ESOMAR-certified market research and consulting firm Future Market Insights recently predicted that the India data center transformation market would grow at a CAGR of 14.6% over the forecast period (2023-2033). According to analysts, the India data center transformation market will be valued at US$ 545.1 million in 2023 and will reach US$ 2,130 Million in 2033. According to estimates, it will hold a 7% market share in the global market.
Investments are focused mainly on Tier 4 data centers
According to NASSCOM, most of the expanding data center investment in India occurs in the cloud. Indian data centers, including Yotta NM1, are among the largest in the world. Among all tiers, Tier 4 data centers offer the greatest fault tolerance and uptime expectations. With the increasing adoption of Tier-4 data centers, data center transformation vendors will need to provide services and solutions that meet the requirements of tier-4 data centers.
The construction of data centers in India was key to the country’s trillion-dollar digital economy’s growth. Data centers will expand faster as the industry attains infrastructure status, creating the need for sustainable measures. During the next few years, sustainability will play a huge role in shaping the growth of the data center industry, with India potentially becoming a leading hub for the industry in the Asia Pacific. On-premises data centers operated by global technology companies are more common in Bengaluru.
Close proximity to Mumbai has made Pune a popular disaster recovery site for business in the banking, financial, and insurance sectors. Several regulatory incentives have supported the Delhi NCR region’s data center industry, which is expected to generate high levels of demand from government agencies. The densely populated region of Kolkata in India is projected to receive a new cable landing station within the next few years, making it a valuable location for international cable landing operations.
Several studies are showing evidence to support an ongoing digital transformation, while cloud service providers, data centers, and telecommunications companies are all adopting a wide range of strategies to gain a competitive advantage to stand out in the market. Nxtra by Airtel, Bharti Airtel’s data center subsidiary, will invest more than US$ 600 million (Rs. 5,000 crores) to expand its network of 11 large and 120 edge data centers by 2025.
Energy-efficient and Eco-friendly Initiatives for Data Centers
Data centers in India have seen remarkable growth in the last decade, driven by the proliferation of mobile devices, social networks, e-commerce, and other digital initiatives. Considering the size and population of India, energy generation demands substantial investment and resources. Renewable energy sources and energy efficiency have been high priorities for current government policymakers. With so many data centers in the country, energy-efficient data center transformation is becoming a norm in the market.
CII-IGBC estimates that data centers consume 3% of global energy and emit about 200 million tons of carbon emissions annually. To address this factor, CII-IGBC and the Lawrence Berkeley National Laboratory are collaborating on energy efficiency upgrades for Indian data centers. This will enable Indian data center transformation companies to focus on environmentally friendly data center projects.
Key Takeaways
- Rapid internet usage and the advent of 5G technologies to propel the Indian market
- By service, consolidation to account for over 1/3rd of the India data center revenue pie
- IT & telecom to emerge as the key vertical leveraging data center transformation, expected to grow at over 10% CAGR
- Cloud-service providers to retain the top spot at over 40%, followed by colocation providers
“Building energy-efficient data centers in India to reduce carbon emissions will be a key strategy. New devices and digital transformation will drive the proliferation of cloud data centers,” says a market analyst at Future Market Insights.
Competitive Landscape
Approximately half of the market share is held by key players, indicating moderate consolidation. Long-term service guarantees are likely to be provided by these players. Some of the key players in the market are Dell, Orangemantra, Schneider Electric, Mtu, Profile IT Solutions, Inknowtech, Infineon, and Cisco.
- Microsoft is investing in the construction of data centers in India to enable the development of solutions in that country. In 2025, it intends to open a fourth facility in Hyderabad. This strategic investment contributes to Microsoft’s commitment to enabling its customers to thrive in a digital economy fueled by cloud computing and artificial intelligence (AI).
- A strategic partnership between India’s Yotta Data Services and Bangladesh’s Shamsul Alamin Group (SAG) supports Yotta’s foray and expansion into Bangladesh. To assist Yotta in identifying the vast opportunities in Bangladesh’s emerging digital transformation market, Shamsul Alamin Group will utilize its expertise in real estate and market leadership.
