Challenges in setting up Datenters in India

The demand for datacenters in India is at its peak due to factors relating to growing data generated by individuals, adoption of Cloud Computing by businesses, and expanding internet penetration. The advancing Indian economy is offering opportunities to private organizations and IT service providers to invest in building datacenters in India and serve the storage-hungry national initiatives and citizens. According to various market research firms, they have estimated the growth of India’s datacenter market size at USD 4.4 Billion in 2020 that is expected to reach at 8 Billion by 2026, meaning growth be at a CAGR of 12%. 

COVID-19 has fueled the use of digital services and boosted the demand for datacenter services across India. Since the pandemic began, many organizations have digitalized their processes and adopted datacenter & Cloud services, while the existing datacenter service providers in India were able to provide efficient and secure services. As days goes by, the demand and usage for data storage is growing as people work remotely and generate huge amounts of data. India is witnessing increased need for more datacenter facilities across multiple locations so that the users receive appropriate application hosting and data storage services. 

datacenter market in India is booming, and the timing couldn’t have been better to set up new datacenters across the nation. The digitalization initiatives by the Government of India has also brought a great shift in adoption of datacenter services as Indians are now utilizing eGovernance services that are generating more citizen-centric data leading to increased and safe storage requirements. Such acceleration in demand for datacenter services points toward establishments of new datacenters, but is it easy to build a datacenter in India? The simple answer is NO but, let’s take a look at the below challenges to understand in depth as to why it is a challenging task to set up a datacenter in India. 

-datacenter policies in India 

-Lack of Skilled datacenter professionals 

-Land availability and Power Costs 

-datacenter infrastructure and Location

The Indian datacenter market is tough for foreign IT service providers to tap because of the datacenter policies and Data Localizations laws of our nation and each Indian state. The Ministry of Electronics and Information Technology (MeitY) that falls under the purview of Government of India released an initial draft of the datacenter Policy in November 2020. This policy is today playing a significant role by helping foreign and domestic investors and IT service providers to set up datacenters across the country. datacenter providers such as ESDS Software Solution Ltd. has multiple datacenters across India and provide MeitY empanelled services while promoting Data Localization. 

To successfully manage a datacenter the need for skilled IT admins is very important. The specialized skills that are required by the datacenter experts can be in areas such as security, power, HVAC, facilities control, etc. As the datacenter market in India is still in the evolving stage, the knowledge is fragmented within this sector. Currently, there is a great shortage of skilled labour in this sector which is a concern for an IT service provider who wishes to hire datacenter admins while building a new datacenter. Another challenge which the IT service providers usually face is choosing appropriate locations in India to build a datacenter. Land availability, power costs & power alternatives are some of the areas that need to be carefully considered before establishing a new datacenter or while expanding the network. 

There is a long list of criteria which needs to be kept in mind while building a datacenter facility in a specific location such as power infrastructure, accessible roads, availability of water resources, analysis of seismic zones, etc. It is important to establish datacenters a bit far from the city limits due to unsafe emissions and this is one of the reasons why it is difficult to set up datacenter anywhere near a city or well accessible areas. Alternative power sources address the issues of dependency on single power supplier because unstable power supply from a single source can be a major issue while hosting important applications and data of various enterprises. 

Lastly, to address various concerns related to datacenter establishments and promote, the Indian Government can collaborate and invest in the Indigenous datacenter providers to set up localized datacenters. It is definitely a challenging task to set up a datacenter in India but building one is rewarding due to the opportunities the Indian market has to offer. datacenters offer multiple services ranging from Colocation services to hosting enterprise applications, which serves a huge amount of audience and caters to the digital needs of businesses and individuals.

The article is authored by Piyush Somani, MD and Chairman, ESDS software solution