India on the verge of significant data centre expansion

Amrita Nair-Ghaswalla Mumbai | Updated on February 14, 2019

Mumbai, Bangalore, and Hyderabad are witnessing high investments from local and global data centre operators, with Telangana and Andhra Pradesh likely to emerge the most sought-after locations for mega-datacentre development.

According to market intelligence firm Arizton’s research, the data centre market in India is expected to reach a revenue of approximately $4 billion by 2024, growing at a CAGR of around 9 per cent during 2018−2024. The significant interest shown by State governments to build and operate data centre facilities appears to be bearing fruit, adds the report.

Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India, told BusinessLine, there is need to develop complementary infrastructure in order to sustain and support the growth in IT enabled services, especially cloud-based services and aid easy implementation of e-governance initiatives.”

Sachdev added, “We expect demand for data centre units, equipment suppliers, and third-party data centres to strengthen in 2019 and beyond, and hence advice occupiers to look at IT centres like Bengaluru and Hyderabad which already have the supporting infrastructure to establish data centres.”

As per Colliers’ research, data centre stock is approximately 2 per cent of the total Grade A office stock across seven cities and is expected to rise to 5 per cent by 2025.

Market analysis firm BroadGroup has noted that data centre capacity is set to increase by almost 68 per cent from 2018 to the end of 2020. Most data centre development has taken place in southern India, said a BroadGroup report, with Bengaluru, Chennai, Hyderabad and Mumbai collectively set to represent around 79 per cent of all retail space by the end of 2020.

Even as Colt Data Centre Services (DCS) is planning to invest around $300 million in a hyperscale data centre facility in Mumbai. The company plans to build a 100 MW IT hyperscale data centre facility. Cloud revenue in India alone is predicted to grow at a CAGR of 25 per cent between 2016-2021, according to Colt DCS.

Oracle is looking to launch its first India data centre in Mumbai at the end of 2019. It will look at Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) workloads.

Alibaba Cloud, the cloud computing arm of Alibaba Group, which had launched its second Availability Zone in Mumbai in September last year was a harbinger to the trend unfolding in India.

Arizton’s research showed that around 20 projects fall under Tier III locations.

Published on February 14, 2019

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