Scaling India on Data Center Risk Index

In a study conducted by Cushman & Wakefield and Hurleypalmerflatt known as ‘Data Center Risk Index’, India became the second most risk ridden Data Center location among top 30 countries all over the world. This study evaluated the risks that threatened the global center facilities and international investment in the IT infrastructure being crucial to your business.

Reasons for India’s Low Score on the Index

Well known as the center of global outsourcing, India is now losing out on its position and the reason being it is scoring low in inflation, ease of business, per capita GDP and Corporate Tax. The power grid collapse that occurred in India at the end of July 2012, further adds to this low ranking in the study. Nevertheless, it ranked high on some factors such as sustainability and cost of labor.

Findings of Data Center Risk Index

This index ranks countries in accordance with the risks that might affect the successful operation of a data center. There are various risk factors like connectivity, energy costs, political stability or natural calamities. Arvind Nandan, Executive Director, India Cushman & Wakefield says, “India and key Asian economies remain preferred locations for data centers and have witnessed a growth in demand owing to various advantages.” Investment by overseas players has been constantly showing confidence in India’s future potential.

What does the Index say about countries other than India?

The US is still at the first place and considered to be the lowest risky location for building and running a data center in the world. The UK got the second position mainly because of its high international Internet bandwidth capacity and also because it is easy to do business there. Germany and Canada count among the top five low risk locations. Hong Kong is the safest and the most secure place in Asia, in order to set up a data center.

According to Stephen Whatling, Global Service Director at Hurleypalmerflatt, “Indonesia, India and Brazil are all considered growth markets, but with barriers to entry, regulated markets and high energy costs, they score poorly relative to the more established economic markets.”

What can India do to revive its markets?

The Indian Government must come up with better policies and reforms in order to make India an attractive market again for leading IT companies. It should make all requisite efforts to revive the country’s IT infrastructure being crucial to every business.