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India, once considered a brownfield data center country, has rapidly evolved into a greenfield powerhouse. The remarkable growth in this industry has transformed the country into a major stakeholder in the Asian market. A greenfield data center is a new facility built from scratch, without constraints imposed by existing structures or systems. It is a clean slate that allows the implementation of the latest technologies, designs and best practices.
Brownfield data center, on the other hand, refers to the expansion or modification of an existing facility, which comes with the challenge of working around current structures, systems, and limitations in terms of space, power supply, and cooling. Previously, data center locations in Asia were primarily limited to Hong Kong and Singapore. Now, India’s strategic advantages, such as ample availability of land, efficient resources and favorable government policies, have attracted significant investment.
Selection of land for data centers is a particularly important factor, and India stands out due to its abundance of natural resources, rapidly improving power infrastructure and available land. Many other Asian countries face space and power-supply limitations, but the runway for data center expansion here is clear. India’s data center market size was projected to be 1,675 MW in 2023 and is expected to reach 4,770 MW by 2029 with a compound annual growth rate of 19%. Total installed racks are projected to reach more than 710,000 units by 2029 – mostly located in Mumbai – up from around 250,000 in 2023.
Mumbai now accounts for 52% of the total data center inventory in India, followed by Chennai, Delhi and Hyderabad. This growth is primarily driven by hyper-scalers, with companies like Amazon and Google actively investing to capitalize on India’s huge potential. And, while geopolitical factors are influencing the expansion of Chinese cloud giants Alibaba and Tencent in the region, domestic organizations in India and the adoption of cloud and Artificial Intelligence (AI) strategies are significantly contributing to the growing demand for data center services. .
Digitization is another major factor driving the growth of the industry. With a population of over 1.4 billion people, India is witnessing a rapid shift towards digital transactions as smartphone penetration and connectivity levels are increasing rapidly. This digital transformation combined with data residency regulations has increased the need for localized data centers with banks and other financial institutions among key customers. As India’s data center industry expands, sustainability and environmental considerations are also gaining prominence. While the country may lag behind Europe in terms of innovative data center initiatives such as waste heat recovery (capturing and reusing heat in heating systems or other industrial processes), the industry is investing in renewable energy sources.
Energy-efficiency measures include advanced cooling technologies that require less water, adopting sustainable construction practices such as using eco-friendly building materials and implementing energy-efficient designs, and proper disposal and recycling of electronic waste. Taking responsibility.
In India, data centers are planning to inject equity into renewable energy plants by focusing on construction and cooling methods including liquid immersion cooling and direct contact liquid cooling. Sustainability is a key area of focus for the data center industry; These goals include achieving net-zero emissions in all operations by 2030 and 100% renewable energy in data centers by 2030. Monitoring data centers is important to track energy consumption, carbon emissions, and other sustainability metrics. However, despite the growth of the data center industry, there are some challenges that need to be addressed.
As more data center providers set up shop in India, often building more centers in certain states with the help of government benefits, price wars could lead to some consolidation and impact the overall profitability of these providers. Additionally, India’s data center skills shortage and supply-chain disruptions caused by the COVID-19 pandemic are hurdles to overcome.
However, continued demand for data centers driven by cloud adoption, digitalization and the rollout of 5G technology – which will drive data consumption even higher – offers immense growth potential, and favorable government policies further contribute to this positive outlook. Over the next five to seven years, expect nothing but growing demand in this industry as it drives India’s digital transformation.
This article is written by Vimal Kao, Senior Director, Products and Services, NTT Global Data Center and Cloud Infrastructure, India.
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