This expansion comes at the back of the government’s data localisation push and the pace at which enterprises are taking in digital transformation journey.
Cloud and data centre service provider NTT Com-Netmagic Solutions is planning to open three new data centres in the coming months.
While one of them is already under construction in Mumbai, two others will come up in Chennai and Navi Mumbai.
This expansion comes at the back of the government’s data localisation push and the pace at which enterprises are taking the digital transformation journey.
Speaking to Moneycontrol, Sharad Sanghi, Managing Director and CEO, said “The data centre in Mumbai is already under construction and will be operational by June 2020.” The company is looking at Chennai and Navi Mumbai for setting up two more data centres, he added.
The company so far has set up nine centres across Mumbai, Bengaluru, Chennai and Noida, and is growing at a CAGR of 30 percent.
According to Sanghi, this demand is a result of the government's push for data localisation across sectors. “If you look at it, the rules are calling for payment providers firms’ data to be stored India,” he pointed out.
In a circular last year, the Reserve Bank of India has mandated that all payment firms should store their data in India. Companies such as Whatsapp have made arrangements to store the data for its payment service in the country.
India is also coming up with a data privacy and protection bill and draft e-commerce policy that enforces the storage of critical data within the country. In addition, in the last two years enterprises, both IT and non-IT, have migrated to cloud and adopted newer technologies such as AI and IoT. This has also increased the demand for data centres in the country.
According to reports, the data centre market in India is growing at a CAGR of 11.4 percent. The market is projected to grow from $1 billion in 2018 to $1.5 billion by 2022. Sanghi said, “In fact, amidst the general slowdown, data centres business has grown and many are looking to get into this business,” he added.
In the last two years, several global companies are setting up data centres in India. Oracle is looking to launch a data centre by this calendar year. According to reports, Colt Data Centre Services is planning to invest around $300 million.
As far as NTT Com-Netmagic is concerned,NTT , the parent company, has so far invested over Rs 2,700 crore for datacenters in India from 2014 to 2018, and there would be more investments coming in for its upcoming hyperscale datacenters.
The company's data centre business is also its largest revenue generator, accounting for about 45-50 percent of its total revenue. Its other businesses, which includes managed cloud services, account for about 30-35 percent, and network services at about 20 percent.Though the market is growing at the rapid pace, there are challenges. While there is demand, the data centre market continues to be concentrated in Mumbai due to demand and also because of its uninterrupted power supply. “That is one of the major challenges. In other parts of India, power is not reliable enough,” he added.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.