You are here: Home » Economy & Policy » News
Business Standard

Data industry to see $5 bln investment by 2025 on higher digitisation

Data centres will witness $5 billion in investments till March 2025 and a threefold increase in capacity, a report said on Monday.

Topics
Data centre | Digitisation

Press Trust of India  |  Mumbai 

Data center

Data centres, which have seen a massive growth on the back of data localisation diktats and the pandemic, will witness USD 5 billion in investments till March 2025 and a threefold increase in capacity, a report said on Monday.

The overall capacity, which is measured by the amount of power they consume, stood at 360 MW as of March 2020 and the same is expected to surge to 1,100-1,200 MW by end of March 2025 after the investments of up to USD 5 billion, the report by the research arm of rating agency Crisil said.

The business has entities like Japan's NTT, Sify, Hiranandani Group etc in the fray already, and others like the Adani Group and an arm of Bharti Airtel have already announced investment plans.

The research note said there was a 38 per cent growth in data consumption in April-June period and the consumption will continue to grow at a compounded rate of 25-30 per cent per year in the next few years, it said.

The growth in consumption will be driven by factors such as high growth in e-commerce, increase in usage of social media, greater preference for over the top (OTT) platforms, the government's impetus to the Digital India initiative and rapid digitalisation of services across industries, it said.

Data localisation norms initiated by the government and regulators, which mandate storage of sensitive data within India, will also support development of local data centres, it said.

Citing industry lobby Nasscom's report, it said over three-fourth of the total IT infrastructure spends were concentrated towards captive and co-location based operating mode as of FY2020.

By fiscal 2025, however, the share of infrastructure-as-a-service (IaaS) in IT infrastructure spends is forecast to increase to more than 40 per cent, it said, adding shift towards IaaS will continue as rapid adoption of Industry 4.0-led revolution leads to exponential growth in data volume and increases the need for scalability of resources.

As the adoption of cloud services increases, demand will transition from captive to co-location and IaaS-based offerings, it said.

The industry has been largely concentrated in top four cities, with Mumbai, Delhi, Bengaluru and Chennai accounting for 60 per cent of total data centre sites and more than 75 per cent in terms of IT load capacities, it said.

However, share of these cities will decline marginally in the next five years as lack of space and higher rental costs along with improved infrastructure availability in next rung cities leads to some larger hyperscale data centres being set up in those cities, it said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, November 02 2020. 20:16 IST
RECOMMENDED FOR YOU
.