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Datacentres – The India Growth Story

In my last blog “Datacentres – The Global Growth Story”, I had discussed the key global markets that account for majority of the global datacentre investments. This one would summarise how India is positioned in the global datacentre story. Though India currently accounts for a small share of the global market at around 2% as of 2019, the market is expected to grow at a fast pace in the coming years driven by India’s growing data economy.

  • Growing internet penetration, increased adoption of cloud, IoT, growing use cases for AR/VR, AI/ML, big data analytics, and edge computing coupled with the Government of India’s (GoI) digitisation initiatives are key factors driving the growth of India’s data economy.

 

  • This digitisation push got accelerated with the advent of Covid with data-usage-per-subscriber rising at an all-time high of 12.1 GB per month in quarter ending June 2020, amidst increased work-from-home, online education, OTT consumption, online gaming and casual internet use during the lockdown. Though the lockdown has relaxed digitisation initiatives continue to hold strong and will play a pivotal role in growth of datacentre investments in the country.

 

This rise in data economy coupled with an increasing focus on data protection and data localisation policies is driving the demand for datacentres in the country which is expected to touch ~5 billion by 2025 growing at a 2X CAGR compared to the global market over 2019 – 2025.

India Datacentre Market Investment 2019–2025 ($ billion)

                                 Source: NASSCOM’s Report “India – The next datacentre hub

Broadly the datacentre market in the country is divided into captive or outsourced. Captive datacentres are owned and operated by enterprises themselves. While the outsourced datacentres are developed and operated by third-party service providers and can be classified as – Hosting Services, Colocation Services and Hybrid Services.

  • Captive datacentres in the country are witnessing growth primarily driven by investments from the public sector and educational institutions, while investments by private sector enterprises in India are declining on account of the shift to cloud platforms.
  • The outsourced datacentre demand remains strong, primarily driven by the cloud service providers, BFSI and entertainment sector, content delivery network providers, and e-commerce organizations.

 

To read more about the key players, major locations and upcoming locations for datacentre investments in the country read our recently released report “India – The Next Datacentre Hub”.

 

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