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03 May 2021

What is the Indian Data Center Outlook?

Michael Goh, General Manager Asia Pacific, Iron Mountain Data Centers

What is the Indian Data Center Outlook?

Michael Goh, General Manager Asia Pacific, Iron Mountain Data Centers

We have just established a Joint Venture with Web Werks, one of India’s leading data center providers. Web Werks operates carrier-neutral data centers in Mumbai, Pune, and Delhi NCR (National Capital Region), with 225,000 square feet (20,900 m2) of space and 4 MW of capacity. We expect to invest $150 million over the next two years, which will help the business expand its existing operations, and also move into Bangalore, Hyderabad, and Chennai.

India is still an unknown market for many, so I thought it would be useful to talk about the data center market in India, the agreement we have arrived at and the opportunities it presents.

Crying out for Capacity

It’s no exaggeration to say that today India is desperately short of data center capacity.  Capacity across the whole Indian subcontinent is still less than 400 MW. That’s even less than in Singapore and less than 10% of the capacity in Northern Virginia. It’s a crazy situation for a country of 1.3 billion people, over half of whom are internet users, India needs more capacity and they need it soon. It is, after all, the second largest telecommunication      market in the world.

There are four other main factors that have driven demand. First, there is the effect of Covid-19 data consumption spike, which was sharp in India and fuelled by the huge population. Second, a lot of India’s data center capacity is traditionally served from overseas data centers such as Singapore, but the government now wants to see all data remaining in-country, so there is also a lot of additional potential in rehoming data. Third, there is the overall global trend towards digitalisation. And finally, there is a huge migration trend from on-premise data centers to colocation, cloud or hybrid solutions.

According to one recent survey by JLL, these various demands are expected to drive the creation of an additional 700+ MW of capacity by 2025.

Land of Opportunity

For global operators there is a major opportunity in being an early mover in the Indian market. There are currently very few global providers with a presence in the country. In fact we are just the second US company to invest successfully in the Indian data center market.

From a global perspective, our partnership with Web Werks may not seem like a huge deal, but it is regarded with great excitement across India. There is not a great deal of foreign investment, and the presence of a new global player in a field dominated by local firms is generating strong expectations of higher standards and new international customers.

There is also a huge amount of talent and potential in the Indian ICT segment, as illustrated by our agreement. The quality and experience of the Web Werks management team, who have built up web, hosting and data center businesses from scratch, was a huge factor for us. In Iron Mountain, we try to work with experienced local operators who know the landscape and have international ambitions. Our global operating know-how, combined with      local knowledge will differentiate us from other competitors in the market.

Funding Expansion

We are entering the Indian market to focus on growth. The way we have structured our agreement enables this. We are not simply pouring money into purchasing an existing business, we are investing in building up new capacity in existing markets as well as new sites across India with the ambition to be the top player in the pan-Indian landscape.    

Once we have finalised the agreement we aim to build out in Mumbai, taking advantage of the exceptional carrier-density there. In addition, we plan to expand in the Pune and Delhi NCR campuses. In the medium-term we will also review the rest of the sites looking at different options for establishing scalable capacity there. The aim is to do this within the year.

The Customer Viewpoint

We have customers that have been waiting to expand to India, and we have had many discussions with them about where we are planning to expand in Asia, with India high up the list due to its geography and demographics. 

In my experience, customers will buy from a company they trust, especially in developing markets. And they will want advice and support before entering new markets. This is what Iron Mountain will bring to the table. Customers will want the reassurance and stability of the Iron Mountain Data Centers global brand promise. This is why we will be moving rapidly to align the standards of our Indian capacity with Iron Mountain’s global portfolio and compliance program.

Customers want to experience the same service and quality, with consistent overviews and service sets. We will work hard with Web Werks to adapt and complement their current offering, bringing our platform, expertise, customers and knowhow to bear. We want our brand promise to be as strong in India as in Singapore, Phoenix or Amsterdam.

Looking Ahead

Demand, scale, timing and skills all mean that India has to be a priority market for any global data center provider, and at Iron Mountain Data Centers we feel that this latest agreement underlines our commitment and ambition to be one of the leading global players in this region as well as elsewhere round the world.

There is still great opportunity elsewhere in Asia Pacific. The region is forecast to account for 50% of total global data center capacity by 2025, so the opportunity is huge, and everyone should look out for some sizable deals in the region over the coming year.  I know that we will continue to look for expansion opportunities across the region as we work hard to meet evolving customer expectations, build new partnerships, and expand our global footprint.

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