Gartner Says Data Center Capacity in India to Surpass 5 Million Square Feet by 2012

India Has the Potential to Emerge as the Hub for Data Center Hosting for Nearby Markets Such As the Middle East, East Africa and Southeast Asia in the Long Term


The total data center capacity in India is expected to reach 5.1 million square feet by 2012 and is projected to grow 31 percent from 2007 to 2012, according to Gartner, Inc. The data center industry in India is expected to double its capacity in the next two years, and captive and hosted data centers capacities will grow at comparable rates. In the long term, India has the potential to become a hub for data center hosting for nearby markets such as Middle East, East Africa and Southeast Asia. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India.

“There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes by 2007, thereby increasing the data center uptake in companies”, said Mr. Nareshchandra Singh, principal research analyst, Gartner. “The potential for Indian data centers is large with the external-controller-based (ECB) market expected to grow by more than 22 percent in 2008, making India the fourth-largest market for ECB storage in the Asia/Pacific region”.

Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfill demand arising from small and midsize users. (See Table 1).

Table1: Data Center Space Forecast for India (Square Feet in Thousands)



2007 2008 2009 2010 2011 2012 CAGR (2007 to 2012)

Captive* 726 1,209 1,723 2,145 2,391 2,571 29%

Hosted* 611 1,090 1,749 2,108 2,371 2,573 33%

Total 1,337 2,299 3,472 4,252 4,762 5,143 31%

*Note: Only facilities with gross space capacity of and above 1,000 square feet are included. Captive data centers include those being outsourced to system integrators (SIs).


The growth in storage demand has resulted in existing data center capacities being fully utilized and, consequently, the need has arisen to build significantly more capacity. Companies are also investing in additional data centers to enhance or meet disaster recovery and business continuity requirements.

However, the development of data centers in India faces a few major obstacles, including security concerns and data retention worries. “The biggest challenge is the concern about a lack of energy supplies in the country,” said Mr Singh. “Even several Tier 1 cities, such as Delhi, Mumbai and Bangalore, have experienced several power blackouts each year. This can become a serious issue as data center energy requirements in India continue to grow with the rapid implementation of high-density equipment”.

Gartner recommends that Indian companies building data centers need to incorporate innovative designs and adopt the concept of Green IT and virtualisation technologies. For example, new data centers should use combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil. Cogeneration not only is fundamentally more efficient than traditional power generation, but also has the potential of pulling in the heat generated from solar energy. Companies that adopt these technologies and processes at the outset will attain the highest level of energy efficiency.

The ‘Green IT’ agenda is gaining momentum in India and it has attracted private and government funding. Investing in Green IT provides two distinct benefits to the companies, namely; brand value as an environmentally friendly company and the significant reduction in the energy cost component of the IT budget. “Setting up energy-efficient data centers is critical. The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever increasing energy demands of the local data center market. Around 30 percent of energy coming from solar power for mid-size data centers of around 10,000 square feet within the next four years should be the government’s goal,” said Mr. Singh.

Source: Gartner