Gartner, in its recently released report has predicted that 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. The research company also estimates that 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.

The company observes that 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.

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.

“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 Nareshchandra Singh, principal research analyst, Gartner. “The potential for data centers in the country 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”. 

The research company also observes that 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 the country.

However, the development of data centers in the country 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 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 the country continue to grow with the rapid implementation of high-density equipment.”