Data is the true wealth driving businesses, governments, and economies of today, worldwide. While data centers are the factories where this precious data is stored, processed, and analysed for meaningful insights, this in itself shows a clear picture of the relevance and significance of data and data centers in the present era. Shedding light on the establishment, growth and near future of India’s data center industry, Royce Thomas, President and Chief Business Officer, CtrlS interacted with Express Computer in an exclusive interview. The conversation also brings forth CtrlS’ business plans and strategies for India and highlights the massive IT potential the country holds.
How has been the growth of your data center business? What are your business plans and strategies for the Indian market?
At CtrlS, we currently have 12 data centers across seven different locations. We currently have about 230 megawatts of capacity deployed across those markets. We have five core markets – Mumbai, Chennai, Hyderabad, Noida, and Bangalore. Moreover, we are expanding to build out a new sixth core market in Kolkata. There’s a part of our strategy where we are building Edge data centers beyond these core markets. Currently, we have built Edge data centers in Lucknow and Patna. These smaller data centers have interconnection hubs with all the core network providers, CDNs, and OTTs. As these markets evolve, we will be able to deploy more services at the Edge. At present, we have deployed these two Edge data centers, further, we plan to take this count to 20 edge markets over the next couple of years.
When we analysed Kolkata, as an Edge market, it became clear to us that this holds the potential to be our next core market. A core market addresses both retail colocation enterprise needs and locations for cloud providers and hyperscalers. Also, we observed that the position of Kolkata in the northeast is kind of a gap in the Indian market in terms of where Cloud can be accessed.
Therefore, we believe that the growth of the hyperscalers within India will go to Kolkata. Hence, instead of Kolkata being an Edge data center, it has to be core. We will build a 10 megawatt facility, which we can further expand to over 100 megawatts in times to come, depending on our business plans and strategies.
From our perspective, the largest markets are Mumbai, Chennai, and Hyderabad respectively. As per our investment plan and strategy, the intention is to scale from 230 megawatts to almost a gigawatt capacity. Much of that growth in terms of volume work will occur in these top three markets. Simply because Mumbai has around half the market while Chennai is about 30 percent of the market, then Hyderabad, and then it spreads out.
Our investment plan is to be able to scale our campus in Mumbai, which is the largest campus in the city. We have already built five data centers and we just broke ground with our sixth and seventh centers in Mumbai. So, the campus alone will be able to support up to about 300 megawatts of capacity. With this, we’ve got a long runway there. However, the market is becoming more and more competitive. A lot of players have stepped into the market, but that’s a good sign too.
We have a multi-pronged strategy and our focus is on hyperscalers. Besides, we also focus on retail colocation business, addressing the needs of enterprises across the industry with a few key sectors like BFSI, pharma, and manufacturing, especially in the Mumbai campus. We have a robust enterprise market, in addition to the hyperscalers. Hence, Mumbai will be a huge investment.
Further, we are currently building two data centers in Chennai. The first one is completely for hyperscalers while the second one will be for other customers. We anticipate that Chennai will continue to be a growth market and we plan to expand beyond the current facility to build a campus as appropriate. Chennai is where subsea cable systems are landing and Mumbai is another city with subsea cables. This makes the two cities the east and the west coast hubs.
Hyderabad is where we have our third largest data center market. We have two operational facilities. The third one will open shortly. Also, this was the original market that we were in, back in 2010. So, back then, we had two and now we have 12 datacenters. We also have a hyperscale campus in Hyderabad that we can build up to 250 megawatts.
Then we have our presence in Noida and Bangalore, which are more enterprise-focused at present. However, they do have a good number of networks, a few content providers, and some cloud providers.
Now, besides hyperscalers and retail colocation, our third focus is managed services business wherein we provide private management service for enterprise customers. Moreover, the fourth area of focus is new and that’s our network business. CtrlS Connectivity Services spans metro network connectivity between data centers, Cloud Connect to the cloud providers, Amazon, Google, Microsoft, Oracle – those all are or will be accessible across our entire footprint. As enterprises undergo digital transformation, they will implement hybrid architectures, private or public clouds, and also build their private infrastructure to keep and control their critical data and applications. So that’s how our go-to market engine works across those four different segments – hyperscalers, retail colocation, managed services, and networks.
Above all, we are aiming to become carbon neutral by 2030. We are investing in 153-Megawatt Peak (MWp) solar projects across three markets, that will generate 2,50,000-Megawatt Hours (MWh) energy annually. This includes a 145 MWp solar project in Maharashtra that will be fully owned and operated by the company. By 2025, we plan to invest in additional 300 MWp projects. As an organisation, we aim to achieve our Net Zero goals through a multi-pronged strategy, going beyond renewable energy. We will further enhance our water conservation measures by deploying more advanced water recycling technologies in line with our goal of 100 percent usage of recycled water at all of our data centers.
CtrlS was one of the few homegrown companies focusing on the data center business. Did you get the first-mover advantage of capturing the majority of opportunities? Also, as we see not only Indian but many foreign entities are setting up shops here. How are you trying to stay afloat?
We are more than staying afloat. If we see the list of our customers in Mumbai, it’s the who’s who of the enterprises. Most of the top banks in India and several renowned global banks are our customers. The BFSI segment is catered by our first two data centers. Therefore, from a legacy perspective, we have been able to build a very solid enterprise customer base, which can be difficult to win when you come into the market. On top of that, being an early entrant in the industry, we have developed relationships with four of the five top cloud providers when they entered the Indian market. Earlier, most of the cloud providers were based out of Singapore. And, when India finally became a market, then all of them felt the need to have a presence here.
CtrlS was in the right place at the right time to capture the initial implementations for some of the cloud providers. We feel like we’re well-positioned with the customer base to grow further. In addition, we have expanded to work with most of the top clouds across our footprint. We built a strong foundation with our enterprise customers and we were able to capture the cloud, the cloud business, before all other players decided to enter the market.
Today we see many global brands have entered the market. Also, India is catching up and therefore, we see billions of dollars in investment. A lot of it is focused on the hyperscalers. However today, it’s even accelerating further with the new AI and ML nodes in India as a market where there will be AI clusters. This is driving the next set of demands beyond the initial cloud deployments. So, we feel like our basic business, networks, the Internet exchange that we have built, and all the ISPs that are in our facilities, provide a foundation for both enterprise customers and the cloud to connect to the end users.
With the influx of new players in the market, how easy or difficult is it to convince prospective customers to choose CtrlS over others?
For any company, including us, it is always difficult to win a customer. Knowing how to build a data center here in India is a different game altogether when compared with other markets. So, in that way, we had an advantage over some foreign players. We have the know-how, vendor base, and skill set to be able to effectively build data centers in India. Also, we have an in-house engineering and design capability that enables us to work closely with our vendors to design, build, and operate facilities here. So, getting permits, power, knowing the domestic supply chain and its alignment, gives us an advantage and edge over some big players despite their money and experience.
Until a couple of years, it was being said that India would eventually become a data center hub, especially in the Asia Pacific region. So does this analysis still hold?
Yes, I think it will be. India as a market is self-significant and it is a major reason why we see investments flowing in for not just data centers but manufacturing as well from across the globe. An example could be the role of the Indian government to fast-track Tesla’s entry into the market as the EV market was taking off.
India is an alternate manufacturing location and the government is fully supportive of driving the economy here. The data center market in the country is on a growth trajectory for the next 10 to 15 years. However, with new cable systems that are being built, India will definitely be a hub between Southeast Asia and Europe. Moreover, as a hub, the global data traffic will flow through, in and out, and this is where data privacy regulations come into play
So does the DPDP Act, the data protection legislation that we have now, will have some sort of impact on the overall data center industry?
Most developed and developing countries across the globe have data privacy laws and regulations. These laws drive the need for more data centers to keep data resident to run the applications on that data locally and not transmit the private data outside of the country. This goes for companies who build their own private clouds, as well as the cloud providers who store and analyse the data within the cloud infrastructure. It has to stay local.
As an example, if we look at what’s happening with Chinese applications. A lot of them have been banned. Now, if they have to set up their business again in the Indian market, they have to work with local data center operators and set up a fresh instance of the application.
From the technology standpoint, where do you see the demand really coming from? Now that we are seeing use cases of cloud, what’s your take on AI and its adoption?
It’s not just about AI as a huge driver. Let me divide that into segments that we work with in the enterprise space. As per our experience in India, many Indian companies operate their IT infrastructure in their office. Those are not great locations for highly reliable and safe computing. Most of those closets that I’ve seen, they are not the nicest places for servers. Therefore, in the enterprise segment, we see that customers are moving out of their own premises into colocation facilities. They either buy their own space and power or deploy their hardware, which I call as ‘do it yourself’ (DIY). Otherwise, they reach out to a managed service provider, like us, and we help them build out the infrastructure and manage it for them inside our facilities.
In this digital transformation where they are moving from on-prem to a more secure and reliable location, building disaster recovery is a key driver. And that is continuing to be a key driver. Cloud is also a driver of this, as customers need access to the cloud. They are optimising applications and analytics that work best in the cloud. Accessing those from colocation is much better than your on-prem data center.
In addition, I do think we are at the beginning of where enterprises figure out how to use AI and what’s the value of AI. Moreover, the applications that are being developed to harness the power of AI are in a nascent stage. Hence, I do believe that it will be a key driver of data center development for the infrastructure to support the AI nodes, which are completely different from even the cloud infrastructure for the cloud service providers. The amount of power that they need and cooling is about twice or thrice or even more than a normal cloud infrastructure. Therefore, those AI pods will definitely be driving consumption of current capacity and current builds, and necessitating extrapolation of new data centers. How that plays out in terms of private AI and how that works for enterprises, I think we have just started seeing the initial trends.
With the massive surge in adoption of AI applications and Cloud technologies, the demand for AI and cloud ready data centers is on the rise. CtrlS will invest in several key technologies and strategies in areas such as advanced cooling, power management, and overall infrastructure design in its new hyperscale data centers. These will include Liquid Cooling (Direct-to-chip or immersion cooling), AI HVAC, AI Optimised Rack Layout, High-Efficiency Power Infrastructure etc., and will provide a plug-n-play environment for emerging technology service providers to grow their IT footprint seamlessly.