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Re-imagine data centres: running India’s digital economy

As India embraced lockdown in March 2020 to combat the spread of pandemic, all industries faced the challenge of keeping their businesses going. How did various industries address this challenge? While most of the manufacturing sector, barring essential services came to standstill, those delivering services through digital medium were able to continue their operations due to the seamless support provided by the data center industry.

The data center industry as part of the nation’s ‘essential services’ took center-stage by providing support to industries, institutions as well as individuals affected by the ongoing crisis. The growing dependence of several industries on this digital infrastructure partially helped to mitigate the impact of the lockdown. Industries such as IT/ITeS, BFSI, e-commerce, capital markets, social media and education remained operational, thanks to India’s 375 megawatt (IT power load) capacity.

The impact of data protection laws, increased shift from captive to colocation data center and implementation of new technologies like 5G, edge computing and the internet of things will drive the next phase of demand for data centers. The Indian data center industry’s capacity is expected to grow to 1,078 MW by 2025 from 375 MW in H1 2020, registering a CAGR of 21%.

Mumbai and Chennai are expected lead the data center industry growth due to advantage of connectivity, power supply and user industry. This huge growth would create a need for real estate space of 9.3 mn sq ft and open up a USD 4.9 bn greenfield investment opportunity (including construction) for real estate developers and investors during next five and half years ending 2025. JLL

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