Cover Story
 Data Center of Opportunity
The data center solutions market is expected to more than triple by 2012 and this presents a thriving growth opportunity for solutions providers
By S Ramdas
India is all set to witness a boom in data center deployment. While market research agency Gartner has forecast a growth in the floor area occupied by data centers from 1.337 million sq ft in 2007 to 5.143 million sq ft by 2012, some vendors feel that the market could outgrow these projections simply because a number of new markets have emerged since the Gartner report was published.
For example, in June 2009, SEBI had announced that it would apply its stringent business continuity guidelines to not just the country’s exchanges but also to other BFSI establishments (including depository services providers and online trading firms) that provide services for customers to trade on the different stock exchanges in the country. The directive will now automatically require all these institutions to have a data center and also a disaster recovery center.
Similarly, in its business continuity guidelines, RBI has emphasized the need for proper data centers and disaster recovery centers. Its directive is presently applicable to around 90 banks that use the National Electronic Funds Transfer system. However, RBI is shortly expected to send an advisory to other banks too.
“The directive from SEBI and the [anticipated] RBI advisory have tremendous significance for the data
center market because the BFSI segment will become the largest user of data center solutions,” analyzes Ashok Pamidi, Director, Partner Engagement & Telesales, HP India.
Another big driver for growth comes from the Indian Government. The government’s department of information technology has approved the establishment of state data centers in 27 states across the country. It will invest a total of Rs 1,237 crore for this purpose. In addition, individual departments at the center and the states have their own plans for setting up data centers.
“The first few tenders are likely to be out in a month’s time, and this can completely change the market forecasts if implemented on time on such a large scale,” comments Anoop Nambiar, Country Manager, Business Partner Organization, IBM India & South Asia. The defense sector is also planning a complete revamp of its IT infrastructure, and core to this will be investments in data centers.
Yet another major growth area will be telecom service providers. Last year the government allotted licenses for 2G services to 35 new operators, and many of them are in the process of firming up their plans to roll out their mobile services. This is expected to boost the demand for data centers that would house the IT and telecom infrastructure of the new players.
“After BFSI and the government, telcos form the biggest segment.
The roll-out of 3G networks by existing players, their focus on expanding their networks in rural areas, and the entry of new players will all fuel growth for data center solutions in the telecom space,” says B Raghavendran, VP, Channel Operations & Commercial Strategy, Cisco India & Saarc.
Potential elsewhere
Other segments such as media, entertainment and manufacturing are also investing in data centers. “We have recently set up a data center attached to a render farm for a large media venture in Chennai. With the digitization of content and the use of high-definition video and animation, the data boom in the electronic media and entertainment segment is huge. It is one of our key focus areas,” says Sandeep Vahi, MD, Compton Computers.
David Blumanis, Data Center Advisor, Asia-Pacific, APC, expects substantial demand for data center solutions to come from enterprises which already have existing investments. “Many of the data centers set up before 2004-05 are expected to be completely revamped. In the last 3-4 years data center technology has matured a lot, with new green technologies, virtualization, and blade server and storage systems. In addition, many customers are finding that their capacities are too low, especially since storage requirements have grown exponentially.” Consequently, there is a spurt of activity in projects to migrate data centers. While customers are ordering new software and hardware, security vendors are lining up their solutions.
Meanwhile, customers who are lacking budgets to build new data centers are turning to virtualization for server and storage consolidation. “Older data center customers are upgrading to new virtualized servers and storage solutions, and the server consolidation is regaining them rack space,” notes Ganesh Mahabala, Sales Director, VMware India.
Also, new data centers are being looked at by customers planning desktop virtualization. “A mandate of virtual desktop infrastructure is to move everything a PC contains into a centralized data center so that IT management can manage the infrastructure efficiently. As of today there are hundreds of POCs and proposals being considered for desktop virtualization, and many of them will result in new data centers in the country,” Mahabala adds.
Numerous opportunities
According to independent studies by IDC and HP, it’s estimated that around 1,65,000 centralized computing infrastructures will be deployed across the country (see table). While almost 1,50,000 of them cannot be classified as a ‘real’ data center, Pamidi of HP feels that these are infrastructures which will potentially migrate to a data center. “We have done a detailed study of the opportunities, and our select data center partners are mapping many customers who have the potential to move from server rooms to real
data centers.”
However, vendors do not believe that all channel partners can become data center partners. This is because, apart from the capacity to make investments in multiple skills-sets, only select geographies are likely to see large-scale data center deployments. “In India there’s a huge mismatch in infrastructure availability between large cities and smaller towns. Power is scarce outside larger cities, there’s also a lack of pipes,” points out Pamidi. HP is therefore planning to work with just 50 partners as far as the data center opportunity is concerned. Indeed, various vendors feel that only about 100 partners will actually cater to the market, at least for the next two years.
While the majority of large government projects are likely to be bagged by vendors such as Wipro, TCS, HCL and IBM, there is likely to be outsourcing to smaller partners. “If you are a channel partner and have the necessary skill-sets, keep a close watch when the tenders start rolling out for state data center projects. There will be outsourcing opportunities as well as business coming from smaller departments,” advises Nambiar of IBM.
Virtualization-related services are likely to form a major portion of the business that partners may get. Even if a large national systems integrator (SI) bags the core implementation, the deployment associated with virtualization and the services around it can still be outsourced to focused solutions providers (SPs).
“That’s why we have empowered our channel partners, along with Cisco and VMware, to sell [the purpose-built virtualized data center solution] Symmetrix V-Max,” says Vishwanath Ramswamy, Director, Partners & Alliances, EMC India and Saarc.
Another area where partners are likely to gain ground is in managed data center services and hosting. “In the long term, India has the potential to become a hub for data center hosting for nearby markets such as the Middle East, East Africa and Southeast Asia. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India,” says Ravichandra GB, Director, Enterprise Business, APC.
Mahabala of VMware says that, in addition to hosting, many channel partners are becoming data center providers. “Two distinct models are emerging. There are sets of partners who approach a customer, ask for space and power, put up infrastructure on lease, and manage the data center for the customer. Then there are others who set up a mini data center within their premises or at larger data centers, and offer this in a managed hosting model to customers.”
Vendor strategies
Almost all large vendors are getting their partners ready to address the data center opportunity. However, since the requirements in terms of investments and skill-sets are stringent, most vendors are aligning only with select partners.
“We have already trained and certified around 15 partners in our data center specialist program in India, and about 50 partners will be enrolled this year,” reveals Pamidi. While HP blade servers and SAN storage solutions are central to their approach, HP is also aligned with power makers (such as APC) to offer a single-window solution on the bill of materials to the partners. Networking components are sourced from HP Procurve. “We describe our strategy to sell data center solutions through partners as blended bladed infrastructure solutions. We are training our partners in every step from making a spec to consulting, deploying and servicing,” Pamidi continues.
EMC is betting on Symmetrix V-Max (Virtual Matrix). “Both Cisco- and VMware-compliant, V-Max is indicative of the industry’s shift toward virtualized data centers keeping in mind the ever-increasing information and the limitations of physical data centers,” says Ramswamy of EMC.
“To equip partners to sell these solutions under our Velocity channel program, we provide business development resources, onsite lab time and live demonstrations to help them in demand generation.” EMC offers them free training under its partner enablement program, and also offers specialized training for partners to become data center specialists.
IBM has unveiled its modular data center offerings which scale from 500 to 10,000 sq ft, and which the vendor is planning to push through channel partners. The company is very bullish about its entry-level offering, Scalable Modular Server Room, which it says is ideal for 3-8 rack-sized data centers, and comes with a contract to hand over a turnaround time of six weeks.
“Another of our offerings in this space is Tivoli monitoring software which consolidates views of energy management information and enables optimization across data centers and facilities infrastructures. Its capabilities offer customers the ability to understand energy usage, to alert data center managers about potential energy-related problems, and to take preventive action,” says Nambiar.
Power vendor APC has classified partners by business environment (business networks—wiring closet, server room, data center—small, medium, large data center) and by product portfolio (power & power distribution, racks & enclosures, security & environment, management, and cooling). Its top-tier partners are being empowered to handle data center implementations.
“Our Elite partners are being empowered to handle data center requirements. We have put training and certification programs in place. A new incentive program will also be unveiled,” informs Ravichandra, adding, “We are perhaps the only vendor which provides partners with training in security, cabling, building automation, electrical lighting and management services.”
Cisco has announced a product line-extension to the Cisco Unified Computing System (UCS) with the addition of a new compute form-factor, the C-Series Rack-Mount Servers. “The Cisco Data Center Channel Solutions program will be Cisco’s first program to leverage the operational excellence of Cisco UCS,” says Raghavendran. “We are working with our technology partners to build a repeatable recipe book for customer solutions —solutions that can bring new selling and service opportunities to our partners.”
Cisco has also announced two new certifications: Cisco Data Center Unified Computing Design Specialist (commonly known as Data Center Architect), and Cisco Data Center Unified Computing Support Specialist (commonly known as Data Center Engineer).
Apart from the major companies, a number of niche security and network-passive vendors are urging partners to go after data centers. Cabling vendors are hoarding not just their 10G cables but also various specialized components that increase redundancy in a data center.
“We have products that are virtually plug-and-go, factory terminated, offer better cooling and more density in less diameter of cable, and above all are RoHS-compliant. We are pushing our intelligent cabling systems—using which any cable faults can be detected instantaneously—for the data center market,” says KK Shetty, MD, Tyco Electronics India.
What it takes
Data center implementation requires several skills-sets that no pure IT SI possesses. “One of the key skills-sets which an implementation partner requires is a strong understanding of power. In some cases, knowledge of civil engineering is also mandatory. Apart from these, specific software skills are needed for different platforms,” explains Pamidi.
“Sometimes we are also required to plan turnkey projects where we need to negotiate with civic authorities on behalf of our clients,” says Vahi of Compton.
Almost all vendors feel that the key challenge will be the partners’ ability to spec and choose the right solution. “The data center is a constantly evolving idea, and there are new technologies and products which every vendor is offering to the market. The ability of the channel partner to suggest and deploy the right solution is a paramount criterion for success,” affirms Ramswamy.
There’s little doubt that data center implementation and the surrounding services will offer plenty of scope for SIs and SPs. However, the opportunities are large and centered on select cities where the infrastructure is better. An estimated 100 mid-market partners will share these opportunities in the near future.
It’s all a matter of joining that league—or being able to. |