August 13, 2020

Wikipedia defines Data as ‘Characteristics or information, usually numerical, that are collected through observation’. Take a good look around us, isn’t it centric to almost whatever we do?

 

Daily, we generate a gargantuan amount of data from various activities, and often unnoticed the unsung hero – ‘Data Center’ powers these vital functions necessary for individuals, families, and communities to thrive and survive in today’s environment.

 

The COVID-19 situation has further propelled the next wave of growth in the sector, and most importantly, the proposal to give DCs the coveted ‘Infrastructure status’ will place them high on global investor radar. Now, more than ever, data centers are central to the functioning of our economy and society as a whole. Now, more corporates would be inclined towards investing in the cloud segment as business moves online and the situation require employees to adapt to the work from home option. With this increasing remoteness, digital communication has become more of a necessity and higher volumes of data are thus being generated even with common communication being made online. The pandemic, uncertainty have made storage and dispersal of digital data essential in preventing the global economic system from collapsing and that is why corporates are increasingly investing in their data storage .

 

Talking about India, the Indian Data Center (DC) market is noticing a steady growth due to an increase in demand for cloud computing. This is further fuelled by an uproar in the use of Big Data, IoT services, and increased adoption of converged / hyper-converged infrastructure platforms and government initiatives to develop a digital economy. Moreover, the rapidly growing economy, a widening customer base, improving infrastructure, and increasing internet penetration have given an impetus to the data center (DC) industry in India.

 

With growing digital consumption patterns, DC operators are expected to see a massive demand for data center space, thereby scaling up their DC facilities quickly to serve Hyperscalers & enterprise clients. These developments allow for enterprise CIOs and technology leaders to engage with CBRE for streamlining their businesses in new site selection and acquisitions for footprint expansion. In the current digital age where technological advancements have become the norm and Internet of Things(IoT), and Machine Learning has automated various manual activities, the rise of a data dominated global economy is foreseeable. 

 

Large-scale, nationwide initiatives such as ‘Make in India’, ‘Digital India’, and Smart City Mission, in particular, have amplified the DC demand in the country. In the era of the fourth industrial revolution, we expect regulatory support to augment the Data Centre demand in India. Policy impetus such as the National E-commerce Policy, Personal Data Protection Bill, proposed policy on Data Center Parks, and digital initiatives by the government will accelerate demand.

 

DC developers are also increasingly redesigning their offerings intending to incorporate edge computing to process data as close to their end-users as possible. It is likely that cities such as Kolkata, Pune, Gurgaon, Kochi and Jaipur, mainly, are likely to be amongst the first ones to witness edge DCs in next few years – on the back of their ability to service-specific geographic zones. With this increasing need of corporate for data storage, our reach predicts that the DC stock across seven key cities would double from the current 500-520 MW in the next five years. Markets across Mumbai, Chennai, Bangalore, Kolkata, Hyderabad and Delhi-NCR will witness the major supply addition, with Mumbai commanding a share of ~40%.

 

DCs were also identified as one of the top five alternate investment RE options in CBRE’s APAC Investor Intentions Survey, 2019. The report identified India as one of the top investment destinations across APAC: the first time in the last five years since the survey was conducted. Believe it or not, Data centers are here to stay and probably hold the key to the future. They are going to provide impetus to the global digital economy while keeping data secure locally.