Indian Data Center Colocation Services Growth Opportunities

Indian Data Center
Colocation Services
Growth Opportunities
Hyperscale Demand to Ensure

Transformational Growth of
Data Center Colocation
Services
Global Information &

C o m m u n i c a t i o n s Te c h n o l o g i e s
R e s e a r c h Te a m a t F r o s t & S u l l i v a n
PEF7-72
The Growth Pipeline™ Company
Powering clients towards a future shaped by growth September 2023
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Contents
Section Slide Number

Strategic Imperatives 5
 Why is it Increasingly Difficult to Grow? 6
 The Strategic Imperative 8™ 7
 The Impact of Top 3 Strategic Imperatives on Data Center Colocation Services 8
 Growth Opportunities Fuel the Growth Pipeline Engine™ 9
Growth Opportunity Analysis 10
 Scope of Analysis 11
 Indian Data Center Colocation Services Market Ecosystem 12
 Growth Metrics 13
Growth Drivers and Restraints 14
 Growth Drivers 15
 Growth Drivers Analysis 16
 Growth Restraints 18
 Growth Restraints Analysis 19

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Contents (continued)

Revenue Forecast 20
 South Asian Data Center Colocation Services Market 21
 Forecast Assumptions 22
 Revenue Forecast 23
 Revenue Forecast Analysis 24
Market Trends 25
 Market Trends 26
Competitive Landscape 28
 Competitive Landscape 29
 Competitive Landscape and Supply-side Analysis 30
Location Analysis 36
 Location Analysis 37
Recent Developments and Highlights 39
 Recent Developments and Highlights 40

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Contents (continued)

Growth Opportunity Universe 43
 Growth Opportunity 1: Hyperscale Colocation Facilities 44
 Growth Opportunity 2: Retail Colocation Facilities 46
 Growth Opportunity 3: Edge Data Centers 48
 List of Exhibits 50
 Legal Disclaimer 51
Author: Kapil Baghel

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Strategic Imperatives

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Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™: Factors Creating Pressure on Growth
Source: Frost & Sullivan

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The Strategic Imperative 8™
Innovative Business Customer Value Chain Transformative Mega

Internal Challenges
Models Compression Trends
A new revenue model that Customer value chain Global forces that define the The internal organizational
defines how a company compression as a result of future world with their far- behaviors that prevent a
creates and capitalizes advanced technologies, reaching impact on business, company from making
economic value, typically internet platforms, and other societies, economies, cultures, required changes
impacting its value direct-to-consumer models and personal lives
proposition, product offering, that enables reduction in
operational strategies, and friction and the number of
brand positioning steps in customer journeys
Competitive Intensity Geopolitical Chaos Disruptive Technologies Industry Convergence
A new wave of competition Chaos and disorder arising New, disruptive technologies Collaboration between
from start-ups and digital from political discord, natural that are displacing the old, and previously disparate industries
business models that calamities, pandemics, and significantly altering the way to deliver on whitespace
challenge the standing social unrest that impact consumers, industries, or cross-industry growth
conventions of the past, global trade, collaboration, businesses operate opportunities
compelling established and business security
industries to re-think their
competitive stance

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The Impact of Top 3 Strategic Imperatives on Data Center Colocation
Services
Disruptive Technologies Competitive Intensity Transformative Mega Trends
SI8
• A surge in data creation has increased

the need for colocation services. • Traditionally, the Indian data center • Environmental sustainability is an
Deployment of cloud-based services colocation market has been very important topic for enterprises and
and disruptive technologies, namely competitive, with more than 10 service providers. Data center service
Why
artificial intelligence (AI), machine participants. This competitive intensity providers are developing
learning (ML), Big Data, and the is further increasing with a new wave of energy-efficient facilities and adopting
Internet of Things (IoT), will boost the competition from domestic and global renewable resources with the aim of
demand for data center colocation and industry participants. reducing their carbon footprints.
computing services.
• Indian enterprises are increasing their • Data center service providers are using
• New data center buildouts continue
adoption of disruptive technologies and lithium-ion batteries, advanced cooling
across multiple cities in India. The high
cloud-based services to improve and solutions, and green solutions to
Frost Perspective
market potential is attracting significant

digitize their business processes. During improve their power usage
investment from many global
2022, a growing over-the-top (OTT) effectiveness (PUE) scores and reduce
participants such as Colt, Equinix,
market and increased cloud migration their carbon footprints. Service
Digital Realty, and some leading
accelerated colocation service demand. providers’ focus on environmental
domestic real estate companies, such
The growth trend is on course to sustainability will continue to evolve for
as Hiranandani and Adani Group.
continue during next 5 years. the next few years in emerging markets.

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Growth Opportunities Fuel the Growth Pipeline Engine™
The Innovation Generator™ The Growth Pipeline Engine™
Perspectives
Analytical

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Growth Opportunity Analysis

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Scope of Analysis
• Colocation refers to space rentals, such as private vaults, floor space,

Scope
cages, and racks in different sizes. Infrastructure-level support covers
power, cooling, physical security measures, and basic network
connectivity. Addressing supplementary network and bandwidth
Geographic Coverage India
requirements will incur additional charges. Customers pay a monthly
or annual rent for the space (typically by power capacity) and facilities;
Study Period 2022–2027
they need to purchase their servers.
• The datacenter colocation services market size includes hyperscale and

retail. Service providers may offer professional services, system support Base Year 2022
services, security management, and related managed services based on
the colocation deal.
Forecast Period 2023–2027
• Carrier-neutral services involve data center colocation facilities
independent of the network provider. They offer multiple connectivity
options, and telecom service providers typically do not operate them. Monetary Unit US Dollars ($)
• Raised floor space includes rack or physical space offering commercial

colocation services measured in square feet or square meters.
• Revenue for the forecast period reflects the total potential revenue from
the data center colocation services market.
• Data center tier classifications follow the definition from the Uptime
Institute unless specified otherwise.

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Indian Data Center Colocation Services Market Ecosystem
Cloud Service Providers

Other Hyperscale Enterprises/SMBs
Customers
Hyperscale DC Service Retail DC Services

Providers Providers
Key Telecom Key Carrier Neutral Services

Services Providers Providers
Sify Reliance STT GDC India Nxtradata

Technologies Communications
NTT Netmagic CtrlS
Yotta Infra

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Growth Metrics
Data Center Colocation Services: Growth Metrics, India, 2022
Growth Rate for Base Revenue for Last Year

Life Cycle Stage Revenue
Year of Study Period of Study Period
Growth $741.5 M 19.6% $2,155.9 M

(2022) (2022) (2027)
Compound Annual Number of Degree of

Growth Rate Competitors Technical Change
23.8% 10+ 5
(2022–2027) (2022) (Scale: 1 [low] to 10 [high])
Increasing Stable Decreasing

Note: All figures are rounded. The base year is 2022. Source: Frost & Sullivan

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Growth Drivers and Restraints

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Growth Drivers
Data Center Colocation Services: Growth Drivers, India, 2023–2027
Driver 1–2 Years 3–4 Years 5th Years
The substantial increase in demand for data storage and

computing from both public cloud service providers and High High High
content providers is boosting the market growth.
The need for data sovereignty and confidentiality will also

High Medium Low
enhance market growth.
Continued digitization and advanced technology

implementation, such as 5G, AI, IoT, and emerging new use Medium High High
cases would drive enterprise colocation demand.
The need for disaster recovery and business continuity support

is growing among enterprises, which is increasing the demand Medium Medium Low
for data center colocation services.

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Growth Drivers Analysis
The Substantial Increase in Demand for Data Storage and Computing from Both Public Cloud Service Providers and
Content Providers is Boosting the Market Growth
Hyperscale cloud providers, such as Google, Amazon, and Microsoft, are experiencing a rapid rise in data transport and
archiving requirements due to an exponential increase in data consumption by consumers and enterprises.
Therefore, hyperscalers are emerging as critical customers that need to scale datacenter footprint in local geographies
for data residency and sheer capacity needs. These giants are going to third-party data center service providers to
fulfill their current requirements, which is one of the key driving forces of the colocation market in India.
The Need for Data Sovereignty and Confidentiality will also Enhance Market Growth
The Indian regulatory environment is quite conducive to overall digital growth, as the government is focused on
protecting Indian citizen data. The government has already introduced a Data Protection Bill in India that orders
companies to host Indian data within the country (with some exceptions).
Various regulations on data residency and data sovereignty are enabling enterprises to host their data within the
geography. Hence, the demand for colocation is increasing.

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Growth Drivers Analysis (continued)
Continued Digitization and Advanced Technology Implementation, such as 5G, AI, IoT, and Emerging New Use Cases
would Drive Enterprise Colocation Demands
AI, IoT, and 5G are enabling digital transformation within and across vertical industries and will boost the requirement
for data center services. Growing investment in AI, ML, Big Data, cloud, and IoT is causing a surge in demand for
colocation services.
Service providers must focus on designs for new workloads and invest in high-density rack capabilities, which will
boost the need for data center colocation services.
The Need for Disaster Recovery and Business Continuity Support is Growing Among Enterprises, Which is Increasing
the Demand for Data Center Colocation Services
The pandemic has made enterprises realize the value of business continuity provisions. In the future, business
continuity solutions will be a necessity than an option.
Most of the enterprises with captive data centers have found it challenging to effectively operate their data centers
(because of the lockdowns), which impacted business operations and continuity.
Therefore, enterprises are expected to move toward colocation facilities in the future.

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Growth Restraints
Data Center Colocation Services: Growth Restraints, India, 2023–2027
Restraint 1–2 Years 3–4 Years 5th Years
The continuously rising cost of power is restraining market

High High Medium
growth.
The lack of a skilled workforce is another deterring factor. High Medium Low
Increasing competition and the need to drive differentiation

Medium Medium Low
will dampen market growth.

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Growth Restraints Analysis
The Continuously Rising Cost of Power is Restraining Market Growth
Power supply, the backbone of any data center, consumes approximately half the operating cost. With the increasing
unit cost of power, it has become a great challenge for colocation providers to maintain operational cost-efficiency.
Many colocation providers are investing in green energy initiatives. Third-party data center providers such as STT GDC
India and NTT Netmagic have been facing issues of increased power cost, causing them to invest in green data centers.
The Lack of a Skilled Workforce is another Deterring Factor
With the increasing complexity of data center infrastructure due to data explosion and the emergence of technologies,
such as virtualization, software-defined storage, and hyper-convergence, getting an adequately skilled workforce for
effective data center operations is a big challenge in India. With the increasing integration of data center hardware
components with software, colocation providers are finding it difficult to onboard the right mix of talent.
Increasing Competition and the Need to Drive Differentiation will Dampen Market Growth
The growing demand for colocation data center services has intensified market competition and pushed service
providers to invest in best practices and better designs to create differentiation. Increased competition creates
challenges for traditional and incumbent datacenter service providers.

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Revenue Forecast

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South Asian Data Center Colocation Services Market
India is the leading country in South Asia, with about 90% of the total South Asian colocation services market share.
Data Center Colocation Services: Percent Revenue by

Country, South Asia, 2022 • India largely contributes to the South Asian data
center colocation market, which was almost
$823.9 million in 2022.
Sri Lanka • India contributes almost 90% to the total
17.6%
South Asian data center colocation services
Bangladesh
27.5% market revenue. The Indian data center
colocation services market will continue to
maintain its dominant share because of the high
demand for colocation services from hyperscale
India
0.2% and enterprise segments in the next few years.
• Pakistan, Bangladesh, and Sri Lanka are 3 other

Others* notable countries jointly contributing 9.6% to the
2.1%
South Asian DC colocation services market.
Nepal
Pakistan
2.1% • A chunk of demand for data center services across
48.6% neighboring countries is served through data
centers in India, adding to the size of the DC
market in India.
*Others include Maldives, Afghanistan, and Bhutan.

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Forecast Assumptions
• Frost & Sullivan conducted primary interviews with stakeholders of leading data center service
providers, analyzed public filings, and leveraged internal databases to perform a detailed analysis of
the market. The resulting market size reflects a bottom-up methodology.
• The forecast model considers 3 main factors: economic assumptions applicable to the data center
services market, drivers and restraints impacting the market, and leading service providers’ DC
capacity expansion plans and revenue growth projections.
• The forecast revenue is provided in US dollars.

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Revenue Forecast
Data Center Colocation Services: Revenue Forecast, India, 2022–2027

Revenue CAGR, 2022–2027 = 23.8%
2,500.0 30.0
25.0
2,000.0
Revenue ($ Million)
20.0
Growth Rate (%)

1,500.0
15.0
1,000.0
10.0
500.0
5.0
0.0 0.0
2022 2023 2024 2025 2026 2027
Revenue 741.5 914.2 1139.1 1425.1 1765.6 2155.9
Growth Rate 19.6 23.3 24.6 25.1 23.9 22.1
Year

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Revenue Forecast Analysis
• By 2027, the Indian data center colocation services market will reach approximately $2.16 billion, growing at a
CAGR of 23.8% in 2022–2027, driven by demand from the hyperscale public cloud services segment, OTT, and
content providers.
• Hyperscale cloud providers, such as Google and Amazon, are emerging as critical customers for colocation providers
due to their requirement to scale in India and cater to their capacity expansion needs. The rapid surge in Internet
data and public cloud consumption is driving the demand from hyperscale cloud providers.
• Hyperscale cloud providers and OTT segments are expected to drive data center colocation growth in the coming
years. However, BFSI and IT demand will drive the sustained growth of the enterprise data center colocation market
in India.
• Majority of enterprises have realized the importance of robust business continuity mechanism. Therefore, several
organizations with captive data centers are moving toward colocation facilities to ensure improved business
continuity provisions.
• In 2022, the Indian colocation market reached a total supply capacity of approximately 604 MW.
• More than 330 MW capacity is expected to be added in 2022–2024 to meet the hyperscale demand, primarily
driven by data center developments.

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Market Trends

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Market Trends
1 Balance Growth in Supply and Demand
Data Center Colocation Services: Supply-Demand Trend and Forecast, India, 2022–2027
2,000.0
1,800.0 Supply Capacity CAGR, 24.4%
2022–2027
1,600.0
1,400.0 25.5%
Total Demand CAGR, Hyperscale Demand
Capacity (MW)
1,200.0 2022–2027
1,000.0 Retail Demand
800.0
Unutilized capacity
600.0
400.0
200.0
0.0
2022 2023 2024 2025 2026 2027
Year
• Overall utilized colocation capacity is expected to grow at a CAGR of 25.5%, primarily attributed to rapid growth in
hyperscale demand (35.5% CAGR in 2022–2027).
• With the supply capacity additions from incumbent and emerging participants, the supply capacity is expected to grow at
a CAGR of 24.4%. It will balance the supply and demand of colocation capacity in India.

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Market Trends (continued)
2 The Requirement for High-density Racks
With rapidly increasing demand for storage and compute, India is seeing a decent surge in data center
requirements with high-density racks; this trend is likely to gather momentum. Colocation providers need to
modernize their facilities and implement cutting-edge technologies to accommodate more servers in a single
rack with a power supply of more than 20 KW to support the increasing demand.
3 Competitive Intensity
Traditional data center providers in India are expected to see new competition from multiple quarters, such
as Global DC providers, global communications providers, and leading real estate companies in India. Global
companies, such as Colt and Equinix, have entered India with aggressive data center plans. Yotta Infrastructure,
backed by Hiranandani Group, has already entered the market. Adani Group is continuously investing heavily in
setting up data centers in India.

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Competitive Landscape

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Competitive Landscape
Number of Competitors 10+
Operational efficiency, skilled resources, data center

investments, skillsets, locations, power capacity, hyperscale
Competitive Factors
capacity, cost of operations, interconnection services,
security and design
Hyperscale cloud providers, financial services, content and

Key End-user Industry Verticals
digital media, network and IT services, government, others
ST GDC India, NTT Netmagic, Nxtradata, Sify Technologies,

Leading Competitors
CtrlS, Webwerks, Yotta Infra
ESDS, Equinix India, NextGen Datacenter, Pi Datacenters,

Other Notable Competitors
Princeton Digital, Bridge Datacenters, Adaniconnex and more

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Competitive Landscape and Supply-side Analysis
Data Center Colocation Services: Supply Analysis by RFS, India, 2022

Total RFS: 3.14 million Sq. ft.
Others*
9.4%
Sify STT GDC India
11.3% 29.8%
Webwerks
4.1%
NTT Netmagic CtrlS

19.5% 10.4%
Yotta Infra Nxtradata

2.5% 12.9%
Key Takeaway: STT GDC India, NTT Netmagic, Nxtradata and CtrlS are leading the investment in deploying new facilities and adding rack space.
*Others include Nextgen, ESDS, Equinix India, Pi Datacenters, Bridge Datacenters, Adaniconnex, Princeton Digital, and so on

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Competitive Landscape and Supply-side Analysis (continued)
ST Telemedia GDC (STT GDC India) is a leading colocation service provider in India, with 21 data center
STT GDC India facilities across 8 cities. The company manages the largest pan-India data center floor area and IT load,
delivering more than 180 MW of billable IT power capacity through 21 carrier-neutral facilities.
Total Raised
Service Floor Space
Providers Data Center Locations (Sq. Ft.) Key Highlights
STT GDC India intends to invest approximately $241 million
Mumbai, Chennai, for the construction of two additional data centers within
its current Pune campus. This expansion will elevate the
Bangalore, Delhi, More than total IT load capacity in the Pune Data Center park to over
STT GDC India
Hyderabad, Kolkata, 937,500 80 MW.
Pune, Ahmedabad The company plans to build 2 more data centers in Chennai
in the near future.
Strengths
• STT GDC India is the dominant leader in the Indian colocation space and has about one-fourth of the revenue market share.
• With the largest floor area, power capacity, and high scalability options in India, STT GDC has become the preferred colocation
partner for hyperscalers.
• The company owns about one-fourth of the supply in the colocation market in India, serving more than 1,000 customers.
• In 2020, STT GDC became the first data service provider in India to adopt Li-ion batteries in its larger data centers.

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NTT Netmagic, a fully owned subsidiary of NTT Communications, is an established data center service
provider in India with about 19.5% market share in the colocation space. The company has 10 data center
NTT Netmagic facilities across 4 cities in India. It has a total IT capacity of 150 MW, of which 118–120 MW is used for
colocation. NTT Netmagic plans to build 3 more data centers with a potential 70 MW or more.
Total Raised
Service Floor Space
NAV1A, NTT Netmagic's hyperscale data center campus

was opened at Navi, Mumbai, last year (2022). This takes
Mumbai, Noida, More than the company’s data center footprint to 12 facilities.
NTT Netmagic
Bangalore, Chennai 614,500
NTT Netmagic plans to invest about $2.50 billion to expand
its data center network in India in the next 5 years.
Strengths
• NTT Netmagic goes beyond colocation services and offers a holistic data center and cloud infrastructure service portfolio covering
end-to-end IT infrastructure management and a self-service platform that spans on-premises, cloud-based, hosted, and colocated
infrastructure.
• NTT Netmagic has the support of NTT’s global network of more than 260 data centers across more than 190 countries, which the
company leverages.

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Nxtradata, a data center arm of Bharti Airtel, is a data center service provider in India with colocation,
hosting, and cloud infrastructure offering. Airtel Group contributes to a chunk of revenues of Nxtradata’s
Nxtradata business. The company is investing hyperscale as well as Edge datacenters and has about 100 MW of IT
load capacity.
Total Raised
Service Floor Space
In 2022, Nxtradata commenced the development of a new

Chennai, Bengaluru,
hyper-scale data center in Kolkata. This upcoming facility is
Mumbai, Pune, More than projected to possess a comprehensive capacity of 25 MW.
Nxtradata
Bhubaneswar, 406,200
The company plans to build 7 new data centers in India by
Manesar, and Noida
2025.
Strengths
• Nxtradata has 12 data center facilities across 7 cities. The company has almost 120 edge locations largely used to serve Bharti
Airtel’s requirements. However, the company is developing robust edge datacenter capabilities to better serve customers in these
locations.
• With its smaller but many DC facilities, Nxtradata has a well-defined portfolio for enterprises (large and medium size) with shared
and dedicated rack space. In addition, Nxtradata allows customers to integrate with Airtel’s nationwide network.

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Sify Technologies is one of the key participants in the data center market, with 10 data centers located
Sify
across 6 cities in India. The company provides a cumulative billable IT power of 70+ MW across its data
Technologies center capabilities for colocation services.
Total Raised
Service Floor Space
To tap into the hyperscale colocation and retail market

Mumbai, Chennai,
Sify More than opportunities, Sify Technologies has a roadmap to build
Bangalore, Noida,
Technologies 355,000 large-capacity data centers— up to 350 MW additional
Hyderabad, Kolkata
capacity—in the next 5 years.
Strengths
• Sify Technologies is one of the oldest Indian data center market participants. The company has a good penetration among enterprise
customers, from large and medium-sized enterprises.
• Sify Technologies is an ICT solution provider in India with solutions/services across multiple areas, such as network, data center,
cloud, security, and managed services. It is an advantage to the company as it can offer holistic solutions to the customers
(specifically midsize enterprises), catering to their data center, cloud, and networking needs.

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CtrlS Datacenters is one of the key DC service providers in India with capabilities of colocation, managed
hosting, and cloud and disaster recovery services. The company is one of the key colocation service
CtrlS providers, with 9 large data centers in 5 cities, in addition to 2 edge datacenters in Tier III cities. It has a
billable IT load capacity of about 65 MW used for colocation.
Total Raised
Service Floor Space
The company plans to add a combined DC floor capacity of

Mumbai, Bangalore, More than
CtrlS 3.5 million sq. ft., in Mumbai, Chennai, and Hyderabad by
Noida, Hyderabad 325,000
2025.
Strengths
• CtrlS has data center management at the core of its data center offerings. It brings strong technical expertise in managing hyperscale
data centers. The company is well-poised to tap the colocation growth potential in India in the coming years once it expands its data
center capacity.

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Location Analysis

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Location Analysis
Key Service
City/ Providers/
Location Key Insights Data Centers
• Mumbai is the largest data center hub in India. It has approximately one-fourth of the
total data centers and almost half of the colocation capacity.
• Being the financial capital and main gateway to international markets, Mumbai has been
the preferred choice for data center deployments in India. • STT GDC India
Mumbai • More than 12 subsea cable landing stations for global network nodes in India are • NTT Netmagic
installed here.
• CtrlS
• Mumbai is home to some of the largest verticals, primarily large BFSI organizations, the
IT/ITeS industry, and MNCs.
• Robust local network infrastructure with good access to national and international
locations makes it a prime location.
• Chennai is an emerging hyperscale data center hub in India, with more than $1.5 billion
in planned investments from global and domestic datacenter service providers to build
data centers in the next few years.
• STT GDC India
• It has better geographic proximity to key Asian cities, such as Singapore, Seoul, and Hong
Chennai
Kong, with 8+ subsea cable landing stations. It is a preferred disaster recovery location • NTT Netmagic
for enterprises.
• It is a coastal area that enables the establishment of a subsea cable landing station.
• It has relatively lesser real estate and power costs.

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Location Analysis (continued)
Key Service
City/ Providers/
Location Key Insights Data Centers
• Delhi NCR is home to 17% of India's total colocation data center facilities. The capital city
offers one of the best metro fiber network connectivity. • STT GDC India
• With the Government of India’s push for a digital economy, data center developments in
• NTT Netmagic
Delhi NCR Delhi will fulfill many of its digital data requirements. The city is home to a major chunk
of government agencies and PSUs. • Nxtradata
• However, the city is completely dependent on a terrestrial network to support its DC • Sify Technologies
network requirements.
• Bangalore is home to 15% of colocation data centers in India. Several colocation service
providers, such as STT GDC India, NTT Netmagic, and CtrlS, are further expanding their
capacities in Bangalore. • STT GDC India
Bangalore • Bangalore has a highly skilled workforce and is considered the hub of the IT/ITeS industry • NTT Netmagic
in India, one of the top two verticals generating the highest demand for data center
services in India. • CtrlS
• Though the city comes under Seismic Zone II, it offers the most robust metro fiber
infrastructure among all Indian cities.

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Recent Developments and Highlights

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Recent Developments and Highlights
• In H1 2023, BAM Digital Realty, a JV involving Brookfield Infrastructure and Digital Realty, has
disclosed its plan to invest $250 million to create a data center in Mumbai. The forthcoming data
center will be the second installation, capable of handling 35 MW, for BAM Digital Realty in India.
• STT GDC India intends to invest approximately $241 million in the construction of two additional
data centers within its current Pune campus. This expansion will elevate the total IT load capacity
in the Pune Data Center park to 80 MW or more.
• In H1 2023, Web Werks along with Iron Mountain Data Centers has announced an investment of
approximately $170 million for the establishment of a data center in Navi Mumbai. This upcoming
center will be Web Werks' seventh data center facility in India and its third establishment within
the Mumbai area.
• In H1 2023, Lumina CloudInfra, a DC entity of Blackstone Real Estate, has outlined a strategic
investment surpassing $300 million. This investment aims to build a hyperscale data center park in
Navi Mumbai.

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Recent Developments and Highlights (continued)
• In 2022, NTT unveiled a roadmap to invest $240 million to establish a hyperscale data center in
Kolkata in the future. This undertaking forms a vital component of NTT Ltd.'s expansive
investment strategy, amounting to $2.5 billion in India. In the initial phase, NTT is poised to
earmark around $60 million, subject to the prevailing regional demand. Subsequent investments
will be determined, based on the evolving demand landscape.
• Bharti Airtel Group is planning to invest $240 million in the establishment of a large data center in
Hyderabad. Designed to be a hyperscale facility, the data center will initially offer a capacity of
60 megawatts (MW) of IT load during its first phase. The project is to be implemented in
5 to 7 years.
• Over the next 4 or 5 years, CapitaLand India intends to invest $238 million for the development of
a 55 MW data center in Ambattur, Chennai.
• In H2 2022, Princeton Digital has launched its inaugural data center (build with an investment of
$300 million) situated in Navi Mumbai. The MU1 facility encompasses two buildings, delivering a
combined capacity of 48MW. This establishment is strategically placed to cater to hyperscalers
and large enterprises.

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Recent Developments and Highlights (continued)
• In 2022, Nxtra Data commenced the development of a new hyper-scale data center in Kolkata.
This upcoming facility is projected to possess a comprehensive capacity of 25 MW.
• In 2022, Sify Technologies has revealed its intentions to inject $325 million towards the
establishment of new data centers in Noida, India. This investment is a pivotal element of Sify's
strategy to incorporate an additional 200MW of capacity within the next four years.
• Equinix has outlined its plan to develop its third IBX data center in Mumbai, an investment of
more than $86 million. In a prior expansion initiative in March 2022, Equinix entered the Chennai
market by procuring a land area exceeding 5.5 acres.

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Growth Opportunity Universe

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Growth Opportunity 1: Hyperscale Colocation Facilities
Relevant End-user Industries for this Growth Opportunity Applicable Regions

Opp. Size $100 M–
in 5 Years $500 M
Manufacturing Mobility Metal & Mining
Information &
Energy & Chemicals &
Communications
Environment Materials Technologies North America Western Europe
Timeline Electronics & Agriculture, Govt and Public

3–5 Years
for Action Semiconductors Food & Nutrition Sector
Healthcare &
Construction Education
Lifesciences Latin America Africa
Consumer Aerospace Hospitality

Base Year 2023
Banking & Central/
Retail Defense
Financial Services Eastern Europe Asia-Pacific
Frost & Sullivan Has Identified 10 Growth Processes that Serve as Levers for Determining and Evaluating New Growth Opportunities.
Customer & Branding Distribution Channel Geographic Expansion Vertical Market Expansion Competitive Strategy
Growth
Processes
Strategic Partnering Product Development Merger & Acquisition Product Launch Technology & IP

PEF7-72 44
Growth Opportunity 1: Hyperscale Colocation Facilities (continued)
Context and Definition Call to Action
• The demand for hyperscale data center capacity has • To tap into the immense hyperscale opportunity
been growing in India over the last few years. The available, colocation service providers must have a
growth in demand is coming from the public cloud larger appetite for investment. They should focus
and content providers. It is due to multiple factors, their efforts on building scalable, high-capacity data
such as more businesses moving their IT centers.
infrastructure to the cloud and high consumer
• Data center service providers must deploy
demand for app-based and OTT services running on
high-power density racks to support enormous
the cloud.
power requirements.
• The government’s mandate on data localization
encourages public cloud providers, OTT, and big tech
companies to host data in the data centers in India.

PEF7-72 45
Growth Opportunity 2: Retail Colocation Facilities

Opp. Size $100 M–
in 5 Years $500 M
Information &
Communications

3–5 Years
Healthcare &

Base Year 2023
Banking & Central/
Retail Defense
Growth
Processes

PEF7-72 46
Growth Opportunity 2: Retail Colocation Facilities (continued)
• The pandemic and the actions taken to curb it forced • Data center service providers should also focus on
enterprises in India to realign their business the enterprise segment that requires retail
operations and IT strategies. With prolonged colocation services.
lockdowns, enterprises across India dealt with
• Though the hyperscale segment provides a
supply chain shortages and limited access to
high-volume opportunity, the enterprise segment
on-premises infrastructure. Several enterprises had
offers higher margins to service providers.
to realign their IT infrastructure strategies to operate
Therefore, DC service providers must have a robust
without on-premises access or have a reliable
strategy and channel for retail colocation.
infrastructure to ensure downtime prevention.
• Service providers should adopt a two-pronged
• Many enterprises are expected to consider captive
approach to building data centers for value
DC a liability and shift toward the colocation model
propositions catering to enterprise segments,
for their data center requirements.
such as BFSI, and IT, in addition to hyperscalers.

PEF7-72 47
Growth Opportunity 3: Edge Data Centers

Opp. Size
in 5 Years <$100 M
Information &
Communications

3–5 Years
Healthcare &

Base Year 2023
Banking & Central/
Retail Defense
Growth
Processes

PEF7-72 48
Growth Opportunity 3: Edge Data Centers (continued)
• The growth in IoT applications and the need for • Smart city development and IoT usage will be overall
faster data processing for latency-sensitive data center service boosters. Colocation providers
applications drive the requirement for edge should tap into the new opportunity in edge data
computing. Some use cases have massive volumes of centers used for latency-sensitive applications. For
data collected for processing from many example, smart traffic management, smart parking,
geographically dense endpoints, such as real-time and smart lighting systems will be hosted in edge
temperature-sensing across climate-controlled DCs or the cloud, which require a low-latency
storage facilities or traffic monitoring. Storing and infrastructure.
analyzing all this data in a centralized, remote data
• Service providers must build edge DCs by
center may be less than optimal. An edge data
themselves/partner with edge DC players to have
center will address the need for local compute
edge datacenter capabilities that can help tap into
power close to endpoints/customers.
the potential opportunity in the coming years.

PEF7-72 49
List of Exhibits
Exhibit Slide Number
Data Center Colocation Services: Growth Metrics, India, 2022 13
Data Center Colocation Services: Growth Drivers, India, 2023–2027 15
Data Center Colocation Services: Growth Restraints, India, 2023–2027 18
Data Center Colocation Services: Percent Revenue by Country, South Asia, 2022 21
Data Center Colocation Services: Revenue Forecast, India, 2022–2027 23
Data Center Colocation Services: Supply-Demand Trend and Forecast, India, 2022–2027 26
Data Center Colocation Services: Supply Analysis by RFS, India, 2022 30

PEF7-72 50
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Frost & Sullivan is not responsible for any incorrect information supplied by companies or users.
Quantitative market information is based primarily on interviews and therefore is subject to fluctuation.
Frost & Sullivan research services are limited publications containing valuable market information
provided to a select group of customers. Customers acknowledge, when ordering or downloading, that
Frost & Sullivan research services are for internal use and not for general publication or disclosure to
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For information regarding permission, write to: permission@frost.com
© 2023 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan.
No part of it may be circulated, quoted, copied, or otherwise reproduced without the written approval of Frost & Sullivan.

PEF7-72 51

Indian Data Center Colocation Services Growth Opportunities

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Indian Data Center Colocation Services Growth Opportunities

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Indian Data Center

Hyperscale Demand to Ensure

Global Information &

Section Slide Number

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Section Slide Number

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Section Slide Number

Author: Kapil Baghel

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Source: Frost & Sullivan

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Innovative Business Customer Value Chain Transformative Mega

Competitive Intensity Geopolitical Chaos Disruptive Technologies Industry Convergence

Source: Frost & Sullivan

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• A surge in data creation has increased

market potential is attracting significant

Source: Frost & Sullivan

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The Innovation Generator™ The Growth Pipeline Engine™

Source: Frost & Sullivan

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• Colocation refers to space rentals, such as private vaults, floor space,

• The datacenter colocation services market size includes hyperscale and

• Raised floor space includes rack or physical space offering commercial

Source: Frost & Sullivan

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Cloud Service Providers

Hyperscale DC Service Retail DC Services

Key Telecom Key Carrier Neutral Services

Sify Reliance STT GDC India Nxtradata

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Data Center Colocation Services: Growth Metrics, India, 2022

Growth Rate for Base Revenue for Last Year

Growth $741.5 M 19.6% $2,155.9 M

Compound Annual Number of Degree of

(2022–2027) (2022) (Scale: 1 [low] to 10 [high])

Increasing Stable Decreasing

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Data Center Colocation Services: Growth Drivers, India, 2023–2027

Driver 1–2 Years 3–4 Years 5th Years

The substantial increase in demand for data storage and

The need for data sovereignty and confidentiality will also

Continued digitization and advanced technology

The need for disaster recovery and business continuity support

Source: Frost & Sullivan

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Source: Frost & Sullivan

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Data Center Colocation Services: Growth Restraints, India, 2023–2027

Restraint 1–2 Years 3–4 Years 5th Years

The continuously rising cost of power is restraining market

Increasing competition and the need to drive differentiation

Source: Frost & Sullivan

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The Continuously Rising Cost of Power is Restraining Market Growth

The Lack of a Skilled Workforce is another Deterring Factor

Source: Frost & Sullivan

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