India Poised to Become the Next Big Hyperscaler in the Cloud Services Market
India is emerging as a promising contender in the hyperscaler landscape, with the potential to become a major player in the global cloud services market. The demand for hyperscale data centers is skyrocketing in India, fueled by the country’s massive data generation, increased 5G penetration, growing adoption of over-the-top (OTT) services, and the rise of generative artificial intelligence (AI).
Currently, the hyperscaler market is dominated by global giants like AWS, Microsoft Azure, and Google Cloud, which collectively hold over 60% of the market share. However, India’s rapidly growing consumer base, extensive data generation, and supportive government policies position the country as an ideal breeding ground for the emergence of new hyperscalers.
Companies like Yotta Data Services, a part of the Hiranandani Group, have ambitious plans to expand their hyperscale infrastructure in India. Yotta intends to install a staggering number of Graphics Processing Units (GPUs) over the coming years. Older players like E2E Network are also expanding their presence in the country. Furthermore, corporate giants such as Adani, Tata, and Reliance are entering the hyperscale data center space, leveraging their established consumer bases and access to vast amounts of consumer data.
The expected growth of India’s data center market, projected to reach USD 7.02 billion by 2029, is a testament to the sector’s increasing prominence. The country’s favorable business environment, coupled with its deep understanding of local market dynamics and close ties with the rapidly growing startup ecosystem, further boost the prospects of Indian hyperscalers.
India’s commitment to an AI for All strategy, supported by the government’s recently enacted Digital Personal Data Protection Act of 2023, bolsters the potential of the local hyperscale landscape. Generative AI is predicted to contribute significantly to India’s GDP growth, with estimates ranging from USD 359-438 billion by 2030. Indian hyperscalers are well-positioned to play a pivotal role in fostering this growth.
Alongside these developments, India’s open regulatory environment and the potential shift towards more local data storage regulations provide an advantage for Indian hyperscalers. The government’s increased focus on de-globalization aligns with the emergence of indigenous players like Yotta, enhancing their competitive advantage over global hyperscalers eyeing the Indian market.
While challenges exist, particularly in sustaining and scaling operations, Indian corporate giants Reliance, Adani, and Tata possess the necessary deep pockets and influence to shape policies and regulations favorably. Startups entering the hyperscale domain may face acquisition by major players, further consolidating the domestic hyperscale landscape.
The potential for a government-backed hyperscaler cannot be ruled out, with a public-private partnership model being a viable option. The Indian government has already announced plans for a 25,000 GPU cluster to support domestic startups in accessing AI. Such initiatives lay the foundation for a robust hyperscale ecosystem.
In conclusion, India’s vast consumer base, growing startup ecosystem, increasing data generation, and supportive regulatory environment are propelling the country towards emerging as the next big hyperscaler in the global cloud services market. With its unique advantages and potential for significant growth, India is poised to revolutionize the hyperscale landscape in the coming years.
