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Why everyone wants a piece of the data centre pie

The way it is right now, data centres are not sustainable. Climate change studies reveal that they account for about 3 percent of total electricity consumed totally.

September 16, 2019 / 07:54 PM IST
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India's data centre market is expected to hit $4 billion by 2024, reports suggest. This is double the current estimated size of $2 billion and an over 200 percent jump from $1.3 billion in 2016.

Growth of data centres has exploded in the last couple of years and is only set to grow more in the coming months. In the last two years, several global companies have set up data centres in India. Oracle is looking to launch a data centre this calendar year. According to reports, Colt Data Centre Services is planning to invest around $300 million.

Among the latest entrants this year, are Reliance Industries in partnership with Microsoft, and the Adani Group. Some unlikely players such as real estate player Hiranandani Group have also forayed into the data centre market.

So, what's the fuss about data centres?

If you are one of those who binge on Netflix or turn to Google in a heartbeat for any information, then you might find it interesting that these conveniences would not have been possible without data centres.


These data centres process search queries within seconds and get you the answer or required content at the click of a button.

This makes the existence of data centres important to consumers.

Why is everyone vying for a piece of this data centre pie now?

There are several reasons for this. Indian enterprises are adopting cloud at a much faster rate. India’s internet penetration is growing as well. Some reports peg that close to 60 percent of India’s population will be smartphone users by 2022. Right now, it is close to 500 million.

Hardly surprising given the cheap data packages and reducing the cost of mobile phones. We are also at a juncture where enterprises are shifting to digital landscape.

Add to this, the data protection and privacy bill that is slated to be implemented soon. There is no better time to be in the market than now. If the data protection and privacy bill in its current form comes into the picture then companies such as Google, Microsoft and Facebook will have to store a copy of data locally. This would create the need for an enormous amount of data to be stored here and would require infrastructure for that.

In an earlier interaction with Moneycontrol, Sharad Sanghi, Managing Director and CEO, NTTcom-Netmagic, said, “In fact, amidst the general slowdown, data centres business has grown and many are looking to get into this business.”

How much data are we talking about here?

According to reports, by 2022 internet networks in India will carry about 646 pegabytes or one million gigabytes of data per day, 490 percent more than that in 2017.

Sunil Gupta, CEO, Yotta Infrastructure that is into the data centre and managed IT services space, said currently India does not have enough infrastructure considering the number of internet users in the country compared to its Western counterparts.

Few reports on data centres point out that there are about 500 million users in India but the data centre capacity is only about 700 MW. This is 15 times less than that of the European Union with close to 300 million internet users.

This means there is a huge latent demand for data centres as the number of internet users is likely to increase to 630 million by 2019 end.

What about its sustainability? 

The way it is right now, data centres are not sustainable. Climate change studies reveal they account for about 3 percent of the total electricity consumed totally. This is quite huge considering the rate at which data centres are growing.

But it is impossible to do away with data centres. What you can do, is switch to renewables.

For instance, Hiranandani Group has set up a 300-acre solar power plant for its first data centre coming up in Navi Mumbai. Another play CtrlS too has launched green datacenter powered by solar last year.

Companies like Google have put in place an efficient energy mechanism and uses renewable energy to power its data centre.
Swathi Moorthy
first published: Sep 16, 2019 07:54 pm

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