India's massive data consumption, the coming of 5G technology and the move towards data localisation make data centre development the go-to business
Demand for data centre space requirement is likely to increase by around 15 to 18 msf across major Indian cities in the next five years
Out of adversity came success for 46-year-old technology-focussed entrepreneur Sridhar Pinnapureddy. In the early 2000s, his internet service venture Pioneer Internet had failed to scale up and ran into losses. “There was a compelling need to carve out a niche, to either differentiate or die,” he tells Forbes India. His intuition, in 2005, was that data centers—then largely used by websites—would be the future powerhouses of the economy.
Pinnapureddy and his leadership team travelled to the US to study data centers there and realised that India did not operate a single Tier-4 data centre. Tier-4 data centres, contrary to perception, need to be of the highest quality, with a completely fault tolerant design, continuous cooling, an expected uptime of 99.995 percent and no more than 26.3 minutes of downtime in a year. A Tier-1 data centre is basic and offers little sophistication to the client, besides an uptime of 99.67 percent.
In February 2008, CtrlS, the company Pinnapureddy founded, built India’s first Tier-4 data centre in Hyderabad. In 2011, CtrlS launched Asia’s largest Tier-4 hyperscale data centre in Mumbai followed by others in the last decade.
Pinnapureddy could not have got his act more right. Over the past decade, the explosion of data consumption, adoption of cloud services, 5G technology and artificial intelligence in India has all meant an increased demand for hyperscale data centres. But India has only 0.2 MW of data centres per 100,000 people compared to 8 MW in the US.
Data localisation has also been one of the key drivers for data centres in India. In 2018, the Reserve Bank of India (RBI) called on payment system providers to store payments data in India. The draft Personal Data Protection Bill, which is being debated by a joint parliamentary committee, signals towards the storage of data in India. A JLL report of September 2020 notes that the capacity of India’s data centres is expected to rise nearly three times to 1,078 MW by 2025 from 375 MW last year, representing a $4.9 billion investment opportunity during this period.
(This story appears in the 02 July, 2021 issue of Forbes India. To visit our Archives, click here.)