India&#8217;s Villages are the New Frontier for Data Center Expansion
In a country with nearly 60% of the 1.4 billion population residing in rural areas, data centers are fast emerging as a solution to address the challenges of patchy connectivity and limited digital access. India is rapidly moving towards hyperscale data centres, which are centralised in various cities and metropolitan areas. However, edge data centres are expected to gain prominence in Tier 2 and 3 cities to serve the consumers in these areas directly, reducing their need to connect to a main data centre every time. Nestled in the Tier 2 city of Nashik, ESDS aims to serve everyone, regardless of their physical location within the country, as long as they have a smartphone in their hand. In a recent conversation with AIM, Piyush Somani, the founder of ESDS, shared his insights on the rapidly evolving data centre industry in India. With a keen eye on the industry and its future, Somani believes that the next wave of data centre growth will be driven by the untapped potential of Indian villages. While many players have been ramping up content delivery networks (CDNs), Somani sees an unrealised potential in smaller data centres for these regions to reap the multifold increase in demand. Somani’s journey with ESDS began as a bootstrap project in Nashik in 2005, where he started with a single computer in the backyard of a kindergarten. “We have heard about garage startups, but we were a kindergarten startup,” Somani quipped. From these humble beginnings, ESDS has grown to become one of India’s leading cloud and data centre service providers, with four data centres across the country. When asked about the choice of Nashik for ESDS’s largest data centre, Somani explained, “Cost was one factor, second was the people. I did not want to lose my people by taking something to Mumbai.” This decision proved to be the right one, as ESDS has managed to retain a majority of its early hires, ensuring stability and growth. In a highly competitive market, ESDS has carved out a niche for itself by creating and addressing specific market segments. The company focuses on providing end-to-end solutions for cooperative banks, government organisations, and enterprises. It also offers tailored services such as SAP HANA, hosts on cloud platforms, and provides low-code no-code solutions. Embracing AI and GPU Computing Somani envisions ESDS becoming the first Indian hyperscaler among foreign players in the next couple of years. The company’s strategy involves launching smaller data centres of 5-10 megawatts while generating premium returns through managed co-locations, cloud services, and cybersecurity offerings. While competitors like Yotta are partnering with NVIDIA and acquiring GPUs with government support, ESDS is taking a different approach to maximise profitability and valuations. “We are already there in the AI market, but not in the form of a hardcore AI compute service provider,” Somani explained. Instead, ESDS is creating niche offerings, such as quantum-safe encryption and low-code no-code solutions for digital universities, to address specific market needs and generate higher returns – upwards of up to 30% increase this year. The company is also making strides in the AI and GPU computing space by creating a GPU community cloud, which is being utilised by central government and defence departments for research purposes. “Certain government departments, including those involved in defence research, are utilising our GPU community cloud services. However, due to the sensitive nature of their work, we are unable to disclose their specific names,” Somani stated. The company also provides GPU compute power for quantum-safe encryption, which requires a massive amount of processing capabilities. Somani revealed that ESDS plans to invest massively in the GPU compute technology over the next 2-3 years. “In the next couple of years, we would have invested hundreds of crores of rupees on GPU compute technology because the demand from our customers is humongous,” Somani explained. However, rather than simply providing GPU compute as a service, ESDS aims to offer value-added SaaS offerings, such as quantum-safe encryption, to maximise profitability. “We are trying not just to provide GPU compute as a service but also certain SaaS offerings. We are coming up with niche offerings like quantum-safe encryption on the GPU platform,” Somani explained. With the expansion, ESDS expects to generate revenues 5-10 times higher than its competitors. While the competition focus remains on providing pure infrastructure as a service on their GPU machines, ESDS will be delivering Platform-as-a-Service (PaaS) offerings, which command higher margins and profitability. The Future: Data Center in Villages The most intriguing aspect of Somani’s vision for the future of data centres in India is his belief that they could move to villages. By tapping into the vast potential of rural areas, ESDS aims to create solutions that address the unique challenges faced by sectors such as agriculture. With climate change disrupting traditional farming practices, ESDS aims to transform the lives of the 700 million people in India who depend on agriculture. “Agritech – India has such a serious problem centred around agriculture,how are you going to address the agriculture market using AI and sensor technology,” Somani posed. ESDS has developed its own Agritech solution, Farmrut, to help farmers navigate the challenges of climate change and optimise their yields. I will also help them with seed selection, soil testing and nutrition management. The Booming Data Centre Industry India’s data centre industry is experiencing unprecedented growth, with a target of reaching 1 gigawatt of capacity by 2024. Somani sees this as a tremendous opportunity. “There is actual demand. The reason so many hyperscalers are coming to India is that many foreign companies that are purely into data centre services are coming to India. The investors are also coming to India,” he said. Somani believes that India is no longer the country it was a decade ago. “India is an ocean of opportunities,” he remarked, highlighting the optimism and demand that is driving the supply of data centres in the country. In just seven years, India’s data centre capacity has grown from 100 megawatts to about 1 gigawatt, and Somani predicts that by 2031-2032, the country would have crossed the 10-gigawatt mark. As India continues to embrace digital transformation, the demand for data centres and cloud services is only set to grow. And companies like ESDS are well-positioned to lead the charge in shaping the future of the industry, one that extends beyond the confines of cities and into the heart of India’s villages.
ESDS’ Somani believes smaller data centers in underserved regions have untapped potential to meet surging demand, despite focus on CDNs.
ESDS' Somani believes smaller data centers in underserved regions have untapped potential to meet surging demand, despite focus on CDNs.
["Data Center", "data center India"]
["Go", "data center India", "API", "Data Center", "AI", "R", "Git", "RAG", "Aim", "ViT", "GAN", "GPU computing"]
["AI", "Aim", "RAG", "GPU computing", "R", "Go", "Git", "API", "GAN", "ViT"]
Shyam is a tech journalist with expertise in policy and politics, and exhibits a fervent interest in scrutinising the convergence of AI and analytics in society. In his leisure time, he indulges in anime binges and mountain hikes.