Indian Data Center Market Grow by 75-80% in Next 3 Years

The Indian data center market which is currently estimated to be $983 million is growing at 25-30% every year, the fastest across the globe. Specifically, data center outsourcing is expected to grow by 75-80% over the next 3 years. Companies in the past were concerned about outsourcing their data center because of issues like security, availability, accountability and intellectual property rights.

With the entry of focused Tier IV data center companies in India, which clearly address the key concerns of end-users, the trend is quickly shifting to outsourcing of data centers by companies cutting across sectors like Financial Services, Manufacturing, Portals, SAAS Providers, etc. The vaccum of quality data center space matching global specifications has been filled up by these data centers. The challenge is to make the data center resilient and eliminate any single point of failure. For e.g. for the first time in India we have implemented two active sources of power supply from different power sources at our Hyderabad Data center.

A Tier IV data center not only addresses the security concerns of the company but also provides additional benefits like 99.995% uptime, superior Infrastructure, access to latest technologies, etc. Data Centers require huge capital expenditures which can be avoided by hosting in a 3rd Party data center. As a matter of fact, it makes financial & economic sense for companies to outsource their data center operations for requirements below 500 racks.

In India there are many best practices and standards being used widely. For instance, by strictly implementing green measures, one can save almost 50-60% of energy bill. By virtualization technique one can reduce 10-40% in power consumption and rightsizing network critical infrastructure would lead to a saving of 10-30%. Apart from having efficient air conditioning architecture, using economizer modes of air conditioning, efficient floor layout and using efficient power equipment would lead to power savings of 15-30%.

The effective competition is increasing in India with the aggressive expansion plans by Indian data center players. This means that the hosting costs would come down by atleast 25-30% over the next two years. All the above mentioned factors would result in value added services being provided to customers at economical rates. The revenue model of Indian data centers would shift from margins to volumes.

With the bandwidth costs going down, Hosting in India is all set to become cheaper than US by end of 2008. And with talks of technologies like cloud computing and grid computing being implemented by Indian data centers, the growth story is here to stay for a long time. India has arrived in the global data center stage with a bang. It is all set to emerge as the data center capital of the world.

Author: Chief Managing Director, Ctrl S Data Centers