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Data Center Manufacturing Industry Poised for High Growth

By Raviraj U

In 2019, India became a $2.7 trillion economy. In 2014, the World Bank had ranked India at 142nd position in its ‘ease of doing business’ report, and in 2019 India was ranked 63rd. Keeping a view on the positive developments, the government of India envisioned making India a $5 trillion economy by 2024-25. But, everything changed post COVID-19 pandemic. While the world is grappling crisis due to the pandemic, MSMEs to large corporations are veering towards a view that they need to look beyond the established region of manufacturing to newer countries such as India. Countries such as India can be an attractive new investment hub and can cater to their needs readily and will also keep their productivity invulnerable from unexpected threats.

Investors find India an attractive destination due to myriad factors. A thriving democracy, a vibrant law and justice system, rising ease of doing business ranking, a vast expanse of land banks available, large technical and trained talent pool, economical operational cost, young demography besides the sops being offered by both central and state governments are reasons to attract the global corporations to look at India.

Many state governments are inviting international investors and easing regulations for both international as well as domestic companies. As new investors enter the Indian market, Indian data center and rack manufacturers will see a boost. As per a 2019 forecast, it is expected that the Indian data center market size to reach USD 1.5 billion by 2022 at a CAGR of 11.4%.But this was before COVID-19. Global equations have drastically been altered by COVID-19. Now, with India emerging as a potential destination of manufacturing also, tectonic changes are likely which will favor India.

Most organisations have started realizing the power of data and, hence, data centers. A lot of investments is being made in establishing world-class data centers in India, and as an obvious extension the data center rack market size is growing(globally by over $524 million during the period 2019-2023).

The government is increasingly relying on IT-intensive services to improve its public service delivery and performance, and robust data centers network is the key. The IT & telecom segment is expected to lead the data center market growth in India. Media & entertainment, retail through e-commerce, and manufacturing sectors are the also key verticals that require the most number of data centers.

With the data center industry evolving, more research and development is being put in to bring forth cutting edge data center technologies. To keep pace with the growing DC market, DC rack manufacturers are progressively working towards offering efficient, flexible, cost-effective, scalable, modular & intelligent DC solutions adhering to globally recognized safety and compliance. There will be a need for future-proof racks that could smartly help businesses make intelligent use of all the IT resources, including IT assets, power, cooling, and network. That, in turn, will lead India to become a key hub of the data center industry.

(The author is Director – Sales & Support, NetRack Enclosures Pvt Ltd and the views expressed in this article are his own)

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