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Data CenterServices:Powering thenext Decade ofGrowth in India

Table of Contents03Overview of Data Center Industry in India04Key trends shaping the DC industry in India08Attributes of a DC partner09STT GDC India: An ideal DC partner for EnterprisesSpecial Feature: New State of the art DC in Bengaluru@Frost & Sullivan I DC Market I Page 22020

1Overview of Data Center Industry in IndiaDigital transformation has already become imperative forand medium enterprises are adopting digital technologiesenterprises to gain a competitive edge. Enterprises, aheadand cloud computing.in the digital transformation curve, are driving businessThe key theme driving growth in India is the explosivetransformation and innovation through the adoption ofdigital needs of Indian emerging economy with hugedigital technologies such as cloud computing, Internet ofpopulations, the growing presence of hyperscalers, highThings, Mobility, Analytics etc. In the quest to become apenetration of Internet connectivity and a keen focus ondigital enterprise, Cloud has become a major pillar of digitaldata privacy. Furthermore, rising complexities within the ITtransformation for enterprises. Enterprises, irrespective ofinfrastructure brought about by virtualization andtheir size, are moving their workloads onto the cloud forconsolidation, coupled with various cost constraints, areflexibility and economies of scale. They are adoptingencouraging enterprises to look into adopting third-partydynamic hybrid cloud/multi-cloud environments to boostData Center services. The market is also expected to seetheir business growth and operational efficiency.many growth-related projects across verticals viz., banking,The Data Center market in India is one of the fastest-insurance, telecom, IT and ITeS. This is spurring the healthygrowing markets in the world. With the dawn of digitalgrowth of DC market.transformation, organizations ranging from large to smallMarket size and forecastExhibit 1: Data Center (DC) Services Market: Market Revenue Forecast in India, 2019 – 202440%CAGR (2019-2024) 25.9%35%REVENUE (INR, VENUE GROWTH RATE ( %)14000Frost & Sullivan estimates theIndia Data Center servicesmarket to be worth INR4511.2Cr. in revenue in FY20,representing a growth of 18.4%over FY19. The market willgrow at a compound annual5%growth rate (CAGR) of 25.9%0%from 2019-2024 to reachFY 19FY 20FY 21FY 22FY 23FY 24Managed .8 Cr. by the end Y24.18.4%34.1%27.3%26.6%23.7%Growth RateSource: Frost & Sullivan analysis*Forecasted using the base year FY-19@Frost & Sullivan I DC Market I Page 32020

2Key trends shaping the DC industry in IndiaIndian Colocation Market – an opportunity for all Colocation players“The Indian Colocation market has an immense potential to grow and is growing with a CAGR of 26.1 %.India is one of the major markets for colocation providers. The growth opportunities are attracting theglobal players towards this market.”The Indian Colocation market has tremendous potential to(BFSI), IT/ITES, OTT, Media which require strict datagrow leveraging key levers like multi-tenancy, scalability andconfidentiality and complete management control of theirreduce CapEx amongst other things. Colocation servicesoperations. In addition, cloud service providers are alsoaccounted for the bulk of market revenue at 78.5% in 2019.generating new demand for colocation as they opt for third-This will continue to be driven by large enterprises andparty facilities to host their infrastructure for providingverticals such as Banking, Financial Services, and Insuranceservices to customers.Exhibit 2: Colocation Data Centers in India - City Wise Colocation DC Numbers Share10 major providers present in the current Indianmarket.23%33%MumbaiMumbai hasthe maximumnumber ofColocation DCbecause of her locations9%19%16%Source: Frost & Sullivan analysis@Frost & Sullivan I DC Market I Page 42020

Driver of growth for India Data Center marketIndia is recognized as one of the leaders in the ICT sector, globally. The growth of digital business in India is expected to risesubstantially in the coming years, thus fuelling the demand for data processing and colocation services.Digital Data Flow: The Unprecedented Growth StoryIncreasing mobile penetrations and usage of internetmedia. As existing applications grow and new social mediaapps are created, their need for Data Center capacity willWith the falling data cost and affordability such as EMI,more people are gaining access to the internet andsmartphones, have enlarged the prominence in recentyears. India had more than 570 million smartphone users in2019. In every three seconds, a new user connects to theinternet, deciphering into 30,000 new users per day. Thishas led to an ever-growing amount of digitized data, whichdrives the adoption of data center services in India.continue. Millions data users are consuming large volumesof data in the form of entertainment (movies and music),gaming and sports content. There are more than 40providers of over-the-top (OTT) media services in India. Thisspace is dominated by a regional language user base, whichis progressively growing. Most of OTT users face the issueof latency. To offer better user experience with lessbuffering in the semi-urban and rural regions, India willSocial media, Gaming, and OTT driving capacityneed more Data Center to be set up in the tier-II and IIIgrowthcities and towns. This will translate into edge data centresin the populated rural areas of the states such as UP, BiharIndia is the largest market for social media platforms likeand MP, to name a few for the faster data processing andWhatsApp, with 400 million users. Social media companieslower latency. Edge Data Centers will complement existinghave to quickly adapt in order to store and manage all ofData Centers by acting as an additional processing layerthe data produced from the billions of people on sociallocated close to the source.

High growth in e-commercepenetration across, urban semi-urban and rural segmentswould help boost the online sales. Data centres form theThe Data Center segment is expected to get the oil from theeCommerce in India as consumers are shifting to onlinebackbone of this vast and ever-expanding e-commerce tostore data with enhanced data security & privacy.spending to keep social distancing. The increasing internetIT, BFSI, Fintech and Payment Space – widespreadRise of App eco-systemdemand baseThe mobile app market is booming. The app industry hasTechnology and banking & financial services are the twoseen immense growth in the past couple of years and evenimportant industry sectors that have accounted for thehas no end in sight. The rise in technology-driven start-upsmajority of investments over the past few years. Theis boosting this market. Such an unprecedented evolutiondemand for IT and IT-enabled services is creating the needof the app world has been a catalyst for the DC marketfor third-party Data Center services. This is because servicesgrowth.can be provided in a cost-efficient and convenient manner,in comparison to establishing captive Data Centers,indicating that the demand for colocation will riseEmerging Technologies – Cloud Services, IoT, 5G, AIand Big Dataexponentially in the coming years. The amount of data thatThe growth is being fuelled by the global hyperscalersis being stored and processed by this segment is huge.requiring evermore space/capacity to support the IndianBanks are encouraging their users to use internet-basedchannels or mobile apps. The number of transactionpayments, whether online or offline, is growing at anmarket demand. 5G will also result in a steep rise in theamount of data on the wireless eco-system due to widebandwidth and speed. This will spur the uptake of third-unprecedented rate. The number of transactions will alsoparty Data Center leasing capacities. IoT, AR, VR, AI, and bigact as a booster shot for India’s Data Center growth.data are likely to provide investment justification in theData Centers.Exhibit 4: Increasing data usage – DC Industry Enabler1.1 billionSocial Media UsersThat’s a lot of Mobile subscribers60 Mn400 Mn570 millionAnd a lot of Smartphone users34 Mn320 Mn80 Mn260 Mn10.8 GB per monthOTT UsersIndia has highest average monthlydata usage per smartphoneSource: Frost & Sullivan analysis@Frost & Sullivan I DC Market I Page 6

Government effort on digital economyThe Personal Data Protection Bill, 2019 and Data localizationIndian government policies are conducive for the ICT market's growth. It has set up objectivesin the National Digital Communications Policy in 2018 (NDCP-2018) to boost the Digital Indiainitiative, which needs to be achieved by 2022. The government has also introduced personaldata protection bill that seeks to create a framework for the processing and storage of thesensitive personal data, and lists out individual’s rights in reference to their personalinformation. As per the legislation, an original copy of personal data is to be stored within thecountry. However, the sensitive personal data can also be transferred abroad for the purposeof processing in line to the legislation. The data processing can be processed without person’sconsent in certain situations such as legal cases, national security and medical emergencies.The key legislation that is having the direct impact is the Reserve Bank of India’s (RBI’s)notification on ‘payments’. This notification states that payment system players (serviceproviders/intermediaries/third-party vendors and other entities) to store entire data with fullend-to-end transaction details related to payment transactions only in India. Exception: Datarelating to the foreign piece of the transaction is permitted to be stored outside India, ifrequired.States also recognize the potential of the DC industry. State government aren’t behind inattracting DC players as Maharashtra, Gujarat and Telangana are offering special incentives andother benefits for industry players.Right to privacy and protection of personal will become important aspects of the data storage.The data localization and other incentives by the states are expected to drive the growth ofdomestic data centres. It brings up a massive opportunity for colocation data centre players.E-commerce PenetrationCard Transactions Growth Volume0.4%3.0%7.2 Bn15.9 Bn2017202020152019Cloud Computing Growth in INREnterprise IoT Growth in INR39,159 Cr.110,104 Cr.5,627 Cr.7,585 Cr.2020202520192023Source: Frost & Sullivan analysis@Frost & Sullivan I DC Market I Page 72020