Denser, Cleaner, Smarter

As data centers break free from the boundaries of IT hardware and look at attaining overall efficiency, vendors are shifting focus to the new growth areas of software and services. Heena Jhingan finds that the fast growing, third party data center market is luring new players to invest in the business

Once considered to be large structures that housed a large number of servers running and piling up a humongous energy bill for the enterprise, data centers are donning an improved image. The industry identifies new age data centers as the meeting point of various elements—storage, servers and network—that are considered to be denser, cleaner and smarter.

Data center growth is a derivative of the growth of its components like server, storage, networking. The data center market in India has been flourishing along with the overall IT industry that has been growing at about 10% every year. IT research firm Gartner estimated that India’s data center market for raised floor space had been growing at a healthy 25% to 30% annual rate for the last three years. In 2011, it saw similar growth

The Indian data center market is marked by broad trends of expansion, efficiency and consolidation. Enterprises try to consolidate multiple servers and application from a distributed environment, mainly due to the space constraints, which is at a premium.

Owing to the complexities involved in setting up and running data centers, customers are looking at outsourcing as a suitable and cost-effective options. SMBs have felt the need for a hosted data center due to factors like rising energy and power costs, operational control and data confidentiality.

Following some recent global examples of data loss due to disasters in Japan and Australia, enterprises have the importance of data backup for maintaining business continuity. In 2011, recovery sites or secondary data centers, besides the new data centers heralded the growth in this space.

The Government of India is set to be a key contributor to the data center growth in the country as it is focused on building and consolidating IT infrastructure both at the central as well as state levels. The Central Government and various state governments are working toward delivering projects that will make government services more easily available to individuals and business organizations through citizen service centers, online passport application monitoring, e-filing of income and service tax returns. Specific projects such as the State Data Centers (SDCs) are expected to present attractive opportunities for data center services players in providing consulting and system integration services over the next few years. Among the new data centers that are coming up are government projects like Crime and Criminal Tracking Network & Systems (CCTNS) and UID are likely to result in huge investments.

The data center business in India will get a further boost and grow larger than the existing Rs 1,000 crores, mostly driven by increasing domestic requirements from sectors such as telecom, financial institutions, IT/ITES, manufacturing and services.

Indian enterprises have accepted the concept of power solutions to trim the energy bills of their data centers. According to Pratik Chube, GM – Products and Marketing, Emerson Network Power India, improvements in energy efficiency can result in massive savings on the cost of power. Considering the kind of impact that energy efficiency makes to the business, it is an obvious priority for the CIOs to make their data center efficient and invest in power management solutions to that end.

Sanjay Motwani, Regional Manager, India & Middle East, Raritan, pointed that 95% of the company’s business came from data center management solutions. When they shifted their focus on green solutions back in 2009 the revenues from these solutions were between 3 to 4% and today they have amassed to about 40%.

He said that today’s data centers were more planned and better designed to meet the future requirements, unlike earlier ones most of which were designed with a narrow upgrade window and are now due for refurbishment to become more scalable and efficient. “This is one reason that data center management and consulting is coming up as a big business in India. Enterprises bring in experts to help them design and build data centers that can comply with the needs of their respective businesses.”

Naresh Chandra Singh, Principal Research Analyst at Gartner, agreed, saying that data center consulting was now being offered by many players, including system integrators, whose main business is about providing IT services as well as technology vendors like IBM and HP who are in this business by the virtue of having a services business.

Since a large number of existing data centers are waiting to be revamped, the advice is to make them more efficient. However, that does not mean that the existing infrastructure needs to be ripped out.

“Power and cooling solutions comprise 60% of the power usage in the data center. Making minor changes on the equipment end and plugging in solutions that help optimize and reduce energy consumption on cooling or switching to more energy-efficient solutions are simplest ways of doing it,” suggested Jaybalan Velayudhan, Director, Strategy and Business Development, APC.

The new age data center is not just about IT solutions, it includes other parameters like premises, building and the use of alternate energy sources. “Upcoming data centers that are being designed now are looking at reducing the requirement for cooling. There is a focus on using environment-friendly building materials in order to prevent power losses in cooling systems,” observed KB Rajendran, Senior VP – Data Center and Managed Services, Reliance Communications.

CIOs are making conscious efforts to make data centers more energy efficiency compliant and one of the basic yardsticks that they rely on while picking products is the Power Usage Effectiveness (PUE) of the product.

“Indian customers no longer look solely at products while buying a solution. They are looking at the PUE of these products—it is the new qualifying feature. In the current scenario, the efficiency of a product in data center hovers anywhere around 1.5- 2. The PUE parameter cannot be looked into in isolation,” explained Chube of Emerson.

There are other standards such as LEED certification, which is more to do with the buildings that house servers. These standards help CIOs while selecting a solution provider and a better rating on these certifications gives service providers a competitive edge.

Vendors have been toying with the concepts of using alternate energy sources to power data centers. Last year saw IBM India develop the first solar-powered data center. In contrast to this, there are several vendors who are of the opinion that the ROI on renewable energy sources is slow and, for that reason, it might it not be a success until looked at as a long term investment plan for next 10-15 years.

The management layer

Greening the data center has long been associated with making the hardware more energy-efficient. Over the past few years, we have seen the increased intervention of software tools that help optimize power usage within the data center. A variety of data center management tools and Building Management Solutions are now an obvious part of a data center.

The power situation worsens when there is a dispute between the facility manager and the IT manager over the responsibility of managing power consumption in a data center. It has been observed that in most cases, facility managers deploy solutions to keep track of power at the rack and PDU level. Servers that are known to consume a large share in the data center set up are to be managed by the IT team. In such a situation, data center management software solutions that help in real time power and thermal monitoring come in handy. These solutions are capable of accurate power and thermal consumption data, manage data center hot spots, plan and forecast power usage etc.

Vendors are coming up with comprehensive solutions including racks and building control systems. For instance, APC’s StructureWare comes in two components. While the monitoring part is concerned with cooling and power management, the operational component is focused more on traditional IT functions along with asset, change, capacity and energy management.

A major factor that has lead to a change, making the data center energy efficiency bound is that we have seen a change in the profile of servers, network and computing hardware over time. The industry is moving from traditional drivers to multi-core processors, the real challenge lies in controlling and managing the power required to run these and bring about greater efficiency in power management.

“The Data Center Infrastructure Management solutions are now designed to look at not just room and row level, instead they are now able to peep into the unit level of the rack. The customers are looking at intelligent and integrated infrastructure,” Chube elaborated.

Mishra of Gartner believed that the energy management software solutions market was definitely likely to grow in the next couple of years.

Service providers, new kids on the block

Lack of availability of power and space is a stumbling block en route to data center build outs. At present, not many companies have the ability to make strategic, long term investments in data centers. Backed by the Cloud, third party data centers have picked up fast. A Gartner report found that the data center colocation and hosting market in India was estimated to reach $609.1 million in 2012. It announced that this market would experience consistent growth through 2016 and was expected to reach $1.3 billion by then. Indian data center capacity is poised to touch 6.6 million square feet in that year with service providers driving the majority of this growth. With hopes of encashing on the opportunity, a large number of new players are entering the market, including service providers, such as Tulip, BSNL and MTNL as well as system integrators such as Dimension Data (earlier Datacraft Asia), SIS and Trimax. Analysts are of the view that there will be an increased outsourcing of data center requirements in the forecast period because of the big data center users including banks and government. AS Rajgopal, CEO, Tulip Data Center Services, observed, “The third party data centers are dominated by mobile service providers for whom the enterprise opportunity is small and lacks management attention. Other smaller players do not have the ability make investments into this CAPEX-intensive business.” Even though the service provides have been looking at hosted data center as a green pasture, Sitaram Venkat, National Manager – Data Center Solutions Marketing at Dell India, felt that the service providers lacked the underlying understanding of running a data center business. “The data center business requires an understanding of applications and the readiness for them to be migrated to an outsourced model, which is lacking in most such cases. Therefore, these players end up being hosts,” he stressed. Nitin Mishra, VP – Product Management & Solution Engineering, Netmagic, felt some of the new entrants, especially the service providers, lacked the readiness to penetrate the market. Besides, managed services require a complete service stack and not just a solution, he argued. It is quite different from offering telco services or pure colocation services, which is mostly about scale.

Consolidation through virtualization

Even as the enterprises are opening up to the idea of managed services, many are still insisting on a hybrid model as they want to have control over crucial assets. A data center offering has to meet the business expectations. Data centers need to be flexible so that applications can be migrated easily. The solution to all this is to deploy virtualization.

Rajesh Rege, Senior Vice President – Data Center, Virtualization and Cloud business, India & SAARC, Cisco, said, “A virtualization-led consolidation strategy seems to be the common thread across most data centers in India. Clearly, Indian organizations have started embarking on their Virtualization 2.0 strategy, which essentially reflects the stage when organizations have consolidated their low-hanging server workloads and are evaluating other opportunities within and beyond server technology.”

In tune with this strategy, third party players are constantly upgrading their infrastructure, deploying virtualization and enabling themselves to offer Cloud services.

Virtualization is not only the first step in the long journey of consolidation, it is also one of the ways to add a green tag to a data center. As enterprises virtualize and consolidate, the number of devices deployed tends to come down, resulting in power savings to the tune of 40-50%.

Data center consolidation lowers management costs, increases data security and improves manageability. It also improves the overall agility and deployment flexibility of applications in the business.

In order to achieve the overall, purpose of making data centers green IT has to decrease the data center footprint, which can be done only by consolidating data centers in one place rather than spreading them across various locations. At the same time capacity management is required. The early signs of data center consolidation are visible and we see high density compute environments formed by blade servers being employed.

There is no question that fact data will continue to grow at a torrid pace and that IT budgets will fail to keep pace. Therefore, organizations are increasingly implementing storage virtualization and dynamic provisioning as a foundation for the Cloud and for creating dynamic, highly available data centers and saving money in the process. Virtualization has emerged as the model of choice not just from a cost saving perspective but also as an effective means for organizations to ensure resource optimization and adopt green IT practices.

Amal Bhattacharya, General Manager, Networking, Wipro Infotech, pointed out that there were two factors driving this growth. “Making resources available on an ‘on demand’ basis was always the requirement from all CIOs. However, technology maturity was the issue. Today, with all major OEMs having invested heavily on virtualization, CIOs are confident about adopting the same. In addition, with wide area networks becoming larger and broader, all major companies are moving towards application consolidation in a single instance. Once that is done, virtualization provides them with the best data center efficiency and enables them to control the process of rolling out services quickly,” he said.

Vendors are crafting their strategies. “We continue to execute our strategy to shift to higher growth areas i.e. software and services. Virtualization is a key part of this strategy helping customers drive storage capacity, performance, disaster recovery, energy, management and migration efficiencies,” said Vivekanand Venugopal, Vice President and General Manager, India, Hitachi Data Systems.

Another trend that 2011 saw emerge was that of modular data centers or the containerized data center with players like Cisco joining the bandwagon. Motwani explained that of the total number of data centers in India, about 35-40% are mid-sized. These modular data centers are sized to match shipping containers and are packed with servers, switches and other IT equipment. These container data centers are the best fixtures for adding capacity to an existing data center at short notice or to bring capacity to remote locations.

Unlike, traditional data centers, which need to be located in tier 1 cities so that they can be manned and managed, a large number of data centers are now coming up in tier 2 and 3 cities that can be easily monitored and maintained using RIM tools.

Sanjay Lulla, Director, Global Services – India and SAARC, EMC, said, “Data is likely to increase 50 times in the next ten years, while the staff managing this data will increase only by 1%, which is a clear indication of the need to automate data centers. Data creation by the individual and application has gone up, putting pressure on the storage capacity of data centers. The phenomenon of big data is going to have implications for the management of this data.”

All in all, the data center market in India is likely to keep orders pouring in for vendors. Virtualization and consolidation and high in demand hosted data center offerings will push vendors to focus and devise strategies around data center management software and services

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