Indian data center service market was valued at USD 4.4 billion in 2020 and is projected to cross USD 8 billion by 2026, expanding at a CAGR of 12%. Due to high demand from BFSI, logistics, transportation, e-commerce, and government agencies, the Indian data center sector is seeing substantial investment from colocation service providers. fueled by the COVID-19 pandemic outbreak.Numerous global colocation and data center service providers have demonstrated a strong interest in the Indian data center sector, possibly contributing to the market’s growth. For example, Equinix entered India in August 2020 via the acquisition of GPX Global Systems in Mumbai, which is expected to close in Q2 2021.
INDIAN DATA CENTER MARKET SEGMENTATION
IT Infrastructure (Servers, Storage, and Network);
Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructures);
Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Dry Coolers, & Condensers, and Other Cooling Units) and Racks, and Other Mechanical Infrastructure);
General Construction (Core and Shell Development, Installation and Commissioning Services, Engineering and Building Designs, Physical Security, and DCIM/BMS);
Tier Standards (Tier I & II, Tier III, and Tier IV); and Geography (India)
The Ministry of Electronics and Information Technology (MeitY) in India drafted a data center policy in November 2020, which is expected to have a significant impact on the growth of the data center industry. In December 2020, Adani Group announced plans to invest approximately $340 million in Chennai to establish a hyperscale data center facility. The company had partnered with global colocation service provider EdgeConneX to develop and operate 1 GW of data center campuses across the country, all of which would be powered by Indian renewable energy sources. In India, government agencies and businesses are establishing their own data centers. The demand for on-premises infrastructure solutions is continuing to expand. The National Payments Corporation of India, the State Bank of India, the National Payments Corporation of India, and the Tamil Nadu Information Technology Department are investing in self-built facilities throughout the region.
The India data center market is seeing a slew of new entrants, including Colt DCS, Bridge Data Centers, Mantra Data Centers, AdaniConneX, and Equinix, as a result of strong internet user growth and proposed data protection laws.
NTT Global Data Centers (Netmagic) announced plans to invest $2 billion in developing new facilities across India in September 2020.
Yotta Infrastructure has begun construction of hyperscale facilities in Chennai (240 MW) and Delhi (200 MW).
The COVID-19 pandemic will act as a catalyst for data center growth in India, as enterprises increasingly migrate on-premises workloads to colocation facilities.
Tax breaks for data center development are available in Maharashtra, Uttar Pradesh, and Telangana, increasing market competitiveness among states in attracting hyperscale facility investments.
With growth in high-load applications, all-flash and hybrid storage arrays will likely dominate the storage systems market.
Due to increased HPC infrastructure deployment the rack power density is expected to increase from 6 – 8 kW to 13- 15 kW.
IT INFRASTRUCTURE INSIGHTS
Demand for servers suitable for cloud and big analytics workloads is expected to rise. T he adoption of converged and hyper-converged infrastructure solutions is likely to have an impact on market growth. Enterprises are likely to prefer servers that take up less space in the data center without sacrificing performance. White-box server systems are expected to grow in the market as enterprises seek to adopt server infrastructure based on open community designs (OCP).
The storage systems market was driven by the increased adoption of all-flash storage arrays, as well as a sizable contribution from hybrid storage arrays, in 2020. High-performance operations support the expansion of flash storage systems in data centers that require high I/O capabilities. AI and machine learning workloads will be deployed more widely.
ELECTRICAL INFRASTRUCTURE INSIGHTS
Colocation providers are likely to purchase a lot of lithium-ion UPS systems. Less than 500 kW lithium-ion UPS systems are likely to be promoted by modular operators. Single-phase lithium-ion systems with a power capacity of less than 10 kVA will be used in single-rack prefabricated solutions. Large and mega facilities are increasingly interested in purchasing UPS systems with capacities greater than 750 kVA. Small and medium-sized facilities, on the other hand, are purchasing UPS systems with capacities of less than 500 kVA. Furthermore, the increasing rack power density and the need to provide high availability services are expected to increase the importance of UPS systems in India.
Because of the unreliability of grid supply, which has resulted in multiple data center outages, the data center generator market in India is expected to grow. Diesel Rotary Uninterruptible Power Supply (DRUPS) systems, which combine both battery and flywheel UPS topology and a diesel generator to provide backup power during outages, are likely to be used in the market because they are highly reliable, efficient, and require little maintenance. The Indian data center market is seeing an increase in the use of high-capacity generator systems, which aid in space optimization.
MECHANICAL INFRASTRUCTURE INSIGHTS
With over 90% market share, air-based cooling dominates the Indian data center market. Water scarcity in major metropolitan areas is expected to pose challenges to the market’s water-based cooling technique’s growth. The construction of facilities with a power capacity of more than 10 MW is expected to contribute to the market’s growth of cooling solutions. The majority of facilities in India have a versatile design that allows for the use of up to 52U rack sizes. As a growing number of cloud-based and internet-based service providers consider adopting OCP architecture-based IT infrastructure systems, the rack market is expected to grow. CRAC units are more commonly used in Indian facilities, and most facilities use air-based cooling systems. Most facilities that operate in colder climates use free cooling chillers with smart technology to enable temperature-based operations.
GENERAL CONSTRUCTION INSIGHTS
Construction contractors and subcontractors are well-represented in India’s data centre market. Sterling and Wilson and L&T Construction are two of the market’s leading contractors. These companies can provide installation and commissioning services. As a result of the increased construction of new facilities, multiple global construction contractors are likely to enter the market. Data center development requires installation and commissioning services. The Uptime Institute has certified several Tier III and Tier IV facilities in India for design, construction, and operational stability. This is frequently required by colocation service providers in order to attract customers for their service offerings.
TIER STANDARDS INSIGHTS
According to the Uptime Institute, the total number of certified data centers in 13 Indian states, including local and global facilities, is around 35. Tier III certified data centers outnumber Tier IV and Tier II certified data centers. The major states with certified facilities are Maharashtra, Uttar Pradesh, Haryana, Karnataka, and Gujarat. Several underdeveloped projects in India fall into the Tier III category. This trend is expected to continue throughout the forecast period. With the rack power density and critical applications, many operators expected to move to Tier IV. According to the uptime institute, India has five data center facilities located in Maharashtra, Tamil Nadu, and Andhra Pradesh.
Maharashtra is a popular destination for data center development in India. Mumbai is the most active city in terms of data center development, followed by Chennai. AWS, Microsoft, Alibaba, and Google all have physical locations in Mumbai. Colt DCS is building Mumbai’s largest data center, with a total power capacity of more than 100 MW. The main factors influencing data center development in Maharashtra are favorable government incentives and high IT connectivity. Mumbai is a significant location for high submarine cable deployments connecting to key markets and regions around the world. Google announced a $400 million investment in Blue-Raman cable deployment in April 2020, connecting India with Israel and Italy.
There are several IT, electrical, and mechanical infrastructure providers in the Indian data centre market. Some major global IT and support infrastructure providers include Arista Networks, Atos, Broadcom, Cisco Systems, Dell Technologies, Caterpillar, Schneider Electric, Eaton, Legrand, and Cummins. Domestic players such as Mumbai-based WQ, which is part of the Dhananjay Group, are significantly expanding operations as a result of policy changes by the government to promote Atma nirbhar Bharat with their Smart Solutions, which compete with global players. During the forecast period, infrastructure vendors are likely to offer innovative products that reduce power consumption and improve efficiency. In addition, the market is expected to see high demand for UPS and generators of various capacities in small, medium, and large data centers. Over the next few years, there will be an increase in demand for high-capacity systems with 2N redundant configurations. As several operators rapidly expand their operations, the Indian data center market is seeing intense competition among local service providers. New market entrants are putting established players on the defensive.
Following the Covid 19 Scenario, Mumbai, Chennai, Greater Noida, Telangana, Pune, and Kolkata are the most popular destinations for data center investment in India.
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