To begin with, entrepreneurs looking to enter the internet data centre business should set up exchange points in metropolitan cities to allow ISPs to talk to each other, said Jagadeesh.

However, for data centre business to be profitable in the country, it is important to have a critical mass of internet users and content providers, he added.

Jagadeesh observed that content providers have been fairly active here. "But, it is equally important to have critical mass of users," he said. Jagadeesh put the critical figure at around 6 million.

He said that Exodus may look to set up a data centre in the country only after this critical mass is achieved. Jagadeesh felt that given the present proliferation rate of internet in the country, it will take at least another two years to reach that level.

Exodus has 14 data centre in eight geographical locations across the globe.Jointly co-founded by KB Chandrasekhar and Jagadeesh, Exodus pioneered the concept of the internet data centres and today hosts 30 of the top 100 websites on the Net. A 1,400-person company, Exodus boosts of an annual revenue in excess of $200 million.

Charting the growth path of Exodus, Jagadeesh said Exodus moved from being a server hosting and internet connectivity company to offering managed services. Indian companies entering this business too have to offer niche services.

As per Forrester Research, the global internet hosting market will be worth $1.9 billion in 1999. This will go up to $6.5 billion in 2001.

Jagadeesh said that the trend in the data centre business was moving towards offering mission-critical solutions. Performance, reliability, scalability and cost-effectiveness should be the value proposition for any internet data centre.

Having peering arrangement with ISPs is important to generate traffic for any data centre. He said that in the US it costs around $6 to $7 million on an average to set up a data centre of 10,000 sq.ft.

As per Exodus estimates, it costs around $9,00,000 to manage their data in-house. However, by outsourcing the data management to internet data centre, the costs can come down to $1,50,000, said Jagadeesh.