Express Computer
Home  »  Guest Blogs  »  Overview of the Data centre industry in 2023 and opportunities in 2024

Overview of the Data centre industry in 2023 and opportunities in 2024

0 20,803

By Rajesh Kaushal, Vice President, Delta Electronics India

Introduction
India’s data centre sector is in the midst of a transformative journey, fueled by a robust digital economy, widespread internet accessibility, and the impending shift to 5G networks. As of 2023, the industry stands at a dynamic phase, showcasing remarkable growth, government backing, and enticing opportunities for businesses providing data centre infrastructure and services. In this article, we delve into the current landscape of India’s data centre industry, examining its key factors fueling growth, government initiatives, key hubs, foreign investments, and the anticipated prospects for the future in 2024.

Growth Drivers
The digital landscape in India is evolving at an unprecedented pace, driven by the demands of the Information Technology (IT) sector, global capability centres (GCC), and a flourishing digital economy. The sectors contributing significantly to this surge include social media, e-commerce, digital transactions, online gaming, and streaming services. The transition to hybrid workplaces further amplifies the need for cutting-edge data centre solutions growth. As a result, the data centre market is forecasted to achieve revenues of approximately US$7.44 billion in 2023, with network infrastructure emerging as the dominant segment valued at US$5.09 billion. By 2027, this figure is projected to reach US$9.27 billion, driven by a steady compound annual growth rate (CAGR) of 5.84%.

Government Initiatives
Recognizing the pivotal role of data centres in supporting the digital ecosystem, the Indian government has undertaken strategic initiatives to foster growth. A data centre policy is in the formulation stage, encompassing measures such as incorporating data centres under the Essential Services Maintenance Act (ESMA), establishing Data Centre Facilitation Units (DCFU), creating Data Centre Economic Zones, and introducing a special category code for data centres under the National Building Code of India.

Current Landscape
India ranks as the 13th largest data centre market globally, with 138 data centres distributed across the country. Mumbai holds a significant share, accounting for 45 per cent of these centres. Chennai is emerging as the next prominent data centre hub, followed by other cities like Bengaluru, Hyderabad, Noida (Delhi-NCR), Pune, and Kolkata. While Tier 1 cities dominate, there is untapped potential in Tier 2 and Tier 3 cities, presenting opportunities for investments in edge data centres to enhance customer digital experiences.

Foreign Investments
The Indian data centre sector has witnessed a substantial influx of foreign investments, totaling US$14 billion over the past five years. This figure is projected to exceed US$23 billion by 2025, indicating a strong vote of confidence from international stakeholders. Investment banking firm Avendus Capital predicts data centres to be the largest segment of real assets investments in India, with an expected 40 percent CAGR, reaching a capacity of 1,700 MW by 2025.

Opportunities in 2024
As we gaze into the future, the data centre industry in India is poised for significant opportunities in 2024. The current growth trajectory indicates an expected compound annual growth rate (CAGR) of 5.84 percent, propelling the market size to an estimated US$9.27 billion by 2027. The government’s continued support, coupled with the increasing demands of a digitally driven economy, positions data centre businesses for consistent annual expansion.

Capacity Expansion: As per a CBRE South Asia report, India’s data centre capacity is expected to cross 1,300 MW by the end of 2024, a significant jump from the current 880 MW. Nearly 500 MW of additional capacity is currently under construction across major cities like Mumbai, Chennai, and Bangalore.

Technological Advancements: The integration of 5G and cloud computing will necessitate data centres to adopt cutting-edge technologies like artificial intelligence (AI), machine learning (ML), and automation to ensure efficient resource management and data security.

Green Data Centres: Sustainability will be a key focus area, with developers increasingly investing in renewable energy sources and energy-efficient technologies to minimize their environmental footprint.

Tier 2 and Tier 3 Cities: As data consumption rises in smaller cities, the demand for edge data centres will surge, presenting lucrative opportunities for developers and service providers.

Data Localisation Regulations: The evolving regulatory landscape around data localization will require data centres to adapt their infrastructure and services to comply with new regulations, creating a need for specialised expertise and services.

Anticipated Trends
Several trends are expected to shape the data centre industry in 2024. The inclusion of data centres under ESMA and the creation of DCFUs are likely to streamline operational processes. Data Centre Economic Zones will foster concentrated growth, while the special category code under the National Building Code of India will ensure compliance with robust standards.

Conclusion
In conclusion, India’s data centre industry is not just a burgeoning sector; it’s a digital frontier on the brink of transformation. The support from the government, strategic initiatives, foreign investments, and the increasing digitalization of diverse sectors position data centres as the backbone of India’s digital evolution. As we step into 2024, the industry stands at the threshold of unparalleled opportunities, ready to power the nation’s digital future.

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.

LIVE Webinar

Digitize your HR practice with extensions to success factors

Join us for a virtual meeting on how organizations can use these extensions to not just provide a better experience to its’ employees, but also to significantly improve the efficiency of the HR processes
REGISTER NOW 
India's Leading e-Governance Summit is here!!! Attend and Know more.
Register Now!
close-image
Attend Webinar & Enhance Your Organisation's Digital Experience.
Register Now
close-image
Enable A Truly Seamless & Secure Workplace.
Register Now
close-image
Attend Inida's Largest BFSI Technology Conclave!
Register Now
close-image
Know how to protect your company in digital era.
Register Now
close-image
Protect Your Critical Assets From Well-Organized Hackers
Register Now
close-image
Find Solutions to Maintain Productivity
Register Now
close-image
Live Webinar : Improve customer experience with Voice Bots
Register Now
close-image
Live Event: Technology Day- Kerala, E- Governance Champions Awards
Register Now
close-image
Virtual Conference : Learn to Automate complex Business Processes
Register Now
close-image