation recently, and the responses came out recently, where telcos and cloud service providers opposed regulating CSPs. Do you see any need to regulate CSPs?

Cloud and all these new technology companies prefer not to be regulated. Regulation can bring in a lot of procedural delays. So many OTTs are coming to India and hosting in India. But if you add regulatory barriers and conditions, it wouldn’t be viable to many of them. We’d just keep doing Zoom calls through foreign servers.

We believe that things have been going very well. Registration could be looked into instead of regulation, to see who is where, but doing in-person visits and all that spooks some of the international players.

MediaNama: Aside from data centres and exchanges, where do you see most room for improvement in the internet infrastructure ecosystem in India?

In India, we have a big problem at the last mile. And then, we need to improve the intra- and inter-city connectivity. That’s a big constraint, because content can’t lie in one data centre; a single data centre fills up pretty quickly. Getting dark fibre activated and providing low-cost connections between nearby data centres would help. 

Change in regulation to encourage new players to put fibre between data centres and operators would be helpful. Today fibre can only be offered to telcos and not data centres. It’s needed to improve interconnectivity. There’s a lot of fibre connectivity with international networks [via submarine cables] but not enough fibre laid within India itself.

Once internet exchanges and cloud exchanges come in in a big way, there will be huge improvements in adoption and connectivity.