The Indian data centre sector experienced a substantial increase in IT capacity, adding approximately 71 MW across key micromarkets in the first half of 2024, according to Savills India. This addition brings the total capacity to 942 MW, marking a 21% growth from 778 MW recorded in the same period last year. Market transactions also reflected robust activity, with about 200 MW in IT capacity reported.

The demand for data centre capacity was primarily driven by hyperscalers, along with sectors such as Banking, Financial Services, and Insurance (BFSI), IT & ITeS, and service sectors, which heavily utilise colocation and related services, according to Savills India.

As of the first half of 2024, the operational IT capacity stands at 942 MW, showcasing a compounded annual growth rate (CAGR) of 22% since 2014, when it was merely 158 MW. Mumbai emerged as the leader, accounting for 54.9% of the total capacity, followed by Chennai, Bengaluru, and Pune with 12.3%, 8.2%, and 7.2% respectively.

"We project a strong demand for data centre capacity in India by the end of 2024, with an estimated requirement of 400 MW across major cities," said Srihari Srinivasan, Director & Lead Data Centre Services, Savills India. He added, "While supply is expected to reach 350 MW during the same period, data centre operators are expanding their service offerings beyond colocation to include networking, cloud solutions, and specialized hardware like GPUs."

This anticipated growth is driven by surging internet usage, the advent of 5G, and the increasing adoption of AI and IoT across various industries. The need for ultra-low latency for mobiles and GPU-powered solutions is also contributing to a burgeoning demand for edge data centres in specific areas.

The data centre industry's shift towards colocation services is attributed to factors such as high capital expenditure, operational costs, and the complexities of predicting future demand and scalability. Additionally, the high cost of security systems and high-performance GPUs, along with rising real estate costs, are making enterprise colocation increasingly attractive for businesses, thus benefiting operators in the sector.

(Source:ET)