Is India Building Enough To Power Its Digital Transformation

INTRODUCTION

India has increased it data centres, owned by both Colocation (Colo) and Cloud firms, at growing speeds over the last few years. From a total of 102MW of installed IT load capacity added in the entire year of 2021 to the addition of 258 MW of IT load in 2023, the project delivery speed has come a long way. This delivery speed will likely rise further over the next five years until 2027. To better understand this growth, a few significant points to note are: By 2028, India will have 3X installed capacity with a total IT load of 3.29 MW. An average of 464 MW of Colo capacity will be added annually between 2024 and 2028 across the top 7 cities. These numbers may look massive, but economies across the world (developed and emerging) for e.g. US, China, Japan, and Australia, are also adding equal or higher capacities despite having relatively healthier installed capacity currently. This paper delves into the crucial question of whether India can bridge the gap with more mature data center markets. To do this, we need to understand why countries are racing to strengthen their data center capacities and determine if India can keep pace or risk falling behind. India currently needs to improve amongst comparable developed and emerging economies regarding metrics for data generation compared to data center capacities. India’s data generation, particularly through smartphones, is significant. For every 1MW of installed Colo capacity, there is a substantial 13.2 Petabyte (PB) of data generated. This ratio is a key indicator of India’s potential for data center growth. As against that, mature economies such as the USA, UK, Australia, and Singapore have a much lower ratio. Data generated per 1 MW of installed Colo capacity stands at 0.3 PB, 0.4 PB, 0.3 PB, 0.1 PB for the USA, UK, Australia, and Singapore, respectively. Even some nations in Asia Pacific such as China are relatively better, with data generated per 1 MW of Colo capacity at 4.5 PB. Taking another example from the same region, India is better off than Indonesia, where the data generated per MW of IT capacity is 18.8. This is just one parameter that suggests that India has a long runway to grow its DC capacity. We have studied similar ratios to determine the potential gap between India and other economies. Using these ratios as benchmarks, we extrapolated the potential gross capacity India might have to build to bring India’s ratios closer to the relevant economies. Readers should note that we recognize there are various ways to slice the pie. Different parameters could be used, and alternate countries/ approaches considered. Our analysis is an attempt to begin answering questions posed by all stakeholder in the data centre space.

POTENTIAL CAPACITY ESTIMATION

During the study, we maintained conservative estimates while evolving two approaches to potential capacity estimation for data centers in India: For these approaches we used our benchmark nation as China. We considered data as of end-2023 for parameters including installed colo capacity, smartphone penetration, average mobile data consumption per user, internet users for all countries, including India, for our analysis.

APPROACH I:

APPROACH II:

Mobile phone data generation approach: In this approach we compared the Petabyte/MW metric for 10 countries for the current and forecasted period using parameters such as smartphone penetration, average data usage / consumer/month and installed Colo capacity. We then estimated the surplus IT capacity (over and above the UC & planned projects) that will be required in India to reach the same level as a benchmark nation.

Internet users’ approach: In this one we compared the internet users/MW metric for 10 countries for the current and forecasted period using the parameters internet users and installed Colo capacity. We then estimated the surplus IT capacity required to reach the same level as a benchmark nation.

Both these approaches suggests that, on a conservative basis, there is a need for India to add another 1.7 to 3.6 MW of IT load to its on-going capacity addition (both, under-construction and planned combined) for it to close the gap with closest comparable nations.

6 | CUSHMAN & WAKEFIELD

DATA CENTER REPORT - 2024 | 7