India’s data centre industry has received a major fillip post the Covid-19 pandemic. Today, data centres have become crucial for sustaining digital operations across industries and supporting digital transformation in the country. Leading data centre company heads share their views on the industry’s evolving landscape, the impact of Covid-19 on data centre uptake and the future outlook for the segment…

Manoj Paul Managing Director, Equinix India

Rohan Sheth Head, Data Centre and Colocation Services, Yotta Infrastructure

Piyush Somani Managing Director and Founder, ESDS Software Solution Limited










How did the Indian data centre landscape evolve during 2021? What were the key business highlights for your company during this period?

Manoj Paul

With the ongoing pandemic, the data centre industry in India witnessed a pivotal moment in 2021. As the country moved to­wards a digitally empowered society, data volumes and digital consumption inc­re­ased exponentially, driving the need for di­gital infrastructure across businesses. The government has developed many citizen-to-government delivery platforms, such as the National e-Governance Plan, e-visas, CoWIN platform for vaccination, national corporate social responsibility da­ta portal, and the widely used unified payment interface (UPI) for digital payments, all of which require secure and reliable digital infrastructure. We believe India’s data centre landscape will continue to ev­ol­ve in 2022 owing to the growing relian­ce on digital technologies, 5G roll-out, internet of things (IoT) devices, cloud adoption and data localisation.

Equinix is bullish on the Indian market and 2021 has been a key year to set the tone for this. Equinix not only expanded into the Indian market last year, but also built a foundation for a long-term commitment towards the market. Our first step into the Indian market provides us the footprint of two highly interconnected data centres, which have become de facto interconnection sites in India for carriers, content delivery networks (CDNs), content providers, and network and cloud service providers. Building on this, the launch of the global centre of excellence in Ben­ga­luru underscores Equinix’s continued efforts to deliver the level of excellence and interconnection that customers need to accelerate their digital transformation.

Rohan Sheth

India’s data centre industry has continued with the growth witnessed over the course of 2020. An increasingly digital environment driven by remote work, e-comme­r-ce, e-learning, healthcare, gaming and entertainment has led to a surge in de­mand for third-party colocation data cen­tres as various businesses scaled up their IT infrastructure to meet this growing digital demand. The first half of 2021 itself witnessed 46.4 MW absorption equivalent to 90 per cent of supply addition, according to JLL’s “India Data Centre Outlook: H1 2021”.

The year 2021 was highly successful for Yotta with many companies signing up for our services. Huhtamaki India, a pro­minent flexible packaging and labelling materials company, migrated its captive, on-premise data centre to the Yotta NM1 data centre at Panvel, Navi Mumbai.

The National Commodity and Deri­va­ti­ves Exchange (NCDEX), India’s leading agricultural commodity exchange, also migrated its live trade data centre to Yotta. This made the NCDEX the country’s first and only exchange to operate from an uptime-certified Tier IV data centre.

Over the course of 2021, we also en­jo­yed immense success in expanding our pa­rt­ner ecosystem and launched several new products with partners such as NVIDIA, Co­m­mvault, Citrix, and Piql.

Piyush Somani

Covid-enforced technology adoption and the increase in smartphone users seems to indicate a deep penetration of digital technology, encouraging firms to shift from tra­ditional offering modes to digital mea­ns. The cloud services market in India was un­dergoing a cloud transition phase, whi­ch got accelerated by the perpetuation of Covid-19 in 2020. The shift in work culture from office set-ups to virtual work cr­eated the urgent need for secure, reliable, scalable and cost-effective technology services across the country. Software-as-a-service (SaaS) has been a huge support amidst the sudden increase in the mobile workforce in 2020. The wave of IT adoption led by cloud computing has allowed firms to transform their back-end operations, re­sulting in an enhanced value pro­position for customers. Cloud service giv­es co­m­­panies of any size access to technological capabilities, which were previously ac­c­essible to large enterprises only. In India, the industry has gained momentum with over 200 data centres and more than 10 cloud operators, targeting an industry market size of $3.8 billion in fiscal year 2020 as per Ken Research.

During the lockdown, in response to the Covid-19 pandemic, we put in place certain interim measures to ensure busine­ss continuity. All of our employees worked re­motely, and our data centres and services continued to operate.

What has been the impact of the Covid-19 pandemic on the demand for data centres? How are you meeting this demand?

Manoj Paul

The Covid-19 pandemic has only accelerated the digital transformation journey that businesses across the region had al­ready been undergoing. Organisations were prompted to accelerate the pace of their digital transformation plans and their IT budgets were also bolstered to accommodate the shift in digital demands br­ou­ght about by the pandemic. It is now ev­en mo­re important for companies to find innovative ways to connect with their customers and partners to gain a competitive advantage at a distance. Worldwide, the pu­blic sector, healthcare and life scien­ces, industrial services and transportation industries are expected to experience the fastest digital infrastructure growth, which is forecast to drive a 48 per cent or more compound annual growth rate (CAGR) in interconnection bandwidth from 2020 to 2024 globally, according to the Global In­ter­connection Index Volume 5. These in­dus­tries were previously lagging in interconnection adoption, but are now leading in in­terconnection growth rate due to the pan­­demic. If the global pandemic has taught us anything, it is this – data centres are essential to keeping society going, especially when in-person interaction is not possible.

Also, with Covid-19 pushing data and resources to the edge, business leaders have been forced to reconsider how they can architect their IT environment in an agile and secure manner. Understanding the demand at an early level, Equinix has been at the forefront of this digital overdrive. Today, the global footprint of Platform Equinix spans more than 235 IBX data centres across 67 metros, providing digital in­fra­structure for more than 10,000 of the world’s leading businesses. Equinix also enhanced its digital service portfolio to provide on-demand interconnection and edge services to help customers build their digital infrastructure at software speed.

Rohan Sheth

The business ecosystem has undergone tremendous digitalisation in recent times and there is a growing need for reliable data centre infrastructure that ensures seamless round-the-clock operations. The Covid-19 pandemic has been a major acc­elerator of migration from captive data centres to third-party colocation facilities. Amidst pandemic restrictions, enterprises faced inaccessibility, and operational and manageability challenges in their captive set-ups. Even the slightest downtime can leave a huge impact on business operations and customer experiences.

As enterprises aim to achieve resiliency and uncompromised uptime, they realise th­at achieving these results in an on-pre­mise data centre setup requires large ca­pex investment in hardware, power and backup, and dedicated resources for continuous monitoring and management of infrastructure. The challenge of scaling up the infrastructure as per the workload re­quirement further adds to the complexity.

Our parent Hiranandani Group’s vast experience and complementary strengths help us maintain a competitive edge in key areas of the data centre business such as land ownership, world-class construction pro­w­ess, timely completion of projects and in-house power generation and distribution capabilities.

Furthermore, with Yotta’s core data centre, design and engineering expertise and skilled resources possessing proven ex­­pe­rience of delivering and operating multiple hyperscale data centres, we can pro­vide colocation services and built-to-suit data centre buildings with infinite sc­alability at the lowest possible costs.

Migrating to a colocation facility ensu­res that an enterprise’s data centres operate in an environment that is best suited to provide the desired outcomes, minus the cost of management. Yotta’s NM1 data ce­n­tre in Navi Mumbai, for instance, provides enterprises the freedom to scale infinitely, with unmatched assurance of a fault-tolerant and power-redundant Tier IV facility that is certified by Uptime In­sti­tute’s Tier Certi­fication of Constructed Facility.

Piyush Somani

As per the IT spending survey, more than 65 per cent of India’s enterprises have re­alised the benefits of opting for cloud in ter­ms of acquiring new clients, serving the existing customer base, and achieving good profitability. Around 81 per cent corporate organisations have adopted cloud services in the wake of the pandemic, with the im­plementation of the work-from-home culture. During the first quarter of 2020, the spending of enterprises on cloud infrastructure increased by around 35 per cent over the fourth quarter of 2019 as per Ken Research.

Impact of Covid-19 on the Indian data centre industry:

  • Change in customer behaviour: The work culture across services firms shifted from traditional to work from home, which has led to an increased volume of data generated online.
  • Firms realise the need for outsourced fa­cilities: With lockdown and other mo­bility restrictions, firms are considering the migration of their servers to a third-party data centre facility, which co­uld en­sure all-time availability of their mi­ssion-critical applications at a rapid pace.
  • Rising preferences for cloud services: Moreover, firms may choose to deploy cloud services, realising the benefits of ava­iling cloud services and having a ro­bust IT infrastructure in place.
  • Shrinking IT budgets favour the data centre industry: Greater scrutiny over IT budgets, and capex seems to have pro­moted a change in corporate preferences to usage-based monthly/quarterly payment models. This changed business mo­del is pushing cloud growth and will ev­entually data centre growth as well.

What, in your view, are the most critical un­resolved policy and regulatory issues hampering growth in the data centre space?

Manoj Paul

To create a digital economy that is open, rules based and innovative, like-minded countries must work together. Govern­ments, businesses and individuals should up­date laws to address legitimate data-related concerns, while ensuring that the en­ormous societal and economic benefits of data and digital technologies are maximised. In most countries, the proliferation of locally adapted data poses a threat to the ability to create an open, rules-based and innovative global digital economy. For businesses to truly harness the po­wer of data, it has to move freely across borders. All­owing free data movement bo­osts shared governance, prevents espionage, and helps maintain financial oversight and conduct law enforcement investigations.

Rohan Sheth

Realising the growing demand and role of data centres in aiding digital gr­owth, various state governments have been formulating policies to create a conducive business environment. This is a step in the ri­ght direction. The government’s push for data localisation and introduction of the Personal Data Protection Bill further indicates that India needs a big dose of the data centre infrastructure.

To incentivise companies to store data in India and reap the benefits of huge revenues from the data centre industry, the government should encourage more private players to set up data centre parks in India. The government should also create a framework to host data on third-party data centres and implement the proposed Data Centre Incentivisation Scheme that focuses on the formulation of fiscal and non-fiscal incentives including tax breaks for any data centre facility. These incentives should also be linked with the quality certifications of data centres, thus leading to the development of world-class digital infrastructure in India.

Given the growing prominence of cloud and efforts to make the technology ma­instream, the government should frame policies on incentivising businesses to use such new technologies and roll out digital tax policies, providing certainty around cloud computing services.

Cloud service providers (CSPs) play a crucial role in making cloud accessible to all. Thus, a favourable tax policy for ho­me-grown CSPs to promote a “Make in India Cloud” would further act as a catalyst. A dedicated framework and incentives for CSPs will help them provide high performance and cheaper cloud services in the Indian market. The Ministry of Electro­nics and Information Technology’s policy gui­delines and accreditation of CSPs can be more accommodative towards new cloud players, including start-ups in this domain.

What is your outlook for the Indian data centre industry for the next few years? What will be the key growth drivers?

Manoj Paul

There is a natural progression towards inc­reasing cloud-led innovation across the board as more and more Indian organisations become digital-first businesses. In addition to government-led initiatives and incentives, India is benefiting from local influences as well as upcoming data sovereignty laws. Cloud adoption is directly linked with growth in demand for data ce­ntres, where CSPs host their servers and storage devices. This growth in demand for data centre infrastructure in India is se­eing an exponential growth in big investments being committed by multiple players. According to Synergy Research, the data centre market in India is expected to exceed $2 billion in 2025 and grow at a 15 per cent CAGR during 2020-25, the se­cond-highest growth rate in the world.

The rise of hybrid multicloud adoption, increased data consumption and generation by half a billion digital users in India is driving the need for digital infrastructure exponentially. The number of Indian businesses embracing digital transformation is growing, and they are naturally progressing towards the hybrid multicloud transformation journey. New technologies such as 5G, edge computing and IoT rely on real-time processing and use huge amounts of data that depend on cl­oud computing. These data-dense techno­logies will drive the demand for data centres because they offer more scalable and cost-effective cloud computing.

In addition, data centre operators are focusing on sustainability measures, such as renewable energy and energyefficient cooling and power solutions. It is the right time for India to take full advantage of the explosion of data sparked by IoT and re­mote work.

Rohan Sheth

A large and growing internet user base, explosion in data consumption and a fa­vo­u­rable push from the government’s Digital India mission will drive the country’s growth as an upcoming data centre hub. As companies hasten migration from captive to multitenant data centres, the data centre industry will witness the adoption of “as-a-service solutions” by enterprises, with high scalability and high quality infrastructure being the primary drivers of this adoption.

Developments such as the Personal Data Protection Bill and 5G adoption will cascade and crystallise across 2022. Data protection and localisation will give a massive boost to the Indian data centre industry as enterprises will embrace local service providers, giving an impetus to the industry and creating jobs. Edge computing and 5G will co-evolve to harness the best of each other, with data centres serving as a bridge between the two.

Underpinned by a robust edge data centre network, enterprises, telecom companies and cloud service providers will invest in edge computing for applications such as faster video streaming, factory auto­mation, telemedicine, autonomous vehicles, and augmented reality (AR) and virtual reality (VR).

Lastly, data centre interconnect technology, which can connect two or more data centres over short, medium or long distances, will continue to grow as it lowers operational costs and flexibility.

Piyush Somani

It is believed that the industry has gained traction during the Covid-19 phase due to pent-up demand from different business verticals. The past few years have witnessed the emergence of several new players in India. Several government-led initi­a­tives such as the draft Data Centre Po­licy, 2020, and data localisation policy are also believed to have accelerated the de­ma­nd for data centres in India.

Other possible growth drivers for the Indian data centre industry are:

  • Focus on cybersecurity
  • Growth of content providers
  • Data centre outsourcing by start-ups
  • Regulators’ focus on keeping data within India (data localisation)
  • Increase in e-commerce transactions
  • Increasing cloud adoption
  • Increasing investments in data centre development
  • Adoption of technologies such as IoT, big data and others
  • Introduction of 5G services.

The focus of data centres is slowly shif­ting from Tier 1 cities to Tier 2 and Tier 3 cities owing to limited capacity, land availability, and high real estate and construction cost in Tier 1 cities. Increa­sing focus on data recovery and disaster management services provided by data centres is driving the market in other cities. The high growth of over-the-top (OTT) services in the rural market is also expected to increase the need for more such data centres in Tier 2 and Tier 3 cities.

What will be your growth plans/strategies over the next few years? Do you have any key focus areas for 2022?

Manoj Paul

Last year in September, we announced our expanded footprint in India with two data centres in Mumbai, providing more than 1,350 cabinets, with the addition of more than 500 cabinets when the second Mum­bai facility is fully built. Moving forward, we will continue to expand our footprint in Mumbai, and look at expansion into other key metros in India.

In addition, we are working tirelessly to introduce more interconnections and digital services in India, including Equinix FabricTM and Network Edge, to help Indian businesses more easily and flexibly build their digital infrastructure and seamlessly interconnect their IT infrastructure across the global platform. We will also continue to work closely with our partners in India to provide innovative solutions for Indian businesses.

Equinix has a highly experienced, skill­ed and knowledgeable team and a ro­bust ecosystem of some of the world’s top CSPs, OTTs, CDNs and enterprises. We believe that this will enable us to grow quickly in India and help our customers fast-track their digital development.

Asia-Pacific, as a whole, is an important expansion region for us. We have great confidence in our strategy to invest more in empowering our customers to seize the best of tomorrow’s opportunities. In 2021, our extensive projects across the region brought our total investment value to over $911 million. From the new builds to the expansion plans for current IBX data centres, we aim to strengthen our capacities and fuel our customers’ future growth.

Rohan Sheth

At Yotta, our vision is to provide best-in-class data centre offerings, an array of cloud services and innovative IT solutions on the “everything-as-a-service” (XaaS) model. In 2020, our first data centre, Yotta NM1, went live in Navi Mumbai, which is Asia’s largest, the world’s second largest, and India’s only Uptime Institute-certified third-party Tier IV facility. Our Navi Mum­bai data centre park already has the structure ready for the second data centre building, NM2, with a massive capacity of 9,000 racks, which can go live in less than nine months. Further, we have the space to develop three more data centre facilities on the same campus.

Yotta is coming up with hyperscale da­ta centre parks in strategic locations across India. Yotta D1, the first data centre building of our Greater Noida data centre park, will go live by July 2022. This data centre park is spread across 20 acres and will com­prise six interconnected buildings off­ering a capacity of 30,000 racks and 180 MW of IT power.

We are soon coming up with close to 200 MW of data centre capacity in the heart of Mumbai and the Navi Mumbai metropolitan region. We have also signed an MoU with the Tamil Nadu government to build a data centre park in Chennai. This facility will have a capacity of 150 MW and 25,000 racks spread across five buildings. We are also coming up with a 120 MW data centre park in Pune. We will be going live with around 200 racks at our data centre building in Gift City, Gu­ja­rat, specifically for international busine­sses and exchanges.

In addition, an investment of Rs 85 billion is being directed towards West Bengal to set up a logistics and hyperscale data centre park. To sum up, we have drawn up a plan to deliver 1,030 MW of capacity across Maharashtra, Gujarat, Tamil Nadu, West Bengal and Delhi-NCR by 2027.

Yotta will also be investing Rs 9 billion over the next four years to set up 100 edge data centres across India. In the first phase, we will start with 8-10 smaller cities co­mparable to the scale of cities such as Nag­pur, Jaipur, Coimbatore and Ranchi, with an investment of Rs 80 million-Rs 100 million in each city.

All our upcoming data centre parks will also feature redundant fibre paths, mul­tiple telcos/internet service providers and internet exchanges. They will be largely powered by redundant on-site substations with express feeders and the capability to source and deliver 100 per cent green power.

With our vast portfolio of managed IT services, application services, SAP and Ora­cle management services, private clou­ds and Yotta public cloud services catering to the demanding workloads of gaming/ rendering/designing/artificial intelligence (AI), machine learning (ML), data analytics, etc., we aim to serve everyone from hy­­perscalers, enterprises, small and medium enterprises to start-ups, on an opex-based XaaS model.

Piyush Somani

ESDS intends to capitalise on the growth of the cloud market and demand for data centres in India as well as international markets. A possible reason for the increase in demand for cloud services and data centres is the increasing amount of data generated by the customers of a business. All new-generation technologies such as IoT, AI/ML, blockchain, in-memory-database architecture and AR/VR consume a significant amount of data, and there is no quick fix to optimising the compute and storage usage of all these new-generation techno­logies. We intend to capitalise on such opp­ortunities by increasing our focus on:

  • Mid-market enterprise customers by offering integrated cloud solutions
  • Hybrid cloud business models
  • Scaling up across international markets, which have technology adoption trends similar to India
  • Introducing new as well as enhanced existing SaaS solutions for the accelerated digital transformation of custo­me­rs’ businesses.

Further, we believe that due to value dr­i­vers such as customisability, control and autonomy, and interoperability, we wo­uld be able to retain and improve our mar­ket share while competing with hy­per­scalers. Co­­nsequently, to capitalise on such oppor­tu­nities, we are exploring setting up new data centres in India, in locations that may in­clude Mohali, Delhi and Navi Mumbai.