Digital Realty Signs India Data Centre MOU 

Digital Realty Trust has taken its first step towards establishing a presence in India’s data centre market as it moves to capitalise on the booming data economy in the South Asian nation.

The San Francisco-based data centre REIT manager has signed a memorandum of understanding with Adani Group, an Indian conglomerate with interests in coal mining and renewable energy, to jointly assess the feasibility of building data centres and related infrastructure in India.

The agreement between the data centre investment specialist and the Indian firm helmed by tycoon Gautam Adani opens the door for a firm which owns and manages 214 operating data centre facilities globally to enter the Indian market.

New Infrastructure Critical

In announcing the preliminary agreement Digital Realty and Adani said that they would evaluate opportunities to jointly develop and operate data centres and data centre parks, as well as installing undersea cable networks.

“We are excited by the opportunity to enter the Indian market with the Adani Group,” said Digital Realty’s chief executive officer, A. William Stein. “The Adani Group’s understanding of real estate development, energy, cooling technologies and access to connectivity across the nation will be critical to providing a world-class experience to a customer base that sees India as one of the largest and fastest growing markets in the world.”

Adani Group said that building up a data centre infrastructure is critical for India to keep up with the country’s digital growth.

“This partnership leverages several of the capabilities developed by the Adani Group in power generation, transmission, retail electricity distribution, access to waterfronts through the ports business, and real estate management,” said Adani Group’s chairman Gautam Adani. “Also, as one of the top five renewable energy companies in the world, our ability to power our data centres with solar and wind energy is unique and addresses some of the challenges of building and operating data centres.”

Growing Investment in the Data Centre Market

The announcement comes two months after Adani confirmed an INR 700 billion ($9.9 billion) data centre investment initiative based on a memorandum of understanding signed with the state government of Andhra Pradesh in southeastern India during January.

The capital will be invested over the next 20 years and will fund the development of three solar-power data centres as well as a 5GW solar park.

The India data centre market, which is projected to be worth $7 billion by 2020, has received increasing interest from both domestic and international players.

Just last week, US cloud infrastructure developer Oracle launched its first data centre in the country.

The Mumbai-based facility powers Oracle’s Generation 2 cloud service which is set up to compete with parallel offerings from AWS, Google, Microsoft and IBM. Oracle plans to open another data centre in Hyderabad next year.

In July, Mumbai-based developer Hiranandani Group announced an INR 140 billion investment plan that will see its first 500MV data centre park open this year at the Hiranandani Fortune City in Panvel, just south of the capital, while promising two more – one each in Chennai and Mumbai.

Digital Realty Expands Its Asia Presence

Digital Realty’s first step towards entering the Indian market follows recent moves by the company to enlarge its presence in Asia Pacific, a data centre market that is projected to overtake the US by 2024, according to Cushman & Wakefield.

Just last month, the company’s $1.76 billion JV with Tokyo-based Mitsubishi signed an agreement to acquire its second plot of land in the Japanese capital.

The two plots, which cover a combined a 430,000 square feet, have the potential to become three facilities of 36MW, 30MW and 18MW, according to data centre journal DataCenter Knowledge. Its 7.6 MW data centre in Osaka was launched two years ago.

Cushman and Wakefield indicated in a report last year that India is the second-fastest growing data centre market in Asia after China.

According to a joint blog post by Cushman & Wakefield’s director of research for data centre and Propstack co-founder Raja Seetharaman, the data centre market is being driven by an explosion in the country’s data consumption, which is expected to reach 2.3 million petabytes by 2020, growing from 40,000 in 2010.