The Indian economy is growing strongly and remains a bright spot in the global landscape. This growth is built on strong fundamentals driven by digitization, connectivity, cash- and paper-less economy, and a start-up innovation ecosystem. High mobile penetration and rising tech adoption are further propelling our economic progress.

There is a fundamental shift in the way end users perceive and consume data, and this has been a game-changing moment for stakeholders across the IT infrastructure ecosystem, yielding long-term benefits. With an ever-growing and always connected population, there is a surge in data being generated and as a result, industry reports have indicated India’s digital data consumption is expected to grow nearly twice as fast that of the rest of the world. This data needs to be stored, managed and disseminated to users ubiquitously through public and private clouds and is driving the strong demand for efficient, reliable and scalable data centers across the country.

Because of digitization, the data center business has been witnessing high growth and will continue to do so. Cloud computing is the most disruptive force in the digital age, impacting IT strategy and expenditure, and adopting a cloud-first strategy has now become a business imperative. Rapidly growing cloud service providers will work closely with their trusted carrier-neutral data center partners, to plan for their requirements including adjusting designs, up-sizing powered shells, and planning expansion of campuses.

Favorable environment

The Indian data center market is currently underserved, and there is an ever-increasing requirement for energy-efficient facilities. Existing data centers need to be enhanced to meet the developing requirements. As the fastest-growing infrastructure market that is poised to be one of the largest globally within the next few years, we anticipate strong demand for data centers across India. 

India’s macro environment is highly favorable and our teledensity is the highest in the world, with data growth nearly twice the global average. Rapid adoption of smartphones, increasing access to high speed data services and digitization in the content and media industries are leading to strong demands for web hosting in the consumer market. In the enterprise market, increasing transformation to digital and e-business are pushing enterprises to migrate from captive to third party data center service providers. As a result of this, we are seeing an increase in data center traffic.

With the evolution of cloud computing, many captive data centers in India are unable to handle the demands of modern high density computing platforms pushing many organizations to look for reliable third party data services providers with modern facilities. Apart from the private sector, we also see that the government (both state and center levels), are highly committed to roll out IT-intensive services to improve their performance, increase efficiency and organise their services to citizens. The Digital India program, which is being promoted heavily by the current Modi Government, has a vision to transform India into a digitally empowered society and knowledge economy represents a huge business opportunity for the India data center market.

Need for power 

Power constitutes two-thirds of the operating costs for data centers, and power requirements are continuously increasing. Getting highly reliable and diverse power feeds for a data center is a challenge, and the unit costs for power are on the rise too. Due to power and other infrastructure challenges in many states, third party data center providers focus more on major cities putting pressure on the space availability and limiting expansion potential while driving up costs. As an immediate solution, there is a requirement to develop a transmission and distribution network that provides reliable power connectivity in metros and non-metros across India. This will provide impetus to local economic activity resulting in overall development and growth, attracting companies to invest thus benefiting the local economy.

The Indian data center market is currently underserved, and there is an ever-increasing requirement for energy efficient facilities

India’s power infrastructure challenges currently limit the expansion to Tier 1 cities where real estate is expensive and scarce and where there is a heavy concentration of skilled manpower. India is also a large land mass and the varied climates across the country can have an impact on data center efficiency.

In summary, the Indian market undoubtedly poses challenges which are unique to the country, however beyond these challenges lies tremendous growth and opportunity.

Sumit Mukhija is chief executive officer of STT GDC India, which recently acquired Tata Communications’ Data Centers