India is the second most risky location for datacenter operations

India has been ranked as the second most risk prone location for hosting Datacentre Operations according to the annual ‘Datacenter Risk Index 2013’ survey released by international consultants Cushman & Wakefield in association with hurleypalmerflatt and Source8. The ‘Data Centre Risk Index 2013’ identifies risks likely to affect the successful operation of data centre facilities in the 30 most important global markets.

India, which has been the world leader in mass IT processes with presence of most major IT and ITeS companies, has for the second year, remained at the bottom of the list of preferred Data Centre Location, beating only Brazil which ranked the lowest. While India ranked high on parameters such as Cost of Labour (rank 4) and Sustainability (rank 6), it ranked moderately on the parameters of Political Stability (rank 13) and International Bandwidth (rank 16). India however failed to score high on crucial parameters with higher weightage in the survey. India scored low on key factors such as Energy Cost (rank 25) and Ease of Doing Business (rank 30). Other factors where India lags behind are Natural Disasters (rank 28), Energy Security (rank 28), Corporation Tax (rank 28) and Education Level (rank 28).

Arvind Nandan, MRICS, Executive Director, Consultancy Services, Cushman & Wakefield said: “Although India ranks low, it should be noted that compared to other countries included in the index, India presents some marked advantages, such as labour cost and high degree of operational sustainability; while it also offers moderately attractive proposition from political stability perspective. India also has scored high on international bandwidth which is crucial for Data Centre operations in any location. Data Centres that value these aspects above others, will definitely find India a viable location.” 

Arvind continued, “India has a significant scope to improve its rank, in coming years, from the current 29th position. For this, India will need to build further on its strengths like labour and operational sustainability. However, the key to improving its rank will lie in addressing concerns on energy cost and energy security, in the short term. In the medium to long term, India also needs to aim at providing an improved environment for business and strengthening its macroeconomic aspects.” 

The USA maintains its place at the top of the DCRI and is considered the lowest-risk location for building and operating a data centre in the world.  Specifically, it maintains a top-three position across the primary factors of energy cost, international bandwidth and ease of doing business. UK remains second globally in this year’s ranking. The nation’s high scores relating to international internet bandwidth and ease of doing business helped maintain its place above all other locations surveyed in Europe.  

Data centres house business-critical IT systems – any downtime has the potential to threaten an organisation’s viability and impact significantly upon revenues and customer services.  The aim of the DCRI is to help companies make informed investment decisions about where to locate their data centres to increase efficiency, lower costs and to develop strategies to mitigate anticipated risk.