Data Center Market in India 2023-2028

A data center is a physical place that houses computing machines and the hardware that goes with them. It includes the computational infrastructure required by IT systems. The data center market involves hardware-related expenses incurred when establishing and maintaining an IT infrastructure. The IT services, cloud hosting services, and IT software are not included in the market. The market based on IT infrastructure type is segmented into servers, storage, and network infrastructure.

Market insights:

The industry structure is highly concentrated. The concentration is in terms of newer investments primarily focused on upgrading existing data centers or establishing new ones. States such as Maharashtra, Tamil Nadu, Telangana, and Uttar Pradesh are witnessing growth in AI, IoT, virtual reality, online payment systems, and smart solutions, thus, increasing digital content. The increase in digital content is projected to augment the demand for data centers. The country’s commitment to renewable energy infrastructure further supports the sustainability trend in the data centers market.

Market segment:

The network infrastructure segment is expected to expand at a CAGR of 7.79% during the 2024 - 2028 forecast period. The increased implementation of data center virtualization and cloud computing is expected to boost market growth during the forecast period. Data center virtualization improves the performance of IT infrastructure and allows for more effective management of private and public cloud services.

Market drivers:

The need for data centers has plummeted by the increased volume of digital data across sectors such as retail, entertainment, and healthcare. The consumption of digital content is also due to the rise in the popularity of social media usage in the country. The need to adopt a digital lifestyle along with easy access to smart gadgets and the internet has also promoted the amount of digital data in the country. Data creation by banks, OTT players, and CDNs (content delivery Networks) is also a major driver for the increased demand for data centers to manage large volumes of data.

Key market trends:

The integration of sustainable practices in data centers presents a transformative trend in the data center market. The trend is characterized by a shift towards incorporating environmentally friendly practices, with a notable focus on renewable energy sources. New-age data centers are actively embracing hydroelectric, solar, and wind power, alongside other forms of renewable energy resources. Thus, allowing the data centers to conserve energy and reduce operational costs. Simultaneously, there is a growing emphasis on enhancing Environmental, Social, and Governance (ESG) performance in data centers worldwide.