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How the data center market has changed in the last decade

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By Babu Nagarajan, Vice President – Marketing and Sales, Power Generation, Cummins India Ltd

Over the past few years, Datacenter segment has witnessed a double-digit growth, and this robust progress is anticipated to continue over next five years as well.

The strong growth will be driven to by multiple factors. Large global players have increased investments in setting up datacenters in India such as Amazon Web services is investing ~$1.6 billion to set up two datacenters in Hyderabad, NTT Limited has announced investments of ~$2billion in India over a period of four years, Yotta is setting up their multiple facilities in Maharashtra and Noida. India is witnessing investment from both local and international players that is expected to touch $4.6 billion per annum by 2025 (Link). The Indian Government is also driving favorable policies encouraging investments into set up of hyperscale datacenters in India, and aims to invest over $1 billion in the next five years as part of a hyperscale data center scheme (Link).

The Covid-19 pandemic has also supplemented a shift in the work and education culture leading to an increase in remote working concept across industries and sectors, leading to a rise in data generation and enhancement of the access capabilities driving the need for expanding data centers. India’s internet user base crossed the 830 Mn mark in 2021, growing by over 530 Mn in the six years since 2015. Alongside, India’s average Internet data usage has increased from 1.24 GB per month in 2018 to 14.1 GB in June 2021 (Link) driven by the increase in popularity and easy accessibility of OTT and streaming platforms. As the volume of data rises, enterprises, OTT players, cloud service providers, and global offshore centers are requiring robust digital infrastructure in the form of datacentres, which can effectively cater to the demand of the users (Link).

Most datacenters being established in India are following the Tier-III / Tier-IV Uptime norms, owing to which assured power is becoming a critical requirement for the players. Even if the overall power deficit in India is less than 1%, the reliability still remains a concern and hence a power backup solution has become an integral part of the ecosystem of datacenter, for ensuring 100% uptime.

So far, diesel gensets remain a preferred choice for back-up power for Datacentre applications. The mature technology with proven reliability, ease of fuel availability and proliferated technical expertise facilitate the adoption of diesel gensets as power backup solution. As customers become more environment conscious, some datacentre operators are making efforts towards decarbonization. While the efforts visible are niche, amongst renewable, solar energy along with battery storage and fuel cell technology usage has initiated, but it is yet to become an economically viable solution for large scale adoption. By working towards the Destination Zero goal and taking well to wheels emission reduction approach, Cummins is in a unique position to leverage developments in New Power.

Over the past decade, the data centre industry has undergone significant transformation. Businesses are transitioning from maintaining captive data centres to colocation facility (rental DC space) driven by better security and cost efficiencies. On the other hand, increasing cloud adoption is leading to a rise in Hyperscale datacentres by cloud server providers like Amazon, Google, Microsoft etc. The growth of edge datacentres is expected to pick up with commercialization of 5G services in the country. Higher data speeds due to 5G infrastructure will boost data consumption, especially for high latency applications like social media, OTT, and streaming platforms.

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1 Comment
  1. Arinjay Ganta says

    I think a good way to march towards sustainability is to switch over to DCIM. This would reduce the overall operating expenditure and capital expenditure, and as we all know how the companies have been affected by COVID-19.

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