India – The Next Datacenter Hub

The pandemic has pushed the demand for cloud across the globe with digital transformation accelerating across industries, and internet becoming a lifeline for people both for work as well as entertainment. This shift towards cloud has pushed increased investments in hyper-scale datacentres with the global datacentre market investments expected to reach ~$200 billion per annum by 2025. India is also expected to get a share in this growth with investments in the country expected to reach ~$5 billion per annum by 2025. The report identifies the various aspects of global and Indian datacentre market; key trends, drivers and challenges; a site selection framework for India market opportunities; key recommendations for the India market outlook and the market outlook.

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Key Findings

Global Datacentre Market

Cumulative investments of $1.3 trillion are expected over 2019-2025
North America is the leading market in terms of investments, while MEA & LATAM are the fastest growing markets followed by APAC
IT Infrastructure accounts for ~77% share of total datacentre investments; with the rest being invested in electrical & mechanical infrastructure, and general construction
Covid Impact
- Increased data traffic has pushed the occupancy rate of colocation datacentres pushing more investments in the sector
- A temporary halt in construction of datacentres during the lockdown, which quickly recovered as lockdowns were relaxed

India Datacentre Market

Cumulative investments of ~$28 billion expected over 2019-2025
In terms of CAGR over 2019-2025, India is expected to grow at ~5%, 2X faster than global
The India Advantage
- Majority investments focused on Tier IV datacentres
- Operational and development cost advantage
- Availability of engineering skills
Covid Impact
- Increased capacity utilization of existing outsourced datacentres
- Service providers have fast track their planned expansions

Major Datacentre Locations and Site Selection

Mumbai, Chennai, Bengaluru, Hyderabad, Delhi (NCR) - as they offer good fiber connectivity, proximity to customers, availability of skilled workforce, and submarine cable connectivity
Geographic location, power, fiber connectivity, and general construction & operations remain the key selection criteria for site selection before setting up a datacentre

Outlook and Recommendations

India has a huge potential to take a large share of global datacentre investments if it is able to act fast on implementing the recently announced datacentre draft policy growing the CAGR by 2X-3X, with annual investments reaching $6 -$8 billion by 2025
Key recommendations include faster implementation of government’s draft policy, encourage use of renewable resources, level playing ground for all players, deemed regulatory approvals and digitization of RFPs.

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