Google weighs $1 billion data centre in India

Google Inc  is considering setting up a massive data centre in India, two sources familiar with the development said.

The internet search major is in talks with Cisco Systems, the US-based network equipment giant, for connectivity technologies for the data centre, one person said.

Google is yet to approach the Foreign Investment Promotion Board (FIPB) for approvals on this, and things are at the planning stage, said another source.

A Google India spokesperson said the company “doesn’t comment on speculation.”

A data centre is like a huge, secure warehouse where thousands of servers store and process data. They have high-speed telecommunication and internet links, and are protected from security breaches and environmental hazards, with their own massive captive power set-ups.

Google has traditionally maintained secrecy on the
location of its data centres as it provides competitive advantage.

According to experts, details such as size and power usage of data centres could be valuable to competitors.

According to reports, Google has more than 19 locations in the US where it operates data centres, about 12 in Europe, one in Russia, one in South America, and three in Asia. Not all locations are dedicated Google data centres, since they sometimes lease space to host other companies’ data centres.

According to market insiders the need for Google to set up a data centre in India could be to support its ever increasing hosting and data storage requirements given new business lines the firm has adopted in India.

Google weighs $1 billion data centre in India
For instance in July Google India first spoke about its foray into business consulting for small and medium businesses.
“We started a pilot about a year-and-a-half back by setting up a call centre where the mandate was to address the execution issues of small and medium enterprises. We put business experts at the other end of the call who could guide them from conceptual stage to revenue generation. The approach we take is to ask the business owner about things like breakeven, cost of capital, etc and suggest ways to improve on those metrics with support from Google search data,” Sridhar Sheshadri , head-online sales, Google India had then said.
According to estimates by Google, there are about 40 million businesses of various sizes in India, of which just about 2 million are online in some way or the other.
The data centre demand is at an all time high, especially in India which according to research firm IDC data is growing at over 35%. Data centre providers such as Netmagic are seeing even 50% revenue growth annually.
“The data centre demand is huge in India at this point. Companies do not wish to block their money in setting up data centres and are thus moving from capex to opex model in which they are avail of datacentre capabilities on pay as you go basis. The other reason is firms now want to concentrate on their core business and relegate these requirements such as IT, datacentre to experts,” said Sharad Sanghi, managing director of Netmagic Solutions Pvt Ltd.
According to Google’s earnings reports, it spent $1.9 billion on data centres in 2006, and $2.4 billion in 2007 setting up four new data center projects.
The $1 billion investment in India data center is thus considered to be a mega project from Google.
 
 

According to experts, details such as size and power usage of data centres could be valuable to competitors.

According to reports, Google has more than 19 locations in the US where it operates data centres, about 12 in Europe, one in Russia, one in South America, and three in Asia. Not all locations are dedicated Google data centres, since they sometimes lease space to host other companies’ data centres.

According to market insiders the need for Google to set up a data centre in India could be to support its ever increasing hosting and data storage requirements given new business lines the firm has adopted in India.

For instance in July, Google India first spoke about its foray into business consulting for small and medium businesses.

“We started a pilot about a year-and-a-half back by setting up a call centre where the mandate was to address the execution issues of small and medium enterprises. We put business experts at the other end of the call who could guide them from conceptual stage to revenue generation. The approach we take is to ask the business owner about things like breakeven, cost of capital, etc and suggest ways to improve on those metrics with support from Google search data,” Sridhar Sheshadri, head-online sales, Google India had then said.

According to estimates by Google, there are about 40 million businesses of various sizes in India, of which just about 2 million are online in some way or the other.

The data centre demand is at an all time high, especially in India which according to research firm IDC data is growing at over 35%. Data centre providers such as Netmagic are seeing even 50% revenue growth annually.

“The data centre demand is huge in India at this point. Companies do not wish to block their money in setting up data centres and are thus moving from capex to opex model in which they are avail of datacentre capabilities on pay as you go basis. The other reason is firms now want to concentrate on their core business and relegate these requirements such as IT, datacentre to experts,” said Sharad Sanghi, managing director of Netmagic Solutions Pvt Ltd.

According to Google’s earnings reports, it spent $1.9 billion on data centres in 2006, and $2.4 billion in 2007 setting up four new data center projects.

The $1 billion investment in India data center is thus considered to be a mega project from Google.