Experts Foresee Continued Growth in Indian Data Center Market

By IndraStra Global News Team

Experts Foresee Continued Growth in Indian Data Center Market

In recent times, several companies, such as Reliance, AdaniConnex, Sify, and Amazon Web Services (AWS), have announced their investment plans in data centers across India. AdaniConnex aims to be one of the top three data center players by 2030, while AWS is increasing its investments in data centers.

According to CBRE, India leads major Asia-Pacific countries in data center capacity, with 950MW in the region (excluding China), surpassing countries like Australia, Hong Kong SAR, Japan, Singapore, and Korea. The report forecasts that India is set to witness the highest capacity addition of 850 MW during the period from 2024 to 2026, surpassing other major Asia-Pacific countries.

Experts believe India should capitalize on this opportunity and strive to become Asia’s data center hub by 2030. Sunil David, Chair of Intelligent Networks at IET Future Tech Panel, noted that the increased use of IoT will generate large amounts of data, necessitating significant computing and storage infrastructure. This, in turn, will drive Cloud adoption and spur data center growth.

He explained, "With Gen AI becoming a key focus area for enterprises and many exploring use cases around it, there will be a growing demand for cloud services, resulting in increased need for storage and compute power."

The Indian Data Center industry is rapidly growing due to diverse factors. These include customer preferences, market trends, unique local conditions, and broader macroeconomic influences, all of which contribute to the sector's growth in India.

Customer preferences in India are shifting towards more dependable and effective data storage and management solutions under the colocation model. As businesses increasingly digitize and rely on technology, they seek secure and adaptable data centers capable of managing vast amounts of data. Cost-effectiveness and energy efficiency are top customer priorities when selecting data center solutions.

Globally, the colocation model dominates the data center industry, with over 75% of service providers operating within this framework. In India, most new players in the sector opt for the colocation model or provide carrier-neutral colocation solutions. This model involves data center providers offering physical infrastructure while customers bring their own IT hardware. Charges are typically based on space and power usage, akin to renting an apartment and paying utility bills.  

In 2022, India saw significant data center colocation capacity growth, surpassing 150 MW. Mumbai and Chennai accounted for 90% of this expansion, with Mumbai hosting 60% and Chennai 30% of the increased capacity. India's total operational colocation capacity exceeded 900 MW, covering over 9 million square feet, primarily concentrated in Mumbai and Chennai due to their importance as landing stations for international internet traffic.

Market trends indicate a significant uptake of cloud computing among businesses in India, necessitating robust data centers to support data storage and processing. Additionally, the rise of edge computing, driven by the surge in Internet of Things (IoT) devices and the need for real-time data processing, is leading to the establishment of smaller data centers closer to end-users, reducing latency and enabling quicker processing. This as a significant factor driving a trend of increasing transformation of Global Capability Centres (GCCs) into hubs for cloud engineering. India boasts approximately 1,600 GCCs, which is expected to surge to 3,000 in the coming years.

India's rapidly expanding digital economy, high internet penetration, and government initiatives like "Digital India" and "Make in India" create a favorable environment for the Data Center market growth. States like Karnataka, Tamil Nadu, Uttar Pradesh, Odisha, Telangana, Maharashtra, and West Bengal have implemented data center policies to attract investments, recognizing the sector's growth potential. These policies offer clear guidelines, regulatory standards, and incentives for setting up data centers within their jurisdictions. Incentives may include uninterrupted power supply, access to renewable energy, infrastructure support, subsidies for server and rack providers, financial incentives for manufacturing data center equipment, discounted land and lease rentals, preferential procurement for startups and SMEs, research grants, and internet cost reimbursements. Significant portions of state budgets, such as in Telangana, are allocated for establishing data centers and IT parks.

Furthermore, enacting the Digital Personal Data Protection Act, which mandates data localization and requires citizens' sensitive personal data to be stored within India's borders, will also fuel growth. Strong economic growth, increasing foreign investment, political stability, and favorable business regulations further enhance India's appeal as a destination for data center establishment.

Moreover, the substantial availability of skilled IT professionals in India plays a pivotal role in fostering the growth of the Data Center market. With a vast pool of talented individuals proficient in various aspects of information technology, including network administration, system engineering, cybersecurity, and data management, India possesses a competitive advantage in the global data center landscape. These skilled professionals contribute to the seamless operation, maintenance, and optimization of data center infrastructures, ensuring reliability, security, and efficiency. Their expertise enables innovation and adaptation to emerging technologies, reinforcing India's position as a leading destination for data center investments and operations.

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IndraStra Global: Experts Foresee Continued Growth in Indian Data Center Market
Experts Foresee Continued Growth in Indian Data Center Market
By IndraStra Global News Team
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