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      Home Business Technologies

      Indian data center industry in 2022: Trends that will cascade and crystallize growth

      DQI BureaubyDQI Bureau
      December 23, 2021
      in Business Technologies
      3
      Data Centers

      sds data centers

      The Indian data center industry is witnessing meteoric growth. A large and still growing internet userbase, the explosion of data and the creation of a conducive atmosphere via the government’s Digital India mission has transformed India into a fast-growing data center hub.

      Amidst all this, the most exciting fact is that this industry is at the very beginning of a larger growth journey. A report on the Indian data center market by Arizton Advisory and Intelligence estimates that the industry will grow at a CAGR of 12 percent until 2026. This growth will be fuelled by several trends and technologies. Here are the ones we expect will continue to impact across 2022.

      From captive to colocation
      As enterprises adapt to a shifting technology landscape, they will accelerate migration from captive to multi-tenant data centers. As a result, the data center industry is likely to witness increasing adoption of ‘As-a-service’ solutions by enterprises. High scalability and high-quality infrastructure will be the primary drivers of this adoption.

      According to a JLL report, the colocation data center industry in India is expected to double by 2023, from the current 499 megawatts (MW) to 1008 megawatts (MW). In a nod to its massive spill-over effects, the real estate sector is preparing for a requirement of over five million square feet of space to meet this demand.

      Personal Data Protection Bill (PDP)
      With the Joint Parliamentary Committee (JPC) recently adopted its report, the Personal Data Protection Bill 2019 might finally be tabled in Parliament for discussion. This has firmly put the wind in the sails of the data center companies operating in India. The passing of the PDP Bill 2019 will represent a major milestone for the industry.

      Data protection and localization will give the industry a massive boost as enterprises embrace local service providers. And not just data centers, even allied industries will be able to participate and share in the growth. A large chunk of the investment in data centers will be directed towards infrastructure to meet the requirements outlined by the government. The Bill and industry’s positive response towards it is expected to generate thousands of new jobs, with the demand for IT specialists and engineers going up.

      It takes two to tango: 5G and edge computing
      Indian telecom players, technology providers, and the telecom department are working tirelessly to ensure that India can stick to its country-wide 5G implementation target by the second quarter of 2022.

      A Savills India report pegs a combination of 5G, Internet of Things (IoT), Artificial Intelligence (AI) and Cloud to generate a demand of 15 to 18 million square feet for data centers. 5G is expected to add on to the vast troves of data already being generated. As technology becomes increasingly sophisticated, Edge Computing will help process this data close to the source itself.

      Edge computing and 5G will co-evolve to harness the best of each other, with data centers serving as a bridge between the two. According to Gartner, Edge computing will account for 75 percent of enterprise-generated data by 2025, over a 7x increase from the current 10 percent.

      Underpinned by a robust edge data center network, enterprises, telecom companies and cloud service providers will invest in Edge computing for applications like last mile content delivery, factory automation, telemedicine, autonomous vehicles and augmented and virtual reality (AR/VR). India is increasingly waking up to the limitless possibilities contained within edge data centers. Tier-II cities like Ahmedabad, Bhubaneshwar, Coimbatore, Jaipur, Kochi, Lucknow, Nagpur, Vizag, amongst others, will push for more investments in this space.

      Data center interconnect (DCI)
      Data center interconnect (DCI) technology helps connect multiple data centers over short, medium or long distances and will continue to grow as it brings lower operational costs and flexibility. Hybrid IT solutions have led to an exponential increase in traffic between data centers, making interconnectivity more critical.

      As it helps create many-to-many connectivity options, DCI is assisting enterprises in cutting down on latency due to reduced distances. Not only does this improve user experience, but it also optimises costs. As this technology will significantly improve access speed due to a local re-routing traffic, data center interconnect will transform from a ‘nice-to-have’ to a ‘must-have’ through 2022.

      High on cloud
      While 2021 saw the explosion in cloud adoption owing to the accelerated digital transformation, 2022 will again witness the rise in migrating to the cloud as flexibility, scalability, and cost considerations will take precedence. According to Gartner, end-user spending on public cloud services in the country is forecasted to grow by another 30 per cent in 2022.

      Multi-cloud set up will become more mainstream as companies upgrade their IT infrastructure. Even though it adds complexity to the structure, multi-cloud enables business to select from a wide array of offerings that are better suited to their business needs. As companies stock up cloud services such as SaaS, PaaS, XaaS, etc., they will be exposed to the risk for cyberattacks in 2022 resulting increase in investments in cybersecurity.

      Glimpse into the future
      India’s strategic importance in APAC’s digital ecosystem, availability of high bandwidth speed, low power tariffs, state-of-the-art infrastructure and the presence of hyperscalers form the perfect recipe to create and sustain India’s growth as a data center hub. Moreover, as we move through 2022, solution delivery models like as-a-service, pay-per-use and built to suit will emerge and acquire greater market share.

      A combination of these and the trends listed above has led JLL to forecast that data centers are expected to present a $4.9 billion investment opportunity in India, leading to a three-fold growth of the country’s data center capacity by 2025.

      — Sunil Gupta, Co-founder, and CEO, Yotta Infrastructure.

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      Comments 3

      1. Kevin Johnson says:
        1 year ago

        Super Informative, Clearly Laid Out, Easy to Understand and this Well-Written Article Contributes Quality Information for Better Research & Better Decision-Making.

        Reply
      2. Deep Das says:
        2 years ago

        I gained something valuble here

        Reply
      3. Rajesh zaveri says:
        2 years ago

        good information

        Reply

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