Data Center Infrastructure Market in India to Hit New Low in 2020

Data Center Infrastructure Market in India to Hit New Low in 2020

The Indian data center infrastructure market has declined due to the pandemic – the market revenue is estimated to reach $2.8 billion.

With the ongoing tech market losses and economic challenges, many businesses in India have delayed their infrastructure capital expenditures (CAPEX) upgrades. This is primarily because of the ongoing cost containment, and as a result, the data center infrastructure market is seeing a new low.

According to Gartner’s latest research study, the data center infrastructure spending is projected to reach $2.8 billion. This is a year over year decline of about 14.4% in 2020 – for the “as a service” infrastructure models. However, there is a forecasted single-digit development in 2021, indicated the study.

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Due to uncertain market conditions, most companies are operating in a dispersed manner. As a result, India’s business infrastructure leaders indicate that the principal focus is on automation, coupled with network optimization and remote monitoring – amid the new normal.

It is no secret that the global pandemic has increasingly accelerated the transition into a hybrid cloud. More enterprises are currently experiencing the advantage of the public cloud to keep up with market demands. Hence, data center development projects are held back.

Until the market reaches the recovery stage, a majority of businesses will keep their priority to limited operations. The study indicated that larger enterprise data centers are likely to hit a temporary pause and are expected to resume tech expansion plans by late 2020 or early 2021.

However, the hyper-scalers will continue with the worldwide expansion strategies due to the continued investments in the public cloud. And hence, globally, the end-user spending on data center infrastructure is estimated to touch $200 billion in 2021 – with a 6% surge from 2020.

Unfortunately, there has been a nearly 10.3% decline in the data center revenue this year amid the pandemic. This is due to a definitive restricted cash flow in the market. The lockdowns in India have slowed down or stopped more than 60% of the planned new systems construction. However, the data center market has been projected to grow still, year over year through 2024.

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As mentioned by Naveen Mishra, senior research director at Gartner in the report – “For now, all data center infrastructure segments will be subject to cost-containment measures and enterprise buyers are expected to extend life cycles of installed equipment.”