Data centers are the backbone of the digital economy

Sep 01, 2019 - Realty Plus Magazine

Sunil Gupta, Managing Partner, and CEO at Yotta Infrastructure talks to Leandra Monteiro, explaining the growing trend of investing in the construction of data centers and the growing importance of having professionally managed data centers in India.

What is the scope of data center management in India?

Data centers are the backbone of the digital economy. Businesses, governments and end-users, all depend on data centers (either captive or multi-tenant) to host, process, analyse and access their data, directly or indirectly. For example, when you use Google search, access your work email, apply for a passport online or connect with your friends on WhatsApp, there is a data center at work behind all these applications. Hence management of data centers is a highly specialised and important function. With the rapid move towards digitisation, there is an explosion of data in the country and subsequently demand for data centers has peaked. But the cost of building and managing hyperscale data centers is quite high. Hence most organisations today are inclined towards a multi-tenant, hyperscale data center for better manageability, enhanced experience, and to avoid investing resources in managing captive data centers.

How has the data centre market in India grown over the last 5 years?

India has been undergoing a massive digital transformation from the past few years. Surge in internet users, rise of start-ups, fast adoption of cloud computing, Government’s investment in IT are some of the drivers of digital and economic growth in India. Favourable market conditions in India like low cost of internet and data plans, high demand and low supply and a nascent market with limited data center players has shown immense growth potential for the industry. In 2016 the Indian Data center market stood at USD 1.3 billion. According to a report by ResearchandMarkets, the market is expected to reach USD 4 billion by 2024. That’s an annual growth rate of almost 26%. In cities like Mumbai, Bangalore, Hyderabad, and Chennai we’re seeing high investments from local and global companies.

How does India compare on a global scale when it comes to data center construction and management? 

Hyperscale data centers as a phenomenon are gaining popularity worldwide. In 2015 there were 259 Hyperscale DCs globally which presently stands at approximately 450 and is projected to cross 628 by 2021.

Nearly half of hyperscale data center operators are located inside the U.S.

China is a distant second with only 8 percent of the market. The remaining data centers are scattered throughout North America, the Middle East, Asia, Europe, and Africa. India has much to catch up to.

To give you an example, as per Datacentremap, there are 540 million active internet users in India, but the country has an abnormally low Data Centre Capacity of less than 700 MW, compared to Europe’s 8600 MW capacity for 460 million internet users.

But the outlook is quite positive, given the entry of many large conglomerates into this segment including the Hiranandani group.

How did the idea of starting Yotta conceptualise?

The Hiranandani Group saw a huge potential in the data center business with the Government of India’s digital initiatives especially data localization. The gap between the high demand and low supply of scalable data center capacity in India makes the entry of large infrastructure players inevitable and that is how the idea of Yotta was conceptualised.

Given the Hiranandani Group’s vast experience over the past 35 years, they already had strengths in the key pillars of the Data Centre business viz. ownership of land, world-class construction, timely completion of projects and in-house power supply capabilities.

I joined Yotta bringing my domain expertise of over 20 years in building and managing world class data centers in India. Our vision is to build hyper scalable, hyperdensity, third party, multi-tenant data center parks on fully managed services model to meet the ever-growing digital infrastructure needs of the country.

Future goals for Yotta

Our immediate priority is to launch our Panvel Data center park’s first building in December 2019. At 8.2 lakh sq.ft and 7,200 racks, it will be almost 45% bigger than the largest data centre in India. Alongside we shall also launch a wide suite of data center services such as managed IT services, connectivity, security, hybrid multi-cloud and data center build services.

Another aspect of data center which has not seen any significant development yet is power. Data centers consume a lot of power and the predominant source is thermal power which is not environmentally friendly, and its cost keeps growing year on year. One of our group companies is building a 279-acre solar power plant near Goa which will supply 40 MW of power to our Panvel data center. This green energy will contribute to nearly 30% of our power requirements and will also offer our customers cost efficiencies.

Our overall blueprint over the next 5-7 years is to make 3 hyperscale Data center parks across Mumbai, Navi Mumbai and Chennai, with 11 DC buildings, 60,000 racks and 500 MW of power.

We intend to cater to the needs of tech enabled sectors including BFSI, retail, media and manufacturing, and new age companies in the space of SaaS, IoT, Machine Learning, AI and Big Data.

Sunil Gupta
Managing Partner and CEO