Demand for data centers goes viral

Demand for data centers goes viral

As a result of COVID, data usage has seen a sharp increase of 38% per annum on Q1FY21. Following this, CRISIL expects the industry to invest a quick CAGR of 25-30% to $ 4.5-5 billion by 2025 funding

The data center business has acquired powerful windmills six months ago or from an unexpected source – the Covid-19 epidemic. Even though the epidemic and its parasites have lost their lives and businesses out of gear, they are slowly growing in many areas, becoming a major factor in digital adoption.

Indeed, the government had already begun forcing India to become a digital economy with its Smart Cities and Digital India programs before the epidemic began. However, the crisis accelerated the transition to digital as almost every aspect of daily life – be it banking, education, or shopping – shifted to digital almost instantly, leading to the emergence of the digital  environment in India.

The highlight has been the growing growth in data production, and this has created an unparalleled demand for data centers in India.

To increase the volume of data, the need for local storage

India’s data center industry, which accounts for 1-2% of global pie, is estimated to have set an average annual growth rate (CAGR) of 15-20% from the 2016 financial year to affect $ 1billion in fiscal 2019 and ~ $ 1.2 billion for the 2020 financial year. This growth culminates in a significant increase in internet penetration from ~ 30% in fiscal 2016 to ~ 55% in fiscal year 2019. Also, on account of COVID, data usage has seen a 38% annual growth in Q1FY21. Following this, we expect the industry to invest a fast CAGR of 25-30% to $ 4.5-5 billion by the 2025 financial year. Growth drivers include an increase in the amount of data produced and the growing need for local data retention in line with the government’s focus on data information. Industrial power, standing at ~ 360MW in the 2020 financial year, is expected to more than triple to 1,100-1,200 MW by 2025 after $ 4-5 billion was announced three years ago on both brownfield expansions and greenfield projects.

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