All cables lead to Chennai

With digital becoming all pervasive across business functions and daily lives, data generated within companies runs into terabytes, and has created the need for massive investments for data storage and cloud computing services. What was once in small server rooms has moved to mammoth data centre (DC) setups. And, thanks to their strategic geographic location, Mumbai and Chennai have emerged top picks for DC players to set up shop.

Availability of land, proximity to submarine cable landing stations, dense fibre connectivity and high voltage power distribution networks, work in favour of both cities. However, Chennai’s strong undersea cable network, abundance of IT and non-IT talent, a diversified business ecosystem, and lower set-up and operational costs give it an edge over Mumbai, say analysts.

Industry estimates that India currently houses around 800 MW of installed DC capacity, mostly in these two cities. And companies plan to add around 1,000 MW in the next 2-3 years, with growth rate in Chennai expected to be 22% -- higher than Mumbai’s 14%.

“Chennai serves as an alternative data exchange hub for Asia Pacific with some natural advantages such as a large pool of available land that can be developed into state-of-the-art data centre facilities. Further, Tamil Nadu has an excellent opportunity to be at the forefront of green energy by attracting global DC players looking for sustainable growth,” said analysts at research firm Mordor Intelligence in recent note.

Chennai is home to large DC players including Sify Technologies, ST Telemedia Global Data Centres (STT GDC) India, NTT, Airtel’s Nxtra, CtrlS. More recently, the city also attracted corporate giants Reliance and Adani. While Reliance Jio has partnered with Brookfield and Digital Realty to set up the first Digital Connexion DC in Ambattur, AdaniConneX is a 50:50 JV between Adani Enterprises and EdgeConneX.

Srinivas Anikipatti, senior director, TN and Kerala, Knight Frank India, says a large chunk of international fibre optic networks land in Chennai near the Marina Beach, and then two nodes emerge out of these, one to Ambattur region and the other near Siruseri. “DCs are typically set up in industrial park lands and both these locations -- Ambattur and Siruseri -- are blessed with these lands,” he says. “Mumbai may be the financial capital, but Chennai scores as a technology destination where hyperscalers want to create capacity,” he adds. Hyperscalers refers to large cloud service providers such as Amazon, Google, and others.

“The ecosystem of vendors including electrical, mechanical, and other partners to operate DCs are also available in abundance here,” he adds.

Japanese IT infra major NTT, which invested $350 million in Chennai last year to launch the first phase of its data centre campus also notes a hyperscaler-driven market here. "As the overall global capability centre (GCC) action goes up in Chennai, hyperscalers need to create more infra, and more DCs need to be set up," Vimal Kaw, Senior Director - Products and Services, NTT Global Data Centers and Cloud Infrastructure, India, says.


Sify Technologies believes that growth of knowledge-based industries in TN is accelerating demand for quality DC infrastructure. “While there are a lot of similarities between Mumbai and Chennai such as both being in same safe seismic zones and served by multiple underwater cables, the difference is that TN offers the largest local pool of technically qualified professionals in the country,” says Prashant Pereira, VP of Data Centre Business, Sify Technologies. As a customer market too, Chennai has varied ecosystem including manufacturing, automobile, hi-tech, healthcare, etc, he adds. Sify’s ‘Chennai 01’ DC in Tidel Park has an IT power capacity of 3.6MW, and it is working on a new hyperscale DC campus -- Chennai 02 -- in Siruseri for 78 MW IT capacity

“Chennai has all the ingredients to be a data centre hub for Indian and South Asian markets. It enjoys cost-effectiveness concerning land and skilled manpower, and still has significant headroom for power availability for DCs,” says Jatinder Singh Pabla, chief sales and marketing Officer, STT GDC India. The firm plans to develop up to 80 MW of additional DC capacity across TN over the next 8-10 years.

The onus is on India and Chennai to emerge as an APAC DC hub, a status enjoyed by Singapore so far. But Singapore has now temporarily put on hold new DC developments due to land power rationing as DCs are a power guzzling sector. “Chennai also connects to Singapore via direct undersea fibre cables. This can help various regional workloads to be migrated to Chennai,” says Pereira of Sify.

However, the devastating floods in Chennai in December has complicated matters for the industry as both Ambattur and OMR were severely hit, says an industry executive. “But, from the aspect of cross border safety and crime, Chennai in the South is still considered more favourably by the industry,” adds the executive.



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