The Data Centre industry is expected to close the year with robust demand growth with estimated absorption in the range of 150-170MW. This impressive growth can be attributed to the delivery of pre-committed supply to hyperscale cloud service providers (CSP) according to JLL.
Colocation (Colo) operators are scaling up construction to meet the delivery targets. Some operators adopted retrofitting existing buildings to reduce the time of delivery. Supply has been mostly concentrated in Mumbai due to submarine cable connectivity, power availability, and a large user market. As the year 2022 comes to an end, the supply is expected to exceed 2021 levels by a healthy margin.
Climate change and sustainability objectives to influence the Data Centre industry growth. Like other industries, Data Centre has been equally impacted due to global disruptions, both man-made and natural. Climate change has been at the doorstep with a sharp rise in temperatures leading to unprecedented drought-like conditions in Europe.
On the other hand, some countries have faced high rainfalls posing an operational challenge for existing Data Centres. This coupled with supply chain disruption caused by the geo-political crisis has added to the complications. The supply disruption of sources of power generation like crude and gas has led to a rethink among Data Centre players in setting up capacities. The impact of these outages especially due to sustainability issues is likely to result in a shift of data centre operations to other locations. India with its vast geographical resources, thrust on renewable energy, increasing submarine cable connectivity and cost competitiveness is likely to emerge as an alternative data centre hub.
Future trends look forward to Indian Data Centre industry witnessing 2X growth by 2024. 5G network likely to increase speed by 10X times; smart devices to explode data growth. The commercial rollout of the 5G has the potential to increase the median download speed by 10 times as compared to the existing 4G network. 5G is projected to account for almost 40% of India’s mobile subscriptions – 500 million – by the end of 2027 with average data usage of 50 GB per month.
The global geopolitical crisis has adversely impacted the availability and prices of key energy inputs required for production and logistics leading to inflation across the value chain. The supply chain disruption has also led to a shortage of hardware equipment required for the functioning of data centres.
Digital payments volume jumped by 64% to 72 bn transactions in FY 2021-22 from 44 bn transactions in FY 2020-21. Over-the-top (OTT) video streaming market saw a sharp rise in its paid subscriber base to an estimated 70-80 million in 2021 from 14 million in 2018-5x growth in three years. 5G-driven growth in online gaming, augmented reality, and digital commerce is expected to drive data usage.
