India is the 13th largest data centre market in the world. The country is currently home to 138 data centres, 36 internet exchanges and one internet connection platform, with investments estimated to reach $23 billion by 2025.
Over the past five years, India has seen investments of $14 billion in the data centre domain from companies such as Microsoft, the Adani Group, Google Cloud, Nxtra Data Limited, and DE-CIX. The industry is poised for steady annual growth, with an estimated compound annual growth rate of 5.84 per cent and a market size of $9.27 billion by 2027.
Competitive advantage
India has a significant competitive edge in the data centre industry, with cost-effective operations and development, a pool of engineering skills, and the growing utilisation of existing outsourced data centre capacity. Major cities such as Mumbai, Chennai, Bengaluru, Hyderabad and Delhi NCR are popular choices as they offer excellent fibre connectivity, a skilled workforce, and submarine cable access.
KPIs for data centres
There are three key performance indicators (KPIs) for data centres – local access to more dense and diverse networks, greater geographical coverage of carrier and data-centre-neutral interconnection infrastructure, and a range of scalable and customisable interconnection services that support digital transformation for enterprises. “Latency is the New Currency” has been consistently emphasised by the DE-CIX team. DE-CIX’s Digital Interconncetion Triangle is gaining relevance as new and transformative technologies such as internet of things, artificial intelligence and 5G accelerate the pace of change in markets around the world.
Key offerings
DE-CIX is a Germany-based company that operates on a data-centre-neutral interconnection platform across the world. DE-CIX’s unique selling propositions include peering services, DirectCLOUD, Microsoft Azure Peering Services (MAPS).
DirectCLOUD simplifies business decisions for customers and enables multi-service provisioning over the existing access port based on the transfer price model. Moreover, it is a secure connection that bypasses the internet, providing protection against distributed denial-of-service (DDoS) attacks and further guaranteeing service-level agreements (SLAs).
Another innovative offering is MAPS. It is an SLA-backed, DDoS-free connection service that provides highly reliable and optimised internet connectivity to Microsoft’s cloud services. It improves the user experience by offering the shortest network path from the premises to the nearest edge point of presence (PoP) with the lowest latency in the Microsoft network.
Future plans
DE-CIX has been a leading catalyst for data centre growth of all sizes, from micro to hyperscale data centres. In India, two emerging trends have been observed that reflect the unique demand: first, a significant demand surge for co-location data centres and second, the emergence of newer edge data centres.
Recognising these trends, DE-CIX partnered with AAACloud Telephony Private Limited in December 2022, with has plans to establish 200 edge PoPs across India. Moreover, the majority of data centres in India are concentrated in Tier I cities, leaving the potential for growth in Tier II and Tier III cities largely untapped.
Going forward, DE-CIX has ambitious goals in India, including the densification of interconnection infrastructure and the diversification of interconnection services. The company’s goal is to create more distributed, self-sufficient, resilient, secure and performant interconnected ecosystems.
Presence in India
DE-CIX has a strong foothold in India as it currently has five internet and cloud exchanges and 35 data centres across the country with over 600 network connections.
DE-CIX’s growth in the Indian market is reflected in the data traffic experienced over the past 18 months, that is, from April 2022 to September 2023. The company witnessed a 2,013 per cent growth in data traffic in gaming, 1,888 per cent in over-the-top services and video-on-demand, 1,003 per cent in social media, 850 per cent in internet service providers, 813 per cent in content delivery networks, and 453 per cent in hosting. For the past 25 months, DE-CIX Mumbai has maintained its unassailable lead position as Asia Pacific’s No. 1 interconnection platform amongst 153 exchanges across 29 countries.
Challenges
Enterprise customers face various challenges on their path to achieving the desired outcomes. Some of the obstacles include the need to maintain flexibility by avoiding vendor lock-in, enhancing performance, strengthening the security and resilience of their connectivity, and reducing the complexity of their connections to partners.
What lies ahead
Overall, the data centre market in India presents significant opportunities for growth and innovation. DE-CIX is committed to meeting meeting the customer demands with next-generation infrastructure such as the metaverse, low earth orbit satellite, augmented reality and virtual reality. Notably, India is looking at sustainability as a key consideration in data centre construction and operation, which includes the use of renewable resources, fair play for all players, regulatory approvals, and the digitisation of requests for proposals.
Based on a presentation by Sudhir Kunder, Chief Business Officer, DE-CIX India
