As businesses are going through a digital makeover, the need for storage and management of data has grown significantly giving an impetus to the data centre industry. Today data centers are commanding a priority status backed with the flow of investments and Capex from international IT giants, Indian real-estate and infra investment partners. Data center industry is the answer to many questions including India’s ambitious USD 5 trillion digital economy. Sharing his insights on India’s data centre industry, Ankit Saraiya, Director & Head of Data Centre Vertical, Techno Electric & Engineering Co Ltd. connected with Express Computer in an exclusive interview.
What are Techno Electric & Engineering plans for the data centre market? How much investment is envisaged by the company in this segment?
Given that India is becoming a prominent player in the global data centre industry, we at Techno Electric & Engineering intend to spend $1 billion (about INR 7,310 crore) by 2030. Techno Electric and Engineering Ltd (TEECL) has commenced the installation of an approximately 24 MW data centre at a project cost of 1400 crores at the SIPCOT IT Park, Siruseri, Chennai. While the first phase of 5.6 MW will be completed by September next year, the entire facility will likely be commissioned by 2026. The company plans to install 250 MW by 2030, with the following two projects in Kolkata and Mumbai.
We are looking forward to expanding our data centre business in the near future by establishing a second data centre facility in Chennai itself, contingent on the industry’s growth and development.
What is the potential of data centres in India? What are the key growth drivers rowing the segment?
As more businesses prepare themselves to invest in new data storage and deployment facilities, data centres have expanded significantly in both developed and developing nations. An ASSOCHAM-EY analysis indicated that India is well positioned to become a worldwide hub for cloud computing data centres driven by technologies such as artificial intelligence, machine learning, and analytics with a forecasted increase of USD 8 billion by 2026. Additionally, a NASSCOM study stated that India is anticipated to expand at a CAGR of 5 percent from 2019 to 2025, which is two times higher than the world average.
This rapid growth can be credited to factors such as the rising need for data and high bandwidth capacity, particularly as a result of the proliferation of smartphones. Widespread cloud adoption and digital transformation by Indian businesses; Advantages in operational and development costs; Availability of qualified labour; and Government undertakings like the Digital India Initiative.
What are the suitable geographic needs and concerns for sustainable data centres?
Prior to selecting a particular location to build a data centre, several factors must be considered including the availability of dependable and continuous electricity, telecom accessibility, cable landing stations, BFSI needs, and the lack of severe natural risks. Considering all of these, businesses decide where to set up their data centre.
In India, Chennai and Hyderabad have emerged as enormous IT centres that contribute significantly to the nation’s growth. As a result, organisations like ours are eager to invest there. With its current and forthcoming undersea cable and landing sites, ample electricity, cheaper set-up costs, and close proximity to important Asian hubs, Chennai is certainly one of India’s hottest rising locations for upcoming data centres.
Developers and investors have recognised the impact of data centres and the growth of the e-commerce industry. The data centre industry was one of the few real estate asset groups that were least affected by the worldwide pandemic, underscoring its vital role in maintaining continued business activity.
How do you see the Indian Hyperscale market growth in the next five years?
The demand for cloud computing infrastructure and IoT capabilities has contributed to the rapid expansion of the Hyperscale industry. Emerging trends can be seen throughout Hyperscale data centres. These trends are driving the overall growth factor and these growth prospects are putting different industry-led strategies in place to boost the market’s general expansion.
The average annual rate of global expansion is 18 percent. In the context of India, we may see digital development and the Hyperscale market expanding at a rate that is almost the same which means that the Indian Hyperscale data centre market could be worth USD 10.09 Billion by 2027.
What are your thoughts on the widespread adoption of AI and its impact on data centre business?
AI in conjunction with IoT and machine learning is assisting many operators in designing and constructing lean and intelligent data centres. In addition to improving energy efficiency, reducing carbon emissions, providing predictive maintenance, and enhancing security, AI and robotics technologies automate regular tasks, hence reducing the need for human labour. Artificial intelligence can forecast power outages, minimize maintenance costs, and improve performance metrics. Gartner predicts that by 2025, 50 percent of cloud data centres will use sophisticated robots with AI and ML capabilities, resulting in a 30 percent increase in operational efficiency.
The majority of operational procedures in conventional business data centres such as server upgrades, scheduling, monitoring, maintenance, patching, updating, reporting, application delivery capacity planning, etc., are repetitive and prone to mistakes. In the next five years, these duties may be performed by robots driven by AI that produce precise outcomes.
How will data centres be enablers of 5G deployment in the country? Please share your thoughts.
As 5G and IoT technologies proliferate, data requirements continue to grow driving a USD 43.4 billion edge computing industry in the process. Service providers and businesses are increasingly locating latency-sensitive data services at the digital edge, near support systems and applications, and hosting them in both private and public clouds. The launch of 5G has exacerbated this and there is intense demand for competitive advantage via greater coverage and partner connections.
5G technology will bring in new applications that make use of low latency and high throughput similar to mobile internet and mobile video. These emerging applications, such as metaverse and web3 have compelled data centre providers to prioritise edge capabilities to enable low-latency access to data everywhere which is essential for enabling the transition to 5G. Post the transitional phase it would be safe to say that the demand for data centres will propel 5G to the forefront of the industry.