The way forward for India’s emerging data center market

  • Given IndiaWith its strategic location and availability of submarine cable landing infrastructure, onshore supply, vast green energy resources, skilled workforce and supportive regulations, the country has the potential to become a APAC data center hub.
  • The Indian data center market is expected to grow at a CAGR of 15.07% during the period 2022-2027.
  • We are seeing greater momentum towards building modern software-controlled data centers through the deployment of new-age digital technologies.

The Covid-19 pandemic has reinforced the importance of digital transformation across all industries.

Workforce shifted to productive work-from-home models almost instantly when the pandemic hit. Patients could no longer visit hospitals and their doctors in person, so the use cases for telemedicine skyrocketed.

Students have shifted to virtual classes, which was never anticipated, leading to increased use of HD collaboration apps. Physical outlets have been closed, so reliance on e-commerce has increased, further increasing data consumption on phones.

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The impact of Covid-19 associated with technological advancements such as cloud adoption, the Internet of Things (IoT), high-definition (HD) video applications, etc. has put enormous pressure on the existing IT infrastructure, as huge amounts of data have to be processed and stored optimally. Lights must be left on 24/7.

Growing need for a robust digital infrastructure

This increase in usage has forced companies to review their digital infrastructure strategy. Captive data centers (DCs) are not enough to house digital content of this scale. Additionally, keeping DCs captive has proven too difficult for organizations due to limited mobility and access issues during the pandemic. All of this has led to increased demand for secure, scalable and connected third-party data centers across India.

Furthermore, industry-friendly regulations, localization and data protection standards, and government digital initiatives and investments have all been implemented to give a structural boost to the Indian data center industry. , which is poised to become a key pillar of our digital economy. The capacity of the data center is expected to increase several times over the next two years. The data center market in India is expected to grow at a compound annual growth rate (CAGR) of 15.07% during the period 2022-2027.

Given India’s strategic location in the South Asia region and availability of submarine cable landing infrastructure, onshore supply, vast green energy resources, skilled labor and favorable regulations, the country has the potential to become a hub of Asia-Pacific (APAC) data. We are already seeing significant investment commitments from major national and international players and believe this trend will only accelerate in the future.

Environmental sustainability at heart

We are seeing an unprecedented consensus across the globe on the need for closer alignment between business and people on climate change. Adopting global environmental, social and governance (ESG) best practices is high on the list of strategic business priorities to stay one step ahead.

Traditionally, data centers have been viewed as power guzzlers, consuming an enormous amount of energy to run critical digital infrastructure. With the government granting “infrastructure” status to data centers, data center players can obtain long-term financing at a lower cost and grow much faster.

Globally, there has been a surge of investors who prefer to invest in innovative green data center technologies. There has also been a shift in consumer preferences towards greener and more sustainable alternatives.

Adopting greener energy options and replacing outdated or inefficient technologies not only helps reduce the cost of operating data centers, but also minimizes the carbon emissions generated by data centers. To Nxtrafor example, we aim to achieve net zero by 2031 and provide more than 50% of our electricity consumption from renewable energy sources by FY23, thereby contributing to Airtelthe commitment to reduce its carbon footprint.

The path to follow

The rapid digitalization of the Indian economy, coupled with the lowest data rates in the world and affordable smartphones, has fueled the demand for digital content and applications. The growing demand for digitization has already fueled a clear shift of IT infrastructure to the cloud, a trend that will further increase with the deployment of 5G, IoT infrastructure and Industry 4.0 applications.

5G will specifically bring life to the edge and will require infrastructure to be deployed as close to customers as possible, to reap the critical benefits of latency. This will result in a huge increase in the demand for densely networked edge data centers. This will also enable very high data consumption in video, games, real-time applications, IoT, virtual reality (VR), etc., which in turn will drive exponential demand for center facilities of large-scale data connected over a robust network structure.

We are seeing greater momentum towards building modern software-controlled data centers through the deployment of new-age digital technologies. With this, companies are rushing towards the goal of simplifying data center processes and facilitating smarter and faster decisions, reducing operational risks and providing instant services and solutions to customers.

Rajesh Tapadia is CEO of Nxtra by Airtel. The opinions expressed by the author do not necessarily reflect the views of Business Insider India.


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