From Local to Global: Unleashing India’s Potential as a Data Center Hub - What Will Drive the Transformation?


With organizations across all sectors embracing cloud services, the growth trajectory of India's cloud services market seems unstoppable. Factors such as increased government spending on digital infrastructure, the surge in small and medium-sized enterprises, a burgeoning young population, and a relentless drive for digital innovation are fueling the expansion of the cloud services market in India. As the demand for cloud solutions continues to soar, one cannot help but wonder: What are the driving forces propelling India to become a global hub for cloud services? Delve deeper into this dynamic market to uncover the driving factors behind its growth, and discover the potential it holds for transforming the Indian business landscape. Read more to explore the driving forces behind this meteoric rise and the opportunities that lie ahead.

1. In 2022, India ranked 51st in Global Cloud Ecosystem Index with Singapore, Finland and Sweden as leading nations deploying cloud most effectively

Global Cloud Ecosystem Index, 2022

Parameter Rank Score Description
Overall Ranking 51st 5.9 The Global Cloud Ecosystem Index rates and ranks each of the world’s major economies according to how well technology, regulations, and talent promote the availability of cloud services. It also evaluates and compares the regulatory frameworks and digital practices that promote the use of cloud models in the public and private sector.
Infrastructure 64th 4.3 This pillar consists of various data points that indicate how well each country is served by telecommunications networks and computing resources which enable cloud-centric production models.
Ecosystem Adoption 45th 5.7 A half dozen indicators combine to determine the extent to which each country’s constituents access the outputs of cloud application and services across public and private sectors. At 35%, this pillar contributes the largest portion to the Index’s score.
Security and Adoption 37th 7.5 This pillar measures the maturity of regulatory environments that promote progressive, cloud-forward data security and sovereignty environments—and that enable trust in digital resources.
Talent and Affinity 59th 5.7 The indicators in this pillar examine each country’s human capital assets that can contribute to a cloud-based digital economy

Top 5 Cloud Ecosystem Index ranks by geography

Singapore (8.48)

Finland (8.46)

Sweden (8.43)

Denmark (8.28)

Germany (8.13)

Their scores represent significant efforts to make digital infrastructure available to all constituents and are complemented by pro-cloud governments that use digital tools to deliver public services and create regulatory frameworks to safeguard personal data and digital transactions.

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2. Cloud computing is evolving at a breakneck pace, with businesses of all sizes adopting this new technology, the evolution will only continue to grow and develop in the coming years


I: Emerging Phase <2010


  • Data center Growth was highest
  • Usage of the Cloud started
  • 2006

  • Amazon launched Ec2 and entered the Cloud market with the launch of Amazon Web Services (AWS)
  • 2008-2009

  • Market leader Google launched cloud services in 2008
  • With data security concerns, players such as Microsoft and Rackspace moved towards private Cloud establishment.

II: Growing Phase 2010 - 2035


  • Cloud computing gained acceptance in businesses
  • Introduction of hybrid cloud.
  • Companies such as IBM, Microsoft & SAP established their cloud services during this period.
  • 2013-2018

  • Applications grew beyond SaaS with IaaS and PaaS taking firm grip.
  • Oracle started its cloud services in 2016.
  • 2019-onwards

  • 90% Fortune 500 using cloud
  • Growth of cloud led by advanced technology (AI, ML & others)

III: Maturity Phase > 2035

  • India will continue to spearhead the digital transformation, developing a future-ready infrastructure by embracing fourth industrial revolution technologies.
  • Cost-efficient processing capabilities and data storage possibilities will bloom the potential of new technology such as blockchain and artificial intelligence (AI) in India Cloud Service Market.

Market Potential

  • Market is in a growing stage with a CAGR (FY’2017-FY’2022) of ~27%

    Market Nature

  • The competition in India cloud service market has been observed to be moderately concentrated with few pure cloud providers
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3. Increased government spending, a rising number of SMEs, growing young population and digital innovation are driving India cloud services market

Increase in Rate of Adoption

  • The rate of adoption of cloud services across the country is growing because of the setting up the local data centers.
  • With growing adoption by SMBs, conglomerates such as Reliance, Essar, L&T, Mahindra's, various start-ups, along with the various verticals including banking, financial services & insurance (BFSI), healthcare, e-Commerce and the government sector has been driving the market of cloud services in the country for the company.

Increased Government Spending

  • Increased government spending on National Optical Fibre Network (NOFN) and various e-governance portals, coupled with growing acceptance of cloud services in SME segment is expected to drive the market for cloud computing.

Increasing Offerings from Cloud Providers

  • CPS vendors are also increasing their offerings by implementing new technologies such as AI and ML with integration of cloud platforms hence creating an ecosystem for their clients. The benefits such as increasing efficiency, reduced cost, risk mitigation and increasing competition are encouraging enterprises to opt for cloud professional services.

Increase in Rate of Adoption

  • There are more than 63 Mn SMEs in India. Small and medium-sized businesses are increasingly investing in cloud computing to benefit from various benefits such as flexibility, data recovery, reduction in IT maintenance costs, remote access to data, etc. These benefits are driving the growth of the India cloud data market.

Growing Young Population

  • India is considered as a young nation with around 34.33% share of youth in the total population which is the highest among all nations. Therefore, major cloud computing companies are offering skill development programs to train these potential demographics in cloud computing, for instance, Google recently announced the launch of Google Cloud Skills Boost, a platform for online learning, skills development, and certifications.

Digital Innovation

  • Driven by the need for agility, flexibility, and faster access to digital technologies, cloud continues to gain momentum across segments. Additionally, the need to leverage data intelligently, is supreme and enterprises are able to do so with access to technologies that are built on a cloud foundation
Source: Industry Articles, Interview with Industry Experts, Ken Research Analysis

4. Increasing demand for hybrid cloud computing, integration of cloud and on-demand cloud services are the major technological trends in Indian cloud services market

    Increasing demand for hybrid Cloud computing
  • The demand for consistent operations as well as infrastructure across Clouds is enormous.
  • Therefore enterprises and organizations in India have realized that hybrid Cloud models are the correct strategy to address concerns regarding longer-term costs, scalability, and security.
  • Investments in hybrid Cloud operating models that span public, private, and edge environments is expected to grow enabling rapid scale and IT management
    Integration of Cloud computing, IoT and Big Data
  • Owing to the changing IT landscape in India, organizations are combining services, which will help make
  • their business processes simpler
  • IoT services, Big Data, and Cloud computing are expected to integrate where Cloud computing is expected to play the role of a common platform for IoT
    Increasing demand for on demand Cloud services
  • Cloud computing is increasingly becoming a key element of growth with organizations migrating from traditional applications to Cloud-based platforms enabling them to keep their investments in check
  • A shift is expected toward an on-demand service offering for hybrid Cloud computing, which provides organizations an agile environment for application development, management, and delivery
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5. India is poised to be a global hub for data centers focused on cloud computing riding on technologies like artificial intelligence, machine learning and analytics

Digital Infrastructure-Global Hub for Hyperscale Data Centers

Existing Digital Infrastructure

  • National and State Data Centers
  • National Knowledge Network
  • State Wide Areas Networks
  • Empaneled Cloud Service Providers
  • BharatNet: 3,00,000+Kms of OFS

Future Ready Digital Infrastructure

  • Strengthen National/State Data Centers for critical applications and data
  • Attract investments in Hyperscale data centers
  • Design and development of Petaflop Supercomputers in India
  • NKN 2.0- Digital India Info-way

Robust Digital Foundation

Data Intensive projects and platforms

Hi-tech manufacturing

Cloud services- India as a Global Hub

Internet Resilience

Connected Government

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