With close to 14 percent market share at present, Bengaluru is among the frontrunners when it comes to looking beyond Mumbai.
“The huge and consistently growing IT and technology-startup ecosystems in the city will further spike the demand. Availability of IT talent, good geographic location that offers low risk of seismic activity and other natural disasters, excellent domestic and international connectivity etc., will continue to favour Bangalore’s rise as one of the future hubs for the Indian DC industry,” said Vimal Kaw, Head of Product, Datacenter, NTT<\/a> GDC & CI.
Bengaluru- India’s Silicon Valley, driving demand for data centers<\/a><\/strong>
“India's software sales are expected to touch USD 30 billion by 2025, garnering a CAGR<\/a> of over 10% in the previous three financial years. With Bangalore already accounting for 40% of software exports, we expect this role to expand further. With the state at the forefront of innovation and technological evolution, companies are increasingly adopting ever-improving technologies such as AI, IoT, cloud computing and Big Data in their quest to keep pace with the changing times. DC capacity requirements would emerge from the rapid growth of the cloud providers in the coming years, thereby creating demand for hyper-scale DCs in Bengaluru, “ said Anshuman Magazine, Chairman & CEO - India, SEA, ME&A, CBRE<\/a>.
Being India’s IT hub, Bengaluru is expected to be the prime beneficiary of Karnataka's DC policy. The latest CBRE Q2 research shows that Bangalore has ~100 MW of DC capacity, the second-largest in India.
Rachit Mohan, Head, Data Center Advisory, India, JLL, believes that the growth of technology, start-ups, and other industries has growth implications for the colocation DCs.
“Outsourcing of IT infrastructure like services is going to be a natural evolution for IT companies as they expand and focus on emerging areas like Artificial intelligence<\/a>, Machine learning, blockchain technology, etc. Technology companies are expected to outsource their captive DCs to colocation players. This will result in the growth of the DCs in the long term,” he added.
State’s Data center policy expected to give Bengaluru a push
<\/strong>
The Karnataka Government recently announced its Data Center Policy for 2022-2027 which aims to create a robust DC ecosystem in the state.
“The state government is focusing on enhancing the ease of doing business in Karnataka for DC operators. The Karnataka Udyog Mitra, the Department of Commerce and Industries will act as the single window agency clearing the data center proposals in the state through its online portal,” said Kaw.
The state policy aims to attract investments worth Rs 10,000 crore in the data center industry by 2025.
“The State has also offered power tariff concessions in order to rationalize power costs for the industry. DC has been recognized as a separate industry and provided relaxation in construction norms. The policy has also allowed the stacking of Diesel Generator sets which was not allowed before. The incentives are expected to reduce the Capex cost for DCs and attract more investments,” said Mohan.
According to CBRE Bengaluru has the second-largest DC capacity of almost 100 MW in India as of Q2 2022.
The dedicated DC policy targets more than 200 MW by 2025 in the state, with the expected majority expansion planned in Bangalore, supported by hyper-scale DC demand. Projected critical IT load capacity in Bangalore to reach about 190 MW13 by 2023-24.
Karnataka already has a presence of major DC players such as Reliance, Sify, NTT, NxtGen, Trimax, Nxtra by Airtel, STT, CtrlS, and ESDS already operating their DCs in the state.
Last year, Web Werks and Teleindia Networks invested around USD 95.8 million and 12.8 million, respectively, to set up their DC units in Bengaluru. NTT has also announced that it will be building another data center in Bengaluru.
Chennai continues to dominate DC space in Southern India<\/strong>
According to Kaw, Bengaluru has a lot of positives that will undoubtedly make it one of the biggest data center hubs in the country in the years ahead. The reason Chennai has held an edge is the presence of cable landing stations in the city. It is well known that data centers prefer to be located as close to the landing stations as possible to enjoy superior and less disruption prone experience. However, with the arrival of 5G, network speeds all over the country would increase tremendously.
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