How is India benefiting from the pause in data centre expansion in Singapore
In the increasingly digital world we live in, the consumption of data has been growing exponentially in recent years. The COVID-19 pandemic which has caused people to work and school from home has augmented this trend resulting in even higher demand for digital services.
By Lee Kah Whye In the increasingly digital world we live in, the consumption of data has been growing exponentially in recent years. The COVID-19 pandemic which has caused people to work and school from home has augmented this trend resulting in even higher demand for digital services.
Around the world, digitalisation in the workplace and soaring use of internet-related services especially during the pandemic has significantly boosted global data centre utilisation. There is also a rise in the use of productivity applications like customer relationship management tools, enterprise resource planning and databases, big data, artificial intelligence and machine learning, virtual desktops, communication and collaboration applications. In our daily lives, we are increasingly reliant on digital devices. There are currently more than seven billion Internet-connected devices that generate and use data. These data need to be captured, routed, stored, evaluated and retrieved. With the proliferation of the Internet of Things (IoT), manufacturers are relying on big data and data analytics to enhance the efficiency, productivity, security, and cost-effectiveness of their operations.
Adding to the demand for data services is the popularity of social media. For example, YouTube has seen phenomenal growth in a video being uploaded to its platform. Five years ago, about 80,000 hours of video were uploaded to YouTube a day. Today, this has grown five-fold to 720,000 hours with one billion hours of video being consumed on YouTube every day. Video-on-demand streaming services and OTT (over the top) television services also require data bandwidth and storage.
Last week, Alibaba Cloud while unveiling its new server chip, Yitian 710, also announced plans to expand in the Asia Pacific region by setting up data centres in South Korea and Thailand in 2022. The aim is to tap the opportunities presented as these countries continue to digitise and transform their economies and businesses. Earlier, it had announced the launch of its first data centre in the Philippines. Besides China, in the Asia Pacific region, it already has data centres in Japan, Singapore, Australia, India, Malaysia, and Indonesia. This comes on the back of Amazon Web Services (AWS) plan to open an infrastructure region in New Zealand in 2021. AWS had already announced plans to operate AWS Regions in various countries including Australia, India, and Indonesia.
A research report published in September by IMARC, a Noida-based international research firm, said that the global market for Internet Data Centres is expected to grow at a CAGR (compounded annual growth rate) of 13.4 per cent to USD 143.4 billion by 2027 from USD 59.3 billion in 2020. Earlier in October, Fitch Solutions reported that the "demand for data centres will continue to grow amid digital transformation and cloud-based solutions" with Southeast Asia set to become one of the fastest growing data centre hubs globally. Fitch expects the region will continue to see significant investment in digital infrastructure and data centre development.
Within Southeast Asia, Singapore is the leading country for data centres with over 60 per cent of the region's data centre supply situated on the tiny island. There are many reasons for this. Singapore has abundant availability of high-bandwidth communications infrastructure and sub-sea connectivity with the region and the rest of the world. It has proven capability in managing data privacy, cyber security, and a well-trained IT workforce. Furthermore, it is generally free from natural disasters and has reliable and ample power transmission networks.
There has been a rapid expansion of data centres in Singapore recently. Fourteen data centres with a total IT capacity of 768 MW (megawatts) were approved in the last five years to 2020 compared with 12 data centres carrying 307 MW in the preceding five years. There are now about 60 data centres in Singapore. However, data centres with their servers, equipment, and cooling systems have a huge energy appetite. According to Singapore's Ministry of Trade and Industry (MTI), data centres accounted for about seven per cent of total power consumption in the city-state in 2020. This is also detrimental to the environment.
Singapore's MTI, therefore, announced a halt to approvals to build new data centres in 2020 until the end of 2021 while it reviewed how it can strike a balance between environmental sustainability and supporting business needs. The pause on data centres has benefited Indian cities in their efforts to attract data centres.
In March, Singapore headquartered Princeton Digital Group (PDG) announced that it was planning to build its first data centre in India which will be on a greenfield campus in Navi Mumbai. The facility will have 48 MW of critical IT capacity across two buildings and is scheduled to be ready in 2022. PDG was founded in 2017 by US private equity firm Warburg Pincus and two former Tata Communications executives. Singapore's largest private property developer, CapitaLand in July announced its first data centre investment in India. It will spend an estimated USD 160 million to develop and operate a complex also in Navi Mumbai.
With six submarine cables with a total bandwidth of 14.8 terabits per second, southern state of Tamil Nadu is well placed to take advantage of data centre hiatus in Singapore. It was reported in the media that Japan's NTT, Singapore's PDG and ST Telemedia which is owned by state investment firm Temasek Holdings, are poised to start work on building data centres in Chennai. In Noida, there are reports that global companies including Microsoft, NTT and Singapore's STTelemedia are building data centres in Noida.
In June, ST Telemedia announced that its subsidiary ST Telemedia Global Data Centres India (STT GDC India)has started construction on its greenfield sited data centre facility, STT Noida DC-1. The USD 150 million facilities will offer up to 35MW of critical IT load. Phase one which has an 18MW capacity is due to be completed by June 2022. It added that consistent with their focus on sustainability, the new data centre will be a green building and source more than half of its power from renewable energy sources. During the launch of the new project, Sumit Mukhija, CEO, STT GDC India, said, "Our decision to expand in Noida is driven by the continuing rapid growth in the Indian data centre industry supporting the massive digital transformation that the country is experiencing. The promise of Noida emerging as a new Data Centre hub is well supported by progressive policy impetus at both the Central and State governments." (ANI)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)