Mumbai, January 30, 2009 – The India data centre services market is poised to witness rapid growth in the coming years. The data centre value proposition assumes greater significance as data centres become the nerve centres of enterprises in an increasingly challenging economic environment. The overall India data centre services market crossed the US$ 1 billion mark in 2007 and was expected to grow at a CAGR of 18% over the next two years to touch US$ 1.52 billion by end 2009.

Of the total India data centre services market in 2007, third party data centres constituted nearly 20% in terms of built-up space and this ratio was expected to increase to 27% by end 2009. 

“With the Indian economy expected to grow at a slower rate consolidation, optimisation and productivity will be the key areas of focus for enterprise managements in the near future. Captive data centres will undergo optimisation and aim to leverage the existing assets, while third party data centres will experience a short-term supply glut”, said Praveen Sengar, Senior Manager, Software & Services and Industry Verticals Research, IDC India.

“The growth in third party data centres in India is primarily driven by the need of businesses to rely on the expertise of a specialist service provider, as in-house management becomes too expensive. This is especially true in an environment of continuously changing and increasingly complex technologies. Moreover enterprise managements are focused on reducing their upfront capital investments (capex), and therefore increasingly looking to outsource their data centre needs”, added Seepij Gupta, Assistant Manager, Software & Services Research, IDC India. 

Moving from a pure co-location business model to an IT Services business model will be critical for third party data centre service providers as the market slows down.

On the other hand for captive data centres retaining skilled personnel, optimisation, consolidation and management will be the key challenges. 

As business has become global in the true sense with virtually no boundaries, it has become all the more important for today’s enterprises to have their operations running 24/7. Even a few minutes downtime can result in losses worth millions. Further, due to the increasing intensity of competition and the prevailing subdued business sentiments, providing multiple customer and partner touch points would directly translate into increased sales and profits. This is where data centres will have a pivotal role to play in the success of a business enterprise in the months and years ahead. 

Note for Editors: Learn more about IDC’s perspective on the India Data Centre market at the InfraVision08 Conference Mumbai scheduled to be held at Regus Ballroom, Trade Centre, Bandra-Kurla Complex, Bandra (East) on Thursday, February 5, 2009. For invites, please call/write to Kanchan Rawat, +91-9811375937, krawat@idcindia.com.

For more information about purchasing the "Assessment of Business Opportunities in Data Centre Services in India" report, please contact Mukesh Jain at +91-9312075521 or mjain@idcindia.com.

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