The COVID-19 pandemic has highlighted the vital importance of data centers. The concept of Edge Data Centers has grown rapidly since their inception. In recent times, there are many international players that are entering the Indian data centre market. We believe this segment will continue to attract more investments in the years to come, says Vinit Dungarwal, Director, AMs Project Consultants Pvt. Ltd, in an interaction with CIO AXIS.
1. What role real estate developers/ project management consultants can play in developing quality data centres?
Vinit Dungarwal: Data centres of today need to be cost-effective, efficient, and responsive. Right from the project planning stage, to acquiring the land and even managing the operations in some cases, Project Management Consultants and Real estate developers play a pivotal role in the development of data centres. It is a part of their job to coordinate with various vendors and agencies, keeping a close tab on the work and ensuring that the work is completed within set budgets, on time and the quality is not compromised in any way. They also have to make sure that all the safety measures and labour laws are adhered to.
In recent times, there are many international players that are entering the Indian data centre market. These players have limited knowledge about how things function in the country and having a project management consultant, or a real estate partner can ensure smooth execution of the project.
2. A recent report has predicted that the positive demand for data centres is expected to be boosted by 15 to 18 million square feet over the next 4-5 years. What are your views in regard to India’s growing demand for data centres?
Vinit Dungarwal: In 2020, the Indian Ministry of Electronics and Information Technology announced its draft Data Centre Policy, which is designed to make the country more attractive for domestic and foreign investment into the data centre sector. The mobile internet users in India stood at 749 million in 2020 and are expected to grow to over 1.5 billion by 2040, which presents a huge market opportunity.
In the past few years, there has been a flurry of investments in this segment which has been a result of a confluence of factors. The size of the data centre market in India is expected to touch $4 billion in the next 3-4 years.
In addition to this, the Indian Economy is in recovery mode and expected to grow at a similar pace for the next 10 years. Despite the pandemic, the Indian Market has remained stable, which has infused trust amongst investors and foreign players that their investments are safe in this country. All these factors make the Indian market quite lucrative and will help in attracting more players in the data centre space.
3. Which Indian city do you feel has the potential to emerge as a data centre hub. Will it also reach tier 2 cities of India?
Vinit Dungarwal: Data Centres are thriving in Navi Mumbai, Hyderabad, Chennai, Bangalore, and Noida. At the current juncture, not many tier 2 cities may benefit from the current boom. However, in the next two years, there is a possibility that some of the tier 2 cities will start emerging as data centre hubs.
There is a lot of potential for growth in India and that is evident from the rising demand of Datacentres and the sheer volume of cables that are being laid around the established hubs.
4. How big will be the market for Edge Data Center in India? What is the potential?
Vinit Dungarwal: Small data centres that provide cloud computing support and processing by expanding the Edge of the network are mostly labelled as ‘Edge data centres’. The turnaround time for these centres is faster as they are geographically closer to the end-user. It is likely that a single Edge data centre may be connected to many other Edge data centres that can be used to store, process and cache data and deliver the required information when needed – at the right time at the right place.
There has been a strong push towards digital transformation by the Indian government in the last few years. One of the key initiatives undertaken by the government is the Smart Cities Mission under which 100 Smart Cities will be rolled out in four phases. These Smart Cities have given rise to the need for more data centres. Owing to some of these being present in Tier-2 and Tier-3 locations, Edge data centres will play a crucial role. Many Indian companies in the last three months have shown interest in the same and have explored the options of investing in data centres in India. We believe this segment will continue to attract more investments in the years to come.
5. We are witnessing a huge surge in the integration of technology in various verticals, has this also been implemented in Real Estate?
Vinit Dungarwal: There is a lot of technology integration that is happening in real estate, but it is not at the same pace as the other sectors. The pandemic did force the segment to brace a lot of changes in a short span of time. However, the segment still has a long way to go.
6. How Proptech is going to aid the real estate industry?
Vinit Dungarwal: Prop tech has been around for a while but in this post-pandemic world, it has become more mainstream. It’s disrupting the real estate industry at a considerable pace due to the cost advantages that it offers. Even before the pandemic, Contech was being used extensively to enable real estate companies to make better choices at the development stage and enable real estate companies to be more environmentally conscious. The prop-tech tools are being used extensively for site management. Scheduling is another area where prop-tech can help not just real estate, but any company avoid crowding and manage their workforce better. We believe that prop-tech has the potential to change how buildings are constructed and planned in this new normal and we are just beginning to see how best we can use all the tools that we have at our disposal.