Investment commitments to the tune of $3 billion highlight the growth potential, with the data centre industry expected to double its capacity and cross the 1GW mark by 2023
Data centre industry’s capacity in India, driven by strong digitalisation, rising cloud adoption and ambitious growth plans of operators, is expected to double and exceed 1GW by the year 2023, said a JLL India report.
Across the country, the acceleration of digitalisation has forced enterprises to scale up their information technology (IT) infrastructure. A strong demand for colocation and cloud facilities, which offer scalability, security, and connectivity at lower costs, is being witnessed across India, as a result of digital upgrades. GW and megawatt (MW) indicate the IT design power load.
Additionally, by announcing joint ventures to meet expected demand, investors and global data centre players have increased their commitment during the last six months in the India market.
“The demand momentum, which picked up its pace in 2020, continues to grow unabated. The Indian data centre industry witnessed 46.4MW absorption during H1 2021 – equivalent to 90 per cent of supply addition during the period (H1 2021), indicating robust absorption growth. Demand has been expanding rapidly due to increasing digital usage emerging from distributed workforce, growing data security concerns and business disruptions”, said Rachit Mohan, Head of Data Centre Advisory – India; Co-Head, Office Leasing Advisory – Mumbai at JLL.
According to him, to meet digital growth, banking and financial services are adopting hybrid options. Data centre industry demand is also being fuelled by the home-grown video and gaming platforms in midst of robust user growth. Furthermore, telecom players are formulating the roll out of 5G, which is expected to drive exponential growth in data consumption.
To fulfil the long-term requirements of hyper-scalers including large cloud players and occupiers with massive computing requirements, data centre operators are adopting large land acquisition strategies. These operators would provide occupiers with flexibility in terms of availability zones, fibre pathways and power provisions required for large scale expansions in less time. Players are also adopting strategic alliances by investing in new submarine cables to meet the growing demand.
“Global investors and data centre players have increased their commitment during the last six months, announcing joint ventures with operators to setup sites. Investment commitments to the tune of $3 billion highlight the growth potential, with the data centre industry expected to double its capacity and cross the 1GW mark by 2023”, said Samantak Das, Chief Economist and Head of Research & REIS (India), JLL.
According to Das, Mumbai that currently accounts for 45 per cent of the total capacity is expected to further add 267MW between now and 2023. Various states have also been providing incentives for the data centre industry as they are looking to join the next leg of technological change.
The telecom industry has been gearing for rolling out the 5G services with three providers starting field trials. The trend of sustainability has been gaining pace as tie-ups for green energy are being inked.
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