The data center market in India is expected to grow at a CAGR of over 4% during the period 2019-2025.
Key Market Insights
The report provides the following insights into the data center market in India during the forecast period 2020-2025.
It offers comprehensive insights into current industry trends, forecast, and growth drivers about the data center market in India.
The report provides the latest analysis of share, growth drivers, challenges, and investment opportunities.
It offers a complete overview of segments and the regional outlook of the data center market in India.
The study offers a detailed overview of the vendor landscape, competitive analysis, and key strategies to gain competitive advantage.
As the number of standalone colocation services in India is low than managed colocation or managed hosting services, several small enterprises in India prefer managed hosting or cloud services rather than colocation. Sectors such as BFSI, logistics, transportation, e-commerce, and government agencies are witnessing high demand for colocation services. Global enterprises involved in establishing a physical presence in the Indian market are colocating facilities in the country. Hence, the increased investment from global colocation service providers is likely to influence the India data center market during the forecast period.
The favorable government support in the form of tax incentives is another key factor accelerating market growth in India. Telangana, Gujarat, Andhra Pradesh, and Maharashtra governments are providing considerable incentives for data center development. For instance, the Maharashtra government announced the GST refund for a maximum period of 10 years for the companies that participate in the development of integrated facilities. Similarly, the Andhra Pradesh government announced to provide 50% reimbursement of SGST on the purchase of raw materials and equipment for three years from the date of approval of the project. Therefore, increasing government support is likely to influence the data center development in India.
Data Center Market in India: Segmentation
This research report includes detailed segmentation by IT Infrastructure, Electrical Infrastructure, Mechanical Infrastructure, General Construction, Tier Standards, and Geography.
The adoption of server infrastructure is dominated by rack servers, which account for over 70% of the market share. However, tower servers are experiencing a negative growth rate. The adoption of converged and hyper-converged infrastructure solutions will have a high impact on the server market growth during the forecast period.
The increased adoption of all-flash storage arrays and hybrid storage arrays is boosting the demand for storage systems. High-performance operations aid the growth of flash storage systems in data centers that require strong I/O capabilities. The data center market in India is witnessing significant growth in the data, which requires flash arrays as they offer high storage performance, especially in the virtualized data center environment.
The unstable grid connectivity in India makes UPS systems a critical component for uninterrupted service operations. CtrlS in its Hyderabad facility adopts power systems with up to 2(N+1) redundant configuration. SIFY Technologies in its Kolkata facility has adopted UPS systems with 500kW in N+N redundant configuration. Mumbai has witnessed the highest power capacity addition with investments from Yotta (Hiranandani Group), SIFY Technologies, CtrlS, and Bridge Data Centres. The data center market by power capacity is expected to grow during the forecast period as the solar energy potential in Karnataka is estimated to exceed 24.7 GW. This will be a major benefit for service operators to power their facilities through solar energy.
The use of water-based cooling is likely to increase in the India data center market during the forecast period. However, the scarcity of water in a few cities will pose a challenge for facility operators in supporting operations. Most facilities are powered with air-based cooling systems. For instance, Netmagic recently established facilities in Mumbai and Bengaluru are equipped with air-based cooling systems of N+2 redundancy. The redundancy of cooling systems is N+1 or N+N configuration among tier III facilities. Tier IV facilities adopt the 2N+1 redundant configuration for cooling systems. The redundancy of CRAC and CRAH units is higher than other systems. The use of dual water feeds with on-site water treatment plants is also gaining popularity in the Indian market.
The India data center market has a strong presence of construction contractors and sub-contractors. Sterling & Wilson, VatsuNidhi Architects, and L&T Construction are among the leading local contractors in the market. They also carry out installation and commissioning services. Most government facility development projects are carried out through tenders. The expertise of the construction contractor plays a vital role in attaining these projects. Besides, partnerships with colocation providers will yield significant revenue opportunities for contractors.
With the increasing focus on building highly efficient and reliable data centers, the investment in Tier IV facilities is expected to grow in India. Most new facilities are designed as Tier III standards with minimum N+1 redundancy and can be reconfigured with up to 2N redundancy as the demand arises. The data center market in India witnessed the development of around 20 Tier III category projects. This trend is likely to continue during the forecast period, with many large operators expected to move to tier IV category due to the growth in rack power density and critical applications.
Investments from CtrlS, GPX Global Systems, and Pi DATACENTERS will continue to grow the revenue for the Tier IV category in the market. Building a Tier IV facility in India will cost around $5-6 million. The labor cost is low than in developed countries, thereby reducing the construction cost to a considerable extent.
Insights by Geography
Mumbai, Bengaluru, Chennai, Delhi, and Hyderabad will be the major cities driving data center growth throughout the forecast period. AWS, Microsoft, Google, Alibaba, IBM, and Tencent have established their physical presence in the cities mentioned above. The global service providers such as Equinix and Digital Realty are expected to invest in the market during the forecast period.
Recently, Digital Realty partnered with Adani Group to develop data centers in India. Moreover, government initiatives to migrate all their operations to the cloud platform to push digital economy will aid in the development of multiple facilities in states such as Kerala, Assam, West Bengal, Andhra Pradesh, Gujarat, Madhya Pradesh, Odisha, Bihar, Jharkhand, Uttar Pradesh, Haryana, Punjab, Himachal Pradesh, and Jammu & Kashmir.
Key Vendor Analysis
The India data center market is witnessing steady growth in terms of IT infrastructure procurement, greenfield, brownfield, and modular facility development. It is likely to adopt efficient, scalable, flexible, and reliable infrastructure solutions. The market has evolved over the years with multiple innovations focused on enabling flexible and scalable enterprise operations in the era of cloud, big data, Internet of Things, and Artificial Intelligence in industries.
In terms of support infrastructure perspective, the market is witnessing the high adoption of solutions, which help to reduce power and water consumption and decrease CO2 emissions. Moreover, the market has a strong presence of vendors in the three categories: IT infrastructure, support infrastructure, and data center investors. Tata Consultancy Services (TCS), Wipro, Cognizant, Infosys are the major contributors to the market offering managed data center services. Managed services majorly dominate the colocation market in the country.
Key Topics Covered
1 Research Methodology
2 Research Objectives
3 Research Process
4 Scope & Coverage 4.1 Market Definition 4.2 Base Year 4.3 Scope of the Study 4.4 Market Segments 4.4.1 Market Segmentation by Infrastructure 4.4.2 Market Segmentation by IT Infrastructure 4.4.3 Market Segmentation by Electrical Infrastructure 4.4.4 Market Segmentation by Mechanical Infrastructure 4.4.5 Market Segmentation by General Construction 4.4.6 Market Segmentation by Tier Standards 4.4.7 Market Segmentation by Geography
7 Introduction 7.1 Internet & Data Growth 7.2 Data Center Incentives in India 7.2.1 Maharashtra 7.2.2 Telangana 7.2.3 Andhra Pradesh 7.2.4 Uttar Pradesh 7.2.5 Gujarat 7.3 Data Center Site Selection Criteria 7.4 Data Center Construction Project Flow 7.5 List of Data Center Investments in India
8 Market Dynamics 8.1 Market Growth Enablers 8.1.1 Migration to Cloud-Based Business Operations 8.1.2 Increased Investments from Colocation Providers 8.1.3 Government to Grow Digital Economy Through Data Centers 8.1.4 Big Data and IoT to Increase Data Center Investment 8.1.5 Increased Connectivity with Other Nations 8.1.6 Increased Deployment of Prefabricated Infrastructure Solutions 8.2 Market Growth Restraints 8.2.1 Issues with Power Reliability 8.2.2 Lack of Strong Network Connectivity 8.2.3 Data Center Security Challenges 8.2.4 Water Scarcity for Data Center Cooling 8.3 Market Opportunities & Trends 8.3.1 Adoption of Converged & Hyper-Converged Infrastructure Platforms 8.3.2 Growing Interest to Improve Data Center Efficiency 8.3.3 Growing Rack Power Density 8.3.4 All-Flash & Hybrid Storage Arrays to Fuel Growth
9 Data Center Market in India 9.1 Market Overview 9.2 Investment: Market Size & Forecast 9.3 Area: Market Size & Forecast 9.4 Power Capacity: Market Size & Forecast 9.5 Infrastructure: Market size & forecast 9.6 Five Forces Analysis 9.6.1 Threat of New Entrants 9.6.2 Bargaining Power of Suppliers 9.6.3 Bargaining Power of Buyers 9.6.4 Threat of Substitutes 9.6.5 Competitive Rivalry
10 By Infrastructure 10.1 Market Snapshot & Growth Engine 10.2 Market Overview 10.3 IT Infrastructure 10.4 Electrical Infrastructure 10.5 Mechanical Infrastructure 10.6 General Construction
11 IT Infrastructure 11.1 Market Snapshot & Growth Engine 11.2 Server Infrastructure 11.3 Storage Infrastructure 11.4 Network Infrastructure
12 Electrical Infrastructure 12.1 Market Snapshot & Growth Engine 12.2 Ups Systems 12.3 Generators 12.4 Transfer Switches & Switchgears 12.5 PDUs 12.6 Other Electrical Infrastructure
13 Mechanical Infrastructure 13.1 Market Snapshot & Growth Engine 13.2 Cooling Systems 13.3 Racks 13.4 Other Mechanical Infrastructure
14 Cooling Systems 14.1 Market Snapshot & Growth Engine 14.2 CRAC & CRAH Units 14.3 Chiller Units 14.4 Cooling Towers, Condensers & Dry Coolers 14.5 Other Cooling Units
15 General Construction 15.1 Market Snapshot & Growth Engine 15.2 Building Development 15.3 Installation & Commissioning Services 15.4 Physical Security 15.5 Building Design 15.6 DCIM/BMS
16 Tier Standard 16.1 Market Snapshot & Growth Engine 16.2 Tier I & II 16.3 Tier III 16.4 Tier IV
22 Competitive Landscape 22.1 Competition Overview 22.2 IT Infrastructure 22.3 Support Infrastructure 22.4 Data Center Investors
23 Data Center Critical (IT) Infrastructure Providers 23.1 Atos 23.1.1 Business Overview 23.1.2 Major Product Offerings 23.1.3 Key News 23.2 Arista 23.3 Broadcom 23.4 Hewlett Packard Enterprise (HPE) 23.5 CISCO 23.6 Dell Technologies 23.7 Huawei 23.8 IBM 23.9 Lenovo 23.10 NetApp
24 Data Center Investors 24.1 Bharti Airtel (NXTRA DATA) 24.1.1 Overview 24.1.2 Service Offerings 24.2 Bridge Data Centers 24.3 BSNL Data Center 24.4 Colt Data Center Services (COLT DCS) 24.5 CTRLS 24.6 GPX Global Systems 24.7 ITI Ltd. 24.8 NTT Communications (NETMAGIC) 24.9 PI Datacenters 24.10 Reliance Communications (GLOBAL CLOUD XCHANGE) 24.11 SIFY Technologies 24.12 ST Telemedia Global Data Centres (STT GDC) 24.13 Yotta Infrastructure
25 Support Infrastructure Providers 25.1 ABB 25.1.1 Overview 25.1.2 Product Offerings 25.2 Caterpillar 25.3 Climaveneta (Mitsubishi Electric) 25.4 KOEL (Kirloskar Group) 25.5 Rolls-Royce Power Systems AG (MTU on Site Energy) 25.6 Cummins 25.7 Delta Group 25.8 Eaton 25.9 Legrand 25.10 Larsen & Toubro (L&T) Construction 25.11 Netrack Enclosures 25.12 RIELLO UPS 25.13 RITTAL 25.14 Schneider Electric 25.15 Sterling and Wilson (Shapoorji Pallonji Group) 25.16 STULZ 25.17 Vastunidhi 25.18 Vertiv