Microsoft, Telangana seal deal for Rs 15,000-cr data centre in Hyderabad

US tech giant Microsoft and the Telangana government have finalised a deal to set up a Rs 15,000-crore data centre in Hyderabad. A 50-acre land near the city is believed to have been finalised and the project is expected to create around 300 jobs.

According to sources aware of the development, a formal announcement is likely to come within a month. Microsoft did not comment on questions from Business Standard. 

Telangana is one of the few states that came out with a data centre policy in India, way back in 2016. It is also expecting investments to the tune of around $10 billion in the segment in the next five years.

In late 2020, Amazon Web Services (AWS) had announced plans to set up its second data centre region in the country in Telangana at an investment of $2.77 billion. CtrlS Datacenters is also coming up with a similar facility in the state.

Last year, Microsoft had said it is planning to build around 50-100 new data centres each year in the foreseeable future. At present, it operates around 200 data centres across the world. Microsoft India had set up a research and development (R&D) centre in Hyderabad way back in 1998. It is one of the largest R&D centres by the company other than its Redmund headquarters.

The company had also entered into a tie up with Reliance Jio in 2019 for a long-term alliance to set up cloud data centres in India.

According to a JLL report, out of India’s current data centre capacity of 499 megawatts (Mw), around 45 per cent is based out of the financial capital Mumbai. It is followed by Chennai, Pune and Bengaluru contributing 12 per cent each, Delhi around 8 per cent, Hyderabad around 7 per cent and Kolkata around 1 per cent.

Telangana is trying to bridge this gap through its aggressive sops lined up for investors in the segment. In addition to speedy clearances and land availability in key places, the state was also ready to offer some cloud business to those who are setting up their centres in Telangana.   

Despite being the youngest state in the country, Telangana had attracted $33 billion investment during the last seven years. Through a single-window clearance called TSiPASS that was introduced in 2014, the state has so far cleared around 17,500 investment proposals. These have helped it to jump from the 13th spot in the Centre’s Ease of Doing Business index ranking in 2015 to the third spot in 2019.

Earlier this week, Telangana had signed a deal with the Fédération Internationale de l’Automobile (FIA) Formula E, the governing body for events like Formula One, to make Hyderabad a host city for Formula E, a car race for electric vehicles.

Hyderabad thus entered into the elite league of cities like Beijing, Buenos Aires, Miami, Berlin, Moscow, Paris and Hong Kong as a venue for the event.