The Indian data centre market is on an impressive growth trajectory. Factors such as rising 5G proliferation, growing migration to the cloud, and increasing adoption of OTT streaming, digital payments and cutting-edge technologies such as internet of things, artificial intelligence (AI) and big data analytics are fuelling this growth. The grant of infrastructure status to the industry and the launch of progressive policies across states supporting data centre development have been instrumental in increased operator interest. Consequently, several players, big and small, are now keen on leveraging the Indian data centre opportunity. Existing players have embarked on massive capacity additions, while several new entrants have significant capacity under development.
While the anticipated growth in capacities bodes well for the industry, it also puts immense pressure vis-à-vis power requirements, as industrial data centres are amongst the biggest consumers of power in the country. Consequently, power management is emerging as a key focus area in the sector. In recent years, significant progress has been made towards the adoption of energy optimisation practices as well as the transition to renewable energy. Currently, the Indian data centre industry’s green footprint stands at about 15-20 per cent, on average.
At tele.net’s recent conference on “Data Centres in India”, industry leaders discussed key trends and emerging focus areas, highlighted issues and challenges, and identified upcoming opportunities. Key takeaways from their discussion…
Current operations and capacity
Sify was one of the early entrants in this space and has a presence across six cities in India, where they operate multiple data centre campuses. The company has 12 upcoming data centres, of which five are ready and the rest are under construction. The company is also looking at developing edge data centres.
Nxtra by Airtel is the dedicated data centre arm of Bharti Airtel, one of the largest telcos in India. It also has about two decades of data centre experience, with 12 large core facilities currently in operation. All the data centres are carrier-neutral and interconnected. Further, the company has 120 edge facilities in over 65 Indian cities. These edge data centres mostly provide internal services and are open to customers needing edge applications with latency requirements of under 10 milliseconds.
Web Werks has also been operational in India for several years. In 2021, it entered into a strategic relationship with US-based Iron Mountain, after which its expansion has been rapid. The company is now present in Navi Mumbai, Chennai, Bengaluru, Hyderabad and Noida. In terms of installed capacity, the operator has the capability to go up to 150 MW across locations. Currently, in locations such as Mumbai, Hyderabad and Bengaluru, the capacity is as large as 20-23 MW, primarily catering to retail and small enterprise clients. The company is focusing on building large-scale facilities now. For instance, in Navi Mumbai, it is developing three data centre within a 300 metre radius on 8 acres of land. This is where the major capacity of around 100 MW will come up, likely to go live within two years. In Chennai, it has two adjoining land parcels where the plan is to build 40-45 MW of capacity. In Noida, two data centres are coming up with an IT load of around 15 MW each.
Lumina Cloud Infra is a Blackstone-owned platform. It is currently operating in Navi Mumbai, where it has planned capacities of over 500 MW, spread across phases. The first site, a 32 MW facility, will go live in December 2024. Simultaneously, other capacities will be rolled out. The company is fundamentally a hyperscale platform catering to select clients.
Techno Electric & Engineering Company has been collaborating with DC players, assisting them in building data centres. It assists players in navigating the complexities of land acquisition, power sourcing and management, and design. In Chennai, the company is developing a hyperscale facility with a total capacity of 36 MW, of which 23.5 MW is dedicated to IT load. Each floor has a capacity of approximately 6 MW, with 600 racks per floor, designed for redundancy. It incorporates adiabatic cooling towers, which reduce water consumption by 75 per cent compared to traditional cooling towers and lower power consumption as well. The Chennai facility is being built to handle both regular workloads and AI-specific tasks, with flexible power and cooling designs that can scale to accommodate increasing power demands. The site features a 132 kW gas-insulated substation, 27 diesel generators and UPS systems, as well as battery energy storage. The company is also developing a data centre in Kolkata, with plans for more locations in Mumbai and Noida by 2030. It has also partnered with RailTel to build 102 edge data centres across India, including prominent locations such as Gurugram, and Mahalaxmi (Mumbai).
Focus on power management
Data centres are increasingly becoming power guzzlers, especially with the rise of generative AI. As development progresses, it will be tough to meet the demand. The available infrastructure is not capable of handling the demand. Very few state governments provide renewable power, and the policies differ by state.
In India, approximately 1,000 MW of power is used in data centres. In the next few years, this will increase by a further 500 MW. The power requirements per rack are also increasing. For example, six or seven years ago, each rack required around 6-8 kW of power; now, AI racks require up to 150 kW.
Interestingly, power is not an issue purely from a generation and availability perspective. For instance, the US does not have power issues, but faces the challenge of getting the power to the DC site. Closer home, in Navi Mumbai, where almost 80 per cent of the country’s large data centre capacity resides, the current infrastructure will not be able to handle the consumption expected over the next few years. The challenge is on the transmission side.
To improve power management, concepts such as AI have been brought into play. AI utilisation in servers has increased. AI works in conventional data centres, improving power utilisation. Liquid cooling has been introduced to improve efficiency.
Key challenges
The Indian DC industry faces issues pertaining to the supply chain, availability of people, statutory clarity and standardisation. Lack of consistency in DC policies across states is a hurdle. Norms, timelines and procedures are not uniform and vary across states.
A key emerging challenge is the lack of a skilled workforce. This is still a relatively new industry in India, and the talent pool for highly technical roles is limited. Finding good talent and retaining them is a big challenge.
From the government perspective, support from local bodies for faster development of data centres, especially when it comes to clearances, will be a game changer.
Focus on sustainability
Sustainability is a key focus area, and all operators, are working towards it. Green power is not just a buzzword any more; it is a necessity. Iron Mountain has already become 100 per cent renewable-powered in North America and Europe, either through purchase or self-generation. It has a net zero goal by 2040.
Sify Technologies is currently using green energy at multiple data centres across Bengaluru and Mumbai, and is in the process of implementing it in Noida. In the coming years, the plan is to use over 200 MW of green energy.
Lumina Infra is also integrating renewable energy in a big way, especially as it caters to hyperscalers. Companies such as Google and Microsoft are looking at their data centres to go green by 2030.
Future outlook and growth drivers
Data centres will have a substantial impact in accelerating the digital India momentum. Everyone is talking about AI, workloads and applications. The success of India’s data centre industry will depend on how the industry positions itself as the AI capital of the world.
With the required skill set, land pool and industry collaboration, the data centre industry in India can almost triple in capacity. Currently, the industry is hovering at around 200 MW of installed capacity. If it can catch up with the AI trend unfolding globally, it should be able to scale to 450-500 MW.
Also, the introduction of AI is completely transforming the perception of data centres. AI generates a massive amount of data from multiple systems, and latency needs to be minimal. For example, if a data centre is located in Mumbai or Delhi, and a user is in Kolkata, the bandwidth requirement and latency will be significantly high. To address this, edge data centres are coming up, being built closer to the users to reduce latency and improve accessibility.
Sify is coming up with multiple edge data centres in various cities. Nxtra by Airtel has 120 edge facilities in over 65 Indian cities. Techno is also partnering with RailTel to build 102 edge data centres across India. Its edge data centre blueprint includes nationwide development, long-term operations and a phased roll-out plan to build 20 edge data centres annually, based on city requirements. These centres will provide customised, scalable solutions and will be handed over to RailTel after 25 years of operation.
