Demand for data centres, once fuelled by technology-intensive sectors, is now spreading to a range of non-tech industries such as agriculture, healthcare, logistics, retail, and the labour and skills markets, on the back of increasing digitization.
As per estimates from Deloitte for 2021, the share of IT/ITeS and telecom is 25-30% in India. Utilisation of data centres in the non-technology sector, on the other hand, is estimated to be 75%. The BFSI sector is the leading adopter, followed by healthcare, media and entertainment, manufacturing, retail, transport, government and others. It is observed that digital transformation in pushing companies in non-technology sectors to drive the country's data centre growth.
The expansion chimes in with predictions by industry body Nasscom that India is poised to become a global data centre hub. It says the Indian data centre market is expected to grow at about 5% annually to reach $4.6 billion by 2025, driven by cloud adoption and data localization.
In agriculture, researchers at the International Institute of Information Technology (IIIT) in Naya Raipur have partnered with the Indira Gandhi Agriculture University in Raipur to develop a drone-based crop health forecasting solution that can capture live images in real-time and send these to the institute’s servers to detect insects and diseases that damage crops.
Likewise, the proliferation of online education due to the covid-19 pandemic has necessitated data storage and management in schools and colleges.
“If the data is stored within school or vendor premises, it could be lost due to a technical glitch. Data centres are under 24x7 surveillance – and that makes it safe and hard to break into the systems,” said Ranjan Paine, IT head of a school in Kolkata.
According to P.N. Sudarshan, partner and technology, media, telecom (TMT) industry leader at Deloitte India, growing digitization across sectors in recent years has boosted demand for data centres in India.
“The increased data consumption, especially usage of digital commerce and payments during the lockdown further underscored the need for scaling up data processing, archiving and storage requirements,” he said.
Sudarshan said the pandemic which compelled the workforce to go remote has also led to companies in the healthcare, agriculture, education and retail to invest in data centres.
“Businesses across industries have moved their applications and infrastructure to either third-party colocation data centres or cloud ecosystems. The wealth of data needs to be managed, utilized and stored to get better insights – reason why data centres are imperative today,” he added.
Rachit Mohan, head, data centre advisory, India, JLL, corroborated that apart from existing sectors, emerging sectors will lead to significant growth of data storage and computing.
To meet this demand, multinational technology companies such as Microsoft, Amazon and Google have recently set up additional data centre regions in the country.
Domestic firms such as Adani Enterprises and Hiranandani group-run Yotta Infrastructure, too, have announced plans to set up data centres.
Data centres are set to power the country’s digital transformation that’s likely to create an economic value of $1 trillion by 2025, according to a study by Bharti Airtel’s data centre subsidiary Nxtra and JLL India.
The report pointed out that the data centre industry is expected to continue on a high-growth trajectory over the next few years, primarily led by the structural push of industry-friendly regulations, the government’s digital initiatives and investments, 5G rollout, increasing use of cloud services and digital usage. Much of this growth will be concentrated around Mumbai and Chennai due to their business and infrastructure advantages, strategic location and cable landing stations.
It’s a lucrative business that also has the potential to add to the country’s economic growth. JLL India says the Indian data centre industry stood at 499 MW IT load as of H1 2021, which is expected to double to 1,008 MW by 2023. This, in turn, would lead to a need of over 5 million sq ft of real estate.
