How India’s Data Centre Surge is Reshaping Tech Services

India’s data centre industry is experiencing unprecedented growth, and it is most likely to reshape the technology services sector across the country. 

In just six to seven years, data centre capacity in the top seven cities has increased more than fourfold, reaching 1,263 megawatts as of April. 

This surge is driven by rapid digitalisation, the widespread rollout of 5G networks, increased adoption of cloud and AI technologies, strengthened subsea cable infrastructure, and favourable state-level policies, according to a survey by Nasscom Insights.

Despite accounting for around 20% of the world’s data, India currently holds only 3% of the global data centre capacity, indicating significant room for expansion. While Mumbai leads the sector with 41% of the country’s capacity, Chennai follows at 23%, the survey points out. 

Emerging Tier II and III cities such as Vijayawada, Mohali and Jaipur are also becoming important hubs. The rapid expansion of data centre infrastructure is creating a significant opportunity for technology services, with all leading data centre operators surveyed expecting a notable increase in demand over the next three to five years, the report revealed.  

This growth is expected to boost tech services revenue by approximately 20%, with the majority of respondents predicting a stronger effect on the domestic market.

Tech Services Poised for Growth

Cybersecurity services top the growth prediction, with 17% of respondents citing it as the area most likely to see increased demand due to data centre expansion, followed closely by cloud services (16%) and cooling, power and physical infrastructure services (15%). 

Together, these three areas account for nearly half the expected growth, highlighting the critical role of secure, scalable and efficient data centre operations. 

In addition, IT services and systems integration (14%), data analytics and AI (14%), networking and connectivity services (12%), and software/application development (9%) also feature prominently, indicating a holistic need for advanced skills and solutions as data centres proliferate. 

Jobs & Skills in Demand

The demand for skilled professionals is also rising, particularly for cybersecurity experts, cloud infrastructure engineers, AI and machine learning engineers, data centre hardware specialists and experts in sustainable technology and edge computing.

According to the report, each additional megawatt of data centre capacity can create up to 2,000 jobs, underscoring the sector’s employment impact. 

Critical skills needed over the next few years include expertise in AI-driven automation, real-time data processing, virtualisation and containerisation technologies like Kubernetes and Docker, hybrid and multi-cloud architectures, AI-based threat detection, and advanced cooling and renewable energy integration.

Collaborations, Sustainability, Recommendations

Strategically, technology service providers and data centre operators are increasingly collaborating through AI-ready alliances, managed service partnerships, joint go-to-market solutions, and build-to-suit or sell-to-business models, according to the report. These partnerships allow them to focus on infrastructure while specialised providers deliver cloud, security, and software services.

Sustainability is a growing focus in the industry, with about 25% of data centre capacity in big cities now green certified, according to the report. Operators are actively investing in energy-efficient technologies and adopting renewable energy. Edge data centres, designed to support IoT applications and latency-sensitive services, are also expanding rapidly, with over 200 new edge facilities planned in the next five to six years.

Responding to a question from AIM during a webinar on how data centres tackle energy consumption sustainably, Kuhu Singh, analyst at Nasscom Insights, said that it can be done by adopting renewable energy and green infrastructure.

“Solar, wind, hybrid models and edge computing all contribute to sustainable energy use,” she said. 

Listing out the recommendations from the report, she said that for the government, creating a partnership-friendly environment is crucial. It includes improving the ease of doing business and encouraging state-level data centre policies that integrate allied tech services.

For operators, Singh said, it’s important to identify critical requirements, invest in co-developing solutions with tech providers, and hire talent with emerging skills.

Tech service providers should focus on building end-to-end infrastructure solutions, position themselves around hybrid cloud and cloud migration offerings and pursue a collaboration-first approach.

For the future workforce, she said, “We recommend pursuing academic pathways aligned with in-demand job roles and building skills in AI automation, data processing, and other frontier tech areas.”

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