The Indian data centre business is becoming more mindful of energy efficiency.

Devi Shankar

President - Industrial Logistics & Data Centres, ANAROCK Capital

How is the demand picking up? What are the key demand drivers?

Several important factors have increased demand for data centres in India.

Digital transformation: As numerous Indian businesses continue to undergo digital transformation, a reliable and scalable data centre infrastructure is required to support data processing, storage, and analysis.

Cloud computing adoption: India is seeing a tremendous increase in the use of cloud computing services like Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Data centres must be built to host and administer these services due to the rising reliance on cloud-based solutions.

Internet and e-commerce services: The proliferation of e-commerce platforms, online services, and digital payment systems has raised the need for data centres to manage the enormous volume of data produced by these platforms and guarantee smooth operations.

Governmental efforts: The demand for data centres has increased because of the Indian government's push for digitization and projects like Digital India and Make in India, which have led to a surge in the amount of data that has to be generated and stored.

Data localization regulations: The Indian government's proposed data localization laws, which mandate that certain types of data be housed there, have led both domestic and foreign businesses to open or increase their data centre presence in India.

Internet of Things (IoT) and Big Data: The proliferation of IoT devices and the growing reliance on big data analytics have significantly increased data volumes. Data centres are crucial for processing and analysing this vast amount of data generated by IoT devices and supporting big data applications.

What are the key challenges faced in setting up new data centres?

There are several potential obstacles to building new data centres in India, including:

Power infrastructure: India is prone to power outages and erratic power quality in some areas. The adoption of backup power solutions, such as generators and uninterruptible power supply (UPS) systems, can be necessary to ensure a dependable and uninterrupted power supply to data centres.

Cooling requirements: Because of the high density of the computing equipment, data centres produce a lot of heat. Infrastructure for cooling becomes essential to maintain ideal operating temperatures. Additional difficulties in successfully and efficiently controlling cooling systems arise from the country's generally warm temperature.

Real estate: Finding adequate and reasonably priced property for the construction of data centres can be difficult, especially in heavily populated areas. The total amount of investment required can be considerably impacted by the cost of land acquisition and construction.

Connectivity and network infrastructure: For data centres, dependable and fast network connectivity is essential. Although India's larger cities typically have a strong network infrastructure, providing remote or underdeveloped areas with dependable connectivity may present difficulties.

Competent workforce: To operate data centres, competent engineers and technicians are needed who can manage and maintain the intricate infrastructure. In some parts of India, finding skilled personnel with knowledge of running data centres might be difficult.

Government regulations: Establishing data centres in India may be more difficult if one has to comply with local laws governing data protection and privacy. It can take time and possibly extra resources to comprehend and abide by the legal and regulatory standards.

Addressing these challenges requires careful planning, collaboration with local authorities, and engaging experienced partners who are familiar with the Indian market and its unique considerations.

How are energy efficient technologies gaining traction in data centre facilities?

The Indian data centre industry is heavily promoting and implementing energy-efficient technologies.

Effective cooling technologies: Precision cooling, hot aisle containment, and cold aisle containment are three sophisticated cooling technologies that data centres in India are progressively employing. These systems improve temperature control and ventilation, which lowers the energy used by cooling equipment.

Modular and scalable architectures: These are becoming more and more common in Indian data centres. These designs enable scalable and adaptable infrastructure, allowing businesses to increase the capacity of their data centres as necessary. Organisations can reduce energy waste by properly sizing their infrastructure.

Integration of renewable energy: To lessen their carbon impact, Indian data centres are looking into the utilisation of renewable energy sources like solar energy. Data centres can partially offset their energy use from conventional sources by installing solar panels or buying renewable energy credits.

Power management and monitoring: Data centres can find energy inefficiencies and optimise their power use by putting in place power management systems and sophisticated monitoring technologies. Monitoring energy usage and efficiency data in real-time makes it easier to spot problem areas and put energy-saving strategies in place.

Energy-efficient equipment: Data centres are utilising hardware and equipment that uses less energy while still providing great performance, such as servers, storage systems, and networking tools.

Energy audits and certifications: To evaluate their patterns of energy usage and find potential for energy efficiency improvements, several data centres in India are undertaking energy audits. In addition, accreditations from organisations like the Indian Green Building Council (IGBC) and the Leadership in Energy and Environmental Design (LEED) assist validate and promote energy-efficient practises in data centre facilities.

Government programmes: There are many such that encourage data centres to use energy-efficient technologies and provide incentives for lowering energy consumption include the Bureau of Energy Efficiency (BEE) Star Rating Programme.

Overall, the Indian data centre business is becoming more mindful of energy efficiency, and a number of initiatives are being put in place to maximise energy use and lessen environmental effect.

What the new opportunities for players in data centre market? What is the market outlook?

There are various fresh possibilities for participants in the sector:

Infrastructure development for data centres: India is seeing a rise in demand for infrastructure development for data centres. Players can take advantage of this potential by providing services including planning, building, and operating data centres to satisfy the growing needs of companies in various industries.

Colocation services: By providing shared data centre facilities, colocation service providers enable businesses to outsource their data centre requirements. Players have the chance to offer colocation services and meet the demands of companies who choose to use third-party infrastructure due to the increasing demand for data centre services.

Managed services: There is a demand for managed services that cover data centre management, monitoring, security, and maintenance as firms increasingly concentrate on their core operations. Players may provide thorough managed services to help businesses run their data centres more effectively.

Edge computing: Edge computing, which includes processing data more closely to its source, is becoming more and more popular. In order to enable low-latency data processing and emerging technologies like IoT and real-time analytics, players can look into potential to offer edge computing infrastructure and services.

The Indian data centre market will maintain its upward trend. The need for data centre services is being fuelled by elements including digital transformation projects, cloud usage, data localisation policies, and the growing e-commerce industry. Emerging technologies like 5G, AI, and IoT are also anticipated to increase the demand for reliable and scalable data centre infrastructure.

A positive environment for players in the data centre industry is created by the Indian government's focus on enhancing digital infrastructure, together with different incentives and legislation that support data centre investment.

Hits: 4