The Data Centre services market in India is set to witness phenomenal growth in the coming two years and will be a $ 2 billion market by 2011 reveals IDC’s new research titled, ‘Assessment of Business Opportunities in the India Data Centre Services Market’

IDC attributes the expected growth to the fast evolving ecosystem of the market which includes high speed internet bandwidth service providers, data centre hosting players, power and cooling solution providers, hardware vendors and system integrators (SIs).

The market for data centre services is now estimated to grow at a CAGR of 22.7% till the end of 2011 to touch revenues of Rs 10,000 crore or almost $ 2 billion as compared to Rs 6,300 crore in 2009. Captive data centre services is estimated to grow at a CAGR of 19.9% in the next two years with the BFSI sector predicted to show high adoption rates for these services. Government agencies and departments are expected to increasingly adopt the services from this year. Captive services are mainly followed by sectors requiring high degree of security, internal controls and tighter management.

The relevance of third party data services is gaining traction on account of lack of in-house skills, high investments and long gestation period usually experienced by enterprises. Third party data centre services contributed 18% of total revenues garnered by data centre services. Manufacturing and IT/ITeS sectors together comprised 80% of the third party data centre services market in 2009.

“As the economy further strengthens in 2011 and IT adoption in SMBs increases further to achieve business growth objectives, this segment is expected to become the next growth driver for third party data centre services,” says Ravikant Sharma, Senior Analyst, User Research, IDC India.

In India the market is seen evolving to green solutions as well as those with better efficiency. Price-wise the services are becoming cheaper and the country is expected to serve as an important data centre hub to the global community.