IDC Says-India Data Center Services (Third Party) Market is estimated to reach $671M by the end of 2012, registering an annual growth of around 37%

New Delhi, November 07, 2011: IDC annual study, "Data Centre Opportunities in India, 2011," covering 10 third-party providers and 1,156 large and medium businesses for captives across verticals including Manufacturing, BFSI and Retail, said the third-party data centre services market clocked revenue of USD 360M for the 12-month period ended March 2011.

"Adoption of third-party data centre services has been on the rise by large as well as medium businesses, driven both by the need to cut costs as well as to lower the risks associated with investing in data centre equipment and technologies that face ever shortening refresh cycles," said Jaideep Mehta, Country Manager,IDC India

"While a majority of the third-party data centre services revenues come from colocation and hosting services, the managed services component is steadily rising. The beginning of a major shift, beyond the vanilla co-lo and hosting play, however, is still two-three years away and would depend on the pace at which cloud-based models and offerings are able to mature in India," added Jaideep.

The key verticals for third-party services have been Manufacturing and IT/ITeS. A growing need to focus on core business; lack and retention of skilled human resources for in-house management of data centre operations and rising power, cooling and real estate costs have remained the major drivers for adoption of third-party DC services.

The third-party DC services market in India is estimated to reach USD 671M by the end of 2012, registering an annual growth of around 36.5% .

"While captive data centres in general offer a rapidly growing business opportunity, Manufacturing, BFSI and IT & ITeS constitute the block of more attractive verticals. Further, the expenditure by businesses on their captive data centre build-outs and operations was USD 1389M in 2010, and would reach USD 1937M by the end of 2012, at an average year-on-year growth rate of 18.1%," said Ravikant Sharma, Research Manager, Consulting Group, IDC India.

"With a slew of investments in the e-governance, UIDAI, and state data centre projects, Government would be a vertical to watch for, with spend on data centre build-outs expected to remain unabated for the coming three to five years, both at central and state government levels," added Ravikant.

Around 40% organizations have data centres which have existed for 5 years or more, meaning thereby that investments in technology refresh or consideration of subscribing to third-party data centre services would be due in the near future.

In the third-party data centre segment, telcos continued to hold the largest market share with Reliance Communications being the market leader (in revenue terms), followed by Tata Communications. Among the pure-play service providers, Netmagic has further consolidated its position, with a healthy and growing focus on managed services. Going forward, Tulip Telecom would be a player to watch form as it builds its mega data centre facility of 900,000 sq. ft. in Bangalore.

For more information on this report, "Data Centre Opportunities in India, 2011”, please contact Deepak Kumar, Research Director Telecom, or Ravikant Sharma, Research Manager, Consulting Group,

For media inquiries contact Akanksha Gupta, Marketing Manager at or Tel: +918800755200.

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