The data center market in India is a rapidly growing sector, driven by the increasing demand for cloud computing, data storage, and other IT services. India has a large and diverse population, and the growth of the digital economy has led to a surge in data center construction and expansion.The Indian government has also been promoting the development of the data center industry through initiatives such as the National Data Center policy, which aims to encourage the growth of data centers in the country.
In 2023, the interest and investments in data centers will increase substantially, and we believe the following trends will significantly impact the data center industry in India:
Data Center investments will explode: The data center market in India is expected to continue to grow in the coming years, driven by the increasing demand for digital services and the government’s focus on digital infrastructure development. For the record, data center investments are expected to cross a massive $20 billion by 2025, according to real estate firm, CBRE. In the first half of FY 20222, the data center capacity exceeded 9 million sqft with more than 600 MW capacity in India, and by 2024, this capacity is expected to nearly double, with more than 400 MW currently under construction. This is because of increased data center investments from not only local players but also global hyperscalers, who have shown keen interest by investing in creating cloud regions in India.
Edge data centers will accelerate due to demand from Tier 2 and Tier 3 cities: As demand increases from Tier 2 and Tier 3 cities increases rapidly, localized edge data centers will be in huge demand. A BCG report released in 2022, says that smaller cities are playing a huge role in e-commerce growth, with 30 of the top 50 mature e-commerce markets belonging to small towns. The report also cites that more than half of online shoppers and a fourth of the spending will come from rural markets by 2030. This will accelerate deployment of edge data centers, as service providers seek a way to improve the speed and reliability of their services. Edge data centers are particularly useful in areas with a high density of users, such as urban centers, where traditional data centers may not be able to provide sufficient capacity or low-enough latency. The future will be increasingly at the edge, as numerous analyst reports have pointed out. An IDC report, ‘The EdgeView 2022’ found that three quarters of organizations plan to increase their edge spending over the next 2 years with an average increase of 37%.
Remote data center capabilities will become more popular:The pandemic has taught many lessons – one of the foremost lessons is to have the ability to manage data centers from remote locations, if local staff is unable to physically reach the location for any reason. Remote data center management can be useful for a number of reasons. For example, it can allow data center operators to manage multiple data centers from a single location, reducing the need for on-site staff and potentially lowering operating costs. It can also allow for more flexible and scalable data center management, as staff can be brought in on an as-needed basis rather than being permanently located at the data center site. In 2023, we expect more data center operators increasing the push towards remote data center operations, to improve efficiencies.
AI-enabled infrastructure automation will be fundamental to data center operations: As performance requirements of applications increase, the IT infrastructure has to keep pace. This will be possible using AI-enabled infrastructure automation. A report from Gartnerhighlights that by 2025, 70% of enterprises will complement the continuous delivery of applications with continuous infrastructure automation to improve business agility, which is a significant increase from fewer than 20% in 2021. For example, AI and ML algorithms can analyze data center operations in real-time, identifying patterns and trends that can be used to optimize performance. This can lead to improved efficiency and lower operating costs.AI algorithms can also be used to predict and prevent potential problems before they occur, helping to improve the reliability of data center operations.
Sustainability will at the center of all data center decisions: Sustainability is increasingly important in the data center industry, as data centers are a significant contributor to global energy consumption. With sustainability a board room discussion, every major cloud service provider or hyperscaler has taken a number of initiatives for fulfilling their objective of reducing their carbon footprint in a big way. As Environmental, Social and Governance (ESG) activities receive increased attention, enterprises are focusing on selecting only those service providers who have sustainable practices and processes. A Gartner report corroborates this in a finding, which states that by 2025, the carbon emissions ofhyperscale cloud services will be a top three criterion in cloud purchase decisions.
(This article is written by Vimal Kaw, Colocation Product Head and New Site Selection Lead, NTT Ltd in India, and the views expressed in this article are his own)
