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India – The Next Datacenter Hub

February 3, 2021 4431 0 Data Science & AI Community

India – The Next Datacenter Hub

The pandemic has pushed the demand for cloud across the globe with digital transformation accelerating across industries, and internet becoming a lifeline for people both for work as well as entertainment. This shift towards cloud has pushed increased investments in hyper-scale datacentres with the global datacentre market investments expected to reach ~$200 billion per annum by 2025. India is also expected to get a share in this growth with investments in the country expected to reach ~$5 billion per annum by 2025. The report identifies the various aspects of global and Indian datacentre market; key trends, drivers and challenges; a site selection framework for India market opportunities; key recommendations for the India market outlook and the market outlook.

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The pandemic has pushed the demand for cloud across the globe with digital transformation accelerating across industries, and internet becoming a lifeline for people both for work as well as entertainment. This shift towards cloud has pushed increased investments in hyper-scale datacentres with the global datacentre market investments expected to reach ~$200 billion per annum by 2025. India is also expected to get a share in this growth with investments in the country expected to reach ~$5 billion per annum by 2025. The report identifies the various aspects of global and Indian datacentre market; key trends, drivers and challenges; a site selection framework for India market opportunities; key recommendations for the India market outlook and the market outlook.

  • Global Datacentre Market
    • Cumulative investments of $1.3 trillion are expected over 2019-2025
    • North America is the leading market in terms of investments, while MEA & LATAM are the fastest growing markets followed by APAC
    • IT Infrastructure accounts for ~77% share of total datacentre investments; with the rest being invested in electrical & mechanical infrastructure, and general construction
    • Covid Impact
      • Increased data traffic has pushed the occupancy rate of colocation datacentres pushing more investments in the sector
      • A temporary halt in construction of datacentres during the lockdown, which quickly recovered as lockdowns were relaxed
  • India Datacentre Market
    • Cumulative investments of ~$28 billion expected over 2019-2025
    • In terms of CAGR over 2019-2025, India is expected to grow at ~5%, 2X faster than global
    • The India Advantage
      • Majority investments focused on Tier IV datacentres
      • Operational and development cost advantage
      • Availability of engineering skills
    • Covid Impact
      • Increased capacity utilization of existing outsourced datacentres
      • Service providers have fast track their planned expansions
  • Major Datacentre Locations and Site Selection
    • Mumbai, Chennai, Bengaluru, Hyderabad, Delhi (NCR) – as they offer good fiber connectivity, proximity to customers, availability of skilled workforce, and submarine cable connectivity
    • Geographic location, power, fiber connectivity, and general construction & operations remain the key selection criteria for site selection before setting up a datacentre
  • Outlook and Recommendations
    • India has a huge potential to take a large share of global datacentre investments if it is able to act fast on implementing the recently announced datacentre draft policy growing the CAGR by 2X-3X, with annual investments reaching $6 -$8 billion by 2025
    • Key recommendations include faster implementation of government’s draft policy, encourage use of renewable resources, level playing ground for all players, deemed regulatory approvals and digitization of RFPs.

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