DATA CENTRE - THE NEXT DATACENTRE HUB FEBRUARY 2021 - Prasa Infocom
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THE NEXT
DATACENTRE HUB
F E B R U A R Y 2 0 21
Automation Data
Analytics IoT
AI Cloud
IaaS PaaS
Edge Cloud
Colocation Edge Devices
DATA CENTRE
2 INDIA- THE NEXT DATACENTRE HUB
FOREWORD
DEBJANI
GHOSH
President
Covid-19 has made the online world even
more valuable, with the lockdowns
accelerating the usage of data across
enterprises, individuals as well as Also, investments in datacentres support
governments. This increasing online focus growth opportunities for a number of
with government’s call for being allied sectors such as telecom, IT
‘Atma-Nirbhar’ or self-reliance; and data infrastructure and construction, further
protection through data localisation makes acting as a catalyst to boost country’s
datacentres a critical part of the country’s overall economy.
data ecosystem.
This report “India – The Next Datacentres
The criticality of datacentres came to the fore Hub” is NASSCOM’s attempt to highlight
during the pandemic when most businesses the huge potential that the country has
were unable to access their in-house servers from a datacentre market perspective by
during lockdowns, while datacentres were leveraging the ‘India Advantage’.
still operating as they were deemed as
essential services. We hope you find this report interesting
and we look forward to your suggestions
Demand for datacentres remains upbeat, and feedback at research@nassom.in.
despite the pandemic - highlighting
datacentre as the backbone of the
“newnormal online era”.
3 INDIA- THE NEXT DATACENTRE HUB
TABLE OF CONTENTS
Executive Summary 5
Global Datacentre Market – Key Takeaways 8
Global Datacentre Global Datacentre Market - ~$200 billion by 2025 9
Market
Cloud Adoption and Data Localisation – The Key Drivers 22
Drivers, Trends and Focus on Clean Energy and Consolidation – The Key Trends 24
Challenges Land, Carbon Emissions and Security – The Key Challenges 26
India Datacentre Market – Key Takeaways 29
India – The Growing Data Economy 30
India Datacentre India Market Outlook 56
Market Recommendations 57
61
Appendix
4 INDIA- THE NEXT DATACENTRE HUB
TABLE OF FIGURES
9
Global Datacentre Market Investment
2019–2025 ($ billion)
Global Datacentre Investments Share by 12
Infrastructure 2019
Leading Datacentre Hubs Across the World (2019) 20
India Datacentre Market Investment 32
2019–2025 ($ billion)
Global Datacentre Projects by Status (nos.) 61
Global Datacentre Projects by Region (nos.) 61
Global Datacentre Market Investment by 61
Region 2019–2025 ($billion)
India Datacentre Market Investment by 68
Area 2019–2025 (million Square feet)
India Datacentre Market Investment by 69
Power Capacity 2019–2025 (MW)
Retail Colocation Pricing (per Rack per Month) – 1H2020 70
Colocation Pricing (per kW per Month) 1H2020 71
5 INDIA- THE NEXT DATACENTRE HUB
EXECUTIVE SUMMARY
The pandemic has pushed the demand for cloud across the globe with digital transformation
accelerating across industries, and internet becoming a lifeline for people both for work as
well as entertainment. This shift towards cloud has pushed increased investments in
hyper-scale datacentres with the global datacentre market investments expected to reach
~$200 billion per annum by 2025, and India is expected to account for 2.3% of these total
investments.
Global Datacentre Market India Datacentre Market
Cumulative investments of $1.3 trillion are India datacentre market investments are
expected over 2019-2025, with North expected to grow at a CAGR of 5% (~2X of
America being the leading market in terms of the global market) to reach $4.6 billion per
investments, and MEA & LATAM being the annum by 2025.
fastest growing markets followed by APAC.
India is well positioned to garner a larger
Majority of the global datacentre players are share of global datacentre investments as it
colocation providers, followed by cloud provides: significant cost advantage both in
service providers. With growing investment construction and operations; growing online
opportunities, the market is witnessing market and international connectivity; ample
increased interest from real estate and private skilled workforce; and majority investments in
equity players, and entry of many new Tier IV datacentres.
players.
With the increasing investment in hyper-scale
Major Datacentre Locations
datacentres the average size of datacentres
as well their power capacity has increased Mumbai, Chennai, Bengaluru, Hyderabad,
manifold over the last decade. Delhi (NCR) - As they offer good fiber
connectivity, proximity to customers,
IT Infrastructure accounts for ~77% share of availability of skilled workforce, and
total datacentre investments; with the rest submarine cable connectivity.
being invested in electrical & mechanical
infrastructure, and general construction. Selection Criteria
Focus on green datacentres, advanced IT Geographic location, power, fiber
Infrastructure, emergence of edge connectivity, and general construction &
datacentres, and market consolidation are the operations remain the key selection criteria
other key trends shaping up the market. for site selection before setting up a
datacentre.
6 INDIA- THE NEXT DATACENTRE HUB
Outlook
India has a huge potential to take a large
share of global datacentre investments if it is
able to act fast on implementing the recently
announced datacentre draft policy growing
the CAGR by 2X-3X, with annual
investments reaching $6 -$8 billion by
2025.
KEY RECOMMENDATIONS
Faster implementation of
Government’s draft policy
Encourage use of Deemed approvals for
renewable energy regulatory clearances
Level playing ground for all Digitization of RFPs to
datacentre investments lead by example
India Datacentre Market Investment
$6 - 8 billion
$4.6 billion
$3.4 billion
BUSINESS AS USUAL SCENARIO
2019 2025F
SOURCE: Arizton and NASSCOM
7 INDIA- THE NEXT DATACENTRE HUB
3
1
NOVEMBER 2020
GLOBAL
DATACENTRE
MARKET
8 INDIA- THE NEXT DATACENTRE HUB
GLOBAL DATACENTRE MARKET –
KEY TAKEAWAYS
Global Datacentre market is expected to
reach ~$200 billion per annum by
2025, primarily driven by increased
investments in hyper-scale datacentres
amidst rising demand for cloud.
Cumulative investments of $1.3 trillion expected over 2019-2025, with 2020
witnessing highest growth of 3.6%.
Majority of the global datacentre players are colocation providers, followed by
cloud service providers.
IT Infrastructure accounts for ~77% share of total datacentre investments; the rest is
for electrical & mechanical infrastructure and general construction.
Real estate companies are pushing a lot of new investments into datacentres as they
see higher and faster RoI vs. leasing out to other commercial businesses.
During 2019, the market saw entry of 15 new datacentre providers.
Rise in average size (~3X) and power capacity of datacentres as hyper-scalers
focus on investing in large campuses.
North America, the leading market in terms of investments; MEA & LATAM, the
fastest growing markets followed by APAC; currently, India accounts for about 2%
share in global datacentre investments.
COVID-19 Impact :
Increased data traffic has pushed the A temporary halt in construction of datacentres
occupancy rate of colocation datacentres during the lockdown, which quickly recovered
with several investors planning to expand as lockdowns were relaxed. Operations of
their capacities across major datacentre datacentres continued during the lockdown as
locations worldwide. these were deemed essential services across all
major countries.
49 INDIA- THE NEXT DATACENTRE HUB
GLOBAL DATACENTRE INVESTMENTS:
~$200 BILLION BY 2025
The global datacentre market witnessed significant investments over the last few years
owing to strong growth in consumption of internet related services, to reach $171 billion in
2019. Moreover, as investments continue to rise in hyper-scale datacentres amidst rising
demand for cloud services accelerated by digital transformation across industries, this
market is expected to reach ~$200 billion by 2025.
Global Datacentre Market Investment 2019–2025 ($ billion)
CAGR 2.5% The global market is expected to see
198
cumulative investments of over ~$1.3
trillion during 2019-2025, with 2020
set to witness fastest growth at 3.6%
190
y-o-y, due to demand for datacentre
181
capacity surging post the pandemic,
171 as more users are being pushed
online.
2019 2021 2023 2025
Source: Arizton
Cumulative
~ $1.3 investments over
2019-25
trillion 2020 to witness
3.6% fastest growth
in investments
(y-o-y)
APAC - Second fastest
3.6% growing region
(CAGR 2019-25)
410 INDIA- THE NEXT DATACENTRE HUB
Growing Investments: Over Jan 2017–Jun 2020, the global datacentre industry saw
investments in 1,340 projects1; 900 are currently operational, others are expected to be
operational by 2025. North America led in terms of total investments in 2019, with Europe
leading in terms of number of projects (Details in Appendix1).
Share of Global
Investments - 2019 Trends
IT Infrastructure 2019: Saw entry
78% of 15 new
Support market players
Infrastructure
22%
>10%: APAC
(China, India,
~43% North America Indonesia) &
~30% APAC MEA - fastest
~22% Europe growing regions
~5% MEA & LATAM over 2015-19
Source: Arizton
Emergence of New Regional Players: Increased demand is creating opportunities for
new players in the market. During 2019, 15 new players entered the global datacentre
market including Princeton Digital Group (APAC), NDC Data Center (Europe), Yotta
Infrastructure Solutions (India) among many others (Details in Appendix 2).
Increasing interest of Real Estate and Private Equity Firms: This has been a major
growth factor for datacentre investments. Real estate firms have an advantage of owing the
land and they expect to generate higher ROI through leasing the land out to datacentre
providers vs. other commercial ventures2. Expectations of higher and faster ROI is also
getting the private equity interested - accounted for 80%3 of 100+ global datacentre M&A
deals in 2019, with investments increasing 2X over 20163.
May 2020: KKR & Co. Inc. announced its plan to invest $1 billion4 in Europe through its
investment arm Global Technical Realty, the largest private equity investor in datacentres
since 2016.
August 2020: Hiranandani Group, a major real estate developer in India, announced
investments worth ₹19,000 crore ($2.6 billion)5 in datacentres through Yotta
Infrastructure Solutions.
1
Arizton 2
CBRE Survey Synergy Research Group (CRN)
3 4
S&P Global 5
The Week411 INDIA- THE NEXT DATACENTRE HUB
Local Datacentre Providers Driving Growth: By developing large facilities at multiple
locations:
Sunevision, Hong Kong - In 2018, acquired land covering 27,444 square meters in
Tseung Kwan O, Hong Kong, for datacentre development.
CtrlS, India - Investing in hyper-scale datacentre campuses in Mumbai and Hyderabad
each covering over 2 million square feet of area.
The Rise of Colocation Providers: Majority of this growth in investments is expected to
come from colocation providers who are expected to invest in 300+ projects annually
between 2019-2025.
Colocation providers dominate the global datacentre market.
Global datacentre colocation market by revenue was valued at $35 billion in
2019 and is expected to reach $54 billion in 2025, growing at a CAGR of 7.5%6.
Equinix and Digital Realty, two of the world's leading colocation providers accounted for
31%7 of the total M&A deal value over 2015-2019.
In developed countries, enterprise on-premise datacentre investments are declining due
to significant initial CAPEX & ongoing high OPEX for operating datacentres older than 15
years.
Rise in Average Size and Power Capacity of Datacentres: Over the last five years, the
average size of a facility has increased 3X with majority of the upcoming datacentres
having an area of >50,000 square feet. The total power capacity of a single datacentre
facility on full build-out grew 10X over the past decade crossing 50 MW per facility in
2019. This trend is expected to continue in the coming years as hyper-scalers invest in large
campuses.
Investments by area expected to increase at CAGR 3.6% to reach 39 million square feet
by 2025 (Details in Appendix 3).
Investments by power capacity expected to increase at CAGR 3.5% to reach 7,119 MW
by 2025 (Details in Appendix 4).
MEA & LATAM, the Fastest Growing Markets: Investments in the region (MEA+LATAM)
are expected to grow at CAGR 6.4% over 2019-25, followed by APAC (CAGR 3.6%).
Increase in demand for cloud services and datacentre outsourcing services (colocation
services) remain key drivers.
6
Arizton (Based on revenues of colocation providers worldwide) Synergy Research Group (Fierce Telecom)
7412 INDIA- THE NEXT DATACENTRE HUB
IT Infrastructure accounts for
over ~75% share
of total datacentre investments
Investments in datacentre infrastructure can be classified based on critical (IT Infrastructure)
and support infrastructure (electrical, mechanical and general construction).
The share of global spend on IT and support infrastructure was 78% and 22%,
respectively in 2019. Going forward this share is expected to remain largely unchanged.
Global Datacentre Investments Share by Infrastructure, 2019 (100% = $171 billion)
8%
GENERAL CONSTRUCTION 5%
9%
MECHANICAL INFRASTRUCTURE
ELECTRICAL INFRASTRUCTURE
78%
IT INFRASTRUCTURE
Source: Arizton
IT Infrastructure
Comprised of servers (55% share), storage devices (32%), network (13%)
Servers: USA and China lead the server market, followed by Japan, the UK, and
Germany.
Storage: Enterprises are migrating from traditional hard disk drive (HDD)-only systems to
all-flash and hybrid storage infrastructure.
Cost of Solid-State Device (SSD) likely to decline 4X over 2019-2025, leading to
strong growth of all-flash and hybrid arrays. ~85% of critical applications are
expected to run on all-flash arrays by 2025.
All-flash arrays storage market was valued at ~$12 billion in 2019, expected to reach
~$25 billion by 2025, CAGR of ~14%8.
8
Arizton413 INDIA- THE NEXT DATACENTRE HUB
Network: Adoption of high-capacity Ethernet switches, which include 25GbE, 40GbE
and 100 GbE switch ports is expected to grow due to the explosion in data traffic.
Consequently, this is leading to the decline in low capacity ethernet switches namely,
1/10 GbE port switches.
Electrical Infrastructure
Includes UPS systems, generators, power distribution units, transfer switch &
switchgears and others
UPS: VRLA-batteries are likely to be replaced by lithium-ion batteries, which are expected
to capture 25% market share by 2025. Introduction of innovative battery technology like
Nickel Zinc and Sodium-ion is expected to gain traction.
Generators: Generators continue to play a vital role in powering datacentres due to
unreliability in grid power supply. Also, fuel cells are considered as an alternative solution
for generators for backup power supply. For instance, Microsoft tested hydrogen
powered fuel cells as backup power solutions to diesel generators for datacentre in July
2020.
Power Distribution Units (PDUs): Busway systems and rack PDUs are predominantly
used across datacentres. Increased awareness on reducing power consumption is leading
to strong growth in intelligent power distribution solutions.
Mechanical Infrastructure
Consists of cooling systems, rack cabinets and others
Cooling solutions: The use of free cooling solutions has grown considerably in markets
like North America, Europe, China, Japan, South Korea and ANZ. Countries
experiencing tropical climatic conditions such as India depend on air-cooled chillers and
chilled water-based cooling solutions. Regions which experience water scarcity are likely
to use innovative cooling solutions to reduce water consumption.
Racks: Majority of modern datacentres are built with flexible designs, supporting up to
52U rack adoption. The developed market is witnessing the penetration of OCP-rack
infrastructure solutions among hyper-scale facilities.414 INDIA- THE NEXT DATACENTRE HUB
General Construction
Core & shell development, installation & commissioning services, building & engineering
design are the major services. It also includes services such as physical security and
datacentre infrastructure management.
Construction costs vary by location of the datacentre. For example, in 2018, it cost
around $200 per square feet in Japan, whereas it was around $40 per square feet in
India9.
Over the last 2-3 years, sustainable datacentre designs have been a priority for
datacentre operators so as to improve operational efficiencies. It includes use of
innovative power and cooling infrastructures and renewable energy sources
Datacentres are built with minimum four layers of security, i.e. perimeter security,
datacentre building security, data hall security and electromagnetic pulse (EMP)
shielding.
Use of automation and AI to monitor and manage datacentre operations is expected
to increase. For instance, use of automation and AI enabled controls for datacentre
cooling, which in-turn reduces power consumption.
9
Turner & Townsend415 INDIA- THE NEXT DATACENTRE HUB
IMPACT OF COVID
The global economy witnessed a slowdown due to the outbreak of the COVID-19
pandemic. While the pandemic has affected industries across the world, the datacentre
industry has been impacted in the following ways:
Temporary halt in construction projects: Several construction projects were brought
to a halt but only for about a month or so to prevent the spread of infection.
However, construction soon continued when the lockdown restrictions were eased.
Datacentre services continued during the lockdown as they were deemed as
essential services in most countries.
Supply chain disruptions: The pandemic resulted in several supply chain challenges,
which impacted the revenue of several infrastructure providers in Q1 and Q2 2020.
However, with easing of lockdown restrictions worldwide, the impact is expected to
decrease from Q3 2020.
Availability of high-quality datacentre services: Necessary precautionary measures
taken by operators worldwide ensured availability of high-quality services.
COVID-19 has significantly increased data traffic and the demand for datacentre services.
The pandemic has increased the occupancy rate of colocation datacentres with several
investors planning to expand their capacities in major datacentre locations worldwide.
Investments in capacity expansion by operators worldwide started to pick up in Q3 2020
owing to the surge in demand in the market.
FACTORS Q1 2020 Q2 2020 Q3 2020
Construction
Supply Chain
Impact Indicators:
VERY LOW LOW MODERATE VERY HIGH416 INDIA- THE NEXT DATACENTRE HUB
KEY GLOBAL HUBS
Worldwide datacentre market is dominated by USA
and China. The UK, Germany, Netherlands and
France are leading datacentre hubs in Europe. In
APAC, Singapore, Hong Kong, Australia and
Japan are established datacentre hubs. India and
Indonesia are the upcoming markets as they are
expected to experience strong growth during
2021-2025.
In APAC, shortage of land in Singapore and Hong
Kong is expected to increase datacentre
development in India and Indonesia. However,
compared to Indonesia, availability of skilled
workforce is higher in India along with government
support in offering incentives. The Indian market
also has strong potential to support datacentre
demand from African and Middle Eastern countries,
owing to availability of skilled workforce and
improvement in submarine network connectivity
between India and other countries.
USA
The US market is witnessing investments in at least 80 datacentre
INVESTMENTS projects on an annual basis. Virginia is the leading state with
investments of over $1 billion in 2019
Strong demand for datacentre services among enterprises operating
KEY DRIVING in the market coupled with increase in self-built hyper-scale facility
FACTORS development by Facebook, Google, AWS and Microsoft
Digital Realty, Equinix and CyrusOne are each investing a minimum
of $500 million in datacentre buildouts on a y-o-y basis.
KEY PLAYERS/ Hyper-scale operators namely, AWS, Google, Microsoft, Facebook
INVESTORS and Apple are also investing on datacentre campuses supporting a
minimum of 100 MW of power capacity417 INDIA- THE NEXT DATACENTRE HUB
GERMANY
In 2019, Germany’s datacentre market witnessed investment in
INVESTMENTS around 25 datacentre facilities
The market is mainly driven by data localization law i.e. General
Data Protection Regulation (GDPR) which came into effect from
May 2018. In addition, Industry 4.0 and IIoT are expected to
KEY DRIVING drive market growth in Germany between 2019 and 2025. Also,
FACTORS UK’s decision to move out of European Union (EU) has aided in
the increased of demand for datacentre services in Germany,
Netherlands, and France
KEY PLAYERS/ Equinix, Interxion, CyrusOne, Global Switch and NTT Global
Data Center (e-Shelter) were the leading datacentre investors in
INVESTORS Germany
UK
In 2019, the UK datacentre market witnessed investments in over 20
INVESTMENTS datacentre projects. Colocation providers were the major
contributors with a share of >90% in 2019
KEY DRIVING The UK is the most sought-after location for datacentre owing to
strong business demand for datacentre services from local as well
FACTORS as global enterprises operating in the market
Equinix, Digital Realty, CyrusOne, ST Telemedia Global Data
KEY PLAYERS/ Centres (VIRTUS Data Centres), Telehouse and Colt Data Center
INVESTORS Services418 INDIA- THE NEXT DATACENTRE HUB
CHINA
In 2019, China dominated datacentre spending in the APAC region
INVESTMENTS with a share of around 48%. China has been seeing an addition of
>20 new datacentres annually between 2017 and 2020
Datacentre investment is led by internet, cloud and
telecommunication service providers like Alibaba, China Unicom,
KEY DRIVING Baidu, China Telecom, Tencent and China Mobile. And the
FACTORS increase in digitalization initiatives carried out by Chinese
enterprises and growing consumption of internet-related services
by consumers in the county
As per government rules, global operators can’t hold majority
KEY PLAYERS/ share in ownership of datacentres, leading to complete dominance
INVESTORS by local operators namely, GDS Services, Shanghai Athub,
ChinData, Qnet, Chayora, China Unicom and Tenglong Holdings
JAPAN
Traditionally dominated by domestic IT companies such as Fujitsu,
Hitachi, NTT Communications, Mitsubishi Electric and NEC. Japan
is now evolving into a global datacentre market driven by global
INVESTMENTS hyper-scale cloud providers such as AWS, Google, Microsoft
Azure and IBM SoftLayer, expanding their presence in the country.
Tokyo is the major datacentre destination in Japan. However, over
the past three years, datacentre operators have increasingly shown
interest to build facilities in Osaka, a cost-effective destination
Adoption of cloud-based services and digitalization of enterprise
business environment is the major driver for Japan’s datacentre
KEY DRIVING
market. However, major drawback of Japan is the high construction
FACTORS cost and environmental hazards namely, earthquakes - which
makes site selection a difficult task
KEY PLAYERS/ MC Digital Realty, NTT Communications, Fujitsu, Colt, INAP,
INVESTORS Equinix and KDDI Telehouse are the leading datacentre operators419 INDIA- THE NEXT DATACENTRE HUB
INDIA
The India market is witnessing investments in at-least 10 datacentre
projects on an annual basis from datacentre service providers. The
INVESTMENTS
state of Maharashtra continues to dominate with investment share
of over 50% in the market
Government's Digital India initiatives to spur demand for
KEY DRIVING datacentre services from central and state government in India. The
proposed Data Protection Bill 2018/19 will be one of the key
FACTORS
driving factors for market growth going forward
Service providers including NTT Global Data Centers (Netmagic),
ST Telemedia Global Data Centres India, CtrlS, Yotta Infrastructure
KEY PLAYERS/ Solutions, RackBank are investing in datacentre development to
INVESTORS support the unprecedented demand that will arise through data
localization policy20 INDIA- THE NEXT DATACENTRE HUB
Leading Datacentre Hubs Across the World (2019) Illustrative
Power Global
Country Investment Area
($ Billion) (Mn. Square Feet) Capacity Investment
(MW) Share (%)
US 70.0 (1.2%) 13.0 (0.6%) 2,280 (1.6%) 41%
China 20.4 (3.3%) 3.0 (3.3%) 600 (3.0%) 12%
UK 7.5 (4.8%) 1.1 (0.6%) 189 (1.0%) 4%
Germany 7.0 (4.6%) 1.1 (2.7%) 227 (2.9%) 4%
Japan 5.9 (3.7%) 0.6 (5.8%) 126 (4.1%) 3%
Australia 4.9 (4.9%) 0.7 (3.6%) 129 (3.1%) 3%
Netherlands 4.1 (4.3%) 1.0 (5.0%) 169 (3.0%) 2%
Hong Kong 3.7 (2.6%) 0.7 (2.6%) 101 (2.9%) 2%
India 3.4 (5.0%) 1.7 (7.0%) 310 (7.0%) 2%
Singapore 3.1 (4.6%) 0.8 (4.6%) 160 (3.8%) 2%
Indonesia 1.2 (10.8%) 0.2 (8.3%) 35 (7.3%) 1%
Note: Figures in brackets represent % CAGR over 2019-2025
Source: Arizton21 INDIA- THE NEXT DATACENTRE HUB
2 DRIVERS,
TRENDS AND
CHALLENGES22 INDIA- THE NEXT DATACENTRE HUB
CLOUD ADOPTION AND DATA
LOCALISATION – THE KEY DRIVERS
The global datacentre market is witnessing a continuous uptrend owing to growing internet
penetration, increased adoption of cloud, rising use of big data analytics and IoT,
increased thrust on data localisation and tax incentives10.
COVID-19 has further accelerated
the market growth as the demand
for data traffic, cloud and digital
technologies witnessed an increase,
with more businesses moving online
post the lockdowns globally.
Global internet penetration increased Global public cloud services market is
to 62% in 2019 from 39% in 2010 expected to grow at a CAGR of
14.5% to reach $364.1 billion by
In India, it grew to 55% in Mar’20 2025
(48.5% - Mar’19)
India’s public cloud services is
Global Mobile Traffic is expected to expected to reach $5 billion by 2023
reach 164EB per month by 2025
(33EB -2019)
INTERNET PENETRATION AND
CLOUD ADOPTION
DATA TRAFFIC
10
NASSCOM SMB Cloud Adoption In India, TRAI, Gartner Research, Frost and Sullivan, IDC, Miniwatts Marketing Group,
Ericsson Mobility Report 2019, PriMetrica and Company Press Releases23 INDIA- THE NEXT DATACENTRE HUB
Big data analytics is expected to grow +400 submarine cables under
at CAGR ~29% to reach $68 billion deployment globally (2019)
by 2025
~ 90 submarine cable projects are
Number of IoT devices to reach ~75 expected during 2019-22
billion in 2025, generating 79.4 zetta-
bytes of data Jio (India) has proposed 2 submarine
cable systems connecting Singapore
and Europe (operational by 2022)
BIG DATA ANALYTICS & IOT IMPROVED FIBER CONNECTIVITY
Data localization laws are gaining Datacentre is a capex intensive
prominence such as GDPR in Europe business, thus most countries are
and Cybersecurity Law in China offering incentives on :
Personal Data Protection Bill, Sales and property tax
2018/19 in India is also under Electricity pricing
consideration
DATA LOCALIZATION LAWS TAX INCENTIVES
10
NASSCOM SMB Cloud Adoption In India, TRAI, Gartner Research, Frost and Sullivan, IDC, Miniwatts Marketing Group,
Ericsson Mobility Report 2019, PriMetrica and Company Press Releases24 INDIA- THE NEXT DATACENTRE HUB
FOCUS ON CLEAN ENERGY AND
CONSOLIDATION – THE KEY TRENDS
Increasing efficiency of datacentres has always been a key focus area for operators and
developers. In 2007, The Green Grid, a non-profit organization, was established to focus
on ways to improve the efficiency of datacentres11. This also resulted in an increase in use
of renewable sources and other energy efficient innovations. A shift towards advanced IT
Infrastructure, emergence of edge datacentres, and market consolidation are the other key
trends shaping up the market.
The rise of Shift towards Advance
Green Datacentres IT Infrastructure
In 2019, the average PUE of datacentres Enterprises in datacentres are shifting
was in the range of 1.8–2.0 worldwide; towards advanced IT infrastructure
while the ideal PUE value is 1.0 including:
Hyperconverged Infrastructure
Thus, there is an increasing focus on green
(HCI): Offers scalability, reliability,
datacentres which utilize energy-efficient
easier configuration and
technologies and renewable energy
administration at lower costs
August 2020: Digital Realty powered All Flash Array Storage: Enables
its Dallas area datacentre with 65 faster storage and retrieval of data
MW solar energy from Pattern Energy, compared to traditional storage
Texas (Hard drives)
Increased Use of Energy Efficient
High Capacity Switches: Enhances
Solutions such as free cooling and
network performance as they come
liquid-immersion/ direct-to-chip solutions
in high capacity variants of 200GbE
which increases PUE efficiency; and DCIM
and 400GbE switch ports
software that leverages automation to
enable predictive maintenance
Introduced key efficiency metrics - Power Usage Effectiveness (PUE), Carbon Usage Effectiveness (CUE), Water Usage Effectiveness
11
(WUE). Sources: Digital Realty, Amazon, EdgeMicro, Smart Edge Data Centres, Digital Realty-Adani Group, Equinix-GPX,
451 Research & Ericsson25 INDIA- THE NEXT DATACENTRE HUB
Need for Geographic
Emergence of Edge Expansion Driving
Datacentres Consolidation
Increasing use of compute-intensive The need for stronger market presence is
technologies like IoT and AI has driving M&A deals in the market
increased the need for faster network
>1,700 datacentre M&A deals
response to customers, in-turn driving the
worth ~$115 billion closed during
demand for edge datacentres
2010-2020 (as of Sep’ 20)
In 2020, Smart Edge DC announced
Leading colo-market players
its plans to deploy edge datacentres
Equinix and Digital Realty have
across ~1,000 locations in the UK,
invested +$30 billion over the last
highlighting more storage being
decade
deployed in secondary and regional
August 2020: Equinix announced
markets
acquisition of GPX Global Systems in
India ($161 million)
In August 2020, EdgeMicro
announced its plans to deploy 5
New investor segments-infra funds,
edge datacentres in US
SWFs, pension funds and family
pushing more money into the market
October 2019: Equinix & GIC,
Singapore launched a JV to invest $1
billion in Europe
Introduced key efficiency metrics - Power Usage Effectiveness (PUE), Carbon Usage Effectiveness (CUE), Water Usage Effectiveness
11
(WUE). Sources: Digital Realty, Amazon, EdgeMicro, Smart Edge Data Centres, Digital Realty-Adani Group, Equinix-GPX,
451 Research & Ericsson26 INDIA- THE NEXT DATACENTRE HUB
LAND, CARBON EMISSIONS AND
SECURITY – THE KEY CHALLENGES
Location of the datacentre facility plays a vital role in assuring service continuity of the
facility. The cost of downtime for 33% of all incidents globally, cost enterprises over
$250,000 per incident, and about 15% of incidents cost over $1 million12 per incident.
Apart from choosing the best location, datacentre operators are reeling under pressure to
cut-down carbon emissions and ensuring both physical and logical security of datacentres.
Location Constraints
Skill Availability: Developed countries such as the US and the UK have moderate skill
shortages for advanced datacentre construction and design, while for India, this remains a
key challenge
Government Approvals: Smooth in countries like Singapore, while a time-consuming
process in India
Power and Other Resources: Inadequate availability of power and water is a key
challenge for emerging countries in LATAM, Africa and India. Availability of land is
becoming a key concern in countries like Singapore and Hong Kong; this, along with entry
barriers for global providers in China, is expected to help India emerge as a preferred
location in APAC region
Carbon Emissions
High Power Consumption: With significant growth in datacentres worldwide, their use of
power has increased. In 2018, datacentres consumed 1% of the world’s electricity; this is
set to grow further in the coming years. A datacentre with a total power capacity of 1,300
kWh and 1,000 kWh of IT load, operating at PUE of 1.30, consumes an average of 11.4
million kWh of energy and emits 7,500 tons of CO2 annually
Pressure to Reduce Carbon Emissions amidst a likely Carbon Tax: Increasing focus on
renewable energy as a carbon tax on datacentres is likely due to growing emissions. In
2019, Singapore Govt. set a carbon tax of S$5/ton of CO2
12
Uptime Institute, Schneider Electric’s Carbon Footprint Calculator, Singapore Carbon Tax, Sciencemag.com27 INDIA- THE NEXT DATACENTRE HUB
Datacentre Security
Security Threats: To the datacentre facility from physical damages; safety of IT Infrastructure
from attacks and network vulnerabilities
Growing Complexities in Datacentre Environment Increasing Logical Threats: With a
variety of hardware and software platforms integrated to handle data flow in and out of the
facility, a variety of logical threats are emerging such as DDoS attacks, web application
attacks, DNS infrastructure exploits, SSL-induced security blind spots, weak authentication,
and brute force attacks. Legacy systems in datacentres are more prone to these attacks
12
Uptime Institute, Schneider Electric’s Carbon Footprint Calculator, Singapore Carbon Tax, Sciencemag.com28 INDIA- THE NEXT DATACENTRE HUB
3 INDIA
DATACENTRE
MARKET29 INDIA- THE NEXT DATACENTRE HUB
INDIA DATACENTRE MARKET –
KEY TAKEAWAYS
India datacentre market is expected to
reach ~$5 billion by 2025, primarily
driven by growing internet penetration,
increased cloud adoption, government’s
digitization initiatives and the push
towards localization.
Cumulative investments of ~$28 billion expected over 2019-2025.
At about $3.4 billion investments in 2019, India’s share in the global datacentre
market stood at ~2%; in the base case scenario, by 2025, India’s share is estimated
to be 2.3%.
In terms of CAGR over 2019-2025, India is expected to grow at ~5%, 2X faster
than global.
India is currently home to 80+ third-party datacentres and is witnessing investments
in around 15 projects annually, with growing presence of both local and
international players.
Majority of these investments are being done in outsourced datacentres which are
gaining demand amidst increasing cloud adoption.
The India Advantage
Majority of investments in India are focused on advanced Tier IV datacentres.
India has a major cost advantage compared to matured regions both on
development as well as operational costs.
Availability of Engineering skillset.
COVID-19 Impact
Increased capacity utilization of existing outsourced datacentres.
Consequently, service providers have fast track their planned expansions.30 INDIA- THE NEXT DATACENTRE HUB
INDIA – THE GROWING DATA ECONOMY
Growing internet penetration, increased adoption of cloud, IoT, growing use cases for
AR/VR, AI/ML, big data analytics and edge computing coupled with the Government of
India’s (GoI) digitisation initiatives are key factors driving the growth of India’s data
economy.
Internet penetration in India witnessed a significant increase to 50% in January 2020
with the number of active internet users increasing 3X13 over 2015, with both urban and as
rural areas contributing to this growth. Further impetus came from government’s regulations
to localize data storage, ₹8,000 crore (~$1.1 billion) budget allocation in 2020 under
the National Mission on Quantum Technologies and Applications (NM-QTA) and the
Reserve Bank of India’s target of a tenfold increase in digital financial transactions.
Moreover, this digitisation push accelerated during the COVID-19 with
data-usage-per-subscriber rising at an all-time high of 12.1 GB14 per month in quarter
ending June 2020, amidst increased work-from-home, online education, OTT
consumption, online gaming and casual internet use during the lockdown.
India has the second largest internet user base globally, which has further accelerated
post the pandemic as more number of people moved online and small businesses
digitised. India had an internet subscriber base of 749.1 as of June 202015, which is
expected to cross 1 billion16 by 2025.
This has led to an increase in the amount of data generated and consumed. Indians
consumed the highest amount of data per month at ~12GB in 2019, globally, which is
expected to double over the next five years.17
This rise in data coupled with an increasing focus on data protection and data localisation
policies is driving the demand for datacentres in the country. Consequently, datacentre
investments have risen significantly over the last few years and this trend is expected to be
maintained in the coming years.
¹³Atlas VPN 14
TRAI and CARE Ratings TRAI
15 16
Atlas VPN Ericsson
1731 INDIA- THE NEXT DATACENTRE HUB
Investments in Datacentre Market
in India expected to reach about
$5 billion by 2025
India is home to 80+ third-party datacentres and
is witnessing investments in around 15 projects
annually.
Mumbai, Bengaluru, Chennai, Delhi (NCR), Hyderabad and Pune are the key cities
accounting for majority of the datacentres. Calcutta, Kerala and Ahmedabad are the
upcoming destinations.
India has a growing presence of global datacentre operators such as NTT Global
Data Centers (Netmagic Solutions) and ST Telemedia Global Data Centres (India),
Colt DCS, Equinix and Digital Realty (in partnership with Adani Group).
The market also has a strong presence of local service providers such as CtrlS, ESDS
Data Center Solutions, RackBank, Pi Datacenters and BSNL (Nextgen Infinite),
NGBPS, WebWerks, Airtel (Nxtra Data Centers), Sify Technologies.
Datacentre Projects Status In India (January 2017 - June 2020)
25 20 20 5
PROJECT UNDER ANNOUNCED PLANNED
OPERATIONAL DEVELOPMENT PROJECTS PROJECTS
PROJECT
Source: Arizton32 INDIA- THE NEXT DATACENTRE HUB
India Datacentre Market Investment 2019–2025 ($ billion)
CAGR 5.0%
These growing datacentre market
4.6
4.2 investments in turn drive the demand for
3.8 datacentre infrastructure investments
3.4
including the demand for IT, electrical,
mechanical and general construction
services in India.
2019 2021 2023 2025
Source: Arizton
Cumulative investments Share in global
over 2019-2025 investments in 2019
~$28
billion 2X ~2% 80+
Faster growth than Third party
global market datacentres
India Datacentre Market Investment Share by Infrastructure ($billion)18
India has strong presence of infrastructure
providers such as Dell Technologies,
Schneider Electric; system integrators $3.4 $4.6
(Wipro, TCS and Prasa Infocom) as well as 9% 11%
9% 10%
general construction providers (Sterling & 15% 17%
Wilson, L&T Construction), which further
support investments in datacentres in the 67% 63%
country.
With increasing investments in hyper-scale
2019 2025
datacentres, share of support infrastructure
(electrical, mechanical and general IT Infrastructure Electrical Infrastructure
construction services) is expected to Mechanical Infrastructure General Infrastructure
increase in the coming years.
18
Arizton33 INDIA- THE NEXT DATACENTRE HUB
Datacentre Market Landscape – Captive Vs Outsourced
Broadly the datacentre investments in India can be categorized into captive datacentres
and outsourced datacentres.
Captive Datacentres: Owned and operated by enterprises themselves. On an average,
there are new investments in at least 60 captive datacentre projects annually in India
primarily driven by the public sector.
The market is expected to see an increase in deployment of modular/containerized
captive datacentre facilities i.e. 20-30 annually in the coming years, as that helps in
better utilization of the commercial office space.
However, investments in captive datacentres by private sector enterprises in India
have been declining primarily on account of the shift to cloud platforms, though it is
growing for governments and public enterprises.
The new demand in the segment is primarily coming from public sector and
educational institutions, while it is majorly restricted to expansion/upgradation of the
existing facilities for the private sector.
CAPTIVE DATACENTRE
Control over Higher CAPEX
infrastructure and OPEX
PROS
CONS
Security Scalability
Challenges
Less
Dependence Highly Prone
on Internet to Data Loss
Access
Outsourced Datacentres: Developed and operated by third-party service providers;
these can be classified as – Hosting Services, Colocation Services and Hybrid Services
(Details in Appendix 9).
18
Arizton34 INDIA- THE NEXT DATACENTRE HUB
Hosting Services account for most revenues
Majority of the outsourced datacentre developers/operators such as NTT Global Data
Centers (Net Magic), Ctrl S offer hosting services in India. Also, global cloud service
providers such as AWS, Microsoft, Google, IBM, and Oracle offer cloud hosting services
for Indian customers through their physical cloud regions in India. On an average, hosting
services contribute to 50% of the local outsourced datacentre service providers’ total
revenue, while colocation and hybrid services together account for remaining 50% of the
revenue.
OUTSOURCED DATACENTRE
Scalability Possible Hidden
Cost
PROS
CONS
Up to 99.99%
Uptime Less Control over
Infrastructure
Reduced CAPEX
Improve Physical
Security
Colocation Services Market
Colocation services in the market has gained significant traction especially among large
enterprises users in India
NTT Global Data Center (Netmagic) and ST Telemedia Global Data Centres (India)
are the leading players in terms of colocation services. Netmagic as well as other
colocation service providers such as Ctrl S, Sify Technologies, Reliance, Rackbank
and Airtel (Nxtra) also offer hosting services.
Major end-users of colocation services in India include cloud service providers, BFSI
and entertainment sector, content delivery network providers, and e-commerce
organizations. Emerging sectors include healthcare, state & central government
agencies, manufacturing and logistics.
Consequently, the colocation market in India is expected to increase at a CAGR of
16% to reach ~$1.4 billion by 2025 from $550 million in 201919, a 2.5X growth.
19
Arizton (Based on company colocation revenues)35 INDIA- THE NEXT DATACENTRE HUB
Outsourced Datacentres Gaining Traction
The outsourced datacentre market in India is expected to grow significantly in the
coming years owing to the migration of IT enterprises from captive datacentres to
hyper-scale facilities, which is further aided by the need to establish physical
infrastructure by global organizations amidst the push for data localization.
Cloud leading the demand - Key sectors driving this growth include cloud
service providers, content providers (such as OTT players) and BFSI sector.
Majority investments in Tier 1 cities, with growing focus on Tier 2 - Majority
of these outsourced datacentre investments are currently focused on Tier 1 cities,
with only a few outsourced datacentre providers such as NGBPS Limited, BSNL
(Nxtgen Infinite), Pi Datacenters, and RackBank operating facilities in Tier 2 cities.
Going forward, outsourced datacentre investments in Tier 2 cities is expected
to increase amidst a rising demand from local governments, enterprises, and
educational institutions
Hyper-scale Datacentres to lead the new normal - In recent years, increased
demand for third-party datacentre services such as colocation and hosting
services has led to the evolution of datacentres. The datacentre industry has
evolved from small-scale facilities (40 MW).
Hybrid Services
Hybrid services is combination of colocation as well as hosting services. Enterprise
customers procure infrastructure and host in a colocation facility, while the datacentre
service provider manages the day-to-day operations.
In India, the market is still in the nascent stage, with only a few datacentre operators
like, NTT (Netmagic Solutions) and CtrlS, able to provide advanced hybrid services.
Currently, ~20% of the customers opt for hybrid services. Going forward, this is
expected to grow with the increase in adoption of colocation services.
Outbreak of the COVID-19 pandemic has increased capacity utilization of existing
outsourced datacentres during 1H2020. This has prompted service providers to fast
track their planned expansions, thereby aiding the growth in investments in the market.
In addition, the possibility of implementation of data localization laws, growing
e-commerce and other digital transformation initiatives are also acting as a growth
catalyst.36 INDIA- THE NEXT DATACENTRE HUB
The India Advantage
Focus on Tier IV Standards:
Majority of these upcoming investments in datacentres are for Tier IV standards (the
highest rating in datacentre standards), certified by the Uptime Institute in India. Yotta
Infrastructure Solutions, GPX Global Systems (Equinix) and Pi Datacenters are the notable
companies investing in Tier IV facilities.
Cost:
In India, cost of developing a Tier III datacentre costs around $3.0–$3.5 million, while
for a Tier IV datacentre it is around $4.5-$5.0 million. This is 50%20 cheaper compared
to major global markets such as the US, the UK, Germany, Singapore, Hong Kong, and
Japan.
The retail and wholesale colocation prices in matured markets such as Singapore,
Hong Kong, and Japan are higher compared to India with the difference being 1.4X
- 2X21 as of 1H2020 in case of retail colocation (Details in Appendix 10).
Skills:
Skilled workforce is among the major site selection criteria for datacentre development
and operations. Engineering skill shortage is a major challenge in developed datacentre
markets such as the North America and Western Europe, where it is a benefit for India to
position itself as a major datacentre hub.
Location advantage:
India has a huge data consuming market, a growing submarine cable connectivity
system, and a fairly stable geography (with most cities not prone frequent
earthquakes/other natural disasters). These factors coupled with the increasing shift
towards cloud makes India a hotspot for datacentres. Building datacentres in new tier 2
cities where internet use is booming is also a strategic business move, as it would help in
easing congestion and speed up internet services, creating increased opportunities for
edge datacentres in the country.
Arizton (Primary Research)
20 21
Arizton37 INDIA- THE NEXT DATACENTRE HUB
India has an internet user base of over 700 million subscribers which is expected to
reach one billion22 by 2025. It is also the wold’s second largest internet user market.23
As of June 2020, there were 17 submarine cable projects which connected India with
the rest of the world; with Mumbai, Chennai, Cochin, Tuticorin, and Puducherry
being the landing cities for submarine cables in India.
With increasing internet traffic, more investments are being put into new projects.
For example - Reliance Jio has planned two submarine cables - India-Asia-Xpress
(IAX) and India-Europe-Xpress (IEX), which connect India indirectly to the US
through Southeast Asia and Europe. These cables are likely to support capacity of
over 100 Tbps, and are likely to be operational by 2023.
22
Atlas VPN IAMAI/NIelsen
2338 INDIA- THE NEXT DATACENTRE HUB
Major Datacentre Locations in India
Majority of the datacentres in the country are concentrated in Tier 1 cities namely,
Mumbai, Chennai, Bengaluru, Hyderabad, Delhi as they offer good fiber connectivity,
proximity to customers, availability of skilled workforce, and submarine cable connectivity.
Submarine cable connectivity is a key advantage in case of Mumbai and Chennai
making them the top two locations in terms of number of operational outsourced
datacentres.
Bengaluru and Hyderabad are best placed in terms of environmental hazards criteria
as they fall in Seismic Zone II. They also have favourable land costs compared to
Mumbai, Chennai and Delhi.
Hyderabad and Mumbai also offer tax incentives for datacentres, while skills
availability remains a major support factor across all locations.
Kolkata and Pune are key upcoming cities as the demand across these locations is driven
by digital transformation initiatives by government, improvement in terrestrial network
connectivity, and proximity to customers.
Mumbai (Maharashtra)24
All major datacentre operators in India such as ST Telemedia Global Data Centres India,
NTT Global Data Centers (Netmagic), Reliance Communications, CtrlS and Sify
Technologies have their presence in Mumbai. Mumbai has attracted significant
investments from datacentre operators because the city is connected to 12 submarine
network cables, which connects the city with rest of the world.
Mumbai is the financial and commercial capital of India and is the headquarters for
several global and local organizations including major banks. As of Sep-2020, there
were at-least 20 operational outsourced datacentres in Mumbai which supported a total
of over 250 MW of power capacity.
24
Sources: Maharashtra Tax & Incentives Data Centre, Wheebox India Skill Report 2019, Mumbai Climate AccuWeather, Arizton39 INDIA- THE NEXT DATACENTRE HUB
Major Site Section Criteria Description
Seismic Zone III: Low-moderate impact from earthquake
Environmental Floods: Moderate to high impact through monsoon
Hazards floods (June-October), resulting in power
outages/fluctuations
High Temperature (2019): 40 Degree Celsius
Climatic
Low Temperature (2019): 13 Degree Celsius
Conditions
Water Shortage: Moderate to High
Increased government support for hyper-scale facility
development with over 100 MW power capacity
Power Availability through incentives for establishing datacentre park.
& Cost
Power Cost: From $0.08 to $0.13 per kWh per month
Datacentre developers/operators involved in the
building of integrated datacentre parks with minimum
investment of $200 million can obtain incentives in terms
Tax Incentives of stamp duties and VAT refunds. The exemption on
electricity duty is provided as per the state’s IT policy
2015
Maharashtra Industrial Development Corporation
(MIDC) had allocated 600 acres of land for datacentre
Land Availability development near Taloja Industrial Estate, Navi Mumbai,
& Costs Maharashtra, India in 2019. Land Cost: $20–$35 per
square feet
Navi Mumbai is a targeted location for datacentre
development. The estimated distance from Navi Mumbai
Transport and to Mumbai International Airport and Mumbai Railway
Accessibility Station is 30–40 kilometers
Upcoming: Navi Mumbai Airport (~10 kilometer) from
datacentres
Skilled Workforce: Moderate to High
Skilled Workforce Ranked fifth in employability, according to Wheebox
India Skill Report 201940 INDIA- THE NEXT DATACENTRE HUB
Internet DE-CIX, National Internet Exchange (NIXI), Extreme
Exchanges Internet Exchange (Extreme IX)
Chennai (Tamil Nadu)25
Chennai’s connectivity to Asian countries through the seven submarine cables is a major
factor attracting datacentre investments, making it a preferred disaster recovery location
among customers.
During 1H2020, the Tamil Nadu government signed a MoU with Yotta Infrastructure
Solutions, Princeton Digital Group, HDCI Data Center, ST Telemedia Global Data
Centres, and Adani Group, for over $1 billion datacentre investment in Chennai. As of
Sep-2020, at-least seven operational outsourced datacentres in Chennai supported a
total of over 50 MW of power capacities.
Major Site Section Criteria Description
Seismic Zone III: Low impact from earthquakes
Floods: Moderate to high impact through monsoon
Environmental floods (October–December), resulting power
outages/fluctuations and affecting commute
Hazards
Natural Disasters: Tsunami (2004) and Chennai Floods
(2015)
High Temperature: 43 Degree Celsius
Climatic
Low Temperature: 21 Degree Celsius
Conditions
Water Shortage: High Risk
Government support for datacentre development based
on IT/ITeS policy with minimum threshold in investment
Power Availability amount
& Cost
Power Cost: From $0.09 to $0.12 per kWh per month
Sources: Wheebox India Skill Report 2019, Chennai Climate AccuWeather, Arizton
2541 INDIA- THE NEXT DATACENTRE HUB
In 2020, the state government extended its support to
Land Availability facilitate datacentre development through allocation
& Costs of land and increase in power capacities in Chennai.
Land Cost: $20–$35 per square feet
Hyper-scale datacentres deployment outside the central
city of Chennai are being developed in locations such
Transport & as Oragadam and Sriperumbudur, apart from existing
datacentres in the city centre.
Accessibility Distance from these datacentres to Chennai International
Airport: Approx. 40 Km and Chennai Railway Station:
approx. 60 Km Nearest City: Bangalore (~350 Km)
Skilled Workforce: Moderate to High
Skilled Workforce Ranked second for employability, according to
Wheebox India Skill Report 2019
Internet Exchanges DE-CIX, National Internet Exchange (NIXI), Extreme
Internet Exchange (Extreme IX)
Bengaluru (Karnataka)26
Availability of skilled workforce and strong network connectivity to Chennai and
Hyderabad are the major factors supporting the growth of datacentres in Bangalore.
The market has witnessed increase in datacentre development over the last 2–3 years
driven by demand from IT/ITeS companies based in the city. As of Sep-2020, at-least 12
operational outsourced datacentres in Bangalore supported a total of more than 60 MW
of Power Capacity.
Sources: Wheebox India Skill Report 2019, Bangalore Climate AccuWeather, Arizton
2642 INDIA- THE NEXT DATACENTRE HUB
Major Site Section Criteria Description
Environmental Seismic Zone II: Low impact to earthquakes
Hazards
High Temperature (2019): 37 Degree Celsius
Climatic
Low Temperature (2019): 12 Degree Celsius
Conditions
Water Shortage: High Risk
Power Cost Power Cost: From $0.08 to $0.12 per kWh per month
Land Costs Land Cost: $15–$25 per square feet
Operational datacentres in Bangalore are mostly located
outside the city. Approximate Distance of existing
Transport and datacentres to Bangalore International Airport: 40–60
Accessibility KM and Bangalore Railway Station: 20 KM
Nearest City: Chennai (~350 Kilometers)
Skilled Workforce: High
Skilled Workforce Ranked first for employability, according to Wheebox
India Skill Report 2019
Internet Exchanges National Internet Exchange (NIXI)43 INDIA- THE NEXT DATACENTRE HUB
Hyderabad (Telangana)27
Hyderabad is headquarters to several global cloud service providers - AWS, Microsoft,
and Google. In 2016, State government of Telangana introduced tax incentives for
datacentres to attract several hyper-scale investments. AWS, a global cloud provider, has
announced hyper-scale datacentre development in Hyderabad in November 2020. As
of Sep-2020, at-least six operational outsourced datacentres in Hyderabad supported a
total of over 25 MW of power capacity.
Major Site Section Criteria Description
Environmental Seismic Zone II: Low impact to earthquakes
No Impact from floods and other natural disasters
Hazards
High Temperature (2019): 43 Degree Celsius
Climatic
Low Temperature (2019): 18 Degree Celsius
Conditions
Water Shortage: High Risk
Datacentre building permissions will be covered under
the single window clearance system of TS-iPASS to fast
track approvals
Datacentres will be permitted to avail renewable energy
sources under an open access system from within the
state after paying the cost component to DISCOMs as
Tax & Other fixed by the ERC (subject to a maximum of one-third of
Incentives their total power requirements)
The government will aid in obtaining approvals and
permits through a single-window for on-site renewable
energy plants
Government shall provide fuel at a price lower than the
market rates to eligible players in the Datacentres
Campus
The government will establish a network of dual power
grids to ensure uninterrupted electricity supply to
Power Availability datacentre campuses
& Cost The government will provide power to eligible
datacentre projects at the cost of generation.
Power Cost: From $0.11 to $0.14 per kWh per month
Sources: Hyderabad Climate AccuWeather, Telangana Datacentre Policy 2016, Arizton
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