Rise of Hyperscalers: Accelerating digital transformation of data centres

India’s data centre sector is witnessing rapid growth, propelled by a surge in digital consumption, the expansion of the cloud economy, and rising demand from both enterprises and hyperscalers. As hyperscalers continue to expand their presence, the country is well on its way to becoming a critical hub for supporting digital infrastructure, both domestically and on the global stage. Further, this is not only accelerating digital transformation across industries but also nurturing the development of local tech ecosystems and fostering nationwide innovation. At the 7th Annual Conference on Data Centres in India organised by tele.net, Anil Nama, Chief Information Officer, CtrlS Datacenters, and Prasad Tilve, Head, Strategy and Hyperscale Business Development, CapitaLand Investment, shared their thoughts on how companies such as CtrlS and CapitaLand are leading the charge  expanding capacity across major cities while introducing advanced technologies and sustainable practices to address evolving needs. Key takeaways from their addresses…

Anil Nama

CtrlS is a Tier IV data centre provider, delivering co-location services, managed cloud, private cloud, business continuity plan and disaster recovery hosting. It has data centres across the top technology hubs in India, such as Mumbai, Hyderabad, Bengaluru, Chennai, Noida, Lucknow and Patna. These facilities are widely recognised for their energy efficiency (lowest power usage effectiveness), sustainability practices, captive solar power utilisation, speedy construction and low build cost. CtrlS has also invested in various cooling technologies, such as immersion cooling, liquid-cooled servers, and 1 metre of raised flooring to support 18 kW loads per rack. In Maharashtra, CtrlS has a 100 MW solar plant in Amravati, near Nagpur, to supply renewable energy to its Mumbai data centre. It is also working on reusing water. In Vashi, there is a sewage treatment plant that cleans wastewater flowing into mangroves.

The Indian data centre boom is projected to reach $5.7 billion in investments by 2026. The growing digitalisation in the country is a key contributor to the increasing data centre footprint. Today, India is the third largest digitalised G-20 nation. E-commerce has become an integral part of the daily lives of Indian consumers, with estimates stating that it is likely to reach $136.47 billion in 2026, up from $46.2 billion in 2020. As the economy grows, the requirement for computing also increases. Further, India’s smartphone user base is projected to rise from 750 million in 2022 to 1 billion in 2026. Studies also suggest that 62 GB worth of monthly data is expected to be consumed per user by 2028.

To support this ecosystem, cloud is expanding in India. Public cloud, initially offered by the biggest global cloud providers, is also an emerging domain in the country, largely supported by the government. Companies such as E2E Networks, Web Works and Cloud4C Services are now gaining traction, along with foreign firms like DigitalOcean. The second tier of communications service providers is also entering the Indian subcontinent. This infrastructure-as-a-service ecosystem, comprising processors, RAM, hard disks and the network, drives the transformation journey for players like CtrlS. Artificial intelligence (AI) is also expected to play a key role in catalysing the demand for Indian data centres.

Further, there is a significant cost difference that makes India attractive for data centre players – creating 1 MW of capacity in places like Singapore or Australia might cost between $10 million and $12 million, whereas in India, it costs about $6 million, half of the cost. Moreover, India has a large pool of IT resources available near these data centre “factories”.

CtrlS expects the Indian data centre market to grow at a compound annual growth rate of 24 per cent over the next three years, not accounting for AI’s impact. Across sectors, technology firms, over-the-top providers, banking, financial services and insurance (BFSI) and fintech, and content-driven edge networking will drive India’s data centre market. Meanwhile, Hyderabad is likely to see the highest growth in capacity in India by 2026. Over the next six years, CtrlS plans to make a $2 billion investment, particularly in an AI-ready data centre cluster in Hyderabad. The salient features of this facility include floor loading capacity of 1,800 kg per square metre to support high density racks, support for dual network trays for fibre and copper cables (separately) and support for a range of advanced cooling technologies as per the design need. CtrlS is also expanding its Mumbai campus to 700 MW. It is equipped with 70 fibre cables from 14 internet service providers (ISPs)/telcos connecting the campus, which is situated within 32 km from the international cable landing stations in Versova and Prabhadevi. The company also remains committed to driving 100 per cent renewable energy adoption by 2030 and eventually transition to net zero by 2040.

Prasad Tilve

The CapitaLand Group has developed 250 MW of gross load in four data centres in the country. Hyperscalers constitute 80 per cent of the total market. CapitaLand’s strategy when it entered India was to majorly target the hyperscale and wholesale segments – cloud service providers, content players and local ISPs. The remaining 20 per cent of their target segment is a large segment of enterprises – BFSI, manufacturing, healthcare and pharmaceuticals, retail and ecommerce, and others. This 80-20 concept works for the four key cities, that is, Mumbai, Chennai, Bengaluru and Hyderabad, as well as Noida for hyperscalers. Many Indian AI companies are establishing a presence in these four data centres, which form the core of the hyperscaler ecosystem.

There are several factors that make cities like Mumbai, Chennai, Bengaluru and Hyderabad attractive to hyperscalers. First, in Mumbai, the regions of Chandivali, Juinagar and Airoli form a strategic triangle, supporting disaster recovery and active configurations. The next phase for hyperscalers is to set up data centres in this zone. There is another emerging triangle – Pallava, Thane and possibly Taloja. This second availability zone will come up in the future, and CapitaLand is already setting up data centres in these zones because the entire demand is driven by hyperscalers that want to be in these specific areas, mainly for inferencing workloads. Meanwhile, in Hyderabad, the availability zone includes Chandan Valley to Fab City; and Pharma City, Elikatta and Kottur. Similarly, in Chennai, there are triangles in Ambattur and Siruseri.

Expanding the discussion to the broader reasons behind hyperscalers’ growing preference for India, the availability of ample power supply emerges as a key factor for the data centre industry. India is among the few nations aiming to double its power generation capacity to 820 GW by 2030, with 61 per cent expected to come from renewable sources – benefiting power-intensive industries like data centres. Interestingly, by 2030, India’s data centres are expected to account for around 0.6 per cent of the country’s electricity consumption, and will still leave headroom of approximately 1.5 per cent for competing the larger economies of the world.

In terms of the buying pattern of hyperscalers, they have multiple requirements – point of presence (PoP), core and a larger requirement called “build-to-suit.” Typically, in Mumbai, Chennai, Hyderabad and Bengaluru, there are two types of requirements – one is PoP, which can go up to 4-5 MW, and the other is core, which can go up to 30 MW. For requirements exceeding 30 MW, hyperscalers typically opt for a build-to-suit. In such cases, they engage with data centre service providers well in advance. These providers construct the core and shell for hyperscalers on a speculative basis, after which the hyperscalers apply their own design and instruct service providers on handling the mechanical, electrical and plumbing aspects according to their specifications.

Looking ahead, CapitaLand plans to set up four new data centres in Mumbai (Mumbai 2), Hyderabad (Hyderabad 2), Chennai and Calcutta, and add another 200 MW by 2028 The goal is to generate 80 per cent revenue from the hyperscale and wholesale segments, encompassing cloud service providers, content players and local ISPs.