Piyush Somani, Chairman and Managing Director, ESDS Software Solution Limited
According to a report by the India Brand Equity Foundation, India is expected to generate 2.3 million petabytes of data per year by 2023, an almost tenfold increase from 2016. As India continues to digitise at an unprecedented pace, the need for data centres and cloud services has never been greater. The major factors that are contributing to this sudden increase in demand include data explosion and an increase in data consumption; new data privacy and data security laws; the Reserve Bank of India’s (RBI) mandate for data localisation; reduction in tariff; and adoption of internet of things, 5G and artificial intelligence (AI).
According to a report by Research and Markets, the Indian data centre market, which is currently worth $5.6 billion, is expected to grow at a compound annual growth rate (CAGR) of 11.4 per cent between 2021 and 2026. Meanwhile, the cloud services market in India is expected to reach a value of $15 billion by 2025, growing at a CAGR of 13.5 per cent during the forecast period, according to a report by MarketsandMarkets.
With the rise of digitisation and the increasing use of cloud computing and AI, the demand for data centres has been growing in India. According to a report by JLL, Mumbai is the leading Indian city in terms of data centre capacity, with over 314 MW. The city’s proximity to submarine cable landing stations, and availability of land and power, have made it a popular location for data centres. Pune is in the second position, with over 77 MW of data centre capacity, followed by Chennai with over 76 MW. Other major Indian cities such as Bengaluru, Delhi, Hyderabad and Kolkata also have significant data centre capacity.
Why is Mumbai number 1 in India with respect to data centre capacity? Mumbai’s position can be attributed to various factors such as the city’s strategic location, availability of land and power, and proximity to submarine cable landing stations. According to a report by JLL, Mumbai’s location on the west coast of India makes it ideal for data centres to connect to global networks via submarine cables. Additionally, Mumbai has stable power supply and land available for the construction of data centres, making it an attractive location for operators. Moreover, the city is the financial capital of India, home to many major corporations and financial institutions, resulting in a significant demand for data centre services. According to a report by Cushman & Wakefield, Mumbai is the leading city for colocation services, accounting for more than 30 per cent of the market share in India.
According to a report by JLL, India has witnessed a surge in data centre power absorption in recent years, surpassing many key markets in the US and Europe. As of 2021, the total data centre power absorption in India stands at approximately 400 MW, which is higher than the total in major US markets such as Chicago, Atlanta and Phoenix, as well as major European markets such as Frankfurt, London and Paris. This surge in DC power absorption can be attributed to the rapid digitisation and growth of e-commerce, online gaming and social media in India. The Indian government’s initiatives such as the Digital India programme and the Make in India campaign have also contributed to the growth of the data centre industry.
Summing up
In conclusion, the next 10 years hold great promise for the growth of data centres and cloud services in India. According to a recent report by Market Research Future, the Indian data centre market is projected to reach $1.5 billion by 2026, growing at a CAGR of 11 per cent between 2020 and 2026. Additionally, the cloud services market in India is expected to grow at a CAGR of 15.5 per cent during the forecast period of 2021-26, according to a report by Mordor Intelligence. These statistics point towards a bright future for the Indian tech industry, and it is imperative for companies to stay abreast of these trends to leverage the potential growth opportunities that lie ahead. S
