On 5 August, Hiranandani Group—one of the largest real estate developers in the country—put out a double-sided front-page ad in one of India’s leading business dailies. The spread itself was not unusual for the Group, with big banner advertising par for the course in realty. Its contents, however, absolutely were. The ad announced ‘India’s first data centre park’, being built by the group’s newly-founded technology arm, Yotta Infrastructure—a full-fledged data centre and managed services company.
The ad followed a round of media interviews in the third week of July, where the Group announced plans to invest over $2.1 billion to set up three data centre parks, two in Maharashtra and one in Chennai. The parks will have a total of 60,000 racks—the physical steel and electronic framework for data servers—and an IT power capacity of 500MW, sourcing power from captive solar and gas power plants.
The Hiranandani Group is taking no half measures—it has appointed Sunil Gupta as CEO of Yotta. Gupta is the former executive director of Netmagic Solutions—one of India’s leading cloud and managed infrastructure services companies. In fact, the Hiranandanis learned the ropes of the data centre business while working as a builder for Netmagic, setting up the company’s hyperscale data centre in Andheri East, Mumbai, in 2014-15.
It was here the Hiranandanis realised the commercial potential of data centres. The pricing per rack—each being about 20-25 square feet—is at least 7X to 10X what a developer would get for premium commercial property.
Setting up a data centre facility isn’t easy. The key inputs are land, power (to run the servers and maintain cooling) and the ability to negotiate government clearances—which could go up to 60 permissions across 15 government departments. But as internet giants such as Amazon and Google look to expand their data centre footprint in India—bringing them closer to users, improving service quality—the need for data centres is rising. And builders and infrastructure companies are flocking to service their needs.
There has been a spurt in demand for data centres over the past three-four years. Netmagic, the largest data centre player in the Indian market, has already sold out its upcoming hyperscale data centre in Mumbai.
According to a report by Nasscom and Deloitte, the Indian cloud computing market will grow to $7.2 billion in the next three years. This will drive the demand for data centre facilities, as cloud majors and internet giants host data in third-party locations. In 2018, the cloud market stood at $2.5 billion.
The data centre business may also get another shot in the arm with a possible government dictum on data localisation. This would force companies to host data within the country. The draft data protection bill, currently in the works at the Prime Minister’s Office, could be announced at any moment.