Trends That Are Going To Shape The DC Market In 2021
The Aftermath Of The Pandemic
The Indian data center market has witnessed robust growth in the era of virtualization and cloud computing and is expected to grow at 12 percent compound annual growth rate (CAGR) from 2019-2024. With more and more Indian companies expected to embark on their digital transformation journeys, India has become the second fastest-growing digital economy and the IT and communications sector is expected to double in size by 2025. COVID-19 lockdowns have not only accelerated the usage of data but have in turn increased the demand for bandwidth and storage capacities.
COVID-19 lockdowns fast tracked the adoption of digital and online mediums for business across industries which drove huge quantities of data usage. Like every country across the globe, India too shifted to the `work-from-home' culture and digital communication became the new norm. With most industries taking their services online, this led to the demand for data centre businesses to expand exponentially. To ensure the safety of its people, the government is bringing in regulations, including data protection, data localization and privacy, which has opened up the domestic data centre market even more.
With the companies having got enough and more insight into the cost and complexity of running onsite/inhouse data centers, the practice of colocation centers to house private servers and network equipment will witness a boost
The Need For Business Continuity DC Aiding Growth
While companies identified the need for investment in the space, they were tied down by liquidity constraints and market restrictions led by the pandemic in 2020. However, data centers are expected to witness a huge rebound in terms of spends in 2021 to ensure efficient business continuity and extended work-from-home. Also, with data privacy exponentially becoming an area of concern among the users, data centres are going to be key players in protecting data and maintaining the sanctity of online data usage. Data centres have also started to evolve as an alternative real estate asset class with huge potential which has led to leading real estate developers to enter this segment, in a bid to reap high returns from early investments. With Government initiatives such as Digital India and them driving emphasis on self-reliance and data protection through data localization an increase in the volume of data in the country is expected, which will further increase the demand the data center and cloud services.
Trends That Will Change The Game This Year:-
Growing need for DC rentals: With the companies having got enough and more insight into the cost and complexity of running onsite/in-house data centers, the practice of colocation centers to house private servers and network equipment will witness a boost. Committed to providing end-to-end solutions for the DC industry, CBRE with its transformative approach, global experience, and market leadership will help occupiers to drive cost optimization and efficiencies for colocation, managed services, cloud, and network solutions. CBRE's DCS in India is positioned to negotiate long-term favorable contractual terms, Service Lease Agreement, and economics for data center and IT requirements.
Hyperscale DC Facilities: As the data center market will speed-up, there will be growing demand for hyper-scale DC facilities, which would require strategic positioning of DCs across the globe to facilitate increased consumption of data from social media, business continuity planning, and higher data security systems to facilitate work-from-home, online gaming, OTT streaming, artificial intelligence, and machine learning. On lines of the same, CIOs will need to engage with strategic partners who can understand their business and help them plot adoption of outsourced colocation & hyperscale technology & resources.
5G Dominance:The transformation of 4G to 5G, the need to support edge computing and low-latency applications, the growing popularity of electric and autonomous vehicles, and the promise of blockchain gaining traction within large fintech companies, and 5G gaming are going to be some interests that are going to drive the demand for DC market in 2021.
Integration of AI:The next trend that may garner attention will be unmanned data centers. The pandemic has made it clear that operations need to continue with/without human interference, hence AI is expected to lend that support and partially eliminate the need for staff to facilitate server requirements. However, this is right now just a dream, but who knows AI can manifest even this upon us.
Moving To The Cloud:The quintessential trend that is going to pave the way for the DC market in 2021 will be companies diverting to cloud-centric infrastructure to maintain competitiveness and keep pace with the operational changes induced by the pandemic. Also, with an increased need for sustainability and resultant exponential rise in IoT-linked devices, there is going to be an allocated need for local edge DCs geographically spread out to enable network endpoints, which would further ensure faster response to meet dynamic business requirements and help make operations more agile.
More Engagement With DC Solution Experts: Strategic Partnerships With Industry Experts: Operators are seeing a huge demand for more data center space on account of increased data consumption and hence, will expedite their land transactions to catch-up on lost time and turn-up DC facility quickly to serve hyper scalers and enterprise clients. CBRE's Data Center Solutions team helps occupiers from diverse verticals and geographies to understand the strategic and cost ramifications of Data Center (DC) decisions. This encompasses services across the entire real estate and IT lifecycle of a DC, including Advisory, Transaction, Project Management, and Facilities Management disciplines, thus assisting occupiers in new site selection & acquisition for DC footprint expansion.
Steadily Moving Forward In Line With The Govt's Vision Of Digital India:
While 2021 is going to be a year of recovery for businesses, it is going to bring a transformational phase too and with the ever-changing customer behavior and style of communication, the businesses are going to continue investing in IoT, Artificial intelligence, and big data to ensure digital resilience and improve operations, especially in India, where the government is unwaveringly promoting the vision of a Digital India.