With an existing footprint of nearly 100 MW across 12 data centres in six Indian cities, Sify Technologies is on a steady path towards growth. The company has invested about Rs 1,300 crore over the last two years, as part of its commitment to develop data centres in the country. In this interview, MP Vijay Kumar, executive-director & Group CFO, talks to Sudhir Chowdhary about the key trends in the data centre space and the company’s expansion plans.
How is India’s data centre market evolving? What are the trends that stand out?
In recent years, the data centre industry has seen a major shift in terms of scale and density. As a result of the massive expansion, India is well positioned for future growth. Tier-1 cities are favoured because of a robust infrastructure and connectivity that supports hyperscale data centre projects.
According to a report by JLL, the Indian data centre market is predicted to exceed 1,300 MW of power capacity by 2024 and 1800 MW by 2026.
Among the latest factors driving the demand for data centre space are AI, ML and IoT. The synergy between AI/ML and IoT in India is amplifying the demand for data centre space. With the proliferation of IoT devices, vast amounts of data are generated, necessitating robust infrastructure for storage and processing. AI and ML algorithms further drive this demand by requiring massive computational power for analysis and insights. Data centres serve as the cornerstone, facilitating efficient management and utilisation of this data deluge. As industries across India embrace digital transformation, the reliance on data centres grows, cementing their pivotal role in fostering technological advancement and innovation nationwide.
This is in addition to the domestic factors that spurred data centre growth. The feverish adoption of cloud services, the rise in usage of OTT and other digital content, the penetration of 5G across the country. From a regulatory standpoint, the newly formed laws surrounding data localisation and the Digital Personal Data Protection Act 2023 are also aiding the expansion of India’s data centre capacities.
Tell us about Sify’s expansion plans; how much capacity will be added this year?
Our investment philosophy encompasses expanding our data centre presence to new locations, increasing capacity at existing facilities, and fortifying network and cloud interconnectivity. Sify is committed to investing Rs 9,000 crore in a three-phased approach over the next six years, fueling significant growth in India’s data centre industry. In its first and current phase, the company has invested Rs 3,000 crore in its ongoing projects in Chennai, Mumbai, Noida and Bengaluru. Sify’s data centre campus in Rabale, Mumbai, will see an addition of 38 MW capacity. Moreover, 2024 will see the launch of two more data centre facilities, each with day one design capacity upto 86 MW. The second phase of investment of Rs 3,000 crore is for projects starting in 2025, where the company will add 100 MW over three years. The final phase of Rs 3,000 crore investment will start post 2026.
How do you see AI supporting the data centre business in the immediate future?
AI and ML play significant roles in optimising data centre operations. The implementation of these tools results in predictive analytics, automation and enhanced resource management. Sify has an active Corporate Venture Capital Fund and one of our investee companies is in the space of AI and ML. This investee company gives us needful technology capabilities to integrate AI into our systems to automate tasks, optimise resource allocation, and enhance security with AI-powered analytics providing valuable insights for predictive analysis and proactive decision-making.
Integrating AI and ML into data centre operations requires robust data collection, and skilled personnel to develop, train, and deploy these models effectively. Once implemented, these technologies enhance the efficiency, reliability, and security of data centre operations.
How do you see Sify evolving over the next 3-5 years?
Sify is clear in its mission of building the troika of network connectivity, data centre space and digital services; and the resultant unit being the most comprehensive ICT ecosystem that a CTO could ask for. To do this, the company is continuously investing in expanding the fibre connectivity across India, increasing the interconnects to the cloud while strengthening the hub and spoke connectivity model between metros and mini metros. Sify’s international cable connectivity is also being sought out by enterprises landing their data here.
On the data centre front, Sify is continuously expanding capacity availability to the market for retail, hyperscalers and built-to-suit models with new capacities coming up in major cities. Simultaneously, the company is investing heavily in bringing onstream renewable sources of power into the data centres. The digital business will also see spending on tools, people and platforms to enable servicing both captive clients as well as building its own rooster as separate business entity.