NEW DELHI, INDIA: The India data centre services market is expected to grow at a CAGR of 23 per cent over the three years till 2012 to touch Rs. 11,800 crore, according to findings of CyberMedia Research (CMR) study, ‘India Data Center Services Market Review 2011’.

The third party data centre services market, which makes-up for 20 per cent of the market, is slated to grow at a CAGR of 34 per cent to touch Rs. 2,800 crore during this period.

The captive data centres that make-up for four-fifths of the market will record slower growth compared to the overall data centre services market.

The current penetration of data centers amongst the India enterprise segment is 63 per cent. However among large enterprises nearly 85 per cent had a captive data centre in 2010. The BFSI sector leads the way with the highest penetration of data centres.

Going forward, penetration levels amongst large enterprises are expected to reach almost 100 per cent. As a natural progression, vendors would be well advised to develop their offerings for SMB enterprises, says the analyst firm.

“As more and more enterprises look to outsource the management of their IT infrastructure, third-party data centres will find increased adoption over the next two-three years”, said Apalak Ghosh, lead analyst, India Emerging Technologies Research, CyberMedia Research.

“Exciting opportunities lie ahead in the third-party data centre services space even though this sector faces issues like high real estate and power costs, lack of adequate infrastructure and skilled workforce”, said Kamal Vohra, lead analyst, India Software and Services Research, CyberMedia Research.

CyberMedia expects third party data centre hosting services to cost less.

The cost of hosting is expected to drop significantly over this period due to rapidly decreasing bandwidth cost, and a greater choice of options becoming available to enterprise customers.

This trend is expected to increase data centre adoption levels in the India enterprise segment, and in turn greatly enhance the business opportunities for third- party data centre services providers.

Over the next couple of years, the India data centre services market would shift from being a margin-based business to a volumes-based industry.

The analyst firm also finds that convergence of 3G and WiMax data services, regulations and government data centres to enhance opportunities.

With the gradual roll out of 3G and WiMax services by telecom service providers through 2011, and launch of data intensive services such as video calls, Live TV, video-conferencing, high speed online gaming and so on, the need to store and launch various application-based services is expected to fuel greater spending on building storage infrastructure.