India poised to become a global data center hub

For last five years, we are witnessing a steady rise in the Indian data center market. The surge in the India’s data center market, post pandemic, is being driven by various factors. The growth is accelerated by dynamic digital landscape, burgeoning internet penetration, and the imminent transition to 5G networks. As per a joint report by the Confederation of the Indian Industry and Colliers, the key factors responsible for the growth are penetration of 5G across the country, adoption of Cloud Services, increase in OTT and content usage. The Data Localization laws and Digital Personal Data Protection Act 2023 also has led to increase in data center capacities in India. A JLL report mentioned that Indian data centre market is expanding at a 9.9% CAGR and is predicted to exceed 1.3GW of power capacity by 2024.

An ASSOCHAM-EY analysis predicts that India has potential to become a global data center hub and  expected to grow from $4.4 billion in 2020 with to $8 billion by 2026.

Technologies like 5G, IoT, and AI have emphasized the need for building the necessary physical infrastructure to support India's rapidly evolving digital ecosystem. International data center operators, cloud service providers, hyperscalers, private equity investors, and developers have already made significant investments in the country. The growth is further pushed by progressive government initiatives like Digital India, Make in India, and Atmanirbhar Bharat. With expected annual investments in data centers exceeding USD 200 billion by 2025, India presents a significant opportunity, boasting widespread internet access, strong connectivity, and affordable mobile devices. Mumbai, Chennai, and Bengaluru are expected to dominate around 75% of the data center market, while the remaining 25% will be distributed among cities like Delhi NCR, Hyderabad, Kolkata, Noida, and Pune.

NTT Global sees a surge in data center investments

Vimal Kaw, Senior Director - Products and Services, NTT Global Data Centers and Cloud Infrastructure, India

“The Indian data center industry is one of the fastest-growing markets globally, and this momentum is likely to persist in the foreseeable future. From a market size perspective, it was valued at $4.5 billion in 2023 which is quite a small share of the global pie, but it is the CAGR of 10.98% that’s of great promise. It will be apt to say that the true expansion of the sector has only just begun in the country. India's colossal IT industry and market size have attracted every major international player from diverse industries to operate within its borders. The conducive atmosphere for industry growth is attributed to factors such as data localization, an increasing demand for data safety, and the advantages of storing data in proximity to target markets.

Moreover, India boasts a fantastic talent pool, robust digital infrastructure, and abundant natural resources like land, water, and solar energy, making it an ideal location for the sustainability-driven data centers of the future. As a result, we are witnessing a rapid surge in data center investments in the country.

India is a key market for us, and we have been an integral part of the country’s data center revolution. NTT has taken several steps to continue complementing the DC economy’s growth in India and to maintain its position as the leading brand in the years ahead.”

Sify Technologies witnesses traction from OTT companies

Prashant Pereira, VP Data Centre Services, Sify Technologies

“The Indian data centre industry has undergone major shifts in terms of scalability and density in recent years. As a result of this expansion, India is well positioned for future growth. Though Tier 1 cities have traditionally been selected for primary Data Centre expansion, India is seeing a steady increase in the growth of Data Centres in Tier 2 cities, which are also suitable locations for establishing Edge Data Centres

Much like other industries, data centers are also constantly evolving with technological advancements and changing business needs. With technological breakthroughs like IoT, AI and ML, the focus is shifting to third-party data centers and cloud platforms to meet structural requirements.

Our Data Centers are highly interconnected with presence of all major TELCOs, Internet Exchanges and ISPs. Our data centers have four fiber access paths into the building. Multiple MMRs are present in the Data Center towers. We focus heavily on developing this "Interconnect ecosystem” this enables global OTT and Content providers in our Data Center to reach eyeballs with low latency and high resiliency. OTTs have been significantly increasing their Data Center and network capacities with us.  OTT companies are asking for capacities for their edge data centers in Tier 2 cities. Our network services connect Sify and non Sify datacenters in a very resilient architecture.”

ESDS witnesses strong demand from cloud players and enterprises 

Piyush Somani, Managing Director and Chairman, ESDS Software Solution

“India is expected to see a surge in data centers with the rising demand to localize data and overall economic growth. We are already on the verge of becoming a data center hub for MNCs from around the world. Supported by GOI and the Digital India Initiative the market has seen massive investments around the nation. Additionally, the demand from both cloud players and enterprises post pandemic is strong. ESDS’ focus includes banking, securing power, and preparing for AI-driven infrastructures. With companies pouring in billions of dollars in capital to set up such infrastructure components, about 4,900-5,000 MW of data centre capacity is expected to be added in the next few years basis a study by ICRA Ratings.

The large amount of data generated by the consumption needs be processed, stored and distributed which can create a strain on data centers. Which in turn increasing the demand for computing capacity along with the connected infrastructures, such as storage, connectivity and edge computing support. To combat this, we can look at containerization and virtualization to be faster and more efficient. These technologies support the increased 4G usage and also will be able scale up to handle the current 5G networking infrastructure. Also, we can look at increasing the lifecycle upgrade processes by replacing simpler networking hardware such as switches and routers with 5G capable ones.”

“Equinix envisions a future where the digital industry empowers digital ecosystems”

Manoj Paul, Managing Director, Equinix India

“An industry valued at $4.35 billion in 2021 is set to burgeon by 132% to $10.09 billion by 2027. With over 836 million internet users in 2022 as per DoT annual report, the country’s digital platform users momentum surpasses all other countries except China.

Growth in consumption of multiple services on digital platforms by citizens and adoption of digital platforms by enterprises is fuelling demand for datacenter services. As the demand for datacenter industries grows and major metros saturate, we will see demand for non-metro locations, while at present the demand is predominantly in major metros and its suburbs only.

Equinix envisions a future where the digital industry empowers digital ecosystems. Digital transformation, fuelled by emerging technologies like AI, will reshape the competitive landscapes across industries.

Enterprises need to strategically acquire data from reliable sources and utilize appropriate models to fully leverage the potential of AI. Private AI is a concept that involves creating an AI environment specifically tailored for an organization's exclusive use. Traditional, siloed data centers are replaced by highly interconnected internet exchange points. Equinix has long been an advocate and champion for XaaS through Platform Equinix where users can interconnect and adopt digital capabilities and emerging technologies to build a competitive edge.”

Pi Datacenters realizes the opportunities ingrained in India's data center market

Debmalya Dey Roy, Chief Revenue Officer and Global Marketing Head, Pi Datacenters

“It's evident that the trajectory of India's data center market is one of robust expansion, fueled by a dynamic digital landscape, burgeoning internet penetration, and the imminent transition to 5G networks. Projections indicate substantial growth potential, with anticipated revenues reaching $7.44 billion by 2027 and a noteworthy CAGR of 5.84%.

The colocation model recognized globally, gains traction in India, spurred by the growing digital economy encompassing various sectors such as social media, e-commerce, gaming, and streaming services. Moreover, the emphasis on Tier 3 and Tier 4 data centers is discernible, driven by their superior reliability, disaster recovery capabilities, and on-site support.

Government initiatives are pivotal in shaping the trajectory of the data center landscape, with an emphasis on fortifying infrastructure for seamless internet connectivity, robust data security, and scalable cloud computing solutions.

Looking ahead, the trajectory remains promising, with the market poised to burgeon to $11.6 billion by 2032, demonstrating a commendable CAGR of 10.2%. As one of India's first Greenfields and Uptime Institute Tier IV Certified Datacenter, we at Pi Datacenters, realize the vast opportunities inherent in India's data center market, and acknowledge the responsibility we carry on our shoulders to deliver quality and scale for our clients and partners to drive business growth in their respective fields. All of these are done by leveraging our expertise to drive innovation, scalability, and resilience.

CtrlS Datacenters focusing on expanding infrastructure and service offerings

Vipin Jain, President, Datacenter Operations, CtrlS Datacenters

“Datacenter expansion in India has surged notably following the COVID-19 pandemic. Presently, the country stands 14th worldwide, boasting more than 151 datacenters. Yet, there remains a pressing need for substantial capacity growth to accommodate the escalating number of internet users and the massive data they generate. This demand is further compounded by the increasing adoption of cloud and AI-based services, alongside the rise of hybrid workplaces and other emerging trends. This trend has attracted major hyperscalers, necessitating the expansion of datacenter infrastructure to accommodate their availability zones. Projections suggest substantial growth, with the market expected to reach $8 billion by 2026, encompassing 183 datacenters with a total capacity of 24 million square feet and 1752 MW of IT capacity.

CtrlS Datacenters is strategically positioning itself to complement India's projected surge in data consumption and is focusing on expanding its infrastructure and service offerings to cater to the evolving needs of businesses and consumers. The company boasts a capacity of 234 MW, with datacenters strategically located in Mumbai, Chennai, Bengaluru, and Noida. We plan to strategically expand our pan-India footprint, building new datacenters across major cities to cater to increased demand. We are initiating the establishment of a series of Edge datacenters across India, with a particular focus on tier-2 and tier-3 cities with operational facilities already existing in Lucknow and Patna. The overarching strategic goal involves the establishment of a total of over 20 Edge datacenters in the coming years.”

5G, digital infrastructures and Gen AI boosting growth of Indian data center industry

Rohan Sheth, Head of Colocation Services, Yotta Data Services

“The Indian data center market has seen a consistent uptick over the last 5 year, with an increasing focus on all things digital. According to an analysis conducted by ASSOCHAM-EY, India is poised to become a global data center hub, expected to grow from $4.4 billion in 2020 with to $8 billion by 2026.

Propelled by 5G penetration, the increased digital activities of Indians right from booking flight tickets, consuming OTT content, gaming or dealing with UPI transactions leads to data generation per millisecond. The introduction of digital infrastructures like CoWIN, UPI, Aadhar and ONDC creates a massive need for hyperscalers to store and compute this data. The recent data center launches and expansions announced by large players in the industry are just the beginning of an impending surge in demand. The recent Generative AI wave has also demanded an evolution of existing traditional infrastructure to be able to cater to the high computing needs of this technology.

To complement this growth, we have strategically expanded our offerings of traditional data center services to provide GPU-as-a-service to our end customers – a pioneering move in the industry. Our high-performance offering is not only capable of handling significantly larger workloads but also facilitate connectivity, providing high-speed, low-latency, and scalable solutions for AI and cloud data centers.”

Increasing data consumption can be addressed by reliable and scalable data center services

Amit Agrawal, Chief Business Officer, Web Werks

“Due to growth drivers like the adoption for cloud services, growing user base and requirements for data to reside within the country, there are strong indications that the outlook for data centers in India is positive. According to industry reports, the Indian data center market is projected to reach a value of USD 4.5 billion by 2025, growing at a CAGR of around 14% from 2020 to 2025.

India has 138 data centers and currently is the 13th largest data center market in the world. There are 45 new data centers that are planned to be developed by 2025. Web Werks also has expansion plans which includes an investment of INR 20,000 crore for a DC park in Bengaluru, Hyderabad and Chennai. Last year, the company partnered with Iron Mountain to invest INR 4,000 crore to expand DC capacity in Maharashtra.

As India is projected to lead global data consumption in the coming years, data center businesses like Web Werks will play a significant role to play in supporting this growth. For this, data center enterprises need to focus on expanding infrastructure capacity and enhancing network connectivity. This includes increasing the number of data centers, improving data center efficiency, and investing in robust networking infrastructure. By providing reliable and scalable data center services, businesses can support the increasing data consumption and cater to the growing demand for IT solutions in India.”

STT GDC India is strategically positioned to capitalize data growth

Jatinder Pabla, Chief Sales & Marketing Officer of ST Telemedia Global Data Centres (India)

“The unprecedented growth of digital-first companies and a digitally empowered population, coupled with supportive government policies and robust digital infrastructure, has been and will continue to be a key driver of India's growth trajectory. India’s digitalization story is one of the most significant success stories worldwide and cloud, the foundational element of this digital transformation, has been experiencing annual growth rates exceeding 30%. Complementing this growth, Data Centres, essential for large-scale cloud deployments, are also expanding at approximately 25% annually.

STT GDC India, with 28 facilities totalling over 318MW of IT load across 10 cities, including those under development, is strategically positioned to play a pivotal role in this transformative digital future. Leveraging our expertise, we are committed to meeting the escalating demand for data services, driving digital transformation, and advancing the digital industry landscape in India.

With 318 MW existing and another 250 MW in planning, STT GDC India is strategically positioned to seize the momentum of data consumption in India.

Our campuses in Chennai, Pune, Mumbai, and Noida stand out as some of the largest in the country, each capable of scaling to 100+MW of IT load capacity. These developments underscore our commitment to meeting the evolving demands of India's digital ecosystem and solidify our position as a key player in driving digital transformation across the nation.”

“The data center market in India is poised for substantial growth”

Pinkesh Kotecha, Chairman and Managing Director, Ishan Technologies

“India's prominence in the data center arena is evident in its current standing as the 14th largest global market with 151 operational data centers. The industry has witnessed remarkable growth, expanding from 2.7 million square feet (msqft) in 2017 to 11 msqft in 2023. This growth is attributed not only to increasing demand but also to the Indian government's proactive push for digitalization, exemplified by initiatives like the ‘Digital India’ campaign and crucial policies such as the National Digital Communications Policy, Data Protection Act, and the Data Centre Policy. The regulatory environment, especially the emphasis on local storage of personal data in the DPDP Act, is steering companies towards secure and compliant data storage solutions within India.

Enhanced connectivity further solidifies India's position as an attractive destination for data center providers. New submarine cable infrastructure linking Mumbai and Chennai to global hubs like Singapore, South East Asia, Europe, and the Middle East ensures not only improved connectivity but also reduced latency. This strategic advantage empowers data center providers to offer more competitive services, aligning with the escalating demands of businesses and consumers. In essence, the data center market in India is poised for substantial growth, driven by a confluence of global digital trends, significant investments, supportive government policies, and advanced connectivity infrastructure. The outlook suggests a thriving ecosystem, making India a key player in the dynamic landscape of the digital economy.”