Nikhil Rathi, Founder and CEO, Web Werks
Data centres are thriving across Asia Pacific. The sector had already been coming into its own before the pandemic. The year 2021 is likely to see new markets in the Asia-Pacific (APAC) region lead the regional growth story.
Singapore has long been considered the hub of commercial activities, connectivity and access in the APAC region due to its location, political stability and ease of doing business. However, the country is inherently limited in its ability to cater to the rising global demand for an industry such as data centres. This is where the world of data needs another base, one that provides almost exponential scope for expansion, quality resources, a ready-to-serve market, and ample global connectivity. In short, India is poised to emerge as a hub for the APAC data centre market, and there are plenty of reasons why the country is set to be the next nerve centre of APAC data traffic.
Geographic location
India is blessed with unmatched geographic advantage, which puts it at just the perfect distance from other APAC financial and business hubs such as Singapore,
Dubai, and Shanghai, and even European cities such as London. The country also has a coastline stretching over thousands of miles, making it an ideal point for cable landing from the east as well as the west.
Geoeconomics
India is the second-most populous country in the world and is rapidly advancing economically as well. The pandemic notwithstanding, India’s clout in the region is constantly growing. In fact, there is already a paradigm shift from Asia Pacific to Indo-Pacific under way.
Ready-to-serve market
A population of 1.35 billion with hundreds of millions of active internet users make India a huge market, ready to be tapped into. The country is witnessing a massive emergence of rapidly growing technology-driven companies in almost every business vertical. Several unicorns have come up in sectors such as education, beauty, retail, e-commerce, healthcare, IT and software, food delivery, groceries, and insurance. There are companies in both B2B and B2C segments that are heavy consumers and generators of data. In order to manage and analyse this massive data volume, businesses are rapidly switching to cloud-based data storage. Global leaders in cloud services such as Google, Amazon and Microsoft are competing to dominate the cloud market in the region.
Government regulations
The Indian government has made it mandatory to store crucial data within the geographical limits of the country. This has significantly scaled up demand for domestic data centres. India has ample land and connectivity, and major metro cities such as Mumbai, Bengaluru, Chennai, Hyderabad and Delhi NCR are witnessing a rapid scaling up of data centre infrastructure.
Growth of Indian data centre market and investments
Apart from these geopolitical and demographic dividends, the exponential growth of the digital economy is helping the Indian data centre market to grow faster than ever in the post-pandemic world. It is natural that this demand is going to lead to a massive build-up of data centre infrastructure. Growing at a CAGR of 21 per cent, the market is expected to reach 1,078 MW by 2025. Mumbai with of 360 MW and Chennai with 134 MW are set to be the two biggest contributors of this growth. Several cable landing stations or submarine cables are also going to be added to the infrastructure in the years ahead. In fact, Mumbai has been the core of the Indian data centre industry, right from its early days. The city has led India’s global economic positioning and has played an instrumental role in presenting it as a lucrative investment destination. The Mumbai Metropolitan Region accounts for 42 per cent of all installed capacity in India.
The road ahead
India has a huge untapped potential as a market, but the country does not yet have the infrastructure to cater to its 688 million internet users. It has comparatively less entry barriers in renewable energy, especially solar power, which makes the country an ideal location for sustainably powered data centres. Further, the data sovereignty laws passed by the Indian government mandate all domestic and international companies to store certain data types within the country’s geographical limits, which is bound to drive the demand for data centres and investments in the industry.
However, the existing data centre infrastructure in India is inadequate for fulfilling the demand efficiently. These limitations of infrastructure have encouraged global operators such as IMDC to invest heavily in infrastructure building in the country in the years to come. IMDC and Web Werks are planning to build new hyperscale and edge co-location facilities in cities such as Bengaluru, Hyderabad, Chennai and Kolkata. s
