India Data Center Market size was estimated at $1.3 Million in 2019 and is expected to reach $2.7 Million by 2027, growing at a CAGR of 11.4% during the forecast period of 2020 to 2027.
The Data center market comprises of two components, namely, physical and computational components. The physical component consists of the infrastructure of the data center including power, networking gears and physical security system. The computational component includes the servers and storage systems. In today’s digital generation both business owners and customers require faster online data services in almost all the aspects. With the advancement of internet services and increasing mobile phone users, the data center market has much wider applications in different areas ranging from online gaming, online streaming, online education, e-commerce, IT, telecom and business sectors.
Factors affecting market growth
In the current scenario, the data center market is exponentially growing in India. The escalating demand for digital services, increasing digital data traffic, on-demand online platforms and up-gradation of technology are major drivers for the growth of the data center market in India. The shift towards a digital economy and cloud-based business operations has uplifted the demand for data processing & storage services, in turn acting as a booster for the market. The rising need for cloud and computing services in IT and ITeS start-ups, transportation service providers, e-commerce websites, logistics, governmental organizations and Banking, financial services and insurance (BFSI) industry have surged the growth of data center market in India. Amidst this pandemic shift to work from home and high demand for online services in all industries has especially increased the growth of the data center market in India. The Digital India initiative and DigiLocker facilities provided by the government of India allowing the citizens to store authentic documents in the cloud has increased public cloud services and hence, highly augmenting the data center growth in India. Also, tax incentives provided by the Indian government to data center companies have encouraged the companies to invest more in the data center market. The deeper penetration of the internet in every corner of society, faster connectivity, low cost of online services and easy access have also aided in the spur growth of the market. However, the issue of privacy and data protection raises concerns for data center companies. Also, rising costs of real estate, the high expenditure involved in maintenance, high power consumption and technical problems incurred in wide network coverage are some of the challenges that need to be addressed in the future for further growth of the market. Also, the increasing trend of investment from the global service provider is likely to influence the Indian data center market in the future.
Among all its applications in various sectors, the IT & telecom sector are currently leading and are maximally responsible for the growth of the market. Entertainment, Media and retail (e-commerce) are second on the list, aiding the growth of data center in India.
Based on regional analysis, Mumbai followed by Bengaluru having the highest numbers of data centers among all cities are currently leading in the Indian data center market. Other metropolitan cities like NCR, Chennai, Hyderabad, Indore are also holding a good amount of share in the Indian data center market.
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