Data center opportunities in india 2009 final v13
-
Upload
sunil-gupta -
Category
Technology
-
view
211 -
download
0
Transcript of Data center opportunities in india 2009 final v13
© 2009 IDC 1
Data Center Opportunities In India 2009
© 2009 IDC 2
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Summary and Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 3
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Summary and Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 4
With increasing need for consolidation captive data center market in India has been
witnessing good growth in major verticals like telecom, BFSI, manufacturing, IT/ITeS etc.
Organizations are also looking at Third party datacenters for hosting their critical
infrastructure to Back up and Disaster recovery sites.
Owing to the complexities involved in setting up and running of data centers, more and
more customers are looking towards outsourcing as one of the most suitable and cost-
effective option where the control of the critical IT infrastructure remains with the customer,
and the service provider is responsible for the day-to-day operations and sustainability via
SLAs.
IDC conducted this research to assess the potential and dynamics of the data center
market in India.
About the study
© 2009 IDC 5
Study objectivesStudy objectives
Business objectives
To make informed business decisions based on a detailed assessment of the market opportunity for data center services in India
Research objectives
The primary objective of this market analysis assignment would be to:
Understand the current state and future evolution of the data center market in India
Understand the usage of captive and third party data centers across the industry verticals
Assess the market size for third party, captive datacenters in India and forecast for next two years
Assess the data center market by different services i.e. Collocation, Hosting and IT Services
© 2009 IDC 6
MethodologyMethodology
Primary research on 15 data center ecosystem players like -Data center players (10),,SI (2), and Power & Cooling vendors (3).Listing Interviews - 789 enterprisesMain interviews - 225 enterprises
Project kick-off
Secondary research
Data from press reportsVendor annual reports/ websites
Data verification and validation and in-depth analysis
Baselin
e: IDC
IT S
ervices Research, ID
C data repo
sitory
Final data tables and presentation
Leverage
Leverage
© 2009 IDC 7
Research methodology and sample sizeResearch methodology and sample size
Cities covered: Six cities i.e. Delhi, Mumbai,Chennai,Kolkata,Pune and Bangalore
City-wise sample detailing is as follows:
Sample for Listing interviews
Segment Sample
Medium organizations (100-499 permanent employees) 341
Large organizations (500-999 permanent employees) 200
Very Large organizations (>1000 permanent employees) 248
Total 789
Type of org./data centers
Captive Third-party Total
Medium organizations 44 21 65
Large organizations 47 12 59
Very Large 82 19 101
Total 173 52 225
Sample for Main interviews
© 2009 IDC 8
Definitions
Collocation:
Services that involve renting out rack space to take care of IT systems of user companies. System/application establishment, operations, and management are carried out within the scope of users’ responsibility and data center SPs provide physical environment management and simple operation services (rebooting, light-emitting diode [LED] monitoring).
Hosting:
Data center SPs provide infrastructure such as specific applications, OS, and middleware as well as operation management services by using their own IT systems. Hosting can be classified into the following subcategories based on service type:
Shared hosting: Standardized applications are provided to several users through a specific server system. Examples include basic Internet services such as email, Web, and domain naming system (DNS).
Exclusive hosting: An exclusive server system that is not shared with ordinary users is provided to a specific user. Generally, data center SPs establish OS or middleware and provide operation, management, and updating services on the same level.
IT services:
These include IT consulting, SI, operation management, maintenance, and help desk services based on data center facilities. In the data center services market, these services are provided together with collocation and exclusive hosting.
© 2009 IDC 9
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Summary and Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 10
Market sizing—ApproachMarket sizing—Approach
Total number of organizations with 100 employees
BFSI Manufacturing IT/ITeS Communication & Media
Other services
Current data centerpenetration (%)
% of org. planning to go for data center in near future
Estimated market of Captive datacenter(Forecast till 2011)
Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, healthcare etc.
Total no of organizations deployed Datacenter
Extrapolated to universe
XAverage space allocated per
organization on datacenter till date
XAverage maintenance cost/sqft
Average build up cost/sqft
X Average new build up space in current year
Estimated total no of organizations planning to go for Datacenter by 2011
XAverage space allocated per
organization on datacenter till date
XAverage maintenance cost/sqft
Average build up cost/sqft
X Average new build up space in current year
Captive datacenter Market approach
Third party Datacenter players
Power & Cooling vendors
Revenue
Growth
Perception
Build up space
Third Party datacenter Market approach
Revenue
Growth
Perception
Estimated market of Third PartyDatacenter (Forecast till 2011)
Total Estimated Datacenter Market (Forecast till 2011)
© 2009 IDC 11
Executive summary
Indian datacenter market is expected to touch USD 2.1 billion by 2011 from 1.4 billion in 2009. The third party datacenter is expected to grow at almost double rate of captive datacenter market in next 2 years & manufacturing is expected to maintain its position at the upper end of the spectrum by deriving majority of datacenter revenue in both captive & third party setup.
The third party datacenter market in 2009 is pegged at US$ 266 million, which is expected to reach US$ 481 million by the year 2011, growing at a CAGR of 34.5%. Whereas the captive datacenter market in India is estimated to be around US$ 1169 million and is expected to touch US$ 1681 million by 2011, growing at a CAGR of 19.9%.
Manufacturing still comprises of more than half of the third party datacenter market followed by IT/ ITeS.
The third party datacenter space in 2009 was around 20,00,000Sq ft, which is expected to grow at a CAGR of 32.8% & reach around 88,00,000Sq ft by 2014.
The current penetration of datacenters in India comes around 54.5%, with 77% of the large and about 46% of the medium organizations having a datacenter setup – either captive or third Party.
The current penetration of third party datacenters in India is about 18% & it is expected to rise by 5.4% in 2011 with IT/ITeS, communication & media and manufacturing emerging as the most prospective verticals for third party datacenter growth.
© 2009 IDC 12
BFSI has the maximum datacenter penetration (78%) in 2009 across all the verticals and it is expected that by 2011, IT/ITeS will be the vertical with maximum penetration of datacenters (84%).
Increased deployment of ERP & CRM applications & need for continuous uptime have been some been some of the drivers for the third party datacenters.
Users of a captive datacenter setup claim concerns with data security and ease of operational monitoring & control as the major reasons to go for a captive setup.
Corroborating with the reasons of a captive datacenter setup; Concerns with IT Security & Confidentiality of data followed by High maintenance cost emerge as the major inhibitors in way of Third party datacenter setup.
While, on the other hand lack of real need, high capex involved emerge as the major hurdles in path of establishing a captive setup.
In case of Organizations having a captive setup – managed by third party; Hardware Support (78%) followed by Network management support (67%) are the services most of the times provided by third party.
Executive summary
© 2009 IDC 13
Executive Summary
Among the users of Captive datacenter setup; the current adoption of server virtualization is about 19.7% & it is expected to rise to 27.8% by 2011. By 2011, the highest adoption of virtualization is expected in case of IT/ITeS Segment (49%), followed by BFSI (36%).
It is also noticeable that, Collaborative applications (83%) & website hosting (83%) come up as the major applications hosted at third party datacenters.
Libert/Emerson closely followed by APC have accrued highest top of the mind recall among vendors providing power and cooling solutions.
While selecting a vendor for third party datacenter services; the choice is affected by Support (74%), Cost (71%) and Vendor’s expertise & skill set (65%).
Most of the organizations intended to construct bigger datacenters to bring additional power, closely followed by virtualizing the existing servers to optimize the power requirements.
In case of Third Party datacenters; the average duration of agreement with the service provider turns out to be 4.1 years and the average annual spend on third party services turn up as INR 60.5 lakhs.
© 2009 IDC 14
Executive Summary
Alternative sources of energy such as solar, wind and water are playing a crucial role in meeting the ever-increasing energy demands of the local data center market.
Cloud computing is gaining traction in the market with organisations putting their non core applications to be offered from virtualised platform.
With growing competition in the datacenter space there have been shrinking margins.
Market saw a shift towards hosting services from collocation services and now the shift is further moving towards providing managed services from the existing datacenters.
Market has witnessed an increase in power, cooling and rack prices while the bandwidth charges have gone down as compared to what they were two years back.
The contracts are typically for 3-5 years with extremes going upto 10-12 years; and there is an increasing trend towards annual renewals.
Organisations are seen moving towards green IT which is helping them to reduce their energy cost by 15%-20%.
© 2009 IDC 15
Third Party and Captive Market
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
SWOT analysis
Summary and Recommendation
Annexure
© 2009 IDC 16
Data Center Market - Ecosystem
Types of Datacenters
Captive Third Party
Customer Owned
Third part ManagedManaged In-house
Provisioned by
Telecom Service Provider
Pure play datacenter Service Provider
Managed Service Provider
Internet Service Provider
H/W & S/W Infrastructure Providers
Phy
sica
l In
fra
stru
ctur
e se
rvic
e P
rovi
ders
Netw
ork Equip
men
t Vend
or, Coolin
g & P
ower S
olution
Ven
dors
© 2009 IDC 17
Engagement Types
Involves renting out of rack space Managed by user itself the datacenter player
provides physical environment management
Dedicated Hosting Server dedicated to a single user exclusively Managed by service provider Expensive than shared hosting
Shared Hosting
Many users are provided with services from same server
Standardized applications provided to all users This service is less expensive than dedicated hosting
Collocation
Managed services SLA driven Services provided through RIM model Managed services market growing with organisations looking for cost optimisation
© 2009 IDC 18
Paradigm Shift in Models
Web 2.0 mega datacenter
Hosted/managed Datacenter
IT Assets Enterprise datacenter
On-Demand
Highly standardised Strategic focus on Volume Defined, smaller set of I/O intensive applications Lower business value
Tactical focus on value SLA driven Contained costs Partially standardized
Highly customized
Strategic focus on value SLA driven
Shared services cost center
Optimally customized Pay per use model
Cost
Business Value
© 2009 IDC 19
Data center Setup – Overall /Segment/vertical wiseData center Setup – Overall /Segment/vertical wise
Current Adoption in 2009
Yes54.5%
No45.5%
Figures in %
Figures in %
The current penetration of datacenters in India comes around 54.5%, with around 77% of large organizations having datacenter setup. BFSI leads the way with maximum penetration of datacenters (78%). The expected penetration in 2011 is expected to increase by 8%, with an increase of 9% in medium & 6% in large segments.
77.6
57.5
75.0 73.1
60.8
76.7
46.4
Medium (341) Large (448) BFSI (79) Manufacturing(330)
IT/ITES (109) Communication &Media (31)
Others* (240)
Future Adoption by 2011
Yes62.4%
No37.6%
83.6
65.0
83.7 78.866.4
55.0
82.5
Medium (341) Large (448) BFSI (79) Manufacturing(330)
IT/ITES (109)Communication& Media (31)
Others* (240)
Base 789
Base 789
* Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 20
Captive /Third party Datacenter – Overall /Segment/vertical wiseCaptive /Third party Datacenter – Overall /Segment/vertical wise
Figures in %
Figures in %
Current Adoption in 2009
Captive datacenter
82.1%
Third party datacenter
17.9%
Future Adoption by 2011
Captive datacenter
76.7%
Third party datacenter
23.3%
81.5 83.1 86.5 86.3 79.7 84.2 77.4
18.5 16.9 13.5 13.7 20.3 15.8 22.6
Medium (341) Large (448) BFSI (79) Manufacturing(330)
IT/ITES (109) Communication& Media (31)
Others* (240)
75 79.8 82.1 81.3 75.3 78 74.5
25 20.2 17.9 18.7 24.7 22 25.5
Medium (341) Large (448) BFSI (79) Manufacturing(330)
IT/ITES (109) Communication& Media (31)
Others* (240)
Captive Third party
Base 789
Base 789
Of the organizations using a datacenter setup; 82.1% have a Captive datacenter and around 17.9% employ the services of a third party vendor – both hosted and collocated. The current penetration of datacenters in both the segments is almost identical with around 82% in medium & 83% in large organizations having a captive setup. However in near future; penetration of third party datacenter is expected to increase by 6.5% and 3.3% in Medium and large segments respectively. IT/ITeS emerges as the most prospective vertical for Third Party data center adoption.
* Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 21
Data center market revenue forecast
Exchange Rate IUSD = INR 45
1435
1169
266
1722
1371
351
2162
1681
481
0
500
1000
1500
2000
2500
2009 2010 2011
Total Market Captive Third Party
Values in % represent CAGR growth
Indian Data Center Market will touch USD 2.1 billion by 2011.
Third-party datacenter market is estimated to grow at almost double the rate of Captive data center market in next 2 years.
All figures in US$ million
CAGR 22.7%
CAGR 19.9%
CAGR 34.5%
© 2009 IDC 22
CAGR =
22.7
%
Total data center vertical split
IT/ITES14%
Communication & Media
6%Others10%
Manufacturing54%
BFSI16%
Communication & Media
6%
IT/ITES15%
Others11%
Manufacturing53%
BFSI15%
2009 (Market Size = US $1435 Million)
2011 (Market Size = US $ 2162 Million)
The total datacenter market revenue is expected to increase with a CAGR of 22.7% in the tenure 2009-2011.It is expected that in 2011 also; the maximum revenue will be derived from Manufacturing Vertical (53%), followed by BFSI & IT/ITeS (15% each).
Exchange Rate IUSD = INR 45
* Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 23
CAGR =
34.5
%
Third-party data center vertical split
IT/ITES18%
Communication & Media
5% Others9%
Manufacturing61%
BFSI7%
Communication & Media
6%
IT/ITES19%
Others9%
Manufacturing60%
BFSI6%
2009 (Market Size = US $266 Million)
2011 (Market Size = US $ 481 Million)
The revenue derived from Third Party datacenter is expected to increase to USD 481 million in 2011, with a high CAGR of 34.5%. In 2011 also; Manufacturing is expected to be the vertical with highest contribution to total revenue derived from third party datacenters (61%); followed by ITeS (19%).
Exchange Rate IUSD = INR 45
* Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 24
Captive data center vertical split
IT/ITES13%
Communication & Media
7% Others10%
Manufacturing53%
BFSI17%
Communication & Media
6%
IT/ITES14%
Others12%
Manufacturing51%
BFSI17%
2009 (Market Size = US $1169 Million)
2011 (Market Size = US $ 1681Million)
CAGR =
19.9
%
The market size of Captive Datacenter is expected to increase to USD 1681 million with a CAGR of 19.9% in the time period 2009-2011. Here also manufacturing seems to contribute the maximum percentage (53%) to the overall market size; followed by BFSI (17%).
Exchange Rate IUSD = INR 45
* Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 25
Drivers for the market
Lack of internal skills and management(66%)
High capex(50%)
Cost benefit (38%)
Disaster recovery services are driving up the adoption of third party data center services(37%)
Compliance to international standards(35%)
Third Party – End User Perspective
Captive – End User Perspective
Increased deployment of applications like ERP, financial, DR, remote backup
Willingness of customers to have BCDR site
Decrease in bandwidth cost
Advanced security services
Increased demand by the customers for cost reduction and improved efficiency
High investment in technology is driving customers to go for opex model
Need for continuous uptime
Vendor’s Perspective
Data Security / confidentiality (64%)
Operational control and Monitoring (51%)
Regulatory compliance (35%)
Proximity (35%)
© 2009 IDC 26
Inhibitors for the market
Concerns with physical and IT security
High maintenance cost (32%)
Lack of vendor’s understanding for solution needs
No real need(72%)
High CAPEX and maintenance cost(68%)
Don’t see any competitive benefit for the
organization(41%)
Complexities involved in setting up & running of
data centers(18%)
Power shortage hampering the growth of data center in most of the geographic locations in India
Increased competition is shrinking margins in datacenter space
Bandwidth prices are still very high
Security of critical applications still a block in datacenter growth
Huge mismatch in infrastructure availability between large cities and smaller towns
Postponement of data centre (and many other projects) related investments and decisions owing to slowdown
Third Party – End User Perspective
Captive – End User Perspective
Vendor’s Perspective
© 2009 IDC 27
Transformational Trends
Power per rack up to 3KVA Power per rack between 4.5KVA to 6KVA and even greater
Rack Servers Blade Servers
Bandwidth cost Rs 16k-Rs18K /MBPS/Month
Bandwidth cost Rs 9k-Rs12K /MBPS/Month
Power per CPU have reduced but the number of CPUs that can be packed per sq ft have increased
Increasing trend towards energy efficient & green datacenter
More applications are being offered through virtualized platform
Overall revenues on a growth path, with declining revenue per sq ft
Alternative sources of energy such as solar, wind and water playing a crucial role in meeting the ever-increasing energy demands of the local data center market
Virtualization activity in data centers is going beyond just server virtualization, and now includes a new concept called I/O virtualization technology, which pares down a lot of hardware requirements at the data center
Customers are looking for boot model in large datacenters
Cloud gaining traction in the market
Rated Power Method Consumed Power Method
© 2009 IDC 28
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Summary and Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 29
Third-party data center market in India
© 2009 IDC 30
Third-party space forecast
2,148,064
3,086,732
4,253,488
5,644,521
7,251,678
8,877,893
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
2009 2010 2011 2012 2013 2014
CAGR = 32.8%
Sq ft
Huge expansion planned by the existing and the new players for the next 2-3 years
2008 expansion and built-up plans pushed for 2009 and 2010
With organizations pursuing more of outsourcing for cost rationalization, the market would be ruled by the third party data centers
© 2009 IDC 31
Third party datacenter space & Services revenue break up
% of service contribution:
۩ Collocation: 55%-60% ۩ Hosting: 22%-25% ۩ IT services: 12%-18%
Total build-up data center space
2,150,000 Sq ft (Approx)
Total raised floor
950,000 Sq ft (Approx)
Base : USD 266 million
© 2009 IDC 32
Data center services
Service Margins
Basic business
Create additional Income
Value-adds
Collocation
Hosting (Dedicated/Shared)
Managed services
Increasing revenue per sq ft
35%-40%
20%-25%
18%-20%
Service co
mp
lexity
Sp
aceS
kills
Market saw a shift towards hosting services from colocation services and now the shift is further moving towards providing managed services from the existing datacenters
Reduced bandwidth prices driving the growth of datacenters with margins shrinking down due to growing competition in this space and movement of customers from lower end to higher end
© 2009 IDC 33
IT services
Most offered services• BCDR services
• Cloud computing
• On demand services
• Managed mail hosting
• Security services
• Application services
• RIM
BCDR services are becoming more of a standardized offering, offered as virtualized platform or cloud computing
Huge traction for hosting services witnessed from start-ups and SMEs
System development & other non critical applications being rolled out from a virtualised platform, with critical applications still offered as standard
Application services still continue to have the maximum revenue margins
Application hosting is seeing traction and will be growing further in India, riding high on applications like ERP, SCM, CRM and billing
The share of managed hosting in the entire gambit of outsourcing services is going to increase
© 2009 IDC 34
Sales & Distribution Model
Sales & Distribution Channel
Hosting service providers
Small & Medium business
PartnersChannels
Direct sales
New Accounts Existing accounts
System Integrators & ISVs
Existing/Named Accounts
Content service providers
The direct sales team is predominantly used to target large and medium-sized organizations
Channels are used to expand the market and enter into untapped emerging enterprises and small and medium businesses, a shift is being witnessed with direct sales also starting to tap the SMEs seeing their huge potential and demand but with caution
Consortium among SIs, power and cooling players and third party service providers to emerge, to manage the continuously changing demand of customers for better efficiency, reduced costs and greener provisions
Power & Cooling Players
© 2009 IDC 35
Overview of sales model
All three main data center services, collocation, hosting and IT services, require a different approach to sell and also have different challenges, with customers asking for more of managed services
Increased traction for revenue sharing model, resultant of cost reduction need of slowdown
Generally there are three different types of skills set of people selling these services, though the boundaries are getting blurred
Layer 1: Their focus is on selling hosting services. Their prime aim is to get the customer to the data center
Layer 2: They sell collocation services. Their prime aim is to populate the rack space in the data center
Layer 3: They are responsible for selling managed IT services/value-added services, over and above plain collocation and hosting. They specialize in selling only managed services and are not responsible for populating the data center
© 2009 IDC 36
Selling of Services
Selling of hosting services
Primarily sold as Web hosting
Focus is however shifting towards industries like hospitality, content, telecom and gaming to manage the hosted environment. Traction witnessed from sectors high on increasing the customer base like insurance
Selling of collocation services
Most basic level of data center service sold
Sold as real estate (factors of 'U' or on square feet basis)
With outsourcing coming into foray with the slowdown, a shift is witnessed from collocation to managed services
Selling of managed services
Highest level of service in the value chain, and also the toughest to sell
A combination of IT and telecom skills required and is a SLA/resource-driven model
Engagement depends on infrastructure to be managed, skill sets required, availability of systems, applications assured and number of resources to be deployed
High focus on virtualized and cloud services for non-core applications
© 2009 IDC 37
Go-to-market model
Managed IT services
Hosting
Collocation and DR
Security
Ind
us
try
ve
rtic
als
focu
s
En
terp
rise
Ch
ann
el
All
so
luti
on
sA
ll s
olu
tio
ns
En
terp
rise
an
d c
orp
ora
teS
ma
ll a
nd
med
ium
© 2009 IDC 38
Major factors considered in finalizing third-party service provider
38
44
52
65
71
74
Vendor track record/history/No.of years in operation
One stop shop player
Location
Vendor capability (Skill Sets)
Cost
Support
Figures in %Q: What are the major factors you considered before finalizing a particular third party data center service provider for your organization?
Among the users of Third Party Datacenters Support (74%), Cost (71%) and Vendor Expertise (65%) turn out the major factors while deciding the Third Party Service Provider.
Base: 52
© 2009 IDC 39
Pricing of Collocation
Most collocation centers offer different types of services to customers ranging from dedicated suites/rooms (cage racks) or to smaller racks or partial racks
COLO is sold by Area (cage rack facilities) Complete racks Multiples of ‘U’s
Bandwidth is sold as Data transfer mode, losing ground Capped bandwidth mode, gaining traction Burstable bandwidth mode
Line items Rack space (Sq ft or Units) Bandwidth Power/cooling Manpower
Apart from the normal shift in the market digressing from collocation services, no major shift in the pricing is being witnessed in the components, apart from the emergence of pay-per-use model
© 2009 IDC 40
Pricing strategy for collocation
The burstable bandwidth is charged at a higher rate (by 10-15%) than the normal bandwidth
Standard power bundled with a rack has increased from 3 KVA to 4.5-6 KVA
Rack cost higher than the standard; and bandwidth is charged over and above the cost of rack prices
The contracts are typically for three to five years with extremes going upto ten to twelve years; and there is an increasing trend towards annual renewals
Data transfer based pa
Price range (US $ pa )
10 GB 750 to 850
20 GB 1,500 to 1,600
50 GB 2,700 to 2,900
15,225 to 18,400Rack
8,135 to 9,36520U
4,595 to 5,21510U
2,230 to 2,6204U
1,525 to 1,7402U
840 to 1,0701U
Price range (US $) paRack sizes
© 2009 IDC 41
Pricing of Hosting
Pricing depends on the type of hosting Dedicated
Shared
Dedicated hosting is mainly charged on Servers (number and type of server), (complete server pricing or rented pricing)
Bandwidth
HDD space
Number of U
Shared hosting is charged mainly on Disk space
Bandwidth (burstable as an option)
Generally services such as firewall, IPS and antivirus alert are also built-in with the hosting plans and are shared across clients
Separate charges for dedicated security services like dedicated firewall etc, though at a minimal rate
© 2009 IDC 42
Pricing key take aways
Market has witnessed increase in power, cooling and rack prices while the bandwidth charges have gone down as compared to two years back
Prices are based on a per rack basis and range from US$ 15,225 to US$ 18,400 based on standard requirements. They may vary based on power and network switch configurations. Increasing rack prices are becoming a roadblock in the cost reduction / optimization objective of third party data centers
On an average, organizations are paying US$ 135,000 per annum to third party data center service providers
Extra power requirements are charged US $ 2,350 to US $ 2,650 per KVA. The standard power bundled with one rack is 4.5-6 KVA
Pricing for MS varies according to the type of service offered, with basic services bundled in the standard agreement
Vendors offer burstable bandwidth option with extra charge per MB per month, would be key profitable area in future with data transfer mode getting lesser preference
Volume discounts in cases of larger deals range anywhere from 10-20%, with industries like telecom having higher margins and ones like BFSI having lower margins
Competition is setting big time in third party data center space making players to go for high discounting
© 2009 IDC 43
Data Centre Cost
Build cost (excluding real estate) = US$ 560 to US $ 670 per square feet
Management Costs = US$ 160 to US$ 250 per square feet
OPEX
Power/cooling cost: 55%-60%
Bandwidth cost: 25%-30%
Management cost: 10%-15%
CAPEX (excluding real estate)
Power/cooling equipment cost: 68%-73%
Other equipments, fit-outs etc: 15-20%
Networking and security: 13%-18%
© 2009 IDC 44
Services offered and trends
Managed Services: With rising complexities in IT infrastructures and applications the in-house management is becoming increasing difficult, providing opportunities around managed services especially in storage, servers and applications
Disaster recovery: BC/DR services are gaining more attention in today's scenario. With business continuity becoming more important for continuous business operations, companies are now increasingly showing their interests in services like BC/DR. The same is being looked upon as a big opportunity by the data center service providers with more and more emphasis on uptime commitment
Security services: In the present environment, where newer and more complex security threats are emerging, the resources required to manage multiple-point products are becoming a concern for an enterprise's IT department. With security becoming the top priority among Indian vendors, data center vendors are today offering these services as managed security services over the network up to the desktop level. A key point to note is that security is no longer a differential and is in-built into the offerings
Storage services: Storage on tap, periodic backup and data archival are the leading storage solutions today. Some industries like banking and telecom have regulatory compliance issues for the same. Hence, outsourcing them with stringent service level agreements is high in India
© 2009 IDC 45
Services offered and trends
Collocation: It is no more a plain collocation. The trend is moving towards more value-attached services along with collocation. These can be security services, network services, infrastructure management services, disaster recovery services etc. Though even today collocation is a major contributor to the total data center revenue, there is a clear movement towards managed services, with collocation offering lesser revenues as compared to hosting and managed services
Virtualization: Organizations today are moving more and more towards virtual platform. With cost reduction and optimization in the background, there is an increased traction for consolidation and virtualization
Cloud: Another key area witnessing traction is the cloud services. With increase in security and confidence, organizations are making a movement towards cloud where everything ranging from infrastructure to applications is being offered as a service coupled with pay-per-use model, where they need to pay only for what they consume and not for a fixed cap
Green: Another big wave sweeping the Indian data center market is the green. With increased emphasis on power & cooling and rising power prices (increase of Re 1 per unit from two years ago), the stress today is more on building energy efficient equipments and data centers. The same is also not only guided by the regulatory bodies but is also seen as a marketing tool in attracting the customers
© 2009 IDC 46
Rack Dimensions
One rack unit is commonly designated as "1U", "1RU". Two rack units are "2U" and so on
The size of a piece of rack-mounted equipment is usually described as a number in "U
A rack unit is 1.75 inches in height (44.45 mm)
A full rack can contain 42 U. However, 38 to 39 U can be occupied
The rack's mounting fixture consists of two parallel metal strips standing vertically. Each strip is 0.625 inches (15.875 mm) wide, and is separated by a gap of 17.75 inches (450.85 mm), giving an overall rack width of 19 inches (482.6 mm). The strips have holes in them at regular intervals, with both strips matching, so that each hole is part of a horizontal pair with a center-to-center distance of 18.3 inches (464.82 mm)
Most common rack sizes prevalent in third party data centers are 600x800 & 600x1000 (in mm)
© 2009 IDC 47
Burstable Bandwidth
Burstable bandwidth is defined as bandwidth-on-demand that can be provided to a customer. With increased demand for pay-per-use services, the concept of burstable bandwidth is going to gain prominence in the next 1-2 years
While not all enterprises need it, some online companies like news sites, stock market sites, share trading sites etc, who are heavily dependent on bandwidth, need this service. As the nature of traffic is unpredictable over 24 hours a day or 30 days in the month, they often want the data center provider to give them a committed bandwidth that can be increased for example by 50% more
This is popular as a service in the global market with normal charges for the same. However in India, charges for burstable bandwidth are 10-15% more than the charge per unit for committed bandwidth
© 2009 IDC 48
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Summary and Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 49
Competitive Profile - Sify
Strength Weakness Strong market presence as bandwidth provider
Strong collocation and hosting player
Own huge multi-protocol layered switching network
Market leader in VPN services with strong hold in BFSI, Pharma & IT/ITeS verticals
Not a very strong player in managed services space
Lacks stability
Late entrant in the data center space
Opportunities Threat Building up new establishment in Mumbai with five
floors dedicated for data center and two for administrative and regulatory purposes
Leverage their existing infrastructure to provide other value added services apart from collocation & hosting
Increased focus on government and education sectors, the two with large data center opportunities
Targeting the markets like e-commerce, online banking and corporate ERP
Leveraging the opportunities in data center space with decline in the bandwidth prices
Increasing competition with the entrance of other players
High Attrition
With bandwidth rates going down, the comparative advantage for Sify is diminishing fast
© 2009 IDC 50
Competitive Profile - Reliance
Strength Weakness Largest build up data center space in India
Strong bandwidth player, backing of network from Reliance Infocomm and Flag (International)
Aggressive marketing and expansion plans, have grown almost by 60-70% in last two years
Strong partnerships with application vendors
Still trying to gain momentum in their newly offered on demand and other virtualised services
Falls behind Sify & VSNL when talked about value added hosted business offering
No global footprints in data center business
Opportunities Threat Seeing a lot of traction from SME segment
Has shifted its focus to on demand services where they are seeing a good traction especially from the SMB segment
Looking to position themselves as an SI from being a plain collocation player
Eyeing huge demand from BFSI and manufacturing sectors for BCDR services and Government sector for Green IT
Targeting segments like IaaS but not SaaS or application services
Strong competition from other players like VSNL, Netmagic in terms of variety of managed services
IT managed services players acting as both partners as well as competitors
With a movement towards SI player, players like Wipro, IBM & HP are posing major threats
© 2009 IDC 51
Competitive Profile – NetMagic
Strength Weakness First player to offer cloud computing & electronic
data vaulting services in India
Expertise in hosting services
Strong managed services player with RIM as a service offering
Strong in energy efficient datacenters, fast tapping into Green IT wave
Strong expertise in Manufacturing and BFSI sectors
Not too much presence in Government sector
Does not own bandwidth, segment to tap margins
Too much focus on managed services
Opportunities Threat Desktop virtualization integration services for
enterprise private cloud
Overall growth for data centers in India due to increased traction towards BCDR services
Growing traction in mobility & other value added services
Increased focus around SME segment
Increased competition is resulting into shrinking margins
Huge competition with strong bandwidth capabilities posing major challenge
© 2009 IDC 52
Competitive Profile – Tata communications
Strength Weakness One of the well established and big players in the
data center market
Globally consistent product line
Strong partnership with new players like AT&T and Verizon
Investing heavily in India and other emerging economies like Singapore & South Africa
One of the world’s largest IP network
Strong focus on BFSI, manufacturing and IT/ITeS sectors
Still low marketing focus, convincing customers to outsource in place of colo
Significant portion of revenue from network services
Even though it is a part of large group, still lacks the synergistic effects that Reliance has
High global focus with lesser localization
Opportunities Threat Working on providing services on SaaS platform
Partnering with group companies like TCS etc for e-Governance projects hosting
Looking to leverage the brand image of Tata group to increase foot print in the Indian market
Bandwidth cost as compared to other countries like US etc is high
Emergence of other players in data center space like Wipro, AT&T & Colt
© 2009 IDC 53
Competitive Profile - Bharti
Strength Weakness Strong backing of their existing enterprise customers
Great brand image and synergies of the group
Pan India presence owing to connectivity business
Strong bandwidth player
Aggressive in the local market in increasing the wallet share
One of the late entrants in the market
Lacking in IT skills and managed services offerings
Low occupancy rates in the data centers
Opportunities Threat Being the late entrant in the market, it is looking for
expansion in a big way in the next 1-2 years
Looking to leverage its existing set of customers
Targeting verticals to grow riding on increasing customer base like BFSI, telecom & Retail
Low on new service offerings with not too much attention paid to platforms like cloud
Stiff competition from existing players like NetMagic & Sify
Not too much attention paid to the upcoming segments like SMEs
© 2009 IDC
IDC Opportunity Grid
Opportunity Allignment
Ab
ilit
y t
o g
ain
M
ark
et
Sh
are
Crisis Potential LOW
HIGH
HIGH
Legacy
Niche Leadership
LOW
© 2009 IDC 55
Power & Cooling Trends
Power per rack have increased from 3KVA/rack to around 5 or 6KVA which is further high like 9 to 10KVA in some cases
The demand from high performance servers and storage is further driving the energy cost up
Companies are moving towards green which is helping them to reduce their power cost by 15 to 20%
With blade servers gaining popularity, these servers consume less space but they also consume 2 to 3 times the amount of power compared to traditional servers
Duse to consolidation of servers the heat generation & power consumption at a centralised location have increased
With APDRP coming into foray, the power situation is expected to improve around 2012
Financing have become an important tool to give the green technology market the much desired momentum. Many vendors are offering finance options along with their offerings
© 2009 IDC 56
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Summary and Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 57
Reasons for Opting for Captive Data Centers
31
35
35
38
51
64
23
8
15
15
62
77
In-house skill
Regulatory compliance/CompanyPolicy
Proximity
Cost Benefits
Full operational control &monitoring / Ease of Managing
Data security/confidentiality
User (173) Intenders (18*)
Across the users of Captive data center; Data security and confidentiality (64%) , followed by Full operational control (51%) emerge out as the major reasons for opting for Captive Datacenters. Among the intenders of Captive datacenters; Data security & confidentiality (77%); followed by Complete operational control/ease of managing (62%) emerge as the major reasons for going for Captive datacenters.
*Statistically invalid sample
Figures in %Q: What are the reasons for opting captive datacenters in your organizations?
© 2009 IDC 58
Services provided by third-party to manage captive data centers
Of the organizations using Captive Datacenter – third party managed; most of the times Hardware Support (78%); followed by Network Management Support (67%) and Security Management (56%) are the services provided by Third Party Vendor. In near future; highest growth is expected in Application management/Application Performance services.
53.0
53.0
56.0
67.0
78.0
27
57
67
64
62
73
87
21.0
48.0
Storage Services
Server Management
Application Management / ApplicationPerformance
Software Support
Security Management (e.g., VPN,firewall.)
Network Management (LAN includingRouter)
Hardware Support
Current By 2011
Base: 35
Figures in %
Q: Which services are provided/you are planning to outsource to third party service providers in your organization?
© 2009 IDC 59
Adoption of Server Virtualization – Overall /Segment wiseAdoption of Server Virtualization – Overall /Segment wise
30.3
15.9
Medium (44) Large (129)
Future Adoption by 2011
Virtualized27.8%
Not Virtualized
72.2%
Current Adoption in 2009
Virtualized19.7%
Not Virtualized
80.3%
37.3
24.3
Medium (44) Large (129)
Figures in %
Figures in %
By 2009, only 19.7% organizations have adopted server virtualization with large organizations leading the way with 30.3% adoption whereas only 15.9% medium organizations have virtualized their servers. Going forward by 2011, it is expected that around 27.8% organizations will adopt server virtualization in India.
© 2009 IDC 60
Adoption of Server Virtualization – Overall / Vertical wiseAdoption of Server Virtualization – Overall / Vertical wise
25.6 24.0
4.3
40.6
29.7
IT/ITES (25)* BFSI (26)* Communication &Media (11)*
Manufacturing (69) Others (42)
33.2 31.5
10.7
49.0
36.3
IT/ITES (25)* BFSI (26)* Communication &Media (11)*
Manufacturing (69) Others (42)
Figures in %
Figures in %
In 2009; IT/ ITeS & BFSI are the verticals wherein we see the maximum adoption of server virtualization with 40.6% and 29.7% organizations virtualizing their servers respectively. In 2011 also it will be IT/ITeS and BFSI verticals which will lead the virtualization adoption among Indian Organizations
Adoption in 2008-2009
Virtualized19.7%
Not Virtualized
80.3%
Adoption in 2010-2011
Virtualized27.8%
Not Virtualized
72.2%
*Statistically invalid sample
* Others Include Government & Education, E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 61
Virtualization—Drivers and restraintsVirtualization—Drivers and restraints
To reduce costs (66%) To help in
improving resource
utilizations (62%) To improve energy efficiency (52%)
To ease testing and
development of applications
(45%)To reduce the time in buying and installing a server (13%)
To simplify management/maintenance
(64%)
DR
IVERS
RESTR
AIN
TS
Lack of awareness/don’t fully understand
the benefits (78%)
Initial investment is too
high/virtualization software is very expensive (15%)
Lack of technical expertise (17%)
© 2009 IDC 62
Business impact/challenges faced due to power/cooling issues for captive data centers
54 54
30
18
32
2326
1714
1113
57
9
37
14
33
1
15
0
10
20
30
40
50
60
Overall (60) Medium (9*) Large (51)
Server or System Dow ntime Datacenter Outage Increased Operational Costs
Hardw are Damaged Low ered Customer Satisfaction Constrained deployment of new servers/systems
Server/System downtime (54%) remains the top crib of the organizations deploying captive datacenters among all the segments; followed by Datacenter Outage (30%) and Increased operational costs (23%).
*Statistically invalid sample
Q: What are the business impacts faced by your organization due to issues with power and cooling?
© 2009 IDC 63
Type of challenges across organizations
Challenges All organizations (60) Medium (9*) Large (51)
Composite score on 10-point scale*
Power Costs/Spending on Electricity 6.86 6.67 6.89
Availability of Power Supply 6.45 8.67 6.11
Lack of Environmental Monitoring and Management tools 5.77 7.67 5.47
Inadequate/Outdated Power & Cooling Equipment such as UPS, PDUs, Generators, AC Equipment etc.
5.68 6.33 5.58
Lack of Air Flow 5.00 5.00 5.00
Floor or RACK Space/densities 4.59 4.00 4.69
High Density Systems installed (such as Blades/Small form factor rack servers) 3.64 1.33 4.00
* Respondents ranked the above challenges on a 10-point scale (10 being “Extremely Challenging” and 1 being “Not at all Challenging”). Composite
scores are generated. *Statistically invalid sample
Among the organizations deploying a captive datacenter ;Power Costs/Spending on Electricity , followed by Availability of Power supply come up as the major challenges faced by the organizations.
Q: On a scale of 1-10, please rate the following issues you face with power and cooling in your datacenter?
© 2009 IDC 64
Likeliness to implement various power/cooling solutions across organizations
Power/cooling solutions All organizations (60) Medium (9*) Large (51)
Composite score on 10-point scale*
Room level solutions: Constructing bigger datacenter, bring additional power, better HVAC* systems etc
5.92 5.33 6.02
System/server level solutions: Reduce servers through consolidation/ virtualization or buy more power efficient servers etc
5.80 4.45 5.97
Consulting services: Outsourcing datacenter or collocation/hosting the datacenter, use services to analyze the thermal mapping to better understand the heat flow
4.71 4.67 4.73
Rack level solutions: Install supplemental cooling or other adjustments around the racks that improve air-flow
4.71 4.33 4.78
* Respondents ranked the above power/cooling solutions on a 10-point scale (10 being “Extremely Likely” and 1 being “Not at all Likely”). Composite
scores are generated.
*Statistically invalid sample
Most of the organizations intended to construct bigger datacenters to bring additional power, closely followed by virtualizing the existing servers to optimize the power requirements. Then comes the option to outsource datacenter to third party.
Q: On a scale of 1-10, please rate how likely are you to implement the following power and cooling solutions?
© 2009 IDC 65
Actions taken by organizations to deal with power/cooling issues
Power/cooling solutions All organizations (60)
Room level solutions
Bring additional power to datacenter from utility company 40%
Modernize/replace HVAC systems 32%
Increase the size of datacenter footprint 32%
Clean out cables in raised floor to improve air flow 24%
Increase the no of HVAC/CRAC systems 20%
Implement hot/cold aisle rack configuration 16%
System level solutions
Install more energy efficient servers 65%
Use power management software 23%
Server consolidation/Server Virtualization/Reduce number of installed servers 18%
Consulting services
Use Datacenter Engineering and Design Services to assess and rearchitect the datacenter 60%
Use a collocation or hosting facility 35%
Use Thermal Mapping and Computational Fluid Dynamics (CFD) assessments 15%
Q: Which of the following actions you take to deal with power and cooling issues?
© 2009 IDC 66
Actions taken by organizations to deal with power/cooling issues
Power/cooling solutions All organizations (60)
Rack level solutions
Reduce/Clean up Cabling in the rack to improve airflow 62%
Install supplemental rack cooling such as AC units 19%
Racks with high percent open area doors ---> improve air flow 16%
Use metered rack mount PDU – manage power usage per rack 15%
Use Fans to improve air flow 14%
© 2009 IDC 67
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 68
Recommendations & Key Take Aways
Tap the organizations’ demand for environment friendly & energy efficient data centers; Green data centers to rule the market moving ahead
Growing traction for monthly and hourly charges on pay-per-use model. Pay per use model to come to the forefront even for the power consumption
Increasing demand for cloud computing services starting from IaaS and SaaS; 2011-12 to be the year for cloud computing
Increased demand from SMEs with lower values; commit resources in small numbers
Focus shifting from collocation to managed services driven by high margins
Key verticals to focus – BFSI & Telecom; all customer driven verticals
© 2009 IDC 69
© 2009 IDC 70
Third Party Datacenter Findings
Overall Datacenter Market
Market Sizing Approach & Executive summary
Background
Content
Vendor SWOT analysis
Recommendations
Annexure
Captive Datacenter Findings
© 2009 IDC 7171
Approximate number of Datacenter
Total Number of Racks
Total Number of
Servers
Average number of servers per
Rack
Total Power Requirement
in KVA
Total Cooling Requirement in
Tonne
Server Closet /Server Room (<500 Sq Feet)
27556 91761 165336 1.80 229404 89687.26
Localized Data enter (500-999 Sq Feet)
3059 16302 57058 3.50 40756 15933.71
Mid-Tier Data Center (1000-4999 Sq Feet)
459 16081 72363 4.50 40202 15717.22
Enterprise Class DataCenter (+5000 Sq Feet)
237 27535 158328 5.75 68838 26912.95
Total 31311 151680 453085 379199 148251
Power Usage analysis in Datacenter Market in India – Captive Datacenter
© 2009 IDC 7272
Approximate number of Datacenter
Total Number of Racks
Total Number of
Servers
Average number of servers per
Rack
Total Power Requirement
in KVA
Total Cooling Requirement in
Tonne
<10,000 Sq Feet 36 2727 10909 4.00 13636 16090
10,000-24,999 Sq Feet 18 7636 32455 4.25 38182 45054
25,000 – 50,000 Sq Feet 10 9697 43636 4.50 48485 57212
> 50,000 Sq Feet 4 6667 33333 5.00 33333 39333
Total 68 26727 120333 133636 157691
Power Usage analysis in Datacenter Market in India – Third Party Datacenter
* Above Data center classification has been done on the basis of raised floor area.
© 2009 IDC 73
Type of Application hosted at third party datacenter
Q: What type of applications you host/plan to host at your Third Party Datacenter?
Base 23*
56
79
96
87
17
26
43
70
83
83
30
35
Cloud services
Peripheral application not critical tobusiness need domain names / games
Business Continuity and disasterrecovery.
Critical to business need Applicationlike ERP / SCM / CRM etc.
Website hosting
Collaborative applications
By 2011 CurrentFigures in %
Website Hosting (83%) and the Collaborative applications (83%) turn up as the major applications hosted at third party- hosted datacenters. However very few organizations (17%) host Cloud Services in the case of third party hosted datacenters.
*Statistically invalid sample
Third Party Data Center - Hosted
© 2009 IDC 74
Space allocated for captive datacenters (In sq. ft.)
12
22
810
48
51
47
28
48
35
45
59
24
21
25
38
18
39
36
1213
4
16
26
1210
19
16
3
86
0
10
20
30
40
50
60
Overall(173) Medium(44) Large(129) BFSI(26)* Manufacturing(69) IT/ITES(25)* Communication &Media11*)
Govt &Education(18)*
Others(24)*
< 100 Sq.ft. 100-499 Sq.ft. 500-999 Sq.ft. 1000-4999 Sq.ft. 5000 & above Sq.ft.
Captive Data Center
Mean values in square feet840 564 1012 1447 780 1095 850 580 640
Figures in %
*Statistically invalid sample
Of the organizations having a captive datacenter; 48% have allocated a floor space 100-499 sq feet, followed by around 24% having allocated 500-999 sq feet to their datacenters. The mean floor space allocated is highest in BFSI (1447 Sq feet); followed by IT/ITeS (1095 Sq feet).
Q: What is the space of your datacenter in terms of sq feet?
* Others Include E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 75
TOM Awareness - Power & Cooling Solutions Vendors
In case of Organizations deploying captive datacenters; Liebert/ Emerson (26%) closely followed by APC/MGE (24%) have the maximum top of the mind recall among the vendors providing Power and Cooling Solutions. It is also noteworthy that Eaton/ Powerware has a low top of the mind of around 9%.
Base : 173
Captive Data Center
Figures in %
IBM14%
HP15%
Others12%
Eaton9%
Liebert/Emerson26.0%
APC/MGE24.0%
* Others include Numeric, Bluestar, Voltas etc.
Q: Which vendor primarily comes to your mind when you think about power and cooling solutions?
© 2009 IDC 76
Future plans in terms of datacenter/s expansion/migration/upgradation in next 2 years
1911
2227
16 16
36
11
21
25
32
23
31
23
34
19
22
29
6 7 59
4
11
4
50 50 5042
5246 45
55
46
Overall (173) Medium (44) Large (129) BFSI (26)* Manufacturing(69)
IT /ITES (25)* Communication& Media (11)*
Govt &Education (18)*
Others (24)*
Increasing the capacity of existing data center/s by re-designing it/them Upgrading to anew datacenter/s by building new one/sPlanning to migrate to a third party service provider No future plan/s as such
Of the organizations having a Captive Datacenter setup; around 19% are planning to increase the capacity of the existing datacenters by redesigning them & around 25% are planning to upgrade by building a new one. The tendency to shift to Third party datacenters is highest in Govt. /Education Vertical (11%) closely followed by manufacturing (9%).
Captive Data Center
Figures in %
*Statistically invalid sample
Q: What are your future plans in terms of datacenter expansion, migration or up gradation in next 2 years?
* Others Include E-Commerce, Resource industries, Transportation and trans-services, etc
© 2009 IDC 77
Major reasons to outsource to third party in case of Captive Datacenters
Captive Data Center
Of the organizations having Captive datacenters – managed by Third Party ; major reasons for outsourcing to third party turn out to be the reliability of the vendor (72%), cost reduction (67%) & to lay focus on core competencies (61%).
16
46
46
52
61
67
72
Part of outsourcing contract
To use third party expertise
Lack of skill sets in house
Improve operational efficiency
To focus on core competencies
Reduce cost
Vendor reliability
Base: 35
Figures in %Q: What are the reasons to migrate to third party datacenter in near future
© 2009 IDC 78
31
35
37
37
41
42
46
50
50
66
Increasing data volume
Compliance to International standard
BCDR
Business Expansion
Rely on third party expertise
Redundancy
Cost benefit
Capex
To focus on core business
In-house skill shortage
Reasons to go for Third Party Data Center
Q: What are the driving factors to outsource certain services to third party service provider?
Third Party Data Center
Figures in %
The major reasons to go for a third party datacenter turn out to be the shortage of in-house skills (66%) , to lay focus upon core business (50%) and to avoid Capex (50%).
Base: 52
© 2009 IDC 79
Base 52
Duration of agreement/ Average annual spend Duration of agreement/ Average annual spend
17%
32%14%
3%
34%
1 year 1 year to less than 3 years3 years to less than 5 years 5 years to less than 10 years10 years or longer
Average duration of agreement: 4.1 years
Duration of agreement
Third Party Data Center
12
26 28
34
Less than 10 Lacs 10 Lacs - 50 Lacs51 Lacs - 100 Lacs 101 Lacs - 500 Lacs
Annual spend
Average annual
spend INR 60.5 lakhs
© 2009 IDC 80
Degree of satisfaction with third-party service provider
Satisfaction level Third Party Datacenter
Very satisfied 89
Somewhat satisfied 10
Can’t Say / Don’t Know 1
Very dissatisfied -
Weighted average score – Third Party Datacenter : 3.89/4
Weighted average score is obtained from the product of the number of respondents who said that they go for third-party data center and their relative degree of satisfaction with it.
Third Party Data Center
Major Pain Areas with the third party service providers -
Figures in %
1) Not able to provide low end services
2) Lack of support/Service levels for the function have deteriorated
3) Confidentiality/security of data
4) Unavailability to commissioning service in time.
Q: Considering all aspects and overall experience, are you satisfied or dissatisfied with third party service providers?
© 2009 IDC 81
Future Plans
6%
81%
13%
Planning to migrate to Captive Data CenterPlanning to shift to other service providerNo Plans as such
Major Reasons to migrate to Captive Data Center
1) Loss of control
2) Vendors do not meet SLAs
3) Vendor’s lack of understanding my solution needs
4) Can do it better internally – Better monitoring / Ease of Managing
5) Proximity
Base 52
Third Party Data Center
Of the Third party datacenter users – both Collocated and Hosted; around 13% are planning to migrate to other service provider while around 6% are planning to shift to captive datacenters. Loss of Control and Vendors not adhering to the SLAs turn out the major reasons to move to Captive Datacenters
© 2009 IDC 82
Major reasons for not deploying/outsourcing any datacenter services
Non Users
Lack of real need (72%) & No visibility of any competitive benefit for the organization (41%) turn up as the major barriers/reasons for not deploying or outsourcing any datacenter services among the non users.
18
32
36
41
72
Complexities involved in settingup & running of data centers
High maintenance cost
High Capex
No competitive benefit
No real need
Figures in %
Base 319
Q: What are the major reasons for not deploying/outsourcing any type of datacenter services?