Trends and Targets: Industry views on the growing data centre market

India’s data centre market is booming due to increased digitalisation across industries, coupled with substantial investment inflows and rising 5G deployment. Amidst this dynamic landscape, the data centre sector is shifting its focus towards sustainability, aiming to minimise the environmental impact of operations. At a recent tele.net conference, “Data Centres in India”, leading industry players discussed their current focus areas, upcoming trends, sustainability targets and future plans. Key takeaways from the discussion…

Amit Agrawal

Web Werk’s focus areas are based on four pillars – service, connectivity, compliance and security, and sustainability. We have a significant presence in 21 locations across the world, including India, and are currently running about 800 MW of capability. We have ambitious plans to expand our data centre footprint in Mumbai, Pune, Delhi NCR, Hyderabad, Bengaluru and Chennai. The company is also planning to set up another data centre in Mumbai. Our target is to reach a capacity of 200 MW in India within the next two years.

There is a growing demand for data centres in the country, with many companies investing in this area, as well as a significant amount of foreign direct investment (FDI) contributing to the trend. The demand is being driven by several micro and macro factors, including the rise of generative artificial intelligence (GenAI), which has led to an increased need for large amounts of computing power. To meet this requirement, infrastructure-as-a-service offerings are necessary. Further, sustainability is another major concern for the data centre industry.

In terms of global practices, Web Werks is known for its green data centres, with almost 100 per cent of data centres outside India running on renewable energy. The company is committed to using greener energy sources to power its facilities.

With respect to data centres being AI-ready, they are traditionally designed for a certain power density to meet enterprise requirements. These requirements include specific applications and workloads that need power densities ranging between 6 to 10 kW per rack. However, when AI or graphic processing units (GPUs) are added, the compute power and other power requirements increase by almost three to four times. To accommodate multiple workloads, data centres need to be designed with agility. This means they cannot have a monolithic design that only supports a single workload. Multiple power densities need to be included, and the network must have low latency, with the power backup being modular. Data centres should also have efficient cooling systems to maintain power utilisation efficiency when dealing with high workloads or power density. Lastly, security is critical to ensure data safety.

A major challenge faced by data centres today is managing the cost of power. However, at Web Werks-Iron Mountain Data Centers, we ensure sustainability not only in power efficiency but also in asset life-cycle management.

Our goal is to achieve zero emissions by 2040 and make all our data centres carbon neutral by 2030. We aim to create a facility where seamless connectivity can be accessed, as we believe this will fuel the demand for data centres.

“Our goal is to achieve zero emissions by 2040 and make all our data centres carbonneutral by 2030.” Amit Agrawal

Seema Ambastha

Cloudfiniti is an entity under the parent Larsen and Toubro (L&T) with the primary objective of designing, developing and operating data centres in India. At L&T, their emphasis lies on swift project completion, often achieved within 18-20 months. Their main goal is the development of sustainable data centres. Initially, their aim is to establish sustainable design data centres capable of scaling to achieve net neutral by 2030. They aspire to ensure sustainability across all aspects, including water and waste management, power supply, and even cabinet design. Additionally, they plan to incorporate a diverse range of value-added services to significantly contribute to the India digital strategy.

The data centre industry has witnessed various hype cycles, such as enterprise-hyperscale growth, and the current focus which is AI-enterprise growth.

Our inaugural data centre, located in Chennai, boasts a capacity of 30 MW and was completed within 18 months. The facility is highly modular, designed with a power usage effectiveness (PUE) of 1.5, with a potential to reach 1.3, contingent upon the PUE. Two more data centres are in the pipeline for Mumbai and Bengaluru, one situated in Mahape and the other planned for Whitefield.

These projects are currently undergoing statutory approval processes, with development slated to commence around August 2024, aiming for the first phase of operational readiness by December 2025.

Our target is to achieve a capacity of approximately 200 MW by 2030, with 80 per cent of our power requirements being met through renewable energy sources. This objective is being pursued through three strategies: gradual reduction of reliance on traditional power sources to 20-30 per cent, exploration of solar and wind energy options, and bio-cells to ensure that future growth is not limited by conventional power sources only.

Government policies and approval processes should be streamlined to enhance efficiency, accessibility and transparency, thereby fostering investments in data centres in India. Additionally, the government should strategise grid power access to ensure alignment with the expanding demands of data centres.

“Our target is to achieve a capacity of approximately 200 MW by 2030, with 80 per cent of our power requirements being met through renewable energy sources.” Seema Ambastha

Girish Dhavale

Sify Technologies Limited has data centres spread across India. Currently, it has 12 operational data centres, and three are under construction. Our IT capacity is more than 100 MW, and we are expanding, especially in Mumbai. By 2025, we aim to have a capacity of 250 MW, and our target is to reach 675 MW across India. We are currently constructing hyperscale data centres in different locations. Our first hyperscale facility in Chennai with a capacity of 78 MW will be commissioned in 2024, and we already have a commissioned facility in Bengaluru. We aim to grow in all regions with an increased capacity.

At Sify, we design data centres according to the specific needs of our customers, adopting the latest technologies to meet their future requirements. Each new data centre is designed with improved performance and automation features.

In recent years, the growth of data centres has been tremendous, particularly in metropolitan areas. This growth has been driven by customers such as hyperscalers and the banking industry. Additionally, new businesses are emerging, including domestic businesses that are doing well. One of the crucial focus areas is capacity availability. Over the past three years, hyperscalers have reached three-digit MW. Therefore, data centre colocation players need to prioritise capacity availability for all customers to ensure that business growth is not restricted. Further, infrastructure governance is also crucial.

With many international players eyeing India’s potential for growth, it is predicted that the country will become the hub of data centres in the next five to ten years, serving the entire Asia-Pacific region. India has several advantages, such as a highly skilled workforce in software, firmware and hardware. Additionally, all data centre equipment, from diesel generator sets to uninterruptible power supply (UPS) and batteries, is manufactured in India, making it cost-effective to host services in the country. Over the past two decades, data centre design development has evolved, and it has now become easier to design these facilities in climate conditions such as Mumbai.

The utilisation of data centres across different sectors has shown interesting trends in the past three years. Colocation players have seen a growth in their business. The automobile sector is also experiencing a rise in demand for smart cars. In addition, the banking, financial services and insurance (BFSI) sector has shown excellent growth with the introduction of the unified payments interface. As a result, banking infrastructure is likely to grow substantially in the coming years. Other sectors, such as chemicals, fast-moving consumer goods, government and healthcare, are also showing significant potential for growth.

Hyperscalers have been performing steadily as there is a growing demand for AI modelling. Their technological innovations are also on the rise, and the industry can expect a leap in growth from the next year onwards. The demand for chips, GPUs and hardware is expected to continue beyond 2025, indicating three changes that are likely to happen in the industry. Firstly, there will be a UPS-less design, eliminating the need for UPS to feed the servers as there will be power banks within the servers. Secondly, cooling will become a crucial aspect of the entire network architecture of data centres.

Lastly, automation will play a pivotal role in the growth of the industry. Automation based on connected predictive and cognitive systems will be the game changer. Additionally, AI and internet of things-based automation plays a significant role, allowing for predictive analysis that would not be possible without AI.

The industry faces major challenges, such as harsh remote deployment locations and the rising cost of real estate. Edge computing has emerged as a viable solution. The increasing demand for over-the-top services is likely to further drive the need for edge computing. Further, there is a shortage of power and space, which poses additional challenges for the industry.

Going forward, the future demands AI training modules. The company is prepared with a customised design to meet the requirements. Colocation players in India must accept the needs of customers and deliver accordingly. In conclusion, operational excellence and sustainability are crucial aspects, and security and safety must be maintained at all times.

“With many international players eyeing India’s potential for growth, it is predicted that the country will
become the hub of data centres in the next five to ten years, serving the entire Asia-Pacific region.” Girish Dhavale

Jatinder Singh Pabla

The company has a rich history of around 20 years in India. Currently, we operate 28 data centres in the country with an approximate IT load of 300 MW. We capture about one-third of India’s colocation market and plan to double our capacity within the next three years. At STT, our primary focus is colocation, and we have also ventured into AI and high-performance computing.

There are five key drivers in the data centre industry. First, cloud and hyperscalers, which has grown at a compound annual growth rate of 33 per cent. In most organisations, 60-70 per cent of their business is driven by hyperscalers. However, this growth has slowed down to around 22 per cent. To counteract this declining trend, AI has emerged as a strong lever. Today, the share of AI and the cloud is equal. Moreover, the BFSI industry has started to act like a hyperscaler in some sense, and is a major driver of traditional colocation.

Another lever that has emerged is high-end research. Today, global capability centres and research labs that are being established are focused on high-end research. As the semiconductor industry grows, we are going to see a switch in data centre size. The last key driver is the government, which is driving growth on two fronts. Firstly, through AI initiatives, the government has made several announcements and approvals. Furthermore, MoUs are also being signed to bolster the growth of the industry. Secondly, there is a push for government community cloud and sovereign cloud. In the next year, this is expected to become one of the strongest levers for AI specifically.  The sovereign (government) cloud is anticipated to be one of the largest consumers of AI.

Today, the focus in data centres has shifted from discussing rack density to determining the total number of IT equipment that can be accommodated and sold at a profitable price. Cooling technologies have also evolved over the past 18 months, with liquid immersion cooling offering an effective solution that allows for up to 100 kW of power. The industry has embraced these new technologies, along with power efficiency measures.

While AI is driving the data centre capacity, there are still some concerns that need to be addressed. One of the main issues is the very high capex required for building a data centre with GPU compute capacity. Moreover, GPUs are in high demand, which also leads to long waiting periods, delaying availability. Further the return on investment on GPU compute is lower than traditional compute and it spans two to three years only, thereby putting pressure on business cases.

Despite these challenges on the AI front, AI remains the strongest driver of growth and, combined with the traditional level of IT infra outsourcing, the growth potential for data centres remains as strong as ever.

“As the semiconductor industry grows, we are going to see a switch in data centre size.” Jatinder Singh Pabla