By 2012 India will have over 5 million square feet of data center space giving it the potential to be the major data center services provision player in the region.
Analyst Gartner said that India's storage capacity reached 34 petabytes in 2007 and it is expected to double by 2012.
'The potential for Indian data centers is large with the external-controller-based (ECB) market expected to grow by more than 22 percent in 2008, making India the fourth largest market for ECB storage in the Asia-Pacific region.
There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes by 2007, thereby increasing the data centre uptake in companies,' said Nareshchandra Singh, principal research analyst at Gartner.
Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services, Gartner said. India's total data center capacity, including both captive and hosted, will grow 31 percent from 1.337 million square feet in 2007 to 5.143 million square feet by 2012.
Gartner predicts that captive data center capacity will increase to 2.571 million square feet by 2012 showing compound annual growth rate (CAGR) of 29 percent. The hosted data center capacity will grow 33 percent CAGR to 2.573 million square feet by that time taking the total capacity to 5.143 million square feet.
Gartner made these forecasts considering only facilities with gross space capacity of and over 1,000 square feet.
'The data center industry in India is expected to double its capacity in the next two years, and captive and hosted data center capacities will grow at comparable rates. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India,' the statement said. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfil demand arising from small and midsize users.
The country will continue to face challenges around electricity supply, security and data retention.