Center Of Opportunity


5 Aug 2011
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According to the India findings of the Symantec State of Data Center Report 2010, mid-size enterprises are more aggressive and pioneering than either small or large enterprises. They are adopting new technology initiatives such as cloud computing, replication and de-duplication at rates that are 10-15 percent higher than those of small or large enterprises.

This should be encouraging news for partners, especially in the light of the healthy growth in the data center market. IDC India estimates that the India data center market will grow from Rs6,300 crore in 2009 to Rs10,000 crore by the end of 2011. As per Gartner, by 2012, the amount of data center space in India would cross five million square feet, placing it among the top 10 data center markets globally.

Over the past two years there have been large data center deployments in big banks and state governments, with project sizes from Rs5 crore to Rs100 crore. However, there have been few wins for the mid-market partners. “This was perhaps on expected lines, since most tenders had stringent guidelines which disqualified most partners—and the banking sector is a named account operation for many vendors,” explains Anoop Nambiar, Country Manager, Business Partner Organization, IBM India/South Asia.

Another reason for the limited exposure of partners to data center projects could be financing. Says Vishak Raman, Director, India & Saarc, Fortinet, “Setting up a large data center project is not just about management or skill sets; it’s also about financing a deployment that may span months.”

Though national or large data center projects have been out of the reach of channel partners, several state- or department-level data center deals have been picked up by mid-market partners.

“We took a call to be a support partner in a consortium led by a major national systems integrator for the statewide data center deals,” says KV Jagannath, CEO, Choice Solutions, Hyderabad.

Another example: the Karnataka State Police Data Center project was deployed by Trimax IT Infrastructure & Services. Similarly, across the country, several state and central government departments as well as PSUs are opting for small captive data centers, and are open to working with small partners.

“One of the key calls our management is expected to take when we opt for new data center expansion is to relax tender norms to help more vendors take part,” says R Kalamegham, Deputy Manager, ITI Data Center, Bengaluru.

Similar views were expressed by Ashu Batta, Director, H&H Technologies, Chandigarh. “In our region, and also across India, many government departments and PSUs are opting for captive data centers. The typical project size is Rs1.5 crore-Rs2 crore, and partners like us are winning orders.”

The server room boom
Even as large opportunities are being well mapped by vendors through their direct sales team and tier-1 systems integrators, there are opportunities for partners in smaller data centers which are classified as server room data centers. While no precise figures are known, industry estimates suggest that anywhere between 15,000 and 150,000 server rooms are likely to be upgraded or set up over the next two years.

“There are several customers who have small server rooms—some of them 8x8 square feet—all stacked with racks, servers and storage. When these customers add power and cooling to the server rooms, they are typically said to have set up tier-1 data centers. As a solution provider, we see opportunities with customers who want to move from tier-1 data centers to tier-2,” says Ujjwal Mhatre, Director, Orient Technologies, Mumbai.

The budget of a tier-1 data center is typically Rs5 lakh-Rs50 lakh. This includes racks, air-conditioning, power backup (usually eight hours), networking equipment and servers.

Most vendors also note that the real opportunity for partners lies in data centers that are classified as tier-1 and tier-2. “Typically, all vendors prefer to address the SMB segment through partners, and the smaller data centers are mostly owned by the SMB customers,” observes Raman of Fortinet.

There are relatively fewer tier-3 and tier-4 data centers in India, and they are either addressed directly by vendors or through select national systems integrators. Nevertheless, an increasing number of mid-size organizations in India have business applications (such as ERP and CRM) that are hosted in server rooms or tier-1 and tier-2 data centers. These throw open opportunities for both vendors and partners.

What vendors such as IBM, Dell, HP, APC, Emerson and EMC have done for the mid-market is offer pre-fab, factory-fitted and modular data center solutions.

Such pre-fab solutions exist for both active and passive components of the data center. Says Ankesh Kumar, Director, Channel Products and Marketing, Emerson, “We are into the passive part of the data center, the support value. Around 40 percent of the spend is on passive components where the solutions are pre-fitted based on the number of racks or square feet of space.” Emerson provides these solutions through its tier-2 partners, who, says Kumar, have deployed them at more than 150 customer locations.

Remarks Shankar Bhamidipaty, Director, Ashtech, “There are large clients who want to break down the pricing into separate components. We appoint sub-contractors who work to our specifications, and partner with OEMs to fulfill specific demands. We have done 4-5 projects of this nature. These projects offer us 15-20 percent margins.”

There are also opportunities to up sell and deep sell, say Kumar and Bhamidipaty. The opportunities arise during data center revamping, when partners can also pitch for IP surveillance, digital access control and other solutions that go into the data center.

Many partners are realizing data center opportunities through other engagements with existing customers. For instance, for the core banking project of a Mumbai-based cooperative bank, Ashtech came on board for server and storage solutions, but later became its tech consultant. “Over a period we built the entire data center for the bank and also set up infrastructure for the core banking solution,” says Bhamidipaty.

Avaya is another vendor looking at providing pre-fab solutions. “Avaya provides Data Center Network Solutions which are ‘fit for purpose’ for every type of customer in the industry from very large enterprises to small customers,” says Darshan Watve, Country Sales Manager, Data Business, Avaya India.

IBM too is seeing high traction for portable and modular data centers. These solutions are being targeted at SMBs likely to relocate their infrastructure. “Most fast-growing SMBs are thinking of relocating their premises as they build bigger capacities and expand their business. Portable data centers ensure that investments are protected,” says Akash Saxena, Vice President, Offerings Management & Development, Global Technology Services, IBM India/South Asia. These solutions are being heavily pitched through channel partners.

APC is another vendor pushing the idea of portable and modular data centers. “We have introduced new technologies such as in-row cooling where the cooling unit resides inside the rack. This is preferred especially in the case of an SMB customer who may want to relocate his data center tomorrow. Contrast this to a raised floor which is used for fitting cooling equipment that cannot be [easily] relocated,” says GB Ravichandra, Head, Enterprise, APJ, APC.

Dell’s vStart is a pre-configured solution aimed at the pre-fab data center market. “We are releasing vStart shortly. It is a pre-sized, pre-tested, racked and ready set of virtualization resources to support a pre-determined number of virtual machines,” explains Sitaram Venkat, National Manager, Enterprise Solutions Marketing, Dell India.

To prepare their partners for providing data center solutions, many vendors such as APC, HP and Cisco have been giving extensive training to them for the past couple of years. HP has the Data Center Systems Specialist program for partners as part of its AllianceOne program, while Cisco has launched the Data Center Architecture Specialization (DCAS) program that would be made mandatory for certified data center partners.

“We have the Cloud Partner Program (CPP) and the DCAS which would be essential for partners who want to go after the growing opportunity in the cloud and data center space. We already have two mid-market partners, SK International and Nirmal Datacomm, which have attained Silver status in data center specialization, and Locuz from Hyderabad is presently undergoing certification,” informs B Raghavendran, Head, Partner Organization, Cisco India & Saarc.

Technology drivers
Virtualization remains the biggest driver for the data center boom in the country. Server virtualization is the key as there are direct savings in terms of fewer hardware units to buy and maintain as well as fewer support staff to manage.

“After the global meltdown, for all organizations the key challenge is to do ‘more with less.’ This is changing the way enterprises approach their data center strategies and so they look beyond traditional technology infrastructure,” says Ganesan Aramugam, Director, Partners Sales, VMware India. “Most customers who started virtualization of their non-business critical applications are now moving to get their production applications also virtualized.”

Desktop virtualization, while not as popular as server virtualization, ensures that a customer going for VDI architecture would automatically need a data center. “Desktop virtualization customers automatically need servers, storage and faster networks, and would need a data center to consolidate,” says Anoop Krishnan, VP, Quadsel, Chennai.

The cloud is another key driver. While service providers are investing in setting up public clouds, customers are also building private cloud infrastructure which once again means setting up or expanding data centers.

“We do not expect many customers to completely run their infrastructure off a public cloud. The hybrid cloud model is popular. That’s where the opportunity lies for partners,” comments T R Madan Mohan, Managing Partner, Browne & Mohan, Bengaluru.

Another trend partners are seeing is the move toward RISC-based architecture. “The acceptance of RISC-based servers, whether Itanium-powered or Power 7-based, has suddenly gone up. In fact, with mainframe prices crashing we see customers buying into non-x86 platforms for their ability to deliver more for a lower data center footprint,” says Mohan.

The enterprise data boom is also a key reason for consolidating information at a single point. “Customers are struggling with the data explosion within their enterprises. From silos of information there are definite plans to consolidate data into easily retrievable and more secure central storage. This is another reason why customers are opting for data centers,” says D Bhaskaran, Director, Mach Data System.

Yet another reason is the deep penetration of business-critical applications within the SMB segment. “Many SMBs have started implementing ERP applications, while some of them are rolling out the second generation of their ERP applications. And it’s not just applications; data needs to be protected, and securing everything inside a server room or data center is the usual thought process,” says Ashok L, Managing Director, Futurenet Technologies, Bengaluru.

The affordability of technology is also driving customers to invest in data centers. “Today, blade servers are no more an expensive option, and make perfect sense for customers. Also, 10G has become the norm,” says Kedar Shah, CEO, Nirmal Datacomm, Mumbai.

Structured cabling vendors too are seeing the opportunity. “For a structured cabling vendor, the opportunities are indeed very good. The new standard TIA 942 was ratified last year, and with 10G becoming a norm you need cable to support similar speeds. Data center cabling is far more complex, and needs a lot of attention to detail,” says Dileep Kumar, Chairman, BICSI, an independent association of telecom and networking vendors.

Security is another opportunity partners can tap. “IT consolidation and virtualization projects that don’t directly address security issues can result in weaker and less efficient data center protection. As a result, there’s a stronger need to build the security layer and thus the confidence of the end users,” says Bhaskar Bakthavatsalu, Regional Director, India & Saarc, Check Point.

Future direction
Consolidation is at the top of the mind for the IT industry, and organizations are in the process of redefining their data centers in order to manage the pressure to reduce costs while protecting data.

Says Ajay Goel, Managing Director, India & Saarc, Symantec, “Whether the consolidation involves a physical move, virtualization, decommissioning, or any combination thereof, organizations need to manage the risks and complexity of data center consolidation. In addition, organizations must ensure that information and applications are protected and available to avoid unplanned downtime and data loss.”

According to most research agencies, the data center market continues to grow at a CAGR of 20-25 percent, and with prospective changes in government policy, which could help India become a hosting hub, the country could become one of the biggest data center markets globally.

For partners, the server room revolution triggered by SMBs will continue to provide ample business opportunities.

source : crn
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