← External Forces: Digital & Technology (all topics)
Data centres
What it is
Purpose-built facilities housing servers, storage and networking, sold as colocation space, managed hosting or cloud capacity. Capacity is measured in megawatts of IT load rather than square feet, because power and cooling are the binding constraints
AI workloads have raised rack densities sharply, changing the power, cooling and site requirements from those of conventional hosting
Impact on industries
- Demand is driven by the global cloud and AI investment cycle rather than by Indian industrial activity, so it is uncorrelated with most domestic end-markets
- Pulls through substations, transformers, switchgear, backup generation, cooling, cabling and construction, so the order flow reaches far beyond IT
- Power availability and cost are the constraint, and data centres compete for grid capacity with industry in the same locations
- Concentrated among a few hyperscale developers in a few metros, so the customer base is narrow and negotiating power sits with the buyer