Indian CIOs, once very conservatively attached to their data centers, are now more open toward newer approaches to managing their infrastructure assets. Their outlook is today characterized and driven by slow economic growth, falling IT budgets, the rising cost of skilled IT workforce, increasing competition and the rise of newer, disruptive technologies. They are now open and looking keenly at optimizing their IT infrastructure and strategy by investing in captive data centers mixed with capacity growth initiated by data center service providers.
Driven primarily by modernization and build-out of new data centers, the Indian IT infrastructure market is expected to hit over $3 billion by 2016, according to Gartner. The third-party outsourced data center market in India is expected to grow at a 32 percent CAGR to 55 billion rupees by 2017, according to McKinsey, and about 70 percent of this growth will be from verticals such as BFSI, media and entertainment, manufacturing, telecom and retail.
Growth Drivers for Data Centers in India
Data is growing at an alarming rate; according to an IDC study, the amount of digital information created annually will grow by a factor of 50 from 2010 to 2020, reaching 40,000 exabytes or 40 trillion gigabytes. What makes it even more critical today is the need to churn and analyze this data following the advent of advanced BI tools and technologies for big data. Mobility and social media are also playing a huge role in the way data is being managed in data centers. Couple this with increasing demand for computing power required by newer applications is daunting for IT leaders in their pursuit of robust, secure and dynamic data centers.
Driven by hardware refresh, optimization and consolidation, the Indian IT infrastructure market is going through a sea change, and new data center build-outs initiated by service providers are adding impetus to the market. According to Garter, the infrastructure market in India is expected to surpass $2.9 billion by 2017m and a nexus of forces—big data, cloud, social and mobility—are driving this growth.
As newer technologies emerge and changing business expectations mount, IT expenditure is increasing to ensure expansion, agility and efficiency of IT in the organization. Another factor affecting the data center market in India is the changing regulatory requirements and the landscape in verticals such as telecom, BFSI and government.
The need for better business continuity in volatile market conditions and disaster-prone environments are forcing CIOs to reexamine their disaster-recovery and business-continuity plans. They are spending more to make their data centers resilient and robust, thus changing the dynamics of how they are being managed.
Newer strategies such as BYOD (bring your own device) and social media for the enterprise, as well as increasing Internet-facing businesses, all are leading to more and more devices being connected. A new crop of input devices like tablets and smartphones will force data centers to start investing heavily in technology to not only provide the needed integration but also to address the challenges related to management, monitoring and security.
Trends Affecting the Future of Data Centers
Two disruptive technologies affecting the future of data centers are virtualization and cloud computing. Virtualization is an innovation that improves the optimization and efficiency—both capacity utilization and power consumption—of a data center. The advent of the cloud is changing the very definition of data centers. The adoption of these technologies is the key driver of growth in the data center provider business in India, with organizations trying to reduce their data center footprint and instead depend on third-party providers.
Though the adoption of cloud computing is relatively slower, the fact that organizations will leverage multiple cloud environments is a reality. This essentially means the emergence of intercloud connectors that are open and standards based: software-defined networking (SDN). SDN is a highly programmable and scalable network fabric that can dynamically meet the needs of the applications in real time—another technology that will redefine future of data centers. Globally, the SDN market is forecast to grow from $198 million in 2012 to $2.1 billion by 2017. In India, the concept is still in a nascent stage.
As SDN gains momentum, focus will shift to software-defined storage (SDS) and software-defined data centers (SDDCs). SDS allows the creation of an abstraction layer in the host environment to mask the complexity of storage management, whether it is single storage or a storage virtualized environment. SDDCs combine techniques of cloud computing and SDN into a manageable entity. SDDC also has the potential to create virtualized converged overlays on data center equipment, allowing servers to interoperate seamlessly with storage and networking.
With businesses growing at fast pace, solutions providers are integrating IT systems for faster deployment and agility. Technologies such as CISCO–UCS, Oracle Exadata, IBM Dataplex, IBM Pure Systems and HP Matrix are helping organizations adopt and implement solutions faster, paving way for data center service providers to become certified in these technologies and provide fast deployment of infrastructure to support these implementations.
CIOs are aiming to make their data centers more and more dynamic as the business landscape becomes volatile. In the data center, CIOs increasingly demand the flexibility to move workloads between servers or grids in an effort to optimize and consolidate. Also, they are required to quickly scale IT resources to suit the needs of an ever-changing business scenario and to ensure that these resources are always available to the business. This situation is effectively placing a lot of pressure on them to make their data center operations more dynamic.
Integrated systems and virtualization lead to better utilization of CPU resources and thus more concentration of compute power in a chassis. This combination is leading to faster-than-expected growth in power required per rack and thus greater cooling needs. Physical data centers need to reduce cooling-related power costs and improve electrical efficiency. The cost of power and cooling will largely determine the design and deployments of future data centers.
An analyst firm estimates that energy accounts for over 12 percent of data center expenses. Data center providers will look for ways not only to control costs but also to promote themselves as “green,” leading to an increased focus on green initiatives.
The table below indicates the impact of various technologies on the overall energy-saving potential in a data center.
Percentage Impact on Overall Saving Potential
|More-efficient facilities infrastructure (e.g., CRACs, PDUs)||7%|
|More-power-efficient storage system||6%|
|More-power-efficient network equipment||5%|
|Data-storage management technologies||5%|
|Server or PC power-management software||4%|
|Use of alternative or renewable energy||4%|
Source: .NET Developer’s Journal
Flexibility is a key driver—third-party data centers cater to varied customers with completely different load patterns. Also, data centers need flexibility to cater to varying power and compute requirements. Dynamic IT operations demand that facilities adjust to changing needs quickly.
The advent of a ubiquitous Internet has led to exponential growth of applications. Hosting for these applications is in available data center space, as time to market is key to success—unlike traditional enterprise applications. A new breed of Internet-centric businesses are looking at dynamic scale-out of data center resources and faster time to market as being critical to their success, sustenance and growth.
Quick build-out of facilities to cater to dynamic opportunities require modular designs. So, prefabricated components, repeatable design and minimum need for traditional civil work/components will characterize the future of the data center space in India.
In conclusion, the future of data centers in India is characterized by the need for CIOs to consolidate their IT efforts in order to do more with much less. They must also keep operations dynamic to enable faster scalability, in addition to being completely agile and flexible in their approach to align IT (read: the data center) with their business strategies.
About the Author
Jayabalan Subramanian is Chief Technology Officer and cofounder of Netmagic Solutions Pvt. Ltd. He is recognized in the industry as an expert on internetworking and has consulted with leading organizations, including BAFL, BPL, Bharti, Worldtel and Hathway Internet.
Image courtesy of Beraldo Leal