India has started expanding its data centre footprint. The telecom sector has the opportunity to capitalise on the domestic and international opportunities at hand. While there has been tremendous growth in IT infrastructure outsourcing, almost 40-50 per cent of the information technology (IT) infrastructure in enterprises is still not outsourced. This, combined with the cloud and network demand, is a great lever for sustained data centre industry growth.
Growth trends
India’s policy landscape is evolving with respect to Personal Data Protection, data localisation, RBI and e-commerce. The launch of 5G handsets and connectivity, demand for over-the-top content delivery, adoption of UPI and increased data usage in Tier 1 and Tier 2 cities have further deepened the need for data centres in the country.
Globally, India’s colocation facility share is almost 3 per cent, which is projected to double in the next few years, as the Indian market is growing at a compound annual growth rate (CAGR) of 23 per cent versus the global rate of 12 per cent. We have the opportunity and need to emulate our IT/ITeS outsourcing success story where India’s share is almost 50 per cent of the world market.
Need for uniformity with global policies
To realise our full potential, several policy measures also need to be taken. For example, a competitive goods and services tax input credit policy, electricity tax waivers and other rebates need to be at par or better than such policies prevailing across the world to make India a global data centre hub. Each of these measures can help reduce end-user pricing significantly, make us competitive in the world market and hence help us serve global customers.
Ensuring sustainable operations
Sustainability is a key requirement for the data centre industry and it requires all parties including the government, providers and OEMs to work together. The government has initiated many measures and it needs to further allow flexible green power procurement regulations and a long-term policy framework to increase the green mix in the data centre domain. Innovations through joint research by industry and academia need to be promoted to increase the adoption of innovative solutions.
For instance, while solar energy alone can take the efficiency up by 70 per cent, mixing two sources of energy such as solar and wind energy can hike the efficiency rate by up to 85 per cent. Other innovations pertaining to battery storage efficiency and production of green hydrogen can further aid in improving the green energy mix of the industry.
It is possible to reach a very high level of green energy mix with all stakeholders working towards a common goal.
STT’s data centre footprint
Since its establishment in 2014, STT GDC has expanded its portfolio significantly through both greenfield and brownfield expansions. Operating since 2004, STT GDC India runs 23 data centres in nine cities and has a market share of 30 per cent in India’s colocation market. It currently operates data centres with an IT load of around 216 MW. The load is projected to double in three years. Our global platform spans nine geographies comprising more than 140 data centres and 1.8 GW of IT load.
Future trends
India is in a unique position to serve both local and global demand. Our local demand, driven by cloud growth, enterprise IT outsourcing, network expansion and data localisation, remains as strong as ever, which will help us continue to grow at 23 per cent CAGR for the next three to four years. India is also in a unique position to be a hub for meeting global data centre requirements. With cities such as Chennai and Mumbai, which have abundant network and compute capacity combined with low latency, we have the opportunity to serve the entire APAC market.
India’s data centre growth story is driven by multiple strong demand factors and the industry is all set to fully realise its potential going forward.
Based on a presentation by Jatinder Singh Pabla, Senior Vice-President, STTelemedia Global Data Centres India
