Data Center Infrastructure Business in India

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A Data center is critical for enterprises operating in the presently borderless world. Whether private or public, the data center is essential for hosting mission-critical applications.

All businesses require large amounts of data storage space. For example, companies would need to scale up in terms of server racks to ensure uninterrupted connectivity and uptime.

Data centres in India mainly operate on two models. The first one is known as a captive data centre model, in which an organization builds, operates, and manages its own data centre. The other is the outsourced or a co-location model, where organizations purchases data centre hosting services from external providers. Under this arrangement, the external provider offers power, security and cooling needs for the datacentre, while the customers use the leased space to deploy their servers.

Initially, captive data centres enjoyed a significant market share, but gradually, they have ceded their ground to third-party service providers. Third-party data centre service providers are tipping the scales in their favor with their value-added services, innovation, and high opportunity costs of real estate and electricity.

But having captive data centre added challenges to many companies. Companies need significant financial backing to be able to handle the influx of staffing, and IT needs such as around-the-clock infrastructure maintenance and monitoring. Overall, the idea of building an in-house data centre would be sensible in the long term for an established organization with extensive amounts of data.

By leasing in an external data centre facility, businesses would need a substantially lower cost of installation up front. Thus, companies can focus on managing their servers and networks more efficiently. Overall, colocation data centre services help companies to lower their total ownership costs and maximize productivity significantly.

Worldwide, the data center infrastructure and services business is a very large emerging business. However, very few countries have the basic requirements in terms of infrastructure and policies to become a global data center hub.

Studies show that the Asia Pacific would be the fastest growing region, regarding large data centre segments, over the next five years. Today, APAC accounts for a quarter of the global data centre infrastructure expenditures, at $42 billion.

While global investments in large data center segments are estimated to grow in single digits, Asia Pacific will be the fastest growing region over the next five years. Today, APAC accounts for one-quarter of worldwide data center infrastructure spend at $42 billion. China and India stand to exploit the market the most and fuel the growth in APAC. Growth rates in the mature data center markets have slowed down and will remain sluggish. India shared around 1.8% of the global data center IT infrastructure and 8.6% in APAC in 2017. India is the second-largest market for data center infrastructure and the second-fastest-growing market in Asia/Pacific after China.

In India, the world’s largest democracy, the data economy provides endless opportunities for citizens, businesses, markets, politics, culture, sports and entertainment. India has robust domestic data consumption and a variety of other enormously positive indicators that will help it advance toward a data-driven economy. In its recent budget, the Indian government has been emphasizing importance of creating a cloud warehouse that will safely store enormous amounts of digital data and has urged the industry to make this happen.

The size of the digital populations in India presents a huge potential demand for data center infrastructure. Digital data in India was around 40,000 petabytes in 2010 and this number is projected to shoot up to 2.3 million petabytes by 2020, twice as fast as the worldwide rate.

Digital India mission has propelled this growth further and today the digital ecosystem in India has been booming. With the advent of digital technologies, businesses across India large to small and mid-sized enterprises are undertaking rapid digitization and transitioning to cloud-based solutions.

The Indian government has launched MeghRaj cloud to accelerate G2C services delivery. Under the scheme, many national data centers and state data centers have been built and many are being built in various states, such as Maharashtra and Madhya Pradesh. For example, NIC has already built 4 NDCs in India and the fifth one is coming up in Bhopal.

The adoption and implementation of cloud applications are still very small in India today. It is set to explode as more clients are readily accepting that cloud is the way forward to scale up their business growth and acts as a support system for various applications. Additionally, the government’s decision for data localisation against storing it outside the country is also a tremendous move that adds to the data center development in India. To reap on this opportunity, big hyperscalers are already preparing the grounds for major expansion within the Indian market, aiming to further extend their new builds within colocation facilities and are seemingly showing interest to build their own facilities.

The data centre market in India has doubled in the last 3 years and is projected to grow 1.5x by 2020. The overall cloud services market in India is expected to touch $4 billion by 2020.

Adani group last week said it will be setting up data centre parks with an investment of ₹70,000 crore over a period of 20 years. Hiranandani however, seems to be moving faster with their first data centre in Panvel expected to be completed by December and the remaining 10 are expected to come up over the next 5-7 years.

If country is having largest democracy in the world, the largest youth population in the world, second in mobile users, highest literacy ratio, segments like tourism, Banking, Logistics, E-com, Manufacturing are on pick .. need of Data centre becomes very mandatory.

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