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Trends that are shaping the Indian data centre industry

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In India and across the globe, the pandemic and its disruptions have brought significant challenges for businesses. Data centres have proven their resilience to react to these changing times. The pandemic underscored the importance of data centres in ensuring business continuity as well as the digitisation of the workplace and the home.

What lies ahead for the data centre industry in India? What changes will affect the industry the most? 

We’ve identified six key themes that are shaping the Indian data centre industry. Overall, the theme is the continued digital transformation of India and the vital role that data centres play in this transformation. 

We will discuss the following trends as well as consider the background of each trend:

  • Sustainability to Net Zero
  • Integration and Scaling
  • Edge
  • Connectivity
  • Greater Geographic Coverage
  • Regulations

The relationship between businesses and data centres will continue to strengthen and the dependency of business on resilient data centres will grow. By reviewing these trends that are shaping the Indian data centre industry you can assess the impact of these trends while looking forward and preparing for the continued changes.

  1. Regulations

As is obvious the Personal Data Protection Bill (PDP) has been a huge driver of growth in the data centre industry in India. The requirements of the PDP to have data storage in the country has made a huge impact on demand for local data centre capacity. In addition, India’s cost advantage and availability of skilled labour positions it as a key regional Data Centre hub for Asia.

With the Indian government’s incentive scheme that rewards companies that set up data centres in the country we can expect to see PM Modi’s vision to “make India a global data centre hub” become a reality.

  1. Greater Geographic Coverage

In India, Property consultants such as JLL and Knight Frank are predicting a doubling in data centre capacity in the next year. Mumbai and Pune currently have the lion’s share of all capacity in India while at the same time states besides Maharashtra are also providing incentives for the data centre industry. Of course, the property consultants see data centre operators making strategic land acquisition to meet this increase in demand.

Bangalore, Delhi, Hyderabad, Chennai, and Kolkata are expecting an influx of data centres. Gurgaon, Ahmedabad, Nagpur, Kochi, and Jaipur are expected to house Edge Data Centres in the short-term to serve their specific geographic zones. As digital transformations accelerate in states the demand for data centres also increases. Consolidation in the industry is also underway both in India as well as across Asia.

  1. Sustainability to Net Zero

Data centres have power requirements both for operations and thermal management. The capacity of data centres is measured in Megawatts and Gigawatts. Power is key for data centres. Globally data centres account for 3% of global power consumption and contribute 0.3% of CO2 emissions.

Climate change and sustainability of data centre infrastructure are attracting more and more interest. Companies worry about their Corporate Social Responsibility and environmental sustainability is one key component. Companies are looking for environmentally responsible data centres that use sustainable energy with renewable energy sources and operate carbon neutral; this can be challenging in India. 

At the same time, energy supply in India can be variable. Solar is plentiful and investments are being made for round-the-clock availability from renewable sources with energy storage which will provide data centres with more stable, resilient, and reliable power. To reach Net Zero data centres must also consider their long-term sustainability as well as transitioning to building materials and associated suppliers that have a lower carbon impact.

  1. Integration and Scaling

Integrated systems allowing more modular capacity have become the most popular offering for data centres. The demand for larger, better-integrated systems will grow. These integrated systems are already bringing benefits in the form of reduced construction and deployment times as well as more flexibility in capacity management. There is a side-effect: new servers are smaller and newer servers need more power. 

Demand can vary greatly, and data centres need to prepare for scalability in computing power. Using ultra-scalable technology to create hyper-scalable data centres can meet demands that fluctuate, particularly related to demand around major Indian or state holidays and festivals. 

  1. Edge

Edge computing is thought to be the future of computing according to Gartner. Edge data centres and inter-connectivity of the edge is becoming important as the rate of growth is increasing. Companies are starting to look for “Edge as a Service” offerings. In general, the largest Edge networks are with telcos and rely on 5G.

Edge data centres are efficient to meet the needs of applications in Artificial Intelligence and Machine Learning, Internet of Things, and Augmented / Virtual Reality. In addition, small Edge data centres benefit from the fact that Edge servers exist that can run at elevated temperatures.

Large data centres are inefficient in electricity, carbon emissions, and electronics waste. Edge data centres benefit from lower energy consumption for cooling compared to their processing output. In India there is centres. The growth of this trend is increasing with 5G rollout

  1. Connectivity

5G rollout in India will have a ripple effect across existing, traditional data centres as upgrades will be required to support the increased data processing needs and data consumption is expected to grow exponentially.

In addition to 5G satellite broadband from Low Earth Orbit (LEO) satellites like SpaceX’s Starlink constellation offer low latency connectivity as well as providing connectivity in remote locations across India. This improved connectivity combination will enable Edge data centres in remote regions as well as improved inter-connectivity with traditional data centres.

At this moment, the pandemic does not dominate world news as it once did, but any resurgence (or geopolitical news that adds to global uncertainty), will require India to demonstrate stable and reliable data centres in ensuring business continuity. Understanding the impact of these trends will help companies as they choose data centre service providers.

The article has been written by Mohammed Atif, Business Development Director, India, Park Place Technologies

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