top of page
  • Writer's pictureChesapeake Group

India’s growing datacenter market with Mumbai as a hub

According to a DataQuest report, Datacenter market in India is estimated to reach $7bn by 2020 – representing a growth rate of 23-25%. This makes India one of the fastest growing Datacenter markets in the APAC region, which is expected to grow at a CAGR of 14.7% during 2015-2022 to reach $31.9bn. While all the big cities – Mumbai, Chennai, Bangalore, and Hyderabad – have seen growth of datacenters, Mumbai has been leading the growth. According to a CBRE report, Mumbai has 35 datacentre operators, followed by Bangalore with 27 and Delhi-NCR with 19.

Cloud companies have been setting up datacenters in Mumbai for some time. Google chose Mumbai as its first cloud region in India last year, where it now hosts three datacenters. Microsoft and Amazon launched their Mumbai datacenters in 2015 and 2016, respectively. Alibaba cloud has also opened two datacenters in the region – one in January this year, and another in September. Major datacentre providers in India, be it the telecom companies such as Tata Communications, Reliance, and Sify, or the pure play providers such as Netmagic, CtrlS, NxtGen, and Pi Datacenters, have at least one datacentre in Mumbai. CtrlS recently announced its plans to open another datacentre in Mumbai with 100MW capacity. One thing that makes Mumbai an attractive destination for datacenters is Cable landing stations – the city has four out of the ten cable landing stations in the country. Cable landing stations or submarine cables are international telecom links between the countries across the globe.

The CBRE report has identified multiple reasons for India’s growth in Datacenter market – Increased mobile and internet penetration; Proactive government policies; Real Estate availability at low cost; Wide demand base as a result of sectors such as technology, banking, and financial services; Availability of support infrastructure; and Technological growth with adaptation of IoT, cloud services, and Big Data.

Another recent advancement that is bound to help the India datacenter market is the India data protection laws. The recently drafted India Personal Data Protection Bill (PDPB) and India’s cloud policy panel have both been in favour of data localization. The policies are proposing restrictions on the cross-border transfer of personal data and setting up of Data Protection Authorities to prevent misuse of data. RBI has already imposed these regulations on payments data – In a circular earlier this year, it stated “All system providers shall ensure that entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details / information collected / carried / processed as part of the message / payment instruction.” This essentially means that all cloud-based services will need a local data center.

Still, there are some challenges to realize the potential of India to become major datacenter market. These include cumbersome processes and red tape associated with acquisition of infrastructure and obtaining environmental clearance, and some natural conditions such as high seismic zones, probability of floods, and extreme heat. Also, the increasing energy costs are a big hurdle for any datacentre – according to a Gartner report, 10% of the datacenter operating expense is power, which is expected to increase to 15% over the next few years.


Commenting has been turned off.
bottom of page