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Data Centers are reshaping India’s digital landscape

The Tailwind behind Data Centers in India

Let’s zoom into the dynamic world of DATA CENTERS and how they’re reshaping India’s digital landscape.

Have you ever imagined, what’s powering all the cool stuff you do online. Whether it’s binge-watching shows on Netflix, shopping on Amazon, ordering food from Zomato, planning trips with MakeMyTrip, or backing up your phone? Well, the answer to this question is, Data Centers.

What is a Data Center?

Technically, DATA CENTERS manage, store, and process the vast data that makes our online experiences possible, ensuring you have access whenever you need it.

Simply put, Data centers can be compared to the brain of a modern digital ecosystem. Just as the brain processes, stores, and retrieves information necessary for the body to function, data centers handle the storage, management, and dissemination of data that keep digital services and operations running smoothly. They are essential hubs that ensure the continuous flow of information across networks

History of Data Centers in India

2000-2010: Beginning of Data Center Industry in India

Now, let’s take a quick trip down memory lane to see how data centers in India have evolved. Back in 2000, during the dotcom boom, when the internet was just starting to catch on in India, we got our first commercial data center. But growth was slow at first, with only a little bit of new capacity added each year. By 2010, India’s data center capacity was just 122 MW.

Then, in the next decade, the industry grew by 3x.

2011-2020:The Period of Proliferation

But then, smartphones came along and changed everything. Companies like Ola and Zomato started popping up, and with the introduction of 3G, our appetite for data went through the roof. The real game-changer was JIO and UPI. Suddenly, our phones became our wallets, entertainment centers, and so much more, leading to a boom in data center growth.

During this period, 32 MW of data center capacity were added per year, expanding the total capacity 447 MW by 2020.

2021-Present: Entering the Growth Phase (Seems like the best is yet to come)

From 2021 to 2023, we’ve been adding even more capacity every year, and it looks like we’re just getting started. The industry has added 100-150 MW every year to reach close to 900 MW by the end of 2023.

With rising digitization, capacity utilization also improved, from 82% in 2019 to 93% in 2023. Now, If you are thinking that the story has gone too far, you are wrong; the run way is still vast.

As per the data published in the CareEdge report, the data center capacity in India is expected to expand at a 30% CAGR to 1,950 MW by 2026. Also, India’s data usage is massive, but we are still lagging far behind other countries in data centers and their capacities. Let’s see how India fares against other countries.

India vs Other Countries

While the internet usage as well as data center capacity has increased in the last two and a half decade, India is still very behind compared to its global counterparts.

Here’s what’s interesting…

Internet penetration in India is the lowest compared to other countries. Talking about capacity, for every million people surfing the web in India, there’s only 1 MW of data center power. Now, if you look at China, they’ve got 4 MW for the same number of users. In places like the USA and Europe, it’s even higher. Interestingly, India generates 20% of the global data but accounts for only 3% of global data center capacity.

This under-penetration shows that there is a huge headway for the large capacity addition of data centers. Let’s discuss some key growth drivers below.

What lies ahead?

So, here’s the scoop: AI and machine learning are really shaking things up across various industries right now. It’s still early days, but India is poised to be a big player in this tech revolution. Supporting it will be the Indian data industry, which is currently booming with investments.

We’re looking at nearly doubling our data center capacity to about 1,950 megawatts by 2026. It’s opening up huge opportunities for investments. We’re talking a whopping Rs. 50,000 crore planned for this sector in the next few years.

So, buckle up! We’re on the brink of some major changes in the data center scene here in India.

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