Pandemic-induced telecommuting boosts demand for data centres in India

Analysts reveal a 25 to 35 percent growth in terms of capacity usage throughout the lockdown period 

In India, the demand for data centres grew substantially in the midst of people working from home due to the pandemic, reported Bloomberg Quint, citing a report from Anarock Research. 

During the lockdown period, the capacity usage for data centres rose by 25 to 35 percent as businesses started to reconstruct their digital infrastructure to keep up with new work arrangements. Anarock predicted that this demand will thrust the growth of data centres as a real estate asset. 

Shard Sanghi, the chief executive officer of global data centres and cloud infrastructure (India) at NTT Ltd., said that data centres are now considered as an essential service. He explained that cloud usage has magnified because of e-commerce, schools and streaming services platform like Netflix and Amazon Prime Video.

“You need to have more physical servers to be able to support demand from these places. So absolutely it is a factor in the growth in data centres,” added Sanghi. 

He also revealed that developers are already more comfortable with the notion of constructing their own data centres, which will house internet servers and other data applications. The outbreak will further support the emerging asset class, particularly nowadays when commercial property owners are directly feeling the impact. 

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Moreover, Sanghi said that the Data Protection and Privacy Bill, as well as multinational businesses opening up shop in India have also driven the demand. “If they have sensitive and critical data, it has to be hosted and processed in India itself.” 

In the next two to three years, he projected that India will have an additional 10 million square feet of data centre space. So far, the country documented about 7.5 million sq. ft. space in the top eight cities, primarily led by Bengaluru, Chennai, Hyderabad and Mumbai. 

“Work-from-home compulsions, online education, video-based medical consultations, a huge increase in e-commerce and business-related video conferencing and webinars are increasing the demand for data centres,” said the managing director and chief executive officer at Anarock Capital Shobhit Agarwal. 

“The government’s move to make data localisation mandatory ensures a promising future for data centres in the country.”