Princeton Digital Group forays into the Indian Market

Singapore-headquartered Princeton Digital Group (PDG) recently launched its flagship data center - ‘MU1’ in Navi Mumbai with a project investment of $300 million

Increasing digital growth and demand from hyperscalers, e-commerce platforms, and content providers have been driving the growth for Data Centers across regions. Identifying the growth PDG launched a new data center in Navi Mumbai, India, the company’s first DC in the country.

Built on a six-acre site in the Airoli area of Mumbai, MU1 offers 48MW of capacity across two buildings and has achieved IGBC Platinum certification.

The company said it has invested $300 million in the project, which will be targeting hyperscalers and large enterprises. PDG is ambitious in strengthening its position as a leading Pan-Asia datacenter operator, focused on creating sustainable value and being an enabler of digital growth. MU1 will be powered up to 40 percent by renewable energy, is the first Open Compute Project (OCP) certified data center in the country, and will also be Uptime Tier III certified in the future. The bigger goal is that, PDG aims to be 100% powered by renewable energy by 2030. PDG raised $500 million in another funding round from Abu Dhabi government’s investment arm, Mubadala.

Vipin Shirsat, Managing Director, India at PDG, in a one-on-one chat with Minu Sirsalewala, Executive Editor – Special Projects, Dataquest outlined the trends in the DC space, what is driving the India growth story and how co-location service continues to create value in the managed services value proposition.

How has the DC market evolved over the last decade and what Is the future landscape?

So let me start with the term DC, which is loosely used for multiple things. One is when we talk about the Microsoft, Googles, and Amazons of the world, what they provide is cloud services, you don’t need to care where your equipment is, or who’s running the application. Then the second layer is managed hosting, where we care about where is the equipment and who’s managing it. And the third layer is called colocation. So we operate in the colocation layer and in colocation layer, what we provide is a building in which the servers can sit. So if someone is providing a managed hosting service, they take a co-lo capacity from someone like us and run their Managed Services on top of that. If someone is providing a cloud service — at least as of date, most of the clouds that you know — have most of the capacity based out of the Colocation data center, which is offered by someone like us. So effectively, we don’t really compete with Microsoft, Amazon and Googles of the world, in fact, we enable their services so that their growth is our growth driver. So today, at the margin, 80% of the business for colocation industry is actually coming from these giants what we call as hyperscalers. On the other front for example, whether you’re making a payment on Paytm, doing an online banking transaction, a train booking on IRCTC, all that ultimately sits on some IT equipment, we provide the space for that IT equipment to sit safely. So, colocation forms the bedrock of this entire technology stack. Now, as technologies move and become more complex, there are three things that happen. One is there are certain applications, which are still legacy and there are certain applications that are new, and some can run only on certain kinds of machines. So you require segregated machines and segregated solutions to be able to do that. So that’s easily possible in colocation, so you can put part of it in cloud or part in colocation. Second, as applications are evolving, people are talking more AI, 5G, machine learning; so you need far more advanced equipments. Hence you have two options either buy those equipments, do a CapEx and host them somewhere with someone like us, or rent that kind of capacity from a cloud service provider, which also ultimately will be sitting with someone like us. So all this technology — impetus and growth — that we’re seeing, the entire digitization of business or digital transformation is giving us business.

You are a new entrant in the Indian market and do not have the first-mover advantage when it comes to large clients. How do you see PDG getting a significant share of the market?

PDG is a Pan Asia data center operator. And what we say is we provide standardized, scalable and sustainable data center capacities. And the reason we say standardize is that all the five countries where we operate, which is India, Indonesia, Singapore, Japan, and China, (Korea to be added), you will find a similar specification of data center, similar service from PDG site, common contracting process, common business development process. So irrespective of where you go, we are providing these standardized capacities. Similarly, when you come to India also, we provide global standards of capacity. That is what we’re bringing to all geographies and regarding who our customers are, we are focused on hyperscalers. When we say hyperscalers, we say anyone who requires more than one megawatt of capacity. And these days if I were to translate that into kind of customer segments, so definitely the large cloud service providers, large e-commerce players, internet organizations, most of the larger banks, Stock Exchange’s, large enterprises all of these qualify to those segments — that’s our target segment.

MU1 will be powered up to 40 percent by renewable energy, is the first Open Compute Project (OCP) certified data center in the country, and will also be Uptime Tier III certified in the future. The bigger goal is that, PDG aims to be 100% powered by renewable energy by 2030. PDG raised $500 million in another funding round from Abu Dhabi government’s investment arm, Mubadala.

Most of this target segment happens to be multi-country, hence if they have experienced our services in one region, they’re more than happy to partner with us in another region. That’s our selling point — if you like us in one place, you will get exactly the same service, or the same experience somewhere else. In terms of our new customers, just to give you a sense, our first load of 4 megawatts has gone live in a week since we launched. An additional 10 megawatts will be going live in the early part of next year.

So how many can be accommodated?

Okay, so different customers have different requirements. But if I were to tell you, any bank today is asking a minimum of half to one megawatt that’s generally what any bank is asking, when hyperscalers, cloud service providers buy, they can buy anywhere between 10 to 50 megawatts at one go.

Where is the growth coming from?

So let me talk about two things. One is everyone is undergoing digital transformation. As we speak, almost all the top private banks are rethinking the data center strategy, moving out of where they are today, and trying to get into something which is more economical, more flexible, more suitable for their environment. So that’s a trend that is happening across most enterprises, where some are also rethinking their cloud strategy. That also helps us. So that’s, 20 - 35% of our business, which is coming from enterprises and all the cloud service providers are expanding rapidly. The industry today is close to $1.2 - 1.3 billion, just the colocation, and this is expected to develop further in the next three years. There is this huge demand and it is upon us how to tap into that demand, so one thing that we bring to the table is predictable delivery. Last year when we announced in March of 21, we were amongst the rare players to put an aggressive target to deliver the data center, we said that will go live by end of December 22 and were live as scheduled and the delivery date never changed. In fact, we managed to announce our data center few weeks ahead of time, and this in the context of the current background of global supply chain challenges is considered a huge achievement. In addition, what differentiates us from everyone else is the kind of engineering team that we managed to put together. In India, our core engineering team member has at least 10% of India’s industry experience — either the engineer has delivered 10% of India’s capacity, or has operated 10% of India’s capacity, and has a deep understanding of the hyperscalers requirement. Third, we have focused on sustainability — when we think standardized, scalable and sustainable data centers. To reiterate, this DC is the first India Green Building Council platinum data center (IGBC) in Mumbai. Mumbai is the biggest data center market. But this is the first. That’s the highest grade of green building certificate in the country — we’re also going 40% renewable. We also partner with a lot of platforms, where we try to standardize the industry specifications. One such platform is OCP - Open Compute project, we are the first OCP certified data center in the country. Our customers are indeed appreciating that, our endeavor has been to be better than what you normally see in the colocation industry, with consumption flexibility.

Why India and what is the value proposition?

It is not one cause and effect, but a strategy with which PDG came in. We have deep experience within the region because most of us come from Tata Communications-operated Data Centers in different countries; in Asia as well. The problem we are able to solve and the value proposition is getting the standardized capacity. To explain, there are different challenges in each region, one is a regulatory challenge, the second is a cultural challenge and the third is an infrastructure challenge. If you want to get a 220 KV substation in Mumbai, it takes 24 months, these are the kind of challenges we are solving. These three challenges have different flavors when we get into different countries in Asia. So when MNCs, and global companies, or global hyperscalers — generally coming from Western world — when they try to enter Asia, they find it difficult to solve these challenges across various geographies.

In Mumbai, Maharashtra regulations are applicable, so the amount of capital power setup that we can build, in some ways is constrained. And that roughly translates to 40% renewable energy for the data center. So that’s step one, we are also working with many other players to figure out how can we go from 40% to maybe an 80% or 90% or 100%.

What we bring to the table is solving these challenges so that you get a standard capacity, and we become your single point of contact. With one contract, you’re solving your problem across multiple countries, that’s a thesis for PDG. And a genuine problem that has always been a part of the growth of this industry is that people have outgrown the capacity that they had planned. People who have in-house data centers, they’re outgrowing their capacity. And people who are also in third-party data centers have reached a state where there is no ability to grow within the same footprint. Another observation that is happening is because of the kinds of applications you have — traditionally, you had one DC in one city, one in another city — people are looking at near DC and a near DR. These are external drivers that are leading them to reconsider the DC strategy and it is happening to more people now.

What technology is actually driving the data center?

The technology that is actually driving the data center industry is the secular growth of enterprises and the digital transformation process; so more data is being generated, more data is being processed and more data is being stored. That is the primary growth driver, not just in India, but across markets. And then the flavors would change, kind of processing required for AI, requirement for 5G etc. Ultimately, all of that requires some place to sit and that becomes our business. Secondly, we try to make the process more efficient, the moment I know that a server is going to consume certain number of megawatts, how do I make it efficient? So that’s where we have, multiple layers of decision-making - we call it a sustainability framework. Based on this framework we work on achieving the most efficient set of design. These are the kinds of design principles that will go into the decision-making to maximize the amount of renewable energy that you’re able to get. Now, different states in the country will have different regulations. In Mumbai, Maharashtra regulations are applicable, so the amount of capital power setup that we can build, in some ways is constrained. And that roughly translates to 40% renewable energy for the data center. So that’s step one, we are also working with many other players to figure out how can we go from 40% to maybe an 80% or 90% or 100%. Another important aspect is the selection of equipment and we keep the equipment standardized. So, when we do our designs, we make sure that you know we are putting all the standard equipment with each other and equipment which are more efficient. And fourth is advanced technologies, one of the things that we’re looking at potentially is, we have established that our data center is compatible with liquid cooling. So liquid immersion cooling is a technology where the server is actually immersed inside the liquid. We are in the process of setting up a pilot, where we can showcase to the customer, how a liquid cooling solution can work in big data centers, so that if someone wants liquid immersion cooling to be used, we can provide that service also.

At present, that’s a new technology, we have a pilot running in our China data center, we are in the process of setting up a pilot in our Singapore data center, and India will be the third one to do that pilot. As a part of the exercise, we are also reaching out to our potential partners and asking them to be a part of the testing – if interested, get your equipment, and we’ll test and see the benefits. And the unique part about liquid immersion cooling is that you take out the fans and mechanical equipment, so your server usage also goes down.

Technology trends in the coming years?

Earlier enterprise rack used to consume around 3 to 4 kilowatts. Nowadays, standard racks are looking at anywhere between 6 to 10 kilowatts and number of these new racks are going for 40 - 50 or even 70 - 80 kilowatts per rack. There are different kinds of cooling technologies to address this higher consumption like liquid immersion cooling, another technique called the Rear-Door Heat Exchanger, Sphere Cooling and so on. An ideal situation in the data center is where we spend zero amount of power on cooling.

PDG has an aggressive plan for India and is looking at Delhi, Chennai, Hyderabad, and Pune are some of the top cities to expand with similar investments. It is determined to take its global capacity to 800 Megawatts by next year and add more countries to the kitty.

That’s the ideal world, right? But it may or may not be feasible depending upon your location and the given weather conditions. Traditional cooling systems have also undergone a transition. In the water-based cooling system called ‘water-cooled chillers’, the process leads to 1000s of liters of water being wasted every day. Now, the industry has adopted ‘air-cooled chillers’, in which the last level of cooling happens in a closed loop, on a closed pipe, and the water is not exposed and does not get evaporated. That’s also something that we implemented at PDG. So practically, you have almost zero water usage, almost less than 1%. These are some trends that are going to see higher implementation going ahead as they are more competent and efficient.

How are you ensuring uptime?

PCs are evolving to make sure that there are a limited number of severe impacts. On the other hand, if you look at how many impacts were avoidable, currently that stands at 78% of the total downtime that could have been avoided. This could be avoided through planning, management, and training and we at PDG ensure all three things are stringently followed.

We make sure that all our core engineering and design team is Accredited Tier Designer (ATD) – an uptime certification, which probably is one of the best certifications in the industry for data centers. We are also an organization where everyone, within 3 to 4 months of joining be it the Head of Finance, an accountant, or an Investment Analyst, is a certified data center professional. Thereby we try and ensure that our technical quotient is better than what you see in the industry. These practices go a long way and help minimize the number of impacts or minimize downtime incidents. That’s one and second is whenever you do have a downtime, you need to warrant that your operation teams have the right set of processes to pass through it. When it comes to some of these top technology customers, the response times are really stringent, they can be as low as 5 minutes or 10 minutes within which you have to identify and communicate with them. And all of this still doesn’t ensure that you will be 100% safe, there would be instances but there is a significant improvement, whereby the severity of the impact is minimized and all the precautions are being taken.

Then there is layers of physical security for a data center. Typically, depending on the nature of your DC, there can be five, six or seven layers; five layer is standard. In case of PDG, there is an additional advantage because we are sitting inside a larger IT campus and that serves as an additional layer of security for us.

PDG has an aggressive plan for India and is looking at Delhi, Chennai, Hyderabad, and Pune are some of the top cities to expand with similar investments. It is determined to take its global capacity to 800 Megawatts by next year and add more countries to the kitty. As his closing thoughts, Vipin articulated, “Data Center industry is not where the winner takes it all. There is a healthy space for three-four players to exist and give choices to the customer too as they need that kind of capacity and variety.”

Vipin Shirsat

Managing Director, India, Princeton Digital Group

By Minu Sirsalewala

minus@cybermedia.co.in