Demand for data centres to see two-fold jump by 2025

As more companies focus on work-from-home due to COVID-19 and corporate requirements for data storage increase, the demand for data centre spaces is expected to increase two-fold from the current 500 MW by 2025, according to a report.

Mumbai, Chennai, Bengaluru, Kolkata, Hyderabad, Pune and NCR are expected to witness supply addition of upto 40 percent in 2020. Out of this, Mumbai currently leads with 41 percent data centre capacity, followed by Bengaluru (17 percent) and Delhi (16 percent), the CBRE report said.

Global players are likely to continue to take interest in investing in the country, with a focus on backing leading operators or funding prominent developers to foray into the DC segment in 2020. Further, against the backdrop of the COVID-19 situation in India, corporates would be inclined towards investing in the cloud and hybrid IT infrastructure, as operations would move online and employees may need to continue to work from home, the report said.

With growing digital consumption patterns such as online gaming, online education, streaming, e-commerce, total internet hits, DC operators are expected to see a huge demand for data center space, thereby scaling up their DC facilities quickly to serve hyperscalers and enterprise clients, the report said.

“In the era of the fourth industrial revolution, we expect regulatory support to augment the data centre demand in India. Policy impetus such as the National E-commerce Policy, Personal Data Protection Bill, proposed policy on Data Center Parks and digital initiatives by the government will accelerate demand. The COVID-19 situation will further propel the next wave of growth in the sector and most importantly, the proposal to give DCs the coveted ‘Infrastructure status’ will place them high on global investor radar,” said Anshuman Magazine, chairman & CEO – India, South East Asia, Middle East & Africa, CBRE said.

Transition from captive to co-location and cloud DCs

Occupiers’ demand for co-location space over captive DCs is further likely to boost due to categorization of third-party DCs as essential services ensuring uninterrupted and uneventful operations even during a pandemic situation like the world is facing today.

With regulatory requirements for data storage expected to be implemented in the coming quarters, CBRE anticipates that corporates would now seriously re-evaluate their DC portfolios in the country, the report said.

Cities such as Kolkata, Pune, Gurgaon, Kochi and Jaipur, particularly, are likely to be amongst the first ones to witness edge DCs in the next few years on the back of their ability to service specific geographic zones.

The passage of policies such as the National E-commerce Policy and Personal Data Protection Bill are likely to mandate Indian consumers’ data to reside within the country, thereby boosting the demand for data centers. Further, large-scale, nationwide initiatives such as ‘Make in India’, ‘Digital India’ and ‘Smart City Mission’ in particular would further augment DC demand.

“Technology and automation would provide significant opportunities in terms of how data center operations evolve as we move forward in the next 3-5 years,” said Ram Chandnani, managing director, Advisory & Transaction Services, CBRE South Asia Pvt. Ltd.

—Money Control