Over the past few years, India has witnessed a surge in the production and consumption of data, with more internet users now than ever before. This is further expected to grow in the times to come as technologies such as 5G, AI, IoT and blockchain make inroads into all sectors. This rise in data traffic has provided an impetus to the data centre market with enterprises turning to data centres to host mission-critical applications.
The demand for data centres has also increased power and energy consumption. In view of this, data centre players are now moving towards more energy efficient practices and devising ways to reduce their carbon footprint. The cooling segment of the data centre market is also witnessing rapid growth.
A look at the power requirements of data centres, the emerging green data centre concept and the new opportunities expected to surface across the sector…
Growing power demand of data centres
The surge in data demand has put significant pressure on modern-day data centres to deliver higher capacities. As a result, data centres are guzzling massive amounts of energy. Power is, in fact, one of the key components of a data centre. Recent market studies suggest that industrial data centres are one of the biggest consumers of electricity. To meet its power requirements, a data centre requires a large capex.
As per recent reports, the world’s largest data centres, comprising a large number of IT devices, require more than 100 MW of power supply for their operations. In India, STT GDC is reportedly planning to expand its capacity in load terms from the current 85-90 MW to 500 MW.
Analysts have pointed out that redundant power is a major component of data centre maintenance. As such, power and cooling requirements account for a huge portion of capex in Indian data centres due to the unexpected power cuts or technical failures in various components. As per recent industry analysis, servers and cooling systems account for the largest share in the direct electricity consumption of data centres, followed by storage drives and network devices.
Emergence of green data centres
The growing energy consumption of data centres is rapidly adding to the global carbon footprint. As per industry estimates, the entire information and communications technology (ICT) ecosystem accounts for about 2 per cent of the global carbon emissions, of which data centres contribute about 0.3 per cent. Analysts predict that ICT could potentially account for over 20 per cent of the total global electricity use over the next eight to nine years and data centres are expected to contribute over one-third of this.
Since the power requirement of data centres is expected to increase manyfold in the near future, the industry has started taking initiatives to make data centres energy efficient and environmentally friendly. This has led to the emergence of the concept of green data centres. A green data centre deploys environment-friendly solutions within its infrastructure. Like any other data centre, it stores, manages and disseminates data while ensuring a lower carbon footprint. All its systems, mechanical and electrical, are designed with a goal to conserve energy. Another key aspect of a green data centre is the continuous monitoring of all applications. This enables the data centre to use power efficiently. It can transfer or redistribute energy across various applications, depending on the requirements. This helps reduce the capital expenditure significantly. Green data centres also address the problem of dead server space prevalent in conventional data centres. Traditionally, data centres allocate storage space as per a company’s requirements. The space can be automatically increased as and when required. This often results in the creation of dead server space. As per industry estimates, nearly one-fifth of all servers in a traditional data centre remain vacant and unused as a result of this process. While these servers do not have any functional use, they continue to consume energy and other resources, significantly adding to the capital expenditure. Meanwhile, green data centres can turn these servers off, thus reducing the energy consumption and cost.
The efficient working of a green data centre can also be attributed to its infrastructure layout. Many green data centres use self-contained, prefabricated modules that can be deployed and changed with great ease. These modules are designed for optimal and predictable energy use. As per recent market estimates, the green data centre market is expected to grow from an estimated value of $53.19 billion in 2019 to a value of $181.91 billion by 2025, recording a CAGR of 23.01 per cent during the period under consideration.
A big opportunity
The data centre market is filled with opportunities for vendors and stakeholders across the board. One of the key emerging avenues of growth is the storage capacity domain. Given the massive power requirement in data centres, analysts predict that the power and cooling segment of the Indian data centre market will grow from an estimated $623.3 million in 2019 to over $1,065.5 million by 2025, recording a CAGR of 9.4 per cent during the period under consideration. This growth is expected to be driven primarily by the surge in demand for IaaS, SaaS and PaaS among organisations, and the increased use of internet smart devices and social media platforms. This presents another set of opportunities for stakeholders. As per industry analysts, favourable government regulations and the emergence of alternative sources of power and cooling provide huge opportunities for vendors operating in the data centre segment.
In order to tap the emerging opportunities, vendors and stakeholders in the market need to constantly innovate. Likewise, data centre players need to stay abreast with the latest developments in the segment. The modernisation of data centres is a necessity as any given data centre becomes obsolete in seven to eight years.
In this context, green data centres are emerging as a big opportunity for players in this segment. According to Huawei, the global data centre demand is expected to increase three to ten times by 2030. Green data centres are expected to witness significant demand and will constitute a large share in the overall growth of the data centre market. The key growth drivers of the green data centre market include the need of operators to bring down operational expenditure and regulations, mandating the use of eco-friendly means to operate date centres. For instance, in view of the increasing level of energy consumption by data centres, the US and European countries have started regulating energy consumption in the data space. It is predicted that by 2025, networks will generate over 150 zettabytes of data. This will provide a stimulus to the data centre market.
The way forward
While significant advancements have been made in the data entre space in terms of energy efficiency practices, there is still a long way to go. Analysts are of the view that the demand for ICT services and compute-intensive applications is increasing at a rapid rate, outpacing the adoption of energy efficiency strategies among data centres.
There is a huge scope for energy efficiency improvement in data centres. However, this would require a significant amount of investment from data centre players in next-generation computing, storage, and heat removal technologies. Going forward, vendors also need to invest in renewable power sources as this is where the industry is heading.