Sterlite Technologies Ltd (STL) is doubling down on expanding artificial intelligence (AI)-driven data centre market, both in India and globally. On June 16, the optical and digital solutions firm announced the launch of a new generation of end-to-end of data centre solutions portfolio — from advanced cabling to full-stack connectivity offerings.
The firm is targeting a $1-billion opportunity globally and expects the enterprise and data centre segment to contribute 25 percent to its revenue in the current fiscal.
“We have set a target that the enterprise plus data centre segment should be 25 percent of our revenue in the coming year, and then we will look to grow that by next year,” STL managing director Ankit Agarwal said in an interaction with Moneycontrol.
At present, 20 percent of the revenue comes from this segment but more on the enterprise side. STL wants to shift this more and more towards the data centre segment, Agarwal said.
Cashing in on AI boom
The company said its new-age solution is engineered to meet the exact requirements of hyperscalers, colocation players, enterprises and telecom service providers to build agile, scalable and sustainable data centre infrastructure.
“We are seeing a huge amount of data centre build-out happening globally. And we believe that, you know, this is going to be a continuous cycle over the next five to 10 years. As we're moving to more and more AI, the AI workloads require 10 to 15 times more compute power than traditional data centres,” Agarwal said.
India's data centre capacity stands at just 1.5 GW but is expected to double to 3 GW in five years. STL expects to see growth in the segment as early as the next quarter.
“We build increasingly customised solutions depending on customer needs. But we expect to grow in this space over the next quarter or quarters. Starting next quarter, we expect to be in business and growing,” Agarwal said.
In India, hyperscaler data centre capex is projected to hit $5 billion this fiscal, almost double the FY22 levels. At the core of providing and enabling AI data centres, there will be an increasing requirements for both cabling and connectivity solutions, Agarwal said. “We've been working on that and developed both the technology and the intellectual property, keeping both India and global requirements in mind,” he added.
STL is positioning its new offering as a full-suite solution, with quick turnaround and high customisation for hyperscalers and enterprise-facing players.
Agarwal said a large chunk of global data centre are being built across the US, Europe and Southeast Asian markets such as Malaysia.
“So we'll probably start with our markets in India and the Middle East, but certainly, since we've already built a credible base and brand in Europe and the US, we will also look to cater to those markets as a next step,” he said.
The company has made significant investments to develop precision manufacturing capabilities over the past year. “These are highly specialised cables and connectivity systems that are very niche and require very precise manufacturing. We have been working on building our intellectual property. So, combining these efforts over the last 12 to 18 months has allowed us to launch this portfolio,” he added.
STL has appointed Jimmy Barker as the global head of its data centre business. Barker brings 30 years of experience and an international leadership team. “We are the first Indian company launching such a portfolio. And just like we have been able to take our solutions globally for the telecom segment, we now believe that for the data centre segment, we will grow with the market and faster than the market,” Agarwal said.
He added that the data centre vertical remains a niche yet growing opportunity, dominated by a few players with full-stack capability.
“So we definitely think that this will help as we continue to create the right solutions, and this will help improve the profitability of STL,” he said. To enable local market access, STL has partnered with Tech Data India, a TD SYNNEX subsidiary, to distribute its data centre solutions.
“While we have key distribution partners, most of the distribution will be directly to the customers, and this will all be with our own brand,” Agarwal added.
The Sterlite Technologies stock closed at Rs 99.99 on the National Stock Exchange, up 20 percent from the previous close following the launch.
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