Tamil Nadu’s capital city Chennai after being the ‘Detroit’ of India for housing several automobile makers is turning out to become a major data center hub.

With the central government and Reserve Bank of India insisting on players to have their data stored in India, the data center business is getting a boost.

“With three submarine cable landing stations (one more to come), a comfortable power supply position (data centre capacity is generally measured in MW), the availability of market and knowledge pool, Chennai is an ideal location,” Nikhil Rathi, CEO, and Founder of Web Werks India Pvt Ltd, a major player told IANS.

Adding further he said the Covid-19 lockdown saw a huge amount of data traffic and it is growing.

Web Werks has signed a Memorandum of Understanding (MOU) with the Tamil Nadu government to build a 20MW data center here at an outlay of about Rs.700 crore and will have a headcount of 100.

For WebWorks, Chennai will be its second-largest location in India. The company has its data centers in Mumbai, Pune, and Delhi in India. It also has data centers overseas.

The Tamil Nadu government is working to come out with a separate policy for data centers to strengthen the ecosystem.

“Most common requirements of data centres pertaining to housing regulations and power are being worked upon to encourage data centre investments and further downstream investments,” the state government said.

Rathi said all buildings cannot house a data center. The building that houses a data center will generally need a higher ceiling.

“The buildings are machine specific,” Rathi added.

According to the state government, there are six submarine data cables with a bandwidth of 14.8 Tbps.

The rural areas in Tamil Nadu are also well connected with more than 12,524 village panchayats with a minimum scalable bandwidth of 1 Gbps.

As per TRAI, Chennai is among the top five service areas in India for broadband subscriptions.

The state government has signed Memorandums of Understanding (MOU) with nine companies for setting up data centers with a total proposed investment of Rs 16,927 crore and employment potential of over 9,000 jobs over the last two years.

National and international companies, including Yotta, Princeton Digital, ST Telemedia, Netmagic, and Adani are in the process of setting up their data centers in Chennai.

The Ambattur locality in Chennai is the preferred choice for data center companies owing to its favorable geographical conditions and existing data center ecosystem.

Siruseri is the next ideal destination due to the presence of several IT companies, which offers a great market opportunity, the government said.

Rathi said there is a good market for data centers in Southern cities like Chennai, Bengaluru, and Hyderabad owing to the concentration of IT companies, talent pool.

He said Tamil Nadu has a single-window clearance which eases the regulatory clearance process.

As per a JLL report, Mumbai and Chennai are expected to drive 73 percent of the sector’s total capacity addition during 2021-23, while other cities like Hyderabad and Delhi-NCR emerging as new hotspots.

India’s data center sector will require an investment of $3.7 billion over the next three years in order to fulfill the 6 million square feet greenfield development, JLL said.