India’s tech capital isn’t the top choice for large data centers With high land costs due to a booming commercial market, coupled with high power costs, Bengaluru already faces a disadvantage, as per analysts. It also faces latency issues being solely de…
While Bengaluru is known to attract top tech companies, it may be falling short as a destination for large data centers, for reasons that seem unfixable, despite the incentives the Karnataka government offers, experts told DH. India, recognized as one of the world’s fastest-growing digital economies, has emerged as a major hub for information technology (IT) and tech services. At the heart of India’s IT industry lies Bengaluru, often referred to as the “Silicon Valley of India,” a city that hosts a thriving ecosystem of tech startups, global IT giants, and innovative software companies. However, despite its prominence in the tech industry, Bengaluru is not the top choice for large-scale data centers in India. Instead, cities like Mumbai, Chennai, and Hyderabad are increasingly becoming the preferred locations for data center establishments. Several factors contribute to why Bengaluru, despite its booming tech scene, does not emerge as the leading location for large data centers.
The Growth of India’s Data Center Market
India’s data center market has been on an upward trajectory for the last few years. The country is witnessing an increasing demand for cloud services, digital storage, and internet connectivity, driven by the growth of digital services, internet users, and technological advancements like artificial intelligence (AI), big data, and the Internet of Things (IoT). According to market analysts, the total data center capacity in India is expected to rise to 2 gigawatts (GW) by 2026, representing a significant investment in digital infrastructure. As a result, India’s data center market is expanding rapidly, with more data center facilities being constructed in cities that have the right mix of geographical advantages, infrastructure, and connectivity. The current landscape shows that the largest data center markets in India are concentrated in major urban centers like Mumbai, Chennai, Hyderabad, and Delhi. Bengaluru, despite its significance in India’s tech ecosystem, is not the dominant player when it comes to hosting data centers.
Factors Influencing Data Center Location Decisions
Data centers are large facilities that house IT infrastructure, including servers, storage devices, and networking equipment. These facilities require specific conditions to operate efficiently, and the choice of location plays a critical role in determining a data center’s success. The location must offer strategic advantages such as connectivity, cooling conditions, availability of infrastructure, and overall business environment. One of the most significant factors influencing the choice of data center locations is connectivity. Data centers need to be near undersea cables, internet exchange points, and network hubs to ensure reliable data transfer between local and international networks. Cities located on the coast or near international internet exchange points tend to have better connectivity, which is why cities like Mumbai are preferred. Mumbai’s location along the Arabian Sea provides access to several international undersea cables, making it a prime location for data centers that require high-speed, low-latency connections to global markets.
Bengaluru, while a major tech hub, is situated inland, far from the coast, which limits its access to undersea cables and reduces its connectivity advantage compared to Mumbai. While Bengaluru does have good national connectivity, it cannot match the international connectivity offered by Mumbai.
Bengaluru’s Role in the Data Center Industry
While Bengaluru may not be the top choice for large data centers, it still plays a significant role in India’s tech and digital economy. Bengaluru remains a key center for software development, tech startups, and research and development (R&D). It is home to several data center service providers, but these tend to focus on smaller-scale or regional data center operations compared to the massive facilities in Mumbai, Chennai, and Hyderabad. The city’s infrastructure continues to support the growing demand for digital services, but other cities in India offer more compelling advantages for large-scale data center operators. As the Indian data center market continues to grow, Bengaluru’s role may shift towards more specialized or regional data center operations rather than serving as the hub for large, national-level data centers.
Conclusion
While Bengaluru is India’s tech capital and a global leader in the IT industry, its position as a preferred location for large data centers is overshadowed by other cities like Mumbai, Chennai, and Hyderabad. Factors such as connectivity, climate conditions, infrastructure, and regulatory environments have made these cities more favorable for large-scale data center operations. Bengaluru remains a vital part of India’s digital economy, but when it comes to housing massive data centers, other cities have a competitive edge. As India’s data center industry continues to expand, the dynamics between these cities will evolve, but for now, Bengaluru is not the primary location for large data center investments.
