How Is India Poised To Be The Next Data Centre Destination?

In the Asia-Pacific (APAC) territory, India is a prominent participant in the data centre industry, having more than  23 distinct third-party data centre service providers operating 80 facilities and plans of developing more in the years to come. With the emergence of hyperscale data centres in recent years, India’s DC market share has increased tremendously.[1]

Policy efforts, a growing customer base, and expanding data storage requirements are all propelling India to turn into the ‘next destination’ for data centres. DC providers may expect a surge in demand for data centre space because digital consumption trends such as online gaming, online learning, livestreaming, e-commerce, and internet penetration continue to rise substantially.

The Present Landscape of Digital Consumption In India

According to a recent estimate, the Indian DC industry would most likely require an investment of over $3.7 billion in the next three years to fulfil the industry demand for 6 million square feet of expansion[2]. Due to the rising adoption and reliance on digital innovations, 5G deployment, IoT-connected products, cloud adoption, and data localization, India’s data centre ecosystem will continue to develop. Considering data from 2020, India’s data centre sector consumed nearly 102 MW of electricity, exceeding greater absorption than key markets such as Europe and the United States[2].

As per TRAI, India presently boasts of 1.2 billion individuals with distinctive digital identities, more than 637 million total internet customers, an average of 9.1 GB data usage per subscriber for every month, 350 million smartphones, plus the growing cloud adoption computing has produced unparalleled demand for data centres in the country. In India, overall internet hits have increased by 50 per cent to 70 per cent, while streaming has increased by at least 12 per cent. Online gaming activity and transactional absorption have risen to a stunning 97 per cent, and streaming has climbed by at least 12 per cent.[3]

The Changing Paradigm: Data Centres Fulfilling The Rising Digital Demands

Leading to increased demands from Banking and Financial sectors, logistics, retail e-commerce, and government organizations, the Indian data centre industry is seeing substantial investment from colocation service providers, which is a resultant effect of the COVID-19 fuelled digital transitions. Globally, numerous colocation and data centre service providers have expressed a strong interest in the Indian data centre industry, which is expected to boost future growth[4].

In addition, Government organizations and businesses alike are establishing their own data centres in India, and thus the market for on-premises infrastructure solutions is rising steadily[4]. Similarly, businesses are also moving towards colocation facilities to get access to readily available, state-of-the-art infrastructure, custom-tailored services, availability of ultra-high density, scalable deployments, and all with innovating pricing models.

Some investments in self-built infrastructure in the nation include:

Moreover, the top four cities giving the highest concentration of data centres in India are:

  1. Mumbai
  2. Chennai
  3. Delhi NCR
  4. Bengaluru

These metropolitan cities account for 60% of all data centre sites and more than 75% of IT load capacity. Particularly, Mumbai accounts for 40% of cumulative installed capacity[5].

According to a recent International Data Corporation (IDC) estimate, by 2025, the average individual would interact with smart devices approximately 4,800 times each day[6]. This forecast is about three times the present interaction levels of where we are now. The more intelligent technologies become, the more data will be needed to run and execute functions.

Data centres will need to keep up with increasing volumes of data consumption in order to process, store, link, and analyze it all, which will raise demand for data centres as well as the necessary resources required to operate them.

Automation and technology offer a huge potential to make substantial improvements in how data centre operations evolve over the next 3-5 years[7]. One thing is for sure that data centres in India will continue to play an essential role in supporting the age of digitization.

Cloud Computing And The Shift From Captive To Colocation Facilities

Businesses have started to switch to colocation facilities over captive data centres as third-party DCs are classified as ‘Essential Services,’ providing the assurance of uninterrupted operations, even under unprecedented situations like the ongoing pandemic.

CBRE expects companies to re-evaluate their data centre portfolios as legislative and regulatory requirements for data storage are anticipated to be enforced in the coming years[7]. In addition, considering the benefits of scalability, minimized CAPEX, and improved security, backed with the industry highest uptime, companies should evaluate if their existing strategy needs to transition to colocation.

Consistent Governmental Encouragement To Boost DC Demand

The adoption of legislation like the National E-commerce Policy and the Personal Data Protection Bill will compel Indian consumers’ data to stay in the nation, increasing demand for data centres. Further, large-scale, national programmes such as ‘Make in India,’ ‘Digital India,’ and the ‘Smart City Mission,’ in particular, will boost the rise in the demand for data centres in the country.

While the history of data centres in India may be traced all the way back to the dot-com boom during 2007 when a burgeoning demand for DC operators emerged. At present, data requirements have received renewed attention since 2016, prompting DC providers to build hyper-scale data centres. DC occupants are also progressively using hybrid clouds (colocation, private/public), as well as multi-cloud installations.[7]

The Way Forward

Amongst the many, reputable companies like STT GDC India, being a leading data centre provider, operates 18 state-of-the-art data centre facilities, across nine key cities in the country, with a total IT load capacity of more than 135 MW.

STT GDC India has been at the forefront of the Indian DC industry and aims to strengthen the country’s infrastructure capabilities with their multi-megawatt expansion plan in the coming years, to deliver best-of-breed data centre services to enterprises, hyperscalers and businesses. For more information, you can explore their website or get in touch with their team!

Source:

[1] https://analyticsindiamag.com/is-india-witnessing-a-boom-in-the-data-centre-market/

[2] https://www.business-standard.com/article/companies/data-centre-sector-requires-3-7-bn-to-develop-6-mn-sq-ft-space-jll-121051800886_1.html

[3] https://trai.gov.in/sites/default/files/PR_No.27of2021.pdf

[4] https://www.businesswire.com/news/home/20210414005672/en/India-Data-Center-Market-2021-to-2026—Procurement-of-Renewable-Energy-In-Data-Centers-Presents-Opportunities—ResearchAndMarkets.com

[5] https://analyticsindiamag.com/is-india-witnessing-a-boom-in-the-data-centre-market/

[6] https://www.import.io/wp-content/uploads/2017/04/Seagate-WP-DataAge2025-March-2017.pdf

[7] https://www.expresscomputer.in/data-center/india-poised-to-be-the-next-data-centre-destination-expected-to-grow-2x-times-by-fy25/60168/

https://www.businesswire.com/news/home/20210414005672/en/India-Data-Center-Market-2021-to-2026—Procurement-of-Renewable-Energy-In-Data-Centers-Presents-Opportunities—ResearchAndMarkets.com

 

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