The movement towards cloud computing, the rise of several content-heavy applications, and the exceptional demand for storage space, are some of the factors that are leading to the rapid growth of the data center segment
By Mohd Ujaley
Today the need to increase storage capacity has become a kind of ‘work in progress’ for every major enterprise, there is a continuous rise in the numbers of data hungry customers and applications, there is optimism around cloud and there is the explosion of big data—hence it should come as no surprise that the CIOs and CTOs are always looking for new places where massive amounts of data can be stored and utilised with efficiency and security. It goes without saying that the data center market has every reason to be upbeat about the prospects for the industry.
In line with the global trends, the Indian data center market is buoyed by the positive sentiments in the economy and the strong resurgence of growth-related projects across verticals such as banking, insurance, telecom and the government. According to research firm Gartner, Indian data center infrastructure market, comprising of server, storage and networking equipment, will see a 5.4 % increase to $2.03 billion in 2015.
Cloud, convergence, virtualization propelling demand
As the Indian economy is expected to grow at a healthy pace this year, the data center companies are keen on setting up their infrastructure here. The companies are also encouraged by the programmes like Digital India and Make in India that have been announce by the government. These programmes can lead to the generation of huge amounts of data, which will further propel the demand for data center solutions.
“The Indian data center market is poised for healthy growth due to demand coming from sectors such as BFSI, Telecom, IT and Social Media. Apart from these sectorial influences, various eGovernance initiatives of center and state governments are also fuelling the demand,” says Vinod Ganesan, Director – Platform Solutions & Services Hitachi Data Systems, India.
Echoing the positive sentiments prevailing around Indian economy, Shibu Paul, Regional Sales Director – India, ME and SEA at Array Networks, says “Demand is going to be robust for data center solutions in the years to come. Data centers offer enterprises and cloud service providers a new level of flexibility for deploying automated, software-driven and scalable networks.” He adds that the BFSI, telecom, service providers and eGovernance sector are driving the demand as they are constantly looking for quality, continuity and agility in their data centers.
While large financial institutions, telecom providers and e-commerce giants are building in-house data center for meeting their data storage needs, the pure-play data center hosting providers are catering to the demand from small and midsize businesses (SMB).
Ashish Pachory, Chief Information Officer (CIO), Tata Teleservices, is of the view that the SMB segment will propel the growth for enterprise infrastructure solutions. He goes on to say that enterprise networking will serve as the biggest segment with revenue expected to reach $948 million in 2015. “Data center consolidation and virtualisation, along with cloud and mobility, will be the key trends influencing network purchases,” adds Pachory.
With mobile telephony witnessing unparalleled growth in number of users, auction of spectrum round the corner and National Optical Fibre Network (NOFN) being rapidly rolled out, the demand for data center solutions and data center infrastructure will grow enormously. Companies such as IBM, HP, Teradata, Oracle, SAP, EMC, Amazon, Microsoft, Google, VMware, Cisco, Avayay are seeing good business potential in India. During his recent visit to India, Chief Executive Officer (CEO) of Microsoft Corp, Satya Nadella, announced that the company will set up a local data center in India. Microsoft has decided to spend Rs 1400 crore on setting up three data centers in Mumbai, Pune, and Chennai.
Other players have also shown keen interest in setting up data centers in India. IBM has already launched a 30000 sq. ft. cloud center in Airoli, Mumbai and plans to add more such centers. During his visit to India, the Amazon CEO, Jeff Bezos, indicated that Amazon may set up its data center in India.
Shrirang Deshpande, Country Head – Data Center Business, Emerson Network Power, India, says, “The market opportunity for data center industry in India continues to mature with the growing prevalence of 3G, broadband connectivity and emergence of disruptive technologies like cloud and virtualisation. It is obvious that the data center market in India is maturing and the industry expects better opportunities in 2015.”
Optimising the Data Center
The technology has disruptively changed the overall scenario of data centers. Major application vendors are moving their solutions to public, private or hybrid cloud. The data centers are also being used by enterprises to combine their cloud-based services such as analytics, collaboration, and communication to better understand and target their customers. Emerson Power Network, a major player in this segment, predicts that growing number of organisations will be managing hybrid environments in which on-premise IT resources are supplemented with strategic use of cloud and co-location services to enhance utilisation, resiliency and flexibility.
“As far as cloud is concerned, many of the service providers have started rolling it out. Some of them are offering cloud services to the general public, to gain more mind share with the end-consumers. Many enterprises have implemented the cloud architecture, though they have kept it as private. Making it public will take some more time as many enterprises are concerned about issues of accessibility, availability and security,” says Alamuri Sitaramaiah – MD India & SAARC CommScope.
Enterprises are looking for architectures, which are simple, flexible, and easy to integrate with legacy systems. A report on Data Center Services by IBM articulates that the software defined environment (SDE) in which server, storage, network and facilities resources are automatically provisioned and configured by software programmed to understand and adapt decisions to the requirements of each workload in real time seems to be the way forward.
Other key forerunner in technology space has been virtualisation – especially in data center applications. This has helped in optimising the space, in terms of the hardware, storage, better power and cooling usage. “More and more customers are now a days moving towards virtualised environments, they are experimenting with the cloud method of consumption of IT” says Amod Ranade, General Manager, Schneider Electric IT Business, India.
CommScope’s Sitaramaiah points out that large migration to cloud based architectures is also leading to deployment of more fibre optic cabling systems in the data center and the emphasis has been to optimise and save on power and to lower the PUE. He further says that more and more information is being sought for Data Center Infrastructure Management Solutions. “Increasingly Cat6a UTP and OM4 fibre optic cabling systems are being specified for supporting 10G to servers and 40G / 100G in backbones,” adds Sitaramaiah.
Challenges: Energy, Security and Sovereignty
Energy, security and the issues related to sovereignty are the key challenges that the industry faces today. The lack of regular power supply is a major issue that the data center companies face in India. Data centers are mainly concentrated in Tier-1 cities and the power crunch is forcing the data centers to run on expensive diesel powered generators. In many cases, the data centers start operations before their buildings are fully completed for utilisation. The contract power demand is often based on existing operations and as they expand, the lack of power infrastructure for increased capacity doesn’t get met. This prevents the data center companies from expanding. So the data centers have to resort to technologies like virtualisation, which allow them to use their existing assets to a higher utilisation level to counter such issues.
“A primary concern for most data center operators in the country is to ensure business continuity with a focus on issues such as reducing energy consumption, manageability, scalability, efficiency and security in the datacenter,” says Shrirang Deshpande of Emerson Network Power, India. Schneider Electric’s Amod Ranade is of the view that energy efficiency is an important concern for the industry. He points out that there has been focus on energy efficiency in India and lot of innovation is happening around higher efficiency of UPS system, air conditioning system and the innovative ideas for using external ambiance for cooling the data center.
Another key concern for the industry is the security of the data and the data center. The second is comparatively easier to manage, but the security of the data is dependent on a lot of external factors and is not that easy to manage. Array Networks’s Shibu Paul is of the views that enterprises should ensure proper data isolation and storage segregation to secure their sensitive data; else data center might put entire data at risk. “As core and business critical applications grow in numbers, application delivery and performance becomes very critical for data center solutions,” adds Paul.
We have been having lot of discussion regarding the ownership of the data. There are no clear answers to the question — who governs the data? Is it the law of the country in which data center is located? Or law of the country in which data center provider is based? Many government departments are creating their own data centers in India to ensure that the critical government data does not go into the hands of any foreign country.
Impact of Make in India
Government of India has been taking lot of initiatives to promote the country as a favourable investment destination. Effort is being made to give impetus to manufacturing within India. The “Make in India” initiative has the potential to reinvigorate electronics manufacturing in India. Amod Ranade of Schneider Electric says that we have a huge R&D facility in India and we take pride in designing and developing solutions and products that keep in mind the unique and specific requirements of Indian customers as well as the local market.
Shibu Paul of Array Networks points out that any country that has moved out of their regular growth tangent has invested and executed an effective manufacturing policy. He goes on to says that the current government’s initiative is in similar outline. “Current contribution of manufacturing to overall GDP is below par when compared to other nations. Moreover in an economy, the labour and skilled workers are available in plenty to work on these initiatives that will have a far-fetched effect on a country’s prosperity,” adds Paul.
Conducive regulatory framework and availability of optimal infrastructure are basic to doing business for domestic as well as multi-national companies. Initiatives such as Make in India can fetch the real benefit, if India is able to address these concerns. Data center market across the globe is huge and India can aspire to be a data center hub in the future.
Future looks uprising
With demand coming from various sectors and the big players globalising their operation, the future of the data center market in India seems to be on the rise. In the year 2014, India has seen some announcements by Microsoft and IBM. As per industry players, the market is likely to see more maturity in 2015. According to Ashish Pachory of Tata Teleservices, Indian enterprises will be focusing on building intelligent data centers that will be optimising existing hardware assets by using additional software capabilities. “The current adoption will lead to increased attention to newer trends such as public cloud, and integrated systems,” adds Pachory.
Shibu Paul of Array Networks is of the views that MNC players are heading towards data center space and are largely focused on cloud storage and data center solutions in order to accomplish secure applications. “Currently it is more influenced by local players, but 2015 will see many MNC’s starting their services. This will create a very competitive scenario,” says Paul.
According to Gartner, the data center and co-location business in India is expected to touch $ 1.3 billion which is being fuelled by increased outsourcing of data center requirements by banks and Government.
Sitaramaiah of SAARC CommScope, says, “From a cloud data center perspective, 2014 has seen a couple of investments and this segment of the DC market should grow in 2015.” He is of the view that the third party multi-tenanted data centers (MTDC) segment (e.g. Netmagic) can lead the growth in 2015, while Carrier MTDCs are growing though at a very small pace. “All carriers seem to have big plans for both Telco and Enterprise Data Centers in 2015, with Telco DCs primarily coming from migration to 4G and LTE networks by the carriers,” adds Sitaramaiah.
“With increasing numbers of users coming online and the government’s ‘Make in India’ initiative, we believe that offering data center operators the agility to respond to change with innovative solutions and cost, as well as energy efficient DC infrastructure will drive the growth engine for most players in this segment in 2015,” concludes Shrirang Deshpande of Emerson Network Power, India.