Some articles have been written recently about where the best location for running and building a datacenter is. These reports always pick smaller cities as the locations due to cost. For Example Pune / Nasik /Hyderabad is a great place to build a cheap datacenter if cost is the number one concern. Labor is cheap, material costs are low. Electricity prices may seem low. But these reports always leave out something that is very important. PEOPLE.

Datacenter operations will always be central to locations with population density. Western corridor, Mumbai and its suburbs, and so on. The surrounding population will support the service. Who needs colocation or datacenter services in Nasik or Hyderabad? The only people who can benefit from this are those who do not need to touch their equipment or firms who can afford to fly or travel out their technicians to a remote site after multiple hours. What people don’t realize is most operations that use significant colocation resources (10U and up) need to touch their equipment on a regular basis. They can’t ship it off 700 kms into these smaller cities.

Furthermore, the reduced electricity costs (which is the most significant operational cost of a datacenter) is only temporary as these locations dont have electricity for entire days and have to work their generators during load shedding making the power cost even more expensive. In a few years electricity prices will start to even out. Its sort of an anomaly that is Hyderabad or Nasik you can get electricity at probably 1 Rs per Kwh cheaper– that wont last long. 

Smaller locations also do not have the immense diversified telecom and fiber infrastructure that is present in major cities. Besides, content users are located in the major cities – content providers and users should be close to each other.