Data Centres: Powering the Future of India’s Digital Revolution
Digital Technology Consultant- IT and Telecom Industry
In the heart of India's Digital revolution lies a powerhouse that fuels the nation's technological aspirations: the burgeoning Data Centre market. As the world hurtles into an era dominated by data-driven decisions, India stands at the cusp of an unparalleled opportunity. With a rapidly expanding digital landscape, the demand for robust, scalable, and secure data storage solutions has skyrocketed, giving rise to a thriving ecosystem of data centres across the country. Picture a landscape where businesses, from nimble startups to corporate giants, seamlessly traverse the digital sphere, where Government initiatives converge with private sector innovation, and where the amalgamation of data and technology propels India into uncharted territories of growth. This is the essence of India's data centre market—a dynamic ecosystem where information metamorphoses into opportunity, and challenges serve as stepping stones toward unparalleled expansion.
The granting of infrastructure status to the Data Centre industry when the budget was presented on 1 Feb 2022 for the FY 22-23 was a move that the Industry welcomed , as this would ensure easier availability of concessional financing and resources for Enterprises wanting to set up Data Centres in India. The objective of the Government of India was also to drive significant investments to the tune of $8B to $9B over the next 5 to 10 years. Over the last few months we have seen India’s largest conglomerates making big announcements on their Data Centre plans . Adani Enterprises Ltd through its JV with EdgeConnex formed an entity Adani ConneX to build Edge Data Centres in India and has a target to be one of the top three players in India by 2030. Reliance Industries in July 2023 announced that it would invest up to $122.24 million in building data centres in India in partnership with Canada-based Brookfield Infrastructure. A few weeks back, Colt DCS , a Global Data Centre major announced an investment of $1.3B in India to develop Data Centres in the next 3 to 4 years. Other leading Indian conglomerates from L&T to the Hiranandani Group to Global giants such as Amazon, Google, Microsoft and NTT have plans to build greenfield Data Centres in India and also augment the capacity of existing Data Centres . Existing players such as Sify, Pi Data Centres, Nxtra by Airtel, Yotta and ControlS are also working on augmenting their existing Data centre capacities. As per industry estimates the Indian data centre industry is expected to add 681 MW capacity by the end of 2024 leading to a doubling of capacity to 1,318 MW which will require 7.8 million to 9 million sq.ft of real estate space.
Key Drivers for Growth
The key drivers for the growth from a consumer standpoint would be the increased growth of the Internet user base that will trigger significant Data consumption, the growth of the e-commerce sector , increased usage of OTT platforms and the growth of social media and gaming users . From an Enterprise stand point , increased adoption of IOT where physical assets will be sensorized at scale , will generate massive amounts of data which will require significant amounts of compute and storage infrastructure . This will trigger an increase in Cloud adoption and that will spur Data Centre growth. Pan India 5G coverage is expected by late 2023 or early 2024 will also necessitate the need for Data centre expansion as the high speed and low latency networks enable data transfer from endpoints to the Cloud . The recently passed Digital Personal Data Protection Act with clear Government norms for Data localisation and the need to store sensitive citizens personal data within Indian boundaries will also be a key growth driver. As per a JLL report Mumbai is expected to see the highest capacity addition, requiring close to 4.7 million sq. ft. of real estate space , followed by Chennai at 2.3 million sq. ft. and Delhi NCR at 1.0 million sq. ft and followed by other cities such as Bangalore, Hyderabad and Pune.
Securing the Data Centres
India has built some of the best powerful and scalable Digital Public Goods Platforms such as AADHAR for Digital Identity, UPI for Digital Payments, UMANG for e-Gov services, Govt E Marketplace for Public procurement etc for Digital delivery of services to its citizens. As we see Internet penetration increasing, especially in rural India and with Smart phone costs coming down due to significant local manufacturing within India , and given that India has the lowest Data tariffs in the world, this will only spur more adoption of these Digital Public Goods platforms. Large Enterprises in India are at various stages of their Digital Transformation journey and as we see Digital transformation adoption pick up over the next few years, we anticipate a massive explosion of Data and that will trigger an expansion of Cloud services which will require significant Data centre capacity addition across the nation. The need for having a robust Cyber security framework and a governance model will be extremely critical to ensure the growing Cyber threats can be detected and mitigated and the user data can be secured and protected. This will require multiple stakeholders to work together in order to ensure we beef up India’s Cyber defenses to combat the ever increasing and sophisticated Cyber attacks. The Govt of India will need to come up with a comprehensive Cyber Security policy coupled with a Data Centre policy addressing the Cyber security aspects. The Data Centre and Cloud providers should ensure investments in robust Cyber security solutions and if required , work with niche Cyber security solution providers and startups. The responsibility is also on the Citizens of India to be a lot more aware of the Cyber challenges and thus follow Cyber hygiene . A holistic Cyber security strategy would be the need of the hour that will ensure security of the Endpoints like IOT devices, PCs , Smart phones and other endpoints, Security of the Server and storage infrastructure , Security of the Networks and Applications hosted in the Data Centres. The use of Automation, AI and ML will be extremely critical so as to ensure cyber threats can be predicted leveraging Threat Intelligence and thus corrective action can be taken in advance to prevent damage.
Challenges faced by the Data Centre Industry in the current landscape !!
A draft Data Centre policy was released by MeiTY in 2020 . We however need a firm Data Centre and Cloud policy that can clearly incentivize investment and develop India’s potential as Asia’s Data Centre hub . There are various states which have come up with their own Data Centre policies with Telangana being the first state to come up with one. To build and operationalise a data centre, a number of permits and approvals are needed and as of now nearly 40 clearances from various government agencies are required. This requires approaching different authorities to obtain separate approvals, which makes it extremely difficult to obtain those in a time-bound manner. Hence the need for a single window clearance is an absolute imperative.
Green Energy
Globally, data centres accounts for approximately 4% of the total carbon emissions. Data centre consumes humongous amount of energy and there is also the issue of Energy wastage as they pull power off the grid. The necessity for the Data centres to bring down energy consumption is extremely important so as to lower CO2 emissions. Data centres have to consider the use of alternate sources of energy such as Solar and wind, and hence, the need for Governments to provide incentives for the use of renewable energy will be a necessity . Green data centres aren't merely symbols of environmental stewardship; they are economically sound choices. By optimizing energy usage and adopting renewable energy solutions, these Data centres can demonstrate that sustainability isn't just morally right; it's financially prudent. They set a precedent, proving that businesses can thrive while being environmentally responsible.
Skill development
The Data Centre industry needs people with the right skillsets if it hopes to deliver on the massive growth and in India we currently have a shortage of skill sets. The roles include Cloud architects who would also require skills that encompass software development and databases along with knowledge of DevOps , Networking and enterprise security. There is also a need for skills in the area of load balancing, network engineering and AI /ML . Data Centre operations requires certified and skilled personnel in facilities and project management.
Conclusion
To conclude, there are enough drivers that can propel Data Centre growth in India . India has to seize this opportunity and work towards becoming Asia’s Data centre hub by 2030. India being the world’s most populous country presents huge opportunities for Data Centre companies to take advantage of India’s demographic dividend with a significant percentage of population who are young aspirational and are digital natives. When you combine India’s demographic advantage with the increasing Demand for Digital services , the opportunities are limitless and for India to propel itself to the next level of growth. In the grand tapestry of India's technological ascent, data centres emerge not merely as storage facilities but as the veritable backbone of a digitalized nation. As we conclude our exploration of India's data centre market, one thing becomes abundantly clear: what we've witnessed is more than an industry overview; it's a glimpse into the very soul of India's digital future. Let's carry with us the knowledge that India's digital destiny is not a distant goal—it's a living, breathing reality. The potential we've uncovered here isn't just theoretical—it's the heartbeat of a nation on the cusp of a technological renaissance.
The Journey into Industry
Sunil David is an Independent Digital Technology Consultant with 29 years of experience in the IT and Telecom Industry . He currently is empanelled as an Independent Consultant in the Manufacturing and Process Control Practice Area with Frost and Sullivan India. He also Advises an IOT and AI Focused Technology firm , Flamenco Technologies in their Go to Market strategy , Branding initiatives and building of their partner ecosystem, specifically targeting use cases around Connected Manufacturing, Digital Supply Chain and Technology Enabled Sustainability solutions . Sunil was recently inducted as a Mentor into T-Hub ( Telangana Hub ), one of the largest startup Incubators in India supporting some of the most innovative and disruptive startups in the World. He is an alumnus of Symbiosis Institute of Management Studies,Pune and spent almost 20 years with AT&T India. Sunil who was the Regional Director – IOT ( India and ASEAN ) for AT&T India in his last stint has had extensive experience in Business Strategy , Sales , Business Development and Alliance & Partnership building .
He is a very frequent speaker at Industry forums and leading Educational Institutions on topics related to IOT, AI, 5G, Digital Transformation, Metaverse, Future of Work , Cyber security etc. He has been a recipient of a number of Awards and Recognitions from various Industry bodies and Media conglomerates in recognition for his work in Digital Technology Advocacy , Digital Skilling initiatives for Women and Startup Corporate connect . He has also written a number of articles on topics related to Cyber Security, Digital Transformation, Metaverse, IOT , 5G etc for leading business publications and technology focused websites. He is affiliated with a number of industry bodies like CII , NASSCOM , IET, IACC etc working on a number of national initiatives around Digital Skilling, Digital Technology awareness and advocacy, Startup- Corporate connect etc.
