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Market Research Report

India Data Center Market - Growth, Trends, and Forecasts (2020 - 2025)

Published by Mordor Intelligence LLP Product code 946342
Published Content info 120 Pages
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India Data Center Market - Growth, Trends, and Forecasts (2020 - 2025)
Published: June 1, 2020 Content info: 120 Pages
Description

The India data center market is expected to grow at a CAGR of 8 % over the forecast period 2020 to 2025. The rapid adoption of cloud-based business operations has encouraged businesses to acquire data management capacities to handle huge volumes of data that are being generated. Increased proliferation of online shopping due to the availability of user-friendly interfaces, high-speed internet, and smart devices such as smartphones, tablets, laptops, etc. is expected to drive the market in the future.

  • The governmental initiative such as smart cities and digital India, policies around data localization, and the digitization of various industries such as financial services, e-commerce, media, and the manufacturing sector have fueled the demand for the data centers in the country. For instance, in February 2020, the Indian government had announced its plans for centralized handling of data and has rolled out a policy that enables the private sector to build data center parks throughout the country. It is also a result of RBI's mandate of financial data of Indians that must remain within the country as it is the sensitive data that could be misused. As a result, Amazon has started storing payments data in India locally without mirroring it in their overseas server, and MasterCard has also started adhering to data localization norms. It has created a huge demand for local data center development in the country.
  • Moreover, a lot of demand for data centers will arrive from localized startups and small and medium-sized enterprises (SMEs) due to rapid digitalization. In order to support the growing demand, NTT - Netmagic, which currently operates nine data centers in the country has plans to double its data center capacity in the future. Additionally, Hiranandani Group has announced an investment plan of INR 15,000 crore to set up data centers in Mumbai, Panvel, and Chennai, and Reliance Industries has also partnered with Microsoft to provide cloud services to small and medium enterprises.
  • Furthermore, strategic initiatives aimed at leveraging new-age technologies like the IoT, Big data, machine learning, robotics, bioinformatics, quantum computing, and artificial intelligence across sectors will further help in laying the foundation of a digital economy and will drive the data center market in India.

Key Market Trends

Internet Penetration Will Experience Significant Growth

  • Rapid internet growth in rural areas due to the availability of bandwidth, cost-effective data plans, and increased awareness has led to digital adoption by rural India. According to the ICUBE report, digital adoption is being propelled by rural India that registered 35% growth and reached 200 million internet users in 2018 and is expected to reach 290 million by the end of 2019.
  • India is one of the fast-growing markets of digital consumers and had 560 million internet subscribers in 2018, second to China. Indians have 1.2 billion mobile phone subscriptions and downloaded more than 12 billion apps and consume 8.3 gigabits (GB) of data on an average per month, compared with 5.5 GB for mobile users in China, an advanced digital economy. It indicates opportunities for India's future digital growth and the increasing dependency on data centers to support the digital advancements.
  • The demonetization drive of 2016 has played a pivotal role in the transformation of financial transactions and led to the foundation of electronic payments. Moreover, tremendous growth in the use of debit cards due to push provided through the RuPay cards under the Pradhan Mantri Jan Dhan Yojana and increased number of POS terminals and various incentives provided by the government and merchants for digital payments had helped India to move towards a cashless economy in the medium and long term. It has increased the dependency of consumers on technology and is expected to propel the development of data centers in India.

Information Technology Services is Expected to Hold Significant Growth

  • Expanding economy, highly qualified resources, low-cost computer software and hardware sector, and the favorable governmental initiative have led the foundation of IT-BPM (Information technology-business process management) in the country. According to the IBEF report, IT-BPM sector in India stood at USD 177 billion in 2019 and has accounted for the growth of 6.1% year-on-year and is expected to grow to USD 350 billion by 2025 whereas digital economy is estimated to reach USD 1 trillion by 2025.
  • Moreover, five to six times inexpensive Indian technical graduates than in the United States and flexible governmental polices has attracted the foreign direct investment (FDI) inflows in the country worth of USD 43.58 billion between April 2000 and December 2019 and stands second in the inflow of FDI, as reported by the Department for Promotion of Industry and Internal Trade (DPIIT). For instance, Microsoft partnered with Reliance Jio for ten years to develop Azure data centers across India. The initial two data centers in Gujarat and Maharashtra will house IT equipment consuming up to 7.5MW of power and is expected to be fully operational in 2020.
  • Software development and management, consultancies, online services, and business process outsourcing is changing the shape of Indian business standards and implementing the information technology services in almost every sector, be it telecommunication, entertainment, banking, manufacturing, healthcare, etc.
  • COVID-19 has indirectly affected the growth of IT services and hence, the data center market. The country is under lockdown, and people are restricted from going shopping, movies, restaurants, but the IT services have gained the pace. For instance, the OTT platform, Netflix, has added 3.6 million members from the Asia Pacific region in the first three months of 2020 and over 2 million accounts for the Indian audience. In order to mitigate the network congestion due to high traffic on the telecom network, Netflix decided to remove the highest bandwidth streams and has decreased the traffic by 25% while maintaining the quality of service for users in India.

Competitive Landscape

The India data center market is highly concentrated due to higher initial investments and low availability of resources. It is dominated by a few major players like Atos, Amazon Inc., Cisco Systems Inc., Dell Software Inc., and Hewlett-Packard Enterprise. These major players, with a prominent share in the market, are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.

  • March 2020 - Cisco collaborated with Bharti Airtel (Airtel), India's largest integrated telecom to launch India's largest 5G-ready, 100G IP, and integrated optical network designed to enhance network availability, capacity, and scale. The deployment is part of Airtel's initiative to build a 5G ready network that continues to serve the growing demand for high-speed data services in the country. This new IP over ethernet over a fiber network is the largest hyper-complex brownfield network transformation of its kind in India, collapsing multiple legacy domains to build a flatter, simpler, and automated 5G-ready IP network for enhanced customer experiences.
  • February 2020 - Arista Network had acquired the Big Switch Networks as one of the pioneers in software-defined networking (SDN) that has raised USD 120 million since it was founded in 2010. Big Switch Networks provides network data and analytics to help network professionals manage their networks better. The acquisition will put the company in a stronger position and is a part of optimizing the data center strategy.

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  • The market estimate (ME) sheet in Excel format
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Table of Contents
Product Code: 69901

Table of Contents

1 INTRODUCTION

  • 1.1 Study Deliverables
  • 1.2 Study Assumptions
  • 1.3 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET DYNAMICS

  • 4.1 Market Overview
  • 4.2 Market Drivers
    • 4.2.1 Increased Migration to Cloud-based Business Operations
    • 4.2.2 Government Support in the Form of Tax Incentives for Development of Data Centers
  • 4.3 Market Restraints
    • 4.3.1 Higher Initial Investments and Low Availability of Resources
  • 4.4 Value Chain / Supply Chain Analysis
  • 4.5 Porter's Five Force Analysis
    • 4.5.1 Threat of New Entrants
    • 4.5.2 Bargaining Power of Buyers/Consumers
    • 4.5.3 Bargaining Power of Suppliers
    • 4.5.4 Threat of Substitute Products
    • 4.5.5 Intensity of Competitive Rivalry
  • 4.6 PESTLE Analysis
  • 4.7 Assessment of COVID-19 Impact on the Industry

5 MARKET SEGMENTATION

  • 5.1 IT Infrastructure
    • 5.1.1 Servers
    • 5.1.2 Storage
    • 5.1.3 Network
  • 5.2 Electrical Infrastructure
    • 5.2.1 UPS Systems
    • 5.2.2 Generators
    • 5.2.3 Transfer Switches
    • 5.2.4 Switchgears
    • 5.2.5 Rack PDU
    • 5.2.6 Others
  • 5.3 Tier Standards
    • 5.3.1 Tier I &II
    • 5.3.2 Tier III
    • 5.3.3 Tier IV
  • 5.4 End User
    • 5.4.1 BSFI
    • 5.4.2 Telecom and IT
    • 5.4.3 Retail
    • 5.4.4 Media and Entertainment
    • 5.4.5 Transportation
    • 5.4.6 Healthcare
    • 5.4.7 Others

6 COMPETITIVE LANDSCAPE

  • 6.1 Vendor Market Share
  • 6.2 Mergers & Acquisitions
  • 6.3 Company Profiles
    • 6.3.1 Atos
    • 6.3.2 Arista Networks
    • 6.3.3 Amazon Inc.
    • 6.3.4 Microsoft Corporation
    • 6.3.5 NTT DATA Corporation
    • 6.3.6 Hewlett Packard Enterprise (HPE)
    • 6.3.7 Cisco Systems Inc.
    • 6.3.8 Dell technologies Inc.
    • 6.3.9 Huawei Investment & Holding Co. Ltd
    • 6.3.10 IBM Corporation

7 MARKET OPPORTUNITIES AND FUTURE TRENDS

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