A recent report by Cushman & Wakefield has revealed that the Indian Data Center industry is poised for phenomenal growth over the next five years. Its report titled Is India Building Enough to Power its Digital Transformation, finds that by 2028, India will have 3X installed capacity with a total IT load of 3.29 GW.
According to the report, 2023 has seen an addition of 258 MW which is 105 percent higher than that of full year 2022. The expectation is that 250+ MW is likely to be added in 2024. The report further says that an average of 464 MW of Colo capacity will be added annually between 2024 and 2028 across the top seven cities, namely Mumbai, Chennai, Delhi, Bangalore, Pune, Hyderabad and Kolkata.
“India has increased it data centres, owned by both Colocation (Colo) and Cloud firms, at growing speeds over the last few years. From a total of 102MW of installed IT load capacity added in the entire year of 2021 to the addition of 258 MW of IT load in 2023, the project delivery speed has come a long way. This delivery speed will likely rise further over the next five years until 2027,” says the report.
Colos need to catch up
But the report does raise concerns about India’s Colo capacity pointing to PetaByte/MegaWatts ratio which it uses as a metric to understand Colo data center penetration in any country. Simply put, this is the ratio of data generation through mobile phones (measured in Petabytes) to the installed Colo capacity in the country (measured in MW). A lower PB/MW ratio would indicate that the penetration of Colo data centers is healthy and vice versa.
In this regard, the report finds that India’s high PB/MW ratio suggests that the installed capacity is insufficient compared to other nations such as an equally populous China. It says, “With approximately 13,000 Petabytes (PB) of mobile data generated through smartphones, India’s data generation is comparable only to that of another densely populated nation, China. However, with an installed Colo capacity of merely 977 MW (as of Q4 2023), 13.2 PB of data is being serviced in India for every 1 MW of installed colo capacity. In contrast, China’s PB/MW ratio is merely 4.5, indicating a much better DC market penetration. China has an installed Colo capacity of more than three times that of India.”
Major markets poised for growth
When it comes to specific markets, it says, “Mumbai remains the dominant market by supply, accounting for 54% of the overall installed Colo capacity in India. Chennai and Delhi-NCR complete the list of top-3 Colo markets, accounting for more than three-fourths of the market share in India.” It is also upbeat about Hyderabad. The report says, “Hyderabad is expected to join the current top markets of Mumbai, Chennai, and Delhi-NCR due to several under-construction and planned developments by players such as CapitaLand, CtrlS, Sify, and Adaniconnex.”
Needless to say, the sub-sea cable infrastructure will play a huge role in helping these markets grow. The report finds that at present, Mumbai and Chennai have 12 and 4 sub-sea cable landing stations. Additionally, these two cities are likely to receive 5 (Mumbai) and 3 (Chennai) more cable landings, consolidating the market further. It goes on to say, “Cable landings in the two cities over the next 2-3 years are higher than some of APAC’s gateway cities of Singapore, Hongkong, Jakarta, and Sydney.”
Availability of Sustainable Energy Sources
The report also touches upon power supply, especially that from renewable sources, saying, “India is among the few nations looking to double its power generation capacity to 820 GW by 2030, benefiting large power-consuming industries, including data centers. The availability of ample power supply is a key criterion for the data center industry, which is also sensitive to the quality of the power supply. Interestingly, of the 820 GW expected by 2030, a dominant 61% is likely from renewable sources.”