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India enterprise data center, hosting services market to reach US$1.8B in 2025

The total addressable market size of the data center and hosting services in India, in terms of enterprise spending opportunity, is poised to increase at a CAGR of 6.2% during 2020-2025, driven by the accelerated pace of digital transformation seen among enterprises and rising adoption of cloud services, forecasts GlobalData, a leading data and analytics company.

Saurabh Daga, Technology Analyst at GlobalData, comments: “The massive surge in the volume of data generated by enterprises in the country, courtesy the rising adoption of digital technologies like mobility devices, sensors, and IoT systems, will encourage them to invest in larger technology stacks that can provide scalable and reliable storage, compute and network capabilities to efficiently store, process, manage and share such data. This will drive enterprise spending on data center and hosting services in the country to reach US$1.8bn in 2025.”

Increasing application of analytics, artificial intelligence, and machine learning technologies and the implementation of new applications and service models will also drive the demand for data center and hosting services.

The ongoing shift in enterprise IT operations and spending on cloud environment, partially compelled by the COVID-19 prompted surge in the adoption of remote working and digital service models and the overall digital transformation initiatives of enterprises via e-commerce and other application-based services hosted on data centers, will also drive the market.

Daga adds: “Application hosting and data center services segment will be the largest contributor to the overall market value over the forecast period while the colocation services segment will witness a faster growth. The ongoing pandemic and challenging business environment are especially driving enterprises to adopt colocation services as the means to avoid large upfront capital and operational costs associated with captive data center services.”

Encouraged by the massive demand for data center services in the country, major international data center operators have started expanding their footprint in India. For example, NTT Limited announced in September 2021 that it will commission six new data center parks over the next three years. Similarly, in April 2021, US-based storage and information management services company Iron Mountain entered into an agreement with India-based colocation provider Web Werks to form a joint venture and invest up to $150m over next two years to develop data center infrastructure in India.

This trend is also fuelled in part by data localization regulation as several businesses, especially working in financial services, are dissuaded from outsourcing their data with public cloud providers, which host their servers outside of India.

Additionally, the Indian Ministry of Electronics & Information Technology (MeitY) has already prepared a draft policy to make the country a ‘data center hub’, allocating concessions related with land acquisition, power availability, network connections and regulatory clearances and approvals.

CT Bureau

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