Over the last 12 months a number of companies have announced plans to set up big data centres in India. Companies like Tulip Telecom, Sify, Netmagic and many others have set up their data centres recently and are planning to expand further to meet the growing data traffic. In addition there are large multinational giants like HP which have set up data centres as regional demand explodes.

“With increasing demand for storage, it will necessitate scaling up both in terms of space and manpower involved,” A S Pillai, Senior Vice President – IT Services, Sify Technologies says.

The company has spent around Rs 750 crore to set up the data centres in Bangalore, Chennai, Mumbai and Pune over the last 10 years. The company is coming up with two more, one in Mumbai and one in Noida by September.

As per various studies made by research agencies such as Gartner, IDC and Springboard, till 2014-2015, the data centre market in India will grow at a rate of up to 39 per cent compounded annual growth rate.

Increasing capacity

Gartner has predicted that the total market capacity would see an increase from about 1.3 million square feet of data centre space to about 5.1 million square feet in 2012. This did not include data centres in less than 1,000 square feet area.

Netmagic has already announced to double its capacity from two lakh square feet in total right now in four locations – Bangalore, Chennai, Mumbai and Noida.

“Our occupancy in Bangalore data centre is full so we are adding 1,00,000 square feet capacity there. We are adding another 30,000 square feet in Mumbai which will be operation within this month. In addition, we will add 100,000 square feet more in Mumbai which should be in place within the next nine months,” Managing Director and CEO Sharad Sanghi, Netmagic says.

Tulip Telecom claims that’s its Data City in Bangalore is the world’s third largest and Asia’s largest data centre. The facility offers up to 900,000 sq feet of total data center space with a total planned power capacity of 100 MW. The company said it is growing at 40 per cent CAGR and the growth will continue at similar rate for at least next three-four years as more and more companies are getting into cloud.

Recently it has also won a project worth Rs 87.23 crore for hosting data centre space from the UIDAI. “This is an opportunity for Tulip and the collaboration leverages our leadership in the Data Centre Space in India and represents a tremendous opportunity for partnership and growth,” HS Bedi, Chairman and Managing Director, Tulip Telecom says.

Risk involved

But there are challenges too. India emerged as the second most risk ridden Data Centre Location among the top 30 countries in a study conducted by Cushman & Wakefield and Hurleypalmerflatt.

The study ‘Data Centre Risk Index’ evaluated the risks to global data centre facilities and international investment in business critical IT infrastructure.

Criteria such as quality of power and outages represents a challenge in India which is often exacerbated by increasing IT loads. India however ranked high on the parameters of ‘cost of labour’ and ‘sustainability’, which have been India’s advantages over the last two decades.

Arvind Nandan, Executive Director- Consultancy, India Cushman & Wakefield says, “India and key Asian economies remain preferred locations for data centres and have witnessed a growth in demand owing to various advantages.”

He said India offers the advantages of cost benefits and sustainability of operations. “We would expect the growth to continue as this is also coupled with a rising domestic demand for IT services where internet and mobile communication penetration is still moderate.”

“The final factor is to address operational gaps such as power and cooling capacity. In India, we are witnessing similar trends resulting in greater need for data centre solutions,” Santhosh D'Souza, Vice President - Technology, Data Center and Cloud Computing, Cisco Systems India & SAARC said.

Mobile activity

He said over the last decade, the rise of Internet and web-based technologies has made the data centre more strategic than ever, improving productivity, enhancing business processes and accelerating change.

“Today's data center architecture must support a highly-mobile workforce, proliferation of devices, data-driven business models, and be capable of seamlessly incorporating cloud applications and services,” he said.

In addition to this, the demand for cloud computing is picking up and the foundation for cloud growth in APAC depends on the extent to which data centers are being built and data centre activity in India is moving at breakneck speeds.

“Data centre is now completely ad hoc. There is a lot of pressure on optimising the cost of data centres. We provide the solution and apart from that also provide complete solution – from consulting customers on what type of data centre they should look for to optimising infrastructure and making them more efficient,” Mitesh Agarwal, Director - Solution Consulting for Systems Business, Oracle India said.

The company has customers such as Religare, Bank of Baroda and Tech Mahindra.

Local support

Some analysts say that many MNCs are also helping Indian companies set up data centres for local support. However, most of them do not have a full set up in India. “Most of these companies have centres in Singapore, Hong Kong, Australia and New Zealand for the Asia Pacific region, from where they support the Indian centres as well,” Praveen Bhadada of Zinnov Consulting said.

Home-grown companies such as Reliance, Bharti Airtel and HCL Infosystems have big data centres supported by MNCs such as IBMs, Ciscos and Oracles of the world. Investment by overseas players continues showing confidence in the future potential of India. At the same time it is important to put in place various initiatives for developing other areas such as energy, bandwidth, improving business environment and data protection laws, which can enhance the proposition for India.


(This article was published on August 16, 2012)
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