Given the present concentration of data centres in tier-1 cities, smaller cities and towns in India offer untapped potential for the data storage market
With increasing digitalisation in India, the demand for data storage is on a steep rise. The data processing and storage market is estimated to expand from $56 billion in 2020 to $90 billion by 2025, according to a report by India Brand Equity Foundation. At present, India's aspiration to become a global data center hub faces challenges ranging from concerns around high energy demand, to gaps in the talent landscape.
But innovative sustainability practices and flexible manufacturing capabilities can open up vast opportunities as well, believes Khalid Wani, senior director of sales at Western Digital India. In an interaction with Outlook Business, Wani offers his insights into the data storage industry in the country and on how Western Digital plans to stay competitive in the market. Edited excerpts:
What are some of the latest trends in India's data centre market?
Organisations now depend more heavily on data and the associated Information and Technology (IT) infrastructure. As this reliance on data continues to grow, there is an increased need for robust, reliable, scalable, and sustainable data centres. This rise in data coupled with an increasing focus on data protection and data localisation policies is driving the demand for data centres in the region. Currently, India ranks 13th globally in terms of the highest number of data centres (DCs), boasting a total of 138 operational data centres and 45 new data centres are expected to come up by the end of 2025.
In the Indian market, we observe two emerging trends: a growing demand for colocation data centres and the emergence of newer edge data centres. These trends underscore the unique dynamics of demand in the region. While the need for data centres is on the rise, not all organisations are willing to commit to the substantial investments and management responsibilities that data centres entail. In such cases, colocation services offer an attractive alternative. Consequently, the colocation market in India is expected to increase at a CAGR of 16 per cent to reach close to $1.4 billion by 2025.
Currently, the majority of data centres in India are concentrated in Tier 1 cities, leaving the potential in Tier 2 and Tier 3 cities largely untapped. Mumbai accounts for approximately 45 per cent of all data centres in India, followed by Chennai at a distant second. Interestingly, global industry players are now exploring alternate cities like Pune, Ahmedabad, Jaipur, and Coimbatore, primarily due to the smaller size of these data centres, typically below 5 MW.
Given India's aim to turn net carbon zero by 2070, how can the country meet the energy requirements of the data centre industry?
Considering data centres are massive energy consumers, making data centres sustainable is extremely important. It is encouraging to note that several upcoming data centres in India are investing in renewable energy facilities. In fact, there are a few facilities in India that have achieved 100 per cent renewable energy use in data centres. Data centres are also considering using efficient storage technology to reduce the need for multiple servers.
One effective way to increase efficiency is to pack more density into a given space or use higher-density hard disk drives (HDDs) in DCs. For example, if a DC uses a 22TB HDD, in the same form factor, instead of an 10TB or 8TB HDD, then by simple math it would need about 75 per cent to over 93 per cent less space to store the same amount of data. This ultimately means the need for many fewer racks, and all of the associated network, cabling, etc. in a smaller footprint, and therefore reduced cooling requirements.
How can enterprises improve their data centre sustainability practices?
Data centres are significant consumers of electricity, using approximately 2 per cent of the world's power and emitting CO2 equivalent to the airline industry. Their energy use doubles every four years, resulting in one of the fastest-growing carbon footprints. Embracing renewable energy sources, as seen with cloud giants, is a key strategy. In addition to renewables, data centres can explore innovative cooling technologies such as immersive, liquid, and evaporative cooling. Data centres can also start looking at parameters like BHMS (Battery Health Monitoring System), IBMS (Integrated Building Management System) and EMS (Energy Management System).
Data centres can improve their sustainability practices by focusing on making computing, networking, memory, and storage technologies more efficient. CIOs should consider using the highest-capacity HDDs. For example, using new 22TB HDDs versus 16TB HDDs to deploy 2PB of storage would require 27 per cent fewer servers and use 26 per cent lower energy consumption (1PB equals 1000TB). There is also less infrastructure and maintenance cost by eliminating the extra servers.
Another effective method to reduce power consumption in storage is the use of helium-filled hard drives instead of air-filled ones. Helium's lower density, one-seventh that of air, reduces turbulence within the drive, thereby decreasing the drag on spinning disks, and ultimately leading to lower power consumption.
Beyond high energy requirements, what are the other main challenges in India's data centre market?
One major challenge lies in the skills landscape. The rapid expansion of the data centre industry demands a skilled workforce proficient in specialised areas such as structural design, cooling design, sustainability, edge computing, and automation.
Additionally, India's aspiration to become a global data centre hub necessitates robust infrastructure. Ensuring uninterrupted electricity supply is vital, as power disruptions can lead to operational downtime and data loss. Reliable power backup systems and grid stability are crucial to mitigate these risks. Efficient cooling is another significant challenge, particularly in India's tropical climate. The high server and equipment density generates considerable heat that must be effectively managed.
There are several big international and domestic companies investing in the Indian data centre market. How does Western Digital plan to stay competitive?
Our overall strategy is to leverage our innovation, technology and execution capabilities to be an industry-leading developer, manufacturer and provider of storage solutions. We strive to successfully execute our strategy through our innovation, a broad product portfolio and operational excellence.
As a result of our strategy, our products differentiate us as a leading developer and manufacturer of integrated products and solutions based on Flash and HDD. Also, we have efficient and flexible manufacturing capabilities, allowing us to leverage our R&D and to deliver cutting edge storage solutions to the market. Lastly, deep relationships with industry leaders across the data ecosystems gives us broad routes to market.
What are some of the key objectives that Western Digital has for the Indian market?
We are a consumer-focused and market-driven organisation and are constantly studying the needs of our users and building solutions around those. As a result, SanDisk, our brand has retained the top spot with a 64 per cent share of Q2 2023 consumer storage market in India. We expect Q3 to also be a strong quarter driven by the upcoming festive season.
If you look at the data storage market in India, it has been on a high-speed growth mode ever since smartphones evolved into multi-functional devices. We see a strong demand for our products as a whole in the next three to five years. The adoption of high-end smartphones is also driving the content creation market. We launched the SanDisk Professional portfolio last year to address each and every need across this workflow for content creators. We look at the content creator community closely.
Looking at it from a gaming standpoint, we have a dual objective. We aim to establish WD_BLACK as a leading gaming brand, positioning it as the preferred choice within the gaming community and ecosystem. In terms of initiatives, we remain steadfast in our commitment in supporting the gaming community and ecosystem through ongoing gaming and esports-focused initiatives. On the business-to-business side, Western Digital has three key focus areas: smart video solutions, automobile ecosystem and hyperscale, cloud and enterprise data centres.