New Delhi, April 21 (IANS) India's data services market, growing at a compound annual rate of 23 percent since 2010, is expected to touch Rs.11,800 crore ($2.6 billion) by 2012, said a study released Thursday.

 
 The study -- India Data Center Services Market Review 2011 -- conducted by research firm CyberMedia Research, also said that the third party data services market, which makes up for 20 percent of the market, is also slated to grow at 34 percent to touch Rs.2,800 crore during the period under review.
 
 A third party data services provider hosts data for its clients.
 
 Due to the decreasing cost of bandwidth and increase in options with the enterprise customers, the cost of hosting third party data services is expected to drop as well, the study said.
 
 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 volume-based industry.
 
 The study also said the launch of data intensive services such as video calls, live TV, video-conferencing, high-speed online gaming followed by the launch of high speed mobile telephony services such as third generation (3G), the need for application-based services is expected to fuel greater spending on building storage infrastructure.
 
 At the same time these factors would contribute to a direct increase in the overall size of the opportunity in the India data centre services market.
 
 Another factor, leading to an increase in the demand for enterprise storage solutions, is the revival of the banking, financial services and insurance (BFSI) sector.
 
 Although the India BFSI sector was largely unscathed by the global recessionary trends, demand for financial services was tepid during 2009, but has started showing a healthy revival in the last year, the study said.
 
 The current penetration of data centres amongst the India enterprise segment is 63 percent. However, nearly 85 percent large enterprises 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 percent.
 
 As a natural progression, vendors would be well advised to develop their offerings for small and medium business enterprises.
 
 “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 2-3 years”, said Apalak Ghosh, lead analyst of India Emerging Technologies Research, CyberMedia Research.