Lifted by a push to localize data and overall economic growth, India is expected to see a surge in data centers, according to CapitaLand, a real-estate company that specializes in data centers. In a conversation with Digitimes Asia, Surajit Chatterjee, managing director for Datacenter (India) at CapitaLand Investment explained that the growth is expected to be steady over the coming years.
"At CapitaLand, we are very optimistic about the data center sector's expansion. Factors such as digitization trends, government initiatives in IT infrastructure, and infrastructural developments are fostering growth in this domain," Chatterjee said. "We anticipate a steady Compound Annual Growth Rate (CAGR) of approximately 20-25% over the next five to seven years. Our strategy involves significant investments in building high-capacity data centers across India and closely collaborating with large enterprises and hyperscalers to meet their specific needs."
Perhaps more interestingly, major data center customers are also looking for sustainable systems that could align with their corporate policies and commitments. Toward this end, CapitaLand is witnessing a growth in the increase in "green data centers," according to Chatterjee.
"Green data centers are becoming a necessity in India," Chatterjee added. "Major organizations are increasingly focusing on sustainable practices, which include using renewable energy sources and implementing eco-friendly designs. We foresee a mandate for green data centers emerging soon in the country."
Privacy and cybersecurity boosting growth
CapitaLand's expectations come as the Indian government considers all options to improve data protection, and ensure privacy and cybersecurity.
"The implementation of data center policies by states and recent data privacy legislation has encouraged keeping data within India, benefiting the data center industry," Chatterjee said. "The demand for data centers is rising, not just in metropolitan areas but also in tier-II and tier-III cities. The rollout of 5G technology will further boost this sector."
With significant investments already made and more planned, the demand from both cloud players and enterprises post-COVID is robust. CapitaLand's focus includes land banking, securing power, and preparing for AI-driven infrastructures.
"CapitaLand aims to solidify its position in India and explore new geographies within the country," Chatterjee said. "Our target is to reach 300 megawatts of IT load by 2027-2028. Regionally, we're also present in markets like Singapore and Malaysia and are looking to expand in other prominent countries in the Asian market. CapitaLand is continuously evaluating opportunities for greenfield projects, strategic acquisitions, and joint ventures across Asia."
Challenges in the process
But the rosy picture isn't without challenges. Chatterjee pointed out that the challenges include navigating complex regulatory environments and securing essential resources like land and power. The company has overcome these through strong stakeholder relationships, collaboration with government bodies, and robust infrastructure and power systems. Skilled talent acquisition and training are also a focus to manage these complexities effectively.
"We focus on efficiency, resiliency, and scalability," Chatterjee said. "Our data centers incorporate advanced cooling systems suited for India's tropical climate, aim to optimize power usage effectiveness (PUE), and integrate AI and machine learning for predictive maintenance and energy optimization. We're also exploring Software Defined Networking (SDN) to enhance flexibility and agility in our operations."
The company is also transitioning towards renewable energy usage and has designed data centers for maximum energy efficiency. Their initiatives include waste reduction, recycling programs, and the adoption of liquid cooling immersion technology to achieve an effective PUE, aligning with its goal to establish green data centers.
Conclusion
The Indian data center market is on the cusp of substantial growth, propelled by the country's digitalization, governmental IT initiatives, and a burgeoning economy. With its strategic investments and collaboration with major players, CapitaLand anticipates a CAGR of 20-25% in the sector. The focus on sustainability is evident with the rising demand for green data centers, emphasizing the use of renewable resources and eco-friendly designs.
The market expansion is supported by recent data privacy laws and the impending 5G rollout, which are expected to decentralize the demand from metros to smaller cities. Despite facing challenges like complex regulations and resource acquisition, CapitaLand is committed to overcoming these through partnerships and infrastructural resilience.
The company's strategy to integrate advanced technologies, such as AI and SDN, and to transition towards renewable energy underscores its aim to establish energy-efficient, sustainable data centers, aligning with global environmental goals and meeting the contemporary needs of the data-driven economy.
