ABB goes gung-ho on data centers

For the electrification division of Switzerland headquartered global engineering conglomerate ABB, aligning with data center business seems to be one of the key pursuits currently. And for this, it assesses opportunities in the geographies it is well positioned. India figures in this list and according to Giampiero Frisio, President, Electrification Business Area, and Member of the Group Executive Committee of ABB Ltd., the company is all geared up to tap data center business in a major way. “Globally, it is growing at a pace that is unbelievable. And the same is happening now in India,” Frisio said in an exclusive conversation with Business India during his recent short trip to the national capital.

For the over $30 billion annual revenue conglomerate, electrification division is clearly the mainstay (other key verticals are motion, process automation and robotics and discrete automation) accounting for nearly half of its business globally. According to Frisio, the division has seen major expansion in its data center business in recent years and has almost emerged as a new catalyst on the scene. “The data center business was too small for us five years ago – just 1-2 per cent. But last year, it became 15 per cent of the total order for electrification business globally. Electrification is 50 per cent of our business and the growth we have registered on data center side is massive,” he pointed out. And even as data center business has just begun to evolve in India, ABB’s electrification division chief is hopeful of a big-ticket opportunity in the not so distant a future. “Globally, there are about 12,000 centers and about 50 per cent of them are in the US. In India, currently their number is 152. So, the potential is unbelievable. This is a market of 1.5 billion people,” he further added.

 Solution provider

There are clear indications of data center business globally now taking swift turns in terms of capacity escalation. About five years back, as Frisio pointed out, enterprises were planning smaller units (usually 50 MW type) to basically support cloud storage system. But now the scale has significantly snowballed with leading players planning 1GW and above capacity data centers equivalent to running a modest scale nuclear plant. Facebook’s founder Mark Zuckerberg has just stumped everybody by announcing a gigantic scale (over 2GW) data center which would be the hub for future AI developments and would possibly have a size equivalent to Manhattan. The hyper-scaler club (comprising Facebook, Amazon, Google, Microsoft and others) are in the forefront of scaling up their back-end data support systems and ABB electrification division is believed to be closely aligned with them as solution provider for data centers.

The Indian data center story presently could be small, nevertheless it has begun giving indications of a galloping trajectory in the coming years. According to a report released by Cushman and Wakefield last year, India’s data center capacity across the top seven cities had stood at 977 megawatts. The report had projected this capacity to grow by nearly two and half times by 2028 touching 3.29-gigawatt mark. Furthermore between 2023 and 2032, the worth of data center business in India is expected to increase from $4.5 billion to $11.6 billion dollars which marks a CAGR growth of nearly 11 per cent.

According to Kiran Dutt, President – Electrification, ABB India, the company is keeping a close watch on developments in the local market and is aligning with several companies which are positioning themselves in the forefront of data center business in India. “There are different pockets which are coming up in India for data center business. For instance, in the North, it is around Delhi and Noida. In the South, it is mainly concentrated in Bengaluru with Hyderabad also pitching in now. But Mumbai is the leading hub which has about 55 per cent of the data center projects and we have begun providing various energy efficiency and sustainable solutions to these players,” he said.

In an overall sense, India figures in the top half a dozen global markets for the global technology major in electrification and automation which has given strong indications in the recent past to further expand its business at a brisk pace (refer to our story:  https://businessindia.co/magazine/corporate-report/abb-india-gets-ready-to-accelerate). And elevate India’s positioning in its top markets list. While for the group’s mainstay electrification division, data center would be a major focus area, other domains of interest (as Frisio further pointed out) where it would like to further scale up include solar industry, charging infrastructure and chip manufacturing.