Country's energy shortfall could dampen projections that data center industry could double in the next two years.
The biggest challenge to India's booming data storage industry is the country's energy shortfall, according to a new report by research firm Gartner.
Total data center capacity in India is expected to reach 5.1 million square feet by 2012, representing 31 percent growth from 2007 to 2012. And within the next two years, the industry is projected to double, the report said.
That growth is being driven by demands of the financial, telecom, manufacturing and service sectors.
In the long run, India has the potential to become a hub for data centers for the Middle East, East Africa and Southeast Asia.
Storage demand has increased from one petabyte in 2001 to 34 petabytes in 2007, said Nareshchandra Singh, principal research analyst for Gartner.
However, India's estimated 15-percent energy shortfall has already affected data centers in Delhi, Mumbai and Bangalore, he said 15 percent to 17 percent energy shortfall during peak demand (see India to remove cap on wind incentives).
"The biggest challenge is the concern about a lack of energy supplies in the country," Singh said.
Gartner recommended that Indian companies incorporate virtualization and other energy-savings measures (see Data centers: $7B in annual energy costs). The report also suggested combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil.
"Setting up energy-efficient data centers is critical," Singh said. "The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever-increasing energy demands of the local data center market."
Source: http://www.cleantech.com/
Monday, December 29, 2008
Gartner Says Data Center Capacity in India to Surpass 5 Million Square Feet by 2012
India Has the Potential to Emerge as the Hub for Data Center Hosting for Nearby Markets Such As the Middle East, East Africa and Southeast Asia in the Long Term
The total data center capacity in India is expected to reach 5.1 million square feet by 2012 and is projected to grow 31 percent from 2007 to 2012, according to Gartner, Inc. The data center industry in India is expected to double its capacity in the next two years, and captive and hosted data centers capacities will grow at comparable rates. In the long term, India has the potential to become a hub for data center hosting for nearby markets such as Middle East, East Africa and Southeast Asia. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India.
“There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes by 2007, thereby increasing the data center uptake in companies”, said Mr. Nareshchandra Singh, principal research analyst, Gartner. “The potential for Indian data centers is large with the external-controller-based (ECB) market expected to grow by more than 22 percent in 2008, making India the fourth-largest market for ECB storage in the Asia/Pacific region”.
Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfill demand arising from small and midsize users. (See Table 1).
Table1: Data Center Space Forecast for India (Square Feet in Thousands)
2007 2008 2009 2010 2011 2012 CAGR (2007 to 2012)
Captive* 726 1,209 1,723 2,145 2,391 2,571 29%
Hosted* 611 1,090 1,749 2,108 2,371 2,573 33%
Total 1,337 2,299 3,472 4,252 4,762 5,143 31%
*Note: Only facilities with gross space capacity of and above 1,000 square feet are included. Captive data centers include those being outsourced to system integrators (SIs).
The growth in storage demand has resulted in existing data center capacities being fully utilized and, consequently, the need has arisen to build significantly more capacity. Companies are also investing in additional data centers to enhance or meet disaster recovery and business continuity requirements.
However, the development of data centers in India faces a few major obstacles, including security concerns and data retention worries. “The biggest challenge is the concern about a lack of energy supplies in the country,” said Mr Singh. “Even several Tier 1 cities, such as Delhi, Mumbai and Bangalore, have experienced several power blackouts each year. This can become a serious issue as data center energy requirements in India continue to grow with the rapid implementation of high-density equipment”.
Gartner recommends that Indian companies building data centers need to incorporate innovative designs and adopt the concept of Green IT and virtualisation technologies. For example, new data centers should use combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil. Cogeneration not only is fundamentally more efficient than traditional power generation, but also has the potential of pulling in the heat generated from solar energy. Companies that adopt these technologies and processes at the outset will attain the highest level of energy efficiency.
The ‘Green IT’ agenda is gaining momentum in India and it has attracted private and government funding. Investing in Green IT provides two distinct benefits to the companies, namely; brand value as an environmentally friendly company and the significant reduction in the energy cost component of the IT budget. “Setting up energy-efficient data centers is critical. The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever increasing energy demands of the local data center market. Around 30 percent of energy coming from solar power for mid-size data centers of around 10,000 square feet within the next four years should be the government’s goal,” said Mr. Singh.
Source: Gartner
The total data center capacity in India is expected to reach 5.1 million square feet by 2012 and is projected to grow 31 percent from 2007 to 2012, according to Gartner, Inc. The data center industry in India is expected to double its capacity in the next two years, and captive and hosted data centers capacities will grow at comparable rates. In the long term, India has the potential to become a hub for data center hosting for nearby markets such as Middle East, East Africa and Southeast Asia. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India.
“There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes by 2007, thereby increasing the data center uptake in companies”, said Mr. Nareshchandra Singh, principal research analyst, Gartner. “The potential for Indian data centers is large with the external-controller-based (ECB) market expected to grow by more than 22 percent in 2008, making India the fourth-largest market for ECB storage in the Asia/Pacific region”.
Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfill demand arising from small and midsize users. (See Table 1).
Table1: Data Center Space Forecast for India (Square Feet in Thousands)
2007 2008 2009 2010 2011 2012 CAGR (2007 to 2012)
Captive* 726 1,209 1,723 2,145 2,391 2,571 29%
Hosted* 611 1,090 1,749 2,108 2,371 2,573 33%
Total 1,337 2,299 3,472 4,252 4,762 5,143 31%
*Note: Only facilities with gross space capacity of and above 1,000 square feet are included. Captive data centers include those being outsourced to system integrators (SIs).
The growth in storage demand has resulted in existing data center capacities being fully utilized and, consequently, the need has arisen to build significantly more capacity. Companies are also investing in additional data centers to enhance or meet disaster recovery and business continuity requirements.
However, the development of data centers in India faces a few major obstacles, including security concerns and data retention worries. “The biggest challenge is the concern about a lack of energy supplies in the country,” said Mr Singh. “Even several Tier 1 cities, such as Delhi, Mumbai and Bangalore, have experienced several power blackouts each year. This can become a serious issue as data center energy requirements in India continue to grow with the rapid implementation of high-density equipment”.
Gartner recommends that Indian companies building data centers need to incorporate innovative designs and adopt the concept of Green IT and virtualisation technologies. For example, new data centers should use combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil. Cogeneration not only is fundamentally more efficient than traditional power generation, but also has the potential of pulling in the heat generated from solar energy. Companies that adopt these technologies and processes at the outset will attain the highest level of energy efficiency.
The ‘Green IT’ agenda is gaining momentum in India and it has attracted private and government funding. Investing in Green IT provides two distinct benefits to the companies, namely; brand value as an environmentally friendly company and the significant reduction in the energy cost component of the IT budget. “Setting up energy-efficient data centers is critical. The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever increasing energy demands of the local data center market. Around 30 percent of energy coming from solar power for mid-size data centers of around 10,000 square feet within the next four years should be the government’s goal,” said Mr. Singh.
Source: Gartner
Tuesday, December 16, 2008
Top 10 CIO challenges/technologies for 2009
Top 10 CIO challenges for 2009:
* Budgeting and ROI
* Keeping operating costs in check without compromising on quality
* Recruiting the employees with right skill sets without affecting OPEX
* Scalability and futuristic architecture with less dent on CAPEX
* Enterprise data protection/Privacy
* Remote management and high uptime even in remote locations
* Assessment, partnering and implementation
* Consolidating common IT business/mission functions
* Unifying disparate systems across similar business lines
* Integrating legacy applications
* Budgeting and ROI
* Keeping operating costs in check without compromising on quality
* Recruiting the employees with right skill sets without affecting OPEX
* Scalability and futuristic architecture with less dent on CAPEX
* Enterprise data protection/Privacy
* Remote management and high uptime even in remote locations
* Assessment, partnering and implementation
* Consolidating common IT business/mission functions
* Unifying disparate systems across similar business lines
* Integrating legacy applications
Saturday, December 13, 2008
Green IT technologies gaining popularity in Asia Pacific
Analyst firm IDC has found that Green IT technology is gaining strong momentum and mindshare across the region.
IDC announced as part of the results it obtained in a survey on power management, automation and virtualization in data centers. amongst data center managers in the Asia Pacific region, excluding Japan (APEJ).
According to IDC, the survey of nearly 600 respondents, found that Green IT technology is gaining strong momentum and mindshare across the region as rising power costs in datacenter operations are becoming a top concern of IT decision makers. In the report IDC said that applications that can help to better manage power and cooling and improve management, automation, load and capacity administration of these servers, will be in demand. IDC has classified these applications into three main categories: power monitoring and management tools, asset management and automation tools, and server virtualization software. IDC says that Green IT software can enable significant economical benefits as well as environmental sustainability through the efficient management of existing hardware or services within data centers.
More than 75% of respondents in the survey said that their decision to implement green solutions is largely driven by benefits from cost savings, followed by corporate social responsibility (CSR) and compliance. "As businesses in APEJ continue to grow, power consumption in energy hungry datacenters also increases. Green IT technologies has become even more appealing as businesses look towards energy efficient solutions to reduce power consumption and to alleviate the costs," says Adren Lim, Market Analyst of IDC’s Asia/Pacific Software Research.
The report also found that software was playing an increasingly important part of an attempt to green a data center saying that, "...While mainstream green IT in the data center is largely a combined effort of more energy-efficient hardware, best practices, and consultation services, software is playing an increasingly important role in facilitating the whole "green engine" to achieve business and environmental sustainability".
"A large portion of Green IT practices and supporting software revolve around virtualization products, but equally important, is the management of these consolidated virtual and physical assets that will bring value through lower power, hardware, and manpower costs," Lim added.
When asked if businesses were adopting Green IT solutions because of or despite of the economic downturn, Lim said, "Green IT has been gaining good mind share in APEJ even before the downturn and is poised to become the next big trend. The current economic climate should further accelerate the cost saving advantages Green IT can offer". He adds that it is good to bear in mind that this report looks at Green IT only from the software perspective, which is a component within the whole "green" engine.
IDC announced as part of the results it obtained in a survey on power management, automation and virtualization in data centers. amongst data center managers in the Asia Pacific region, excluding Japan (APEJ).
According to IDC, the survey of nearly 600 respondents, found that Green IT technology is gaining strong momentum and mindshare across the region as rising power costs in datacenter operations are becoming a top concern of IT decision makers. In the report IDC said that applications that can help to better manage power and cooling and improve management, automation, load and capacity administration of these servers, will be in demand. IDC has classified these applications into three main categories: power monitoring and management tools, asset management and automation tools, and server virtualization software. IDC says that Green IT software can enable significant economical benefits as well as environmental sustainability through the efficient management of existing hardware or services within data centers.
More than 75% of respondents in the survey said that their decision to implement green solutions is largely driven by benefits from cost savings, followed by corporate social responsibility (CSR) and compliance. "As businesses in APEJ continue to grow, power consumption in energy hungry datacenters also increases. Green IT technologies has become even more appealing as businesses look towards energy efficient solutions to reduce power consumption and to alleviate the costs," says Adren Lim, Market Analyst of IDC’s Asia/Pacific Software Research.
The report also found that software was playing an increasingly important part of an attempt to green a data center saying that, "...While mainstream green IT in the data center is largely a combined effort of more energy-efficient hardware, best practices, and consultation services, software is playing an increasingly important role in facilitating the whole "green engine" to achieve business and environmental sustainability".
"A large portion of Green IT practices and supporting software revolve around virtualization products, but equally important, is the management of these consolidated virtual and physical assets that will bring value through lower power, hardware, and manpower costs," Lim added.
When asked if businesses were adopting Green IT solutions because of or despite of the economic downturn, Lim said, "Green IT has been gaining good mind share in APEJ even before the downturn and is poised to become the next big trend. The current economic climate should further accelerate the cost saving advantages Green IT can offer". He adds that it is good to bear in mind that this report looks at Green IT only from the software perspective, which is a component within the whole "green" engine.
Friday, December 5, 2008
Enterprises look at BI and analytics to beat recession
With global economic recession having an impact on almost all industries, Businesses Intelligence and Analytics can present companies with an effective solution to the challenges they now face.
Downtime is when revenues nosedive and enterprises look at issues affecting them more seriously than ever before. Adopting business intelligence and analytics solutions can help enterprises get to the heat of issues and take decision timely decisions.
Dr. Mukund Deshpande, senior architect (BI) with Persistent Systems, Pune, says that enterprises are often faced with questions like: Which product promotions have the biggest impact on revenue? How are sales across regions, products? Which of my customers are most likely to switch to my competitor? And so on!
According to the senior architect, the profitability of any enterprise lies in identifying key issues and taking appropriate decisions at right time. To accommodate the exponential growth in data generated by business processes, organizations have invested heavily in building data warehouses that store this data and allow it to be easily queried. However, even with all of this data available, there are a few applications that exist which help business users with their decision-making.
Dr. Deshpande says the increasing global competition and the need for sustainable growth is driving businesses to increasingly looking to analytic applications to provide critical business insights. Whether focused on achieving a return on asset investments, understanding the competitive landscape, improving product and service quality, analysts and executives need to improve decision-making.
While data mining and analytics applications help business in decision-making, they are not widely adopted because of the unique nature of every business. A deep understanding of the business domain as well as expertise in data mining algorithms is required to build applications that are relevant to business users.
The biggest adaptors of BI and analytics in India or elsewhere are large enterprises in the business of telecom, retail, and BSFI. The economic downtime is when enterprises in these verticals fight it out for survival leading to greater demand for applications that can help in proper decision making.
Analytics for KPOs
How can KPOs leverage existing data to enhance their offerings and drive revenues by increasing their customer footprint?
As the global KPO landscape matures and becomes increasingly competitive, leading organizations are looking toward analytics to provide critical insights for driving revenue and continuous innovation. Customers are looking to their KPO partners to provide actionable insights that increase flexibility and responsiveness to anticipate customer and market demands, says Dr. Deshpande.
According to senior architect analytics, professionals are partnering with KPOs to extend core analytics capabilities to provide their customers with the kind of insights they are truly looking for. Leveraging on fully integrated and extensible analytics solutions, KPOs can exceeded their customers' expectations and service level agreement, he adds.
He said that Persistent has been in the business of helping ISVs develop BI solutions for nearly two decades. "In fact, Persistent can point to many industry-leading BI solutions in the market today where we have contributed to product development. This intimate understanding of the underpinnings of market leading solutions, coupled with our solution accelerators translates to rapid time to value for your BI projects," he says.
Specializing in predictive modeling techniques such as boosting, association rule mining, clustering, neural networks, regression, support vector machines, time series analysis, decision trees and Bayesian inference, and optimization methods such as linear programming, nonlinear methods, and genetic algorithms, Persistent's BI experts can jumpstart your BI initiative.
source: http://www.ciol.com/
Downtime is when revenues nosedive and enterprises look at issues affecting them more seriously than ever before. Adopting business intelligence and analytics solutions can help enterprises get to the heat of issues and take decision timely decisions.
Dr. Mukund Deshpande, senior architect (BI) with Persistent Systems, Pune, says that enterprises are often faced with questions like: Which product promotions have the biggest impact on revenue? How are sales across regions, products? Which of my customers are most likely to switch to my competitor? And so on!
According to the senior architect, the profitability of any enterprise lies in identifying key issues and taking appropriate decisions at right time. To accommodate the exponential growth in data generated by business processes, organizations have invested heavily in building data warehouses that store this data and allow it to be easily queried. However, even with all of this data available, there are a few applications that exist which help business users with their decision-making.
Dr. Deshpande says the increasing global competition and the need for sustainable growth is driving businesses to increasingly looking to analytic applications to provide critical business insights. Whether focused on achieving a return on asset investments, understanding the competitive landscape, improving product and service quality, analysts and executives need to improve decision-making.
While data mining and analytics applications help business in decision-making, they are not widely adopted because of the unique nature of every business. A deep understanding of the business domain as well as expertise in data mining algorithms is required to build applications that are relevant to business users.
The biggest adaptors of BI and analytics in India or elsewhere are large enterprises in the business of telecom, retail, and BSFI. The economic downtime is when enterprises in these verticals fight it out for survival leading to greater demand for applications that can help in proper decision making.
Analytics for KPOs
How can KPOs leverage existing data to enhance their offerings and drive revenues by increasing their customer footprint?
As the global KPO landscape matures and becomes increasingly competitive, leading organizations are looking toward analytics to provide critical insights for driving revenue and continuous innovation. Customers are looking to their KPO partners to provide actionable insights that increase flexibility and responsiveness to anticipate customer and market demands, says Dr. Deshpande.
According to senior architect analytics, professionals are partnering with KPOs to extend core analytics capabilities to provide their customers with the kind of insights they are truly looking for. Leveraging on fully integrated and extensible analytics solutions, KPOs can exceeded their customers' expectations and service level agreement, he adds.
He said that Persistent has been in the business of helping ISVs develop BI solutions for nearly two decades. "In fact, Persistent can point to many industry-leading BI solutions in the market today where we have contributed to product development. This intimate understanding of the underpinnings of market leading solutions, coupled with our solution accelerators translates to rapid time to value for your BI projects," he says.
Specializing in predictive modeling techniques such as boosting, association rule mining, clustering, neural networks, regression, support vector machines, time series analysis, decision trees and Bayesian inference, and optimization methods such as linear programming, nonlinear methods, and genetic algorithms, Persistent's BI experts can jumpstart your BI initiative.
source: http://www.ciol.com/
Monday, November 17, 2008
Global outsourcing and offshoring trends for 2009
The financial crisis and global recession will accelerate adoption of global outsourcing and offshoring as strategic business tools as organisations respond to economic adversity with a forceful push toward cost-reduction according to leading sourcing advisory firm EquaTerra. Factors expected to impact outsourcing and offshoring over the next year are:
Globalisation will continue but at a slower pace: Numerous factors, including the severe global economic downturn, repeated product health/safety scares related to Chinese goods, a collapse of commodity prices (critical to supporting many emerging market economies) and the election of a new U.S. administration concerned with the loss of domestic jobs will slow globalisation and one of its key manifestations, the global sourcing of services. But the compelling business benefits of global sourcing, especially in tough economic times, will continue to drive growth.
Reassessment of current global outsourcing strategies/destinations: As buyer focus shifts to cost reduction and cost avoidance, organisations will carefully analyse current and future outsourcing efforts and service provider partners to ensure they are getting services from the most cost-effective location.
Steep learning curves: As buyers turn to outsourcing/offshoring to help weather economic turbulence, they will need to consider mitigating factors, including service provider capacity levels, prior direct experience and whether engaging a service provider expands or consolidates the supplier base, supplier consolidation/rationalisation is viewed as a means to gain economies of scale, reduce overall costs and speed implementation of new efforts to meet shorter term business needs.
Volatility in foreign exchange markets: Outsourcing buyers and sellers must become more effective/efficient at hedging against currency fluctuations that often negatively impact local currencies in emerging markets, creating instability in cost structure/pricing/profit margins. The seesawing value of the dollar will make calculating the true costs of outsourcing/offshoring more complicated, challenging buyers and service providers to plan/project longer-term pricing, cost and profitability levels. Efforts to do this should include explicit contractual contingencies and, when possible, spreading global service delivery efforts across multiple markets.
Wage inflation in offshoring markets will abate, at least temporarily: As Western markets pause to digest events and determine a go-forward strategy,demand for global outsourcing services will slow temporarily, curbing the recent trend toward wage inflation in offshoring markets and helping top outsourcing destinations remain competitive.
Evolving outsourcing business model: Buyers will continue to shift away from the use of project-based contract labor in favor of longer term, formalised outsourcing relationships. By committing to longer term and larger scale deals, buyers can get better pricing from service providers, better levels of service and lock-in longer term cost savings strategies.
Move toward flexible service delivery models and acquiring in-house skills needed to manage sourcing successfully: As buyers gain outsourcing/offshoring management experience, they will seek greater flexibility in service delivery models to fit form to function and tasks. The result will be a mix of domestic, nearshore and offshore shared services/captive centres and other outsourcing efforts that will evolve with the marketplace. Organisations will also place greater emphasis on defining, acquiring and transferring skills needed to successfully govern outsourcing/offshoring efforts.
Globalisation will continue but at a slower pace: Numerous factors, including the severe global economic downturn, repeated product health/safety scares related to Chinese goods, a collapse of commodity prices (critical to supporting many emerging market economies) and the election of a new U.S. administration concerned with the loss of domestic jobs will slow globalisation and one of its key manifestations, the global sourcing of services. But the compelling business benefits of global sourcing, especially in tough economic times, will continue to drive growth.
Reassessment of current global outsourcing strategies/destinations: As buyer focus shifts to cost reduction and cost avoidance, organisations will carefully analyse current and future outsourcing efforts and service provider partners to ensure they are getting services from the most cost-effective location.
Steep learning curves: As buyers turn to outsourcing/offshoring to help weather economic turbulence, they will need to consider mitigating factors, including service provider capacity levels, prior direct experience and whether engaging a service provider expands or consolidates the supplier base, supplier consolidation/rationalisation is viewed as a means to gain economies of scale, reduce overall costs and speed implementation of new efforts to meet shorter term business needs.
Volatility in foreign exchange markets: Outsourcing buyers and sellers must become more effective/efficient at hedging against currency fluctuations that often negatively impact local currencies in emerging markets, creating instability in cost structure/pricing/profit margins. The seesawing value of the dollar will make calculating the true costs of outsourcing/offshoring more complicated, challenging buyers and service providers to plan/project longer-term pricing, cost and profitability levels. Efforts to do this should include explicit contractual contingencies and, when possible, spreading global service delivery efforts across multiple markets.
Wage inflation in offshoring markets will abate, at least temporarily: As Western markets pause to digest events and determine a go-forward strategy,demand for global outsourcing services will slow temporarily, curbing the recent trend toward wage inflation in offshoring markets and helping top outsourcing destinations remain competitive.
Evolving outsourcing business model: Buyers will continue to shift away from the use of project-based contract labor in favor of longer term, formalised outsourcing relationships. By committing to longer term and larger scale deals, buyers can get better pricing from service providers, better levels of service and lock-in longer term cost savings strategies.
Move toward flexible service delivery models and acquiring in-house skills needed to manage sourcing successfully: As buyers gain outsourcing/offshoring management experience, they will seek greater flexibility in service delivery models to fit form to function and tasks. The result will be a mix of domestic, nearshore and offshore shared services/captive centres and other outsourcing efforts that will evolve with the marketplace. Organisations will also place greater emphasis on defining, acquiring and transferring skills needed to successfully govern outsourcing/offshoring efforts.
Thursday, November 13, 2008
Outsourcing one bright light in sea of global gloom
Business outsourcing may not be the most glamorous industry in the world but it is one of the few bright lights amid the doom and gloom of the global financial crisis.
The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.
In the Philippines the business process outsourcing (BPO) industry expects growth this year of between 35-40 per cent on revenues of around seven billion dollars.
"We are part of the solution, not part of the problem," Oscar Sanez the chief executive of the Business Processing Association of the Philippines (BPAP) said in a recent interview.
The BPO sector expects annual growth of around 40 per cent with revenues hitting 12 billion dollars by 2010 and employing one million people compared with 300,000 this year.
In India, where the industry generates some 40 million dollars in annual export revenues, the story is much the same although it admits that it could expect some initial pain.
The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.
India leads the world when it comes to outsourcing with more than half the global business while the Philippines is a distant second with around 10 per cent.
Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.
Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told AFP that the crisis would "actually drive more BPO business to the Philippines".
"You will see many more companies having to go offshore just to survive," he said.
He said he expects about 502 million square metres (5.4 billion square feet) of Philippine office space to be leased this year, up 52 per cent from 2007.
India and the Philippines are the preferred destinations for European and American banks and IT companies for outsourcing their back room and call centre operations due to the highly educated work force and English speaking skills in both countries.
Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines will continue to see growth.
"Judging from the investor meetings we've been having recently our clients will want to ramp up their outsourcing activities in order to accelerate cost savings," he said.
"The Philippines is in a very strategic position due to its strong and successful experience with BPO particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times."
He conceded that in the short term there could be a "bit of distraction" due to management and ownership realignments in the banking sector.
"But this should not affect outsourcing operations as these are critical functions especially those that connect with customers," he said.
Some 85 per cent of the BPO business in the Philippines is in banking and comes mainly from the US.
In India the BPO industry expects there will be a short to medium term impact on the sector as much of its business is IT-related.
Some of the pain from the bankruptcy of Wall Street giant Lehman Brothers, the sale of Merrill Lynch and the US government's bailout of insurance giant AIG -- all ravaged by credit woes -- is already being felt, according to industry sources.
But it's still very much a mixed picture in India where companies are at best "cautious" on the outlook for the sector and not peering too far into the future because they say that all the dominoes have yet to fall.
The main industry body said it will look at its sales forecast for this financial year to March 31, 2009, in December -- and says it may be revising expectations downward.
But it's not looking any further forward than the current year in number terms, it said.
Sales growth could fall below 20 per cent this year from 28 per cent last year while decisions on new projects have come to a virtual halt, said Som Mittal, head of the National Association of Software and Services Companies (Nasscom).
"New projects are always the first to feel the hit," said Mittal.
He said sales growth has slowed but added: "Companies are hiring from university campuses for the next quarter," although the frenetic pace has slowed.
"We've got to pay attention to other parts of the world like Japan and the Middle East," said Mittal. "There is no way we can rely so heavily on the US."
Some 60 per cent of India's outsourcing work comes from the US and 30 per cent from Europe with the rest of the world contributing just 10 per cent.
However, Indian firms doing legal outsourcing work are experiencing a mini-boom as a result of the financial turmoil with US bankruptcies, mergers and acquisitions growing by the day and demand growing for help with litigation.
Legal work in India costs a tenth of what US lawyers charge.
Sanez also believes there are many industries outside the banking sector that can be tapped for new business.
"Industries like construction, food, retail and distribution, high tech, heavy industries and the pharmaceutical sectors have yet to be tapped," he said.
The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.
In the Philippines the business process outsourcing (BPO) industry expects growth this year of between 35-40 per cent on revenues of around seven billion dollars.
"We are part of the solution, not part of the problem," Oscar Sanez the chief executive of the Business Processing Association of the Philippines (BPAP) said in a recent interview.
The BPO sector expects annual growth of around 40 per cent with revenues hitting 12 billion dollars by 2010 and employing one million people compared with 300,000 this year.
In India, where the industry generates some 40 million dollars in annual export revenues, the story is much the same although it admits that it could expect some initial pain.
The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.
India leads the world when it comes to outsourcing with more than half the global business while the Philippines is a distant second with around 10 per cent.
Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.
Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told AFP that the crisis would "actually drive more BPO business to the Philippines".
"You will see many more companies having to go offshore just to survive," he said.
He said he expects about 502 million square metres (5.4 billion square feet) of Philippine office space to be leased this year, up 52 per cent from 2007.
India and the Philippines are the preferred destinations for European and American banks and IT companies for outsourcing their back room and call centre operations due to the highly educated work force and English speaking skills in both countries.
Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines will continue to see growth.
"Judging from the investor meetings we've been having recently our clients will want to ramp up their outsourcing activities in order to accelerate cost savings," he said.
"The Philippines is in a very strategic position due to its strong and successful experience with BPO particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times."
He conceded that in the short term there could be a "bit of distraction" due to management and ownership realignments in the banking sector.
"But this should not affect outsourcing operations as these are critical functions especially those that connect with customers," he said.
Some 85 per cent of the BPO business in the Philippines is in banking and comes mainly from the US.
In India the BPO industry expects there will be a short to medium term impact on the sector as much of its business is IT-related.
Some of the pain from the bankruptcy of Wall Street giant Lehman Brothers, the sale of Merrill Lynch and the US government's bailout of insurance giant AIG -- all ravaged by credit woes -- is already being felt, according to industry sources.
But it's still very much a mixed picture in India where companies are at best "cautious" on the outlook for the sector and not peering too far into the future because they say that all the dominoes have yet to fall.
The main industry body said it will look at its sales forecast for this financial year to March 31, 2009, in December -- and says it may be revising expectations downward.
But it's not looking any further forward than the current year in number terms, it said.
Sales growth could fall below 20 per cent this year from 28 per cent last year while decisions on new projects have come to a virtual halt, said Som Mittal, head of the National Association of Software and Services Companies (Nasscom).
"New projects are always the first to feel the hit," said Mittal.
He said sales growth has slowed but added: "Companies are hiring from university campuses for the next quarter," although the frenetic pace has slowed.
"We've got to pay attention to other parts of the world like Japan and the Middle East," said Mittal. "There is no way we can rely so heavily on the US."
Some 60 per cent of India's outsourcing work comes from the US and 30 per cent from Europe with the rest of the world contributing just 10 per cent.
However, Indian firms doing legal outsourcing work are experiencing a mini-boom as a result of the financial turmoil with US bankruptcies, mergers and acquisitions growing by the day and demand growing for help with litigation.
Legal work in India costs a tenth of what US lawyers charge.
Sanez also believes there are many industries outside the banking sector that can be tapped for new business.
"Industries like construction, food, retail and distribution, high tech, heavy industries and the pharmaceutical sectors have yet to be tapped," he said.
Tuesday, November 11, 2008
Recession set to boost outsourcing
Survey of more than 200 outsourcing service suppliers finds 40-plus percent of those polled had seen increased demand levels, despite economic downturn.
Demand for outsourcing is set to outpace business investments in hardware and software as the recession hits home, says a new survey.
The survey, compiled among more than 200 outsourcing service suppliers, including companies such as Accenture, Atos Origin, Capgemini, IBM, Infosys, and Wipro, and EquaTerra's own consultants, found that more than 40 percent of those polled had seen increased demand levels, despite the economic downturn.
Demand was stronger in Europe than North America (64 percent of E.U. advisors cited increased demand compared to 25 percent in the Americas). However, 38 percent cited economic conditions as causing buyers to slow or defer outsourcing efforts.
The survey suggests that outsourcing projects are changing, with a strong focus on quick return on investment replacing longer-term initiatives to improve end-to-end business processes.
Martyn Hart, chairman of the National Outsourcing Association, says, "Outsourcing has always been associated with cost savings and now with all companies setting aggressive cost saving targets for next year we may see more and more outsourcing contracts come to fruition."
There is a also a longer-term trend toward supplier rationalization in order to simplify sourcing and governance efforts. This is because buyers are seeing an increased cost and complexity from employing multiple providers in overlapping functional areas. As Hart explains: "With the focus moving back onto cost as the main deciding factor in outsourcing, having one outsourcing supplier will minimize management, due diligence and supplier selection costs."
Stan Lepeak, EquaTerra's managing director of global research, explains that "leveraging software tools to automate and improve governance operations will be central to achieving business case objectives for multi-provider outsourcing efforts."
Demand for outsourcing is set to outpace business investments in hardware and software as the recession hits home, says a new survey.
The survey, compiled among more than 200 outsourcing service suppliers, including companies such as Accenture, Atos Origin, Capgemini, IBM, Infosys, and Wipro, and EquaTerra's own consultants, found that more than 40 percent of those polled had seen increased demand levels, despite the economic downturn.
Demand was stronger in Europe than North America (64 percent of E.U. advisors cited increased demand compared to 25 percent in the Americas). However, 38 percent cited economic conditions as causing buyers to slow or defer outsourcing efforts.
The survey suggests that outsourcing projects are changing, with a strong focus on quick return on investment replacing longer-term initiatives to improve end-to-end business processes.
Martyn Hart, chairman of the National Outsourcing Association, says, "Outsourcing has always been associated with cost savings and now with all companies setting aggressive cost saving targets for next year we may see more and more outsourcing contracts come to fruition."
There is a also a longer-term trend toward supplier rationalization in order to simplify sourcing and governance efforts. This is because buyers are seeing an increased cost and complexity from employing multiple providers in overlapping functional areas. As Hart explains: "With the focus moving back onto cost as the main deciding factor in outsourcing, having one outsourcing supplier will minimize management, due diligence and supplier selection costs."
Stan Lepeak, EquaTerra's managing director of global research, explains that "leveraging software tools to automate and improve governance operations will be central to achieving business case objectives for multi-provider outsourcing efforts."
Monday, November 10, 2008
Indian cos to cut IT spend by up to 30%
Indian enterprises in the several key sectors are seen cutting spending on information technology by up to 30% this year as they try to cope with lower demand for their products and services in a slowing economy.
IT heads at leading banks, retailers and public sector companies have started deferring new technology investments, such as on unified communication, and pared annual IT budgets, Chief Information Officers (CIOs) and analysts say.
Economists estimate India’s GDP growth to moderate to 7-8% in 2008-09 from 9% in the previous financial year. ET spoke to five CIOs in the banking, finance, retail and government verticals, who confirmed that that the budget cuts were underway.
“We have postponed our investment in unified communications infrastructure, which could have cost us a few crore,” the IT head of a leading public sector bank said requesting anonymity. His bank spends over Rs 100 crore annually on IT, and he said that it could be down to around Rs 75 crore this year.
Last year, Indian companies spent almost $ 5.6 billion (Rs 26,600 crore) on software services and applications. Total domestic spending on IT, including hardware and BPO services, was around $16 billion for the year ended March 2008. “CIOs are cutting their budgets by anywhere between 20 and 30%, and in some cases even more,” said consulting firm Browne and Mohan managing partner TR Madan Mohan.
The domestic market, which grew at over 25% last year, is expected to slow down to a 15% rate this year because of lower enterprise IT spending, Mr Mohan added.
Many retailers, who were running pilot projects evaluating new technologies such as RFID, have halted them. “The management does not have patience for pilots anymore. I have been asked to stay away from all new investments and only focus on maintaining the existing systems,” a CIO said.
IT heads at leading banks, retailers and public sector companies have started deferring new technology investments, such as on unified communication, and pared annual IT budgets, Chief Information Officers (CIOs) and analysts say.
Economists estimate India’s GDP growth to moderate to 7-8% in 2008-09 from 9% in the previous financial year. ET spoke to five CIOs in the banking, finance, retail and government verticals, who confirmed that that the budget cuts were underway.
“We have postponed our investment in unified communications infrastructure, which could have cost us a few crore,” the IT head of a leading public sector bank said requesting anonymity. His bank spends over Rs 100 crore annually on IT, and he said that it could be down to around Rs 75 crore this year.
Last year, Indian companies spent almost $ 5.6 billion (Rs 26,600 crore) on software services and applications. Total domestic spending on IT, including hardware and BPO services, was around $16 billion for the year ended March 2008. “CIOs are cutting their budgets by anywhere between 20 and 30%, and in some cases even more,” said consulting firm Browne and Mohan managing partner TR Madan Mohan.
The domestic market, which grew at over 25% last year, is expected to slow down to a 15% rate this year because of lower enterprise IT spending, Mr Mohan added.
Many retailers, who were running pilot projects evaluating new technologies such as RFID, have halted them. “The management does not have patience for pilots anymore. I have been asked to stay away from all new investments and only focus on maintaining the existing systems,” a CIO said.
Monday, November 3, 2008
India’s Outsourcing Market
Technology has made the world a global village and this impact is felt not only by the common man but also by the companies in developed countries especially the United States. The phenomenon of outsourcing refers to shifting the non-core jobs of an organization to another organization usually located in a different geographical location in order to increase efficiency and reduce costs.
This phenomenon certainly benefited a lot from the modern networking and communication technologies since it has become very easy for companies located in different parts of the globe to coordinate and cooperate to get the work done in other regions where labor costs are relatively lower and ample skilled labor is available.
Outsourcing in India
One of the countries commonly referenced with the word outsourcing is India which is one of the fastest growing economies of the world today. India has an immense pool of skilled labor and educated people who have a good knowledge of English and are willing to work at relatively lower wages than an average source in say Europe or USA.
All these factors have combined to make India the outsourcing king of the world. Figures from National Association of Software and Service Companies (Nasscom) which is the primary association representing the IT industry in India, noted that India would earn approximately US $ 60 billion by the end of this decade, through the outsourcing exports, and the rate of growth of outsourcing industry would be in the region of nearly 33%.
From this projected growth of 60 billion US dollars, nearly one third would be from IT services and software exports while another one sixth would be from business process outsourcing and call center businesses. In fact so great is the projected growth that the current educational infrastructure would not be able to deal with the shortage of skills and by the end of the current decade; India would be short by nearly half a million of trained workforce for the outsourcing industry.
Figures also show that during the first half of the last year (i.e. 2007) India far surpassed other major players in the Asia Pacific region, namely Japan and Australia, bagging nearly 30% of the contracts while Japan and Australia followed suit by having a share of 22 % and 2% respectively.
The Downside
Despite such heavy growth and potential for further growth, some experts also express reservations about this trend of outsourcing being continued in the long run. There are several reasons cited for these doubts. One strong reason is that with the rise of outsourcing and relatively lower rise in skilled manpower availability, the wages are tending to rise. Since cost savings is one of the major lucrative factors which govern the choice of outsourcing destinations it would go against India in the longer run.
It is estimated that work which cost somewhere in the region of 125 USD per month now costs somewhere in the region of 200 USD per month. This may not seem to be a significant rise but given the number of workers this is certainly a cause for concern.
Nations such as Malaysia, China, Mexico, New Zealand, West Africa and so forth are becoming equally lucrative as outsourcing markets. This would certainly affect the position of India though there is no such danger that outsourcing will be fully gone in favor of these countries. India with its vast supply of skilled English speaking population and a good infrastructure of educational institutes does have the assurance that at least in the near future its position will be very strong regarding outsourcing.
The The fears of the Indian outsourcing market being eroded are echoed in the research findings from research firm Gartner Inc which states that unless something is done about rising wages and labor shortages in India, that companies abroad would certainly be shy of outsourcing to India in the future. They cite the example of Ireland to prove that even Ireland lost substantial outsourcing business due to such problems and India was at advantage at that point, but now Ireland will be at the receiving end if these trends continue.
Data Center Outsourcing & India
When we talk about outsourcing we normally mean IT services, business process outsourcing, legal process outsourcing and so forth, but this discussion cannot be complete without discussing the aspects of data center outsourcing as well. Now logically we might think that data centers would be the last thing a company would like to outsource mainly because of confidentiality issues relating to the vital and important data which is stored on the servers of a company.
The main reasons which prompt parent companies to outsource data center services include complexity of business demands in the current technological arena, data growth, staffing issues and so forth. Though currently India only holds about 2% market share of the total data center outsourcing business, it is expected to grow by nearly 22% in the years to come. These data center operations which are given by foreign companies to specific vendors are also known as managed service providers or MSPs. In recent months we have heard of several major players in the market such as IBM and HP developing global data centers for the purpose of managed data center services.
This phenomenon certainly benefited a lot from the modern networking and communication technologies since it has become very easy for companies located in different parts of the globe to coordinate and cooperate to get the work done in other regions where labor costs are relatively lower and ample skilled labor is available.
Outsourcing in India
One of the countries commonly referenced with the word outsourcing is India which is one of the fastest growing economies of the world today. India has an immense pool of skilled labor and educated people who have a good knowledge of English and are willing to work at relatively lower wages than an average source in say Europe or USA.
All these factors have combined to make India the outsourcing king of the world. Figures from National Association of Software and Service Companies (Nasscom) which is the primary association representing the IT industry in India, noted that India would earn approximately US $ 60 billion by the end of this decade, through the outsourcing exports, and the rate of growth of outsourcing industry would be in the region of nearly 33%.
From this projected growth of 60 billion US dollars, nearly one third would be from IT services and software exports while another one sixth would be from business process outsourcing and call center businesses. In fact so great is the projected growth that the current educational infrastructure would not be able to deal with the shortage of skills and by the end of the current decade; India would be short by nearly half a million of trained workforce for the outsourcing industry.
Figures also show that during the first half of the last year (i.e. 2007) India far surpassed other major players in the Asia Pacific region, namely Japan and Australia, bagging nearly 30% of the contracts while Japan and Australia followed suit by having a share of 22 % and 2% respectively.
The Downside
Despite such heavy growth and potential for further growth, some experts also express reservations about this trend of outsourcing being continued in the long run. There are several reasons cited for these doubts. One strong reason is that with the rise of outsourcing and relatively lower rise in skilled manpower availability, the wages are tending to rise. Since cost savings is one of the major lucrative factors which govern the choice of outsourcing destinations it would go against India in the longer run.
It is estimated that work which cost somewhere in the region of 125 USD per month now costs somewhere in the region of 200 USD per month. This may not seem to be a significant rise but given the number of workers this is certainly a cause for concern.
Nations such as Malaysia, China, Mexico, New Zealand, West Africa and so forth are becoming equally lucrative as outsourcing markets. This would certainly affect the position of India though there is no such danger that outsourcing will be fully gone in favor of these countries. India with its vast supply of skilled English speaking population and a good infrastructure of educational institutes does have the assurance that at least in the near future its position will be very strong regarding outsourcing.
The The fears of the Indian outsourcing market being eroded are echoed in the research findings from research firm Gartner Inc which states that unless something is done about rising wages and labor shortages in India, that companies abroad would certainly be shy of outsourcing to India in the future. They cite the example of Ireland to prove that even Ireland lost substantial outsourcing business due to such problems and India was at advantage at that point, but now Ireland will be at the receiving end if these trends continue.
Data Center Outsourcing & India
When we talk about outsourcing we normally mean IT services, business process outsourcing, legal process outsourcing and so forth, but this discussion cannot be complete without discussing the aspects of data center outsourcing as well. Now logically we might think that data centers would be the last thing a company would like to outsource mainly because of confidentiality issues relating to the vital and important data which is stored on the servers of a company.
The main reasons which prompt parent companies to outsource data center services include complexity of business demands in the current technological arena, data growth, staffing issues and so forth. Though currently India only holds about 2% market share of the total data center outsourcing business, it is expected to grow by nearly 22% in the years to come. These data center operations which are given by foreign companies to specific vendors are also known as managed service providers or MSPs. In recent months we have heard of several major players in the market such as IBM and HP developing global data centers for the purpose of managed data center services.
Wednesday, October 22, 2008
India's tech spending seen growing 17-24% by 2010
Asia Pacific’s IT spending is expected to grow about 10-16% till 2010, beating developed markets, according to a study by consulting firm
Zinnov. India and China, in particular, represent large untapped markets in the region.
While India’s IT spending is likely to grow between 17.6-24% by 2010, China would grow 10-13%, according to the study. This is in comparison to the 3.3-6.5% increase expected in global IT spending. Expenditure on hardware, software and IT-BPO services comes under IT spending.
“With the shrinking IT budgets of the developed world set to shrink further, IT services companies have been working on realigning growth strategies and looking at opportunities in countries such as India and China,” said Zinnov advisory services engagement manager Chandramouli CS.
India’s IT spending currently totals $17 billion, while China’s IT spending stands at about $21 billion.
Zinnov says North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010.
Mr Chandramouli says companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don’t have scalable IT systems.
The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan.
These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015.
Zinnov. India and China, in particular, represent large untapped markets in the region.
While India’s IT spending is likely to grow between 17.6-24% by 2010, China would grow 10-13%, according to the study. This is in comparison to the 3.3-6.5% increase expected in global IT spending. Expenditure on hardware, software and IT-BPO services comes under IT spending.
“With the shrinking IT budgets of the developed world set to shrink further, IT services companies have been working on realigning growth strategies and looking at opportunities in countries such as India and China,” said Zinnov advisory services engagement manager Chandramouli CS.
India’s IT spending currently totals $17 billion, while China’s IT spending stands at about $21 billion.
Zinnov says North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010.
Mr Chandramouli says companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don’t have scalable IT systems.
The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan.
These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015.
Saturday, October 11, 2008
Towards More Efficient Data Centers
The main three areas of focus of data center 3.0 are consolidation, virtualization and automation. The trend in data centers is to go from many data centers in an enterprise to fewer. The main drivers are power, cooling, space constraints, and the massive proliferation of underutilized machines. The focus of our consolidation is to bring greener data centers and improve capex and opex.
Also, Application delivery is something that CIOs need to concentrate on. Suppose I send you a file and you make some changes, and this goes back and forth a thousand times, and each file transfer takes 4 milliseconds, I can spend 40 minutes for the exchange of one PowerPoint presentation. Instead, if I consolidate on what is called the wide area application services (WAAS), my network looks into your content and instead of sending the entire file, and it sends only the changes back and forth. Now, in this case, I'm using my bandwidth more efficiently. We have built this into our networks.
One more area of importance is compression. Today, all sorts of traffic like file traffic, Web traffic, exchange traffic, and video traffic flows through the network. Compression can make the network respond faster and give huge savings. It will also allow remote users to “feel” local by giving them very good response time. Think of the benefits for areas like finance, where one millisecond can represent millions of rupees.
Also, Application delivery is something that CIOs need to concentrate on. Suppose I send you a file and you make some changes, and this goes back and forth a thousand times, and each file transfer takes 4 milliseconds, I can spend 40 minutes for the exchange of one PowerPoint presentation. Instead, if I consolidate on what is called the wide area application services (WAAS), my network looks into your content and instead of sending the entire file, and it sends only the changes back and forth. Now, in this case, I'm using my bandwidth more efficiently. We have built this into our networks.
One more area of importance is compression. Today, all sorts of traffic like file traffic, Web traffic, exchange traffic, and video traffic flows through the network. Compression can make the network respond faster and give huge savings. It will also allow remote users to “feel” local by giving them very good response time. Think of the benefits for areas like finance, where one millisecond can represent millions of rupees.
Remote Infrastructure Management
The Indian offshoring success story is a phenomenon that has changed the way business is done globally. And India has constantly innovated to push the outsourcing envelope. After having created Application Development and Maintenance (ADM) and Business Process Outsourcing (BPO), we now have another addition to the outsourcing saga: Remote Infrastructure Management Services (RIMS).
RIMS comprise of day to day management of IT infrastructure needs of an organization from a remote location (although services are available that combine remote with on-site). RIMS constitutes management of networks, security, servers, storage devices, applications, desktops and a 24x7 help desk. Increasingly, enterprises worldwide have been waking up to the challenges involved in ensuring the availability and the predictability of their networks and devices -- and have stumbled across this RIMS solution.
Traditionally this need has been fulfilled by in-house teams or outsourced to local as well as large traditional IT services players.
Driving the outsourcing of IT infra is the fact that, technology is changing rapidly and today even SMBs are deploying servers and network storage devices (their 180 GB desktop hard drives are not good enough!). As price of devices fall and technological changes become more rapid, it is labor which maintains the IT infra that has become the single largest contributory factor to costs.
You can see the developing picture: lowered device prices, higher technology quotient, wide usage of technology across industry, compliance requirements, growing shortage of qualified talent, increasing cost of IT infrastructure management, retention issues with IT talent...The answer? Offshore IT infrastructure management to markets where talent is easily available and where tools and processes have been developed to manage your infrastructure remotely.
The good news is that newer trends in technology, such as virtualization and cloud computing are creating win-win situations for the customers as well as for the vendors. These technologies are paving the way to consolidation and standardization of IT infrastructure for global players. The reduction in complexity makes it less risky for the clients to outsource to RIMS vendors.
On their part, vendors have enhanced their capabilities in managing diverse technologies by creating training, to rapidly improve the skill sets of their employees, and are placing a growing emphasis on rigorous quality processes. Additionally, as the industry is maturing, IT infrastructure management tools available in the market have simplified. These tools are integrated with governance features which address the management of multiple vendors.
Beyond the technology and delivery aspect, one significant change these technologies are bringing is that of mindset. CIOs are now more comfortable with the thought of having the IT operations hosted and delivered out of locations outside the enterprise premises and Global Delivery Models are strongly gaining acceptance in the IT infrastructure management domain.
The good news for RIMS adopters is that Indian vendors have been innovating not just on the service front, but on the pricing front as well. Today there are several pricing models to choose from ? device based, outcome based, input based and a combination of all.
Not surprisingly, the mid-sized deals segment of the market has become an important source of growth for RIMS providers.
RIMS is clearly a specialist play. The rigorous processes and operations combined with the critical nature of business makes it imperative for the vendors to specialize. A RIMS vendor focused in this area would be able to provide enhanced quality of service as a result of aligning tools, processes and skill sets to the industry needs.
And to us, the biggest trend is the choice that RIMS adopters are making ? by carefully choosing specialist players over others to manage their infrastructure.
RIMS comprise of day to day management of IT infrastructure needs of an organization from a remote location (although services are available that combine remote with on-site). RIMS constitutes management of networks, security, servers, storage devices, applications, desktops and a 24x7 help desk. Increasingly, enterprises worldwide have been waking up to the challenges involved in ensuring the availability and the predictability of their networks and devices -- and have stumbled across this RIMS solution.
Traditionally this need has been fulfilled by in-house teams or outsourced to local as well as large traditional IT services players.
Driving the outsourcing of IT infra is the fact that, technology is changing rapidly and today even SMBs are deploying servers and network storage devices (their 180 GB desktop hard drives are not good enough!). As price of devices fall and technological changes become more rapid, it is labor which maintains the IT infra that has become the single largest contributory factor to costs.
You can see the developing picture: lowered device prices, higher technology quotient, wide usage of technology across industry, compliance requirements, growing shortage of qualified talent, increasing cost of IT infrastructure management, retention issues with IT talent...The answer? Offshore IT infrastructure management to markets where talent is easily available and where tools and processes have been developed to manage your infrastructure remotely.
The good news is that newer trends in technology, such as virtualization and cloud computing are creating win-win situations for the customers as well as for the vendors. These technologies are paving the way to consolidation and standardization of IT infrastructure for global players. The reduction in complexity makes it less risky for the clients to outsource to RIMS vendors.
On their part, vendors have enhanced their capabilities in managing diverse technologies by creating training, to rapidly improve the skill sets of their employees, and are placing a growing emphasis on rigorous quality processes. Additionally, as the industry is maturing, IT infrastructure management tools available in the market have simplified. These tools are integrated with governance features which address the management of multiple vendors.
Beyond the technology and delivery aspect, one significant change these technologies are bringing is that of mindset. CIOs are now more comfortable with the thought of having the IT operations hosted and delivered out of locations outside the enterprise premises and Global Delivery Models are strongly gaining acceptance in the IT infrastructure management domain.
The good news for RIMS adopters is that Indian vendors have been innovating not just on the service front, but on the pricing front as well. Today there are several pricing models to choose from ? device based, outcome based, input based and a combination of all.
Not surprisingly, the mid-sized deals segment of the market has become an important source of growth for RIMS providers.
RIMS is clearly a specialist play. The rigorous processes and operations combined with the critical nature of business makes it imperative for the vendors to specialize. A RIMS vendor focused in this area would be able to provide enhanced quality of service as a result of aligning tools, processes and skill sets to the industry needs.
And to us, the biggest trend is the choice that RIMS adopters are making ? by carefully choosing specialist players over others to manage their infrastructure.
The Indian IT growth
With GDP growth of about 9 percent and wider expectations from analysts that in near future Indian economy can rule the globe, Indian business is on a roller coaster ride. Indian business, especially IT and ITeS segment is the backbone of this commendable GDP growth. Although IT sector was doing reasonably well, however it seems retrenchment has hit India also. The Indian counterparts have been constantly appraised, no wonder Indian IT industry has spearheaded towards consolidated global expansion.
Sky is the limit, when you know where you are heading to. Correlating these words with success of Indian IT, these are the key acquisitions made by Indian IT.
1. Infosys, the leading IT giant of India, recently announced its plans to acquire UK based consultancy, Axon Group plc. The deal will be cash based and company will purchase SAP consultant Axon for USD753 million. The deal will be a landmark in Infy’s history as will give a ready made access to existing market of Axon in Europe. Also, Infosys can leverage Axon’s strength and consultation expertise to win big transformation deals in US and Europe, where Axon has a strong foothold. Last year, the Indian software giant announced its plans to acquire Philips Global’s finance and accounts BPO for assured revenue of USD200 million.
2. The second big acquisition is made by outsourcing giant, Wipro Technologies. The outbound deal by Wipro purchasing US based InfoCrossing for price USD 600 million. It is a mega deal. Such acquisitions are key propellers for Indian IT firms as they help companies to enhance their foothold in domestic market along with the added advantage of resourcing. The biggest advantage of this acquisition is the direct entry to US markets where Infocrossing has strong foothold. Also, the company can leverage its hosted and managed services to provide IT outsourcing solutions.
3. The another key acquisition was made in BPO segment. In July, this year WNS Holdings Ltd. announced its plans to acquire BPO business of UK based insurance major, Aviva. WNS acquired Avivas BPO business Aviva Global Services for USD 228 million. Under the purchase agreement, company took over all shares of AGS and took complete control over operations in Bangalore, Colombo, Pune and Chennai. Beside these captive operations, the WNS will offer BPO services to Avivas UK and Canadian operations.
These were the acquisitions that transformed the Indian IT scenario and made Indian companies to unfurl their flag of expansion on foreign lands. Such acquisitions offer not only a strong presence in domestic markets but also provide them chance to be renowned as global brand.
Sky is the limit, when you know where you are heading to. Correlating these words with success of Indian IT, these are the key acquisitions made by Indian IT.
1. Infosys, the leading IT giant of India, recently announced its plans to acquire UK based consultancy, Axon Group plc. The deal will be cash based and company will purchase SAP consultant Axon for USD753 million. The deal will be a landmark in Infy’s history as will give a ready made access to existing market of Axon in Europe. Also, Infosys can leverage Axon’s strength and consultation expertise to win big transformation deals in US and Europe, where Axon has a strong foothold. Last year, the Indian software giant announced its plans to acquire Philips Global’s finance and accounts BPO for assured revenue of USD200 million.
2. The second big acquisition is made by outsourcing giant, Wipro Technologies. The outbound deal by Wipro purchasing US based InfoCrossing for price USD 600 million. It is a mega deal. Such acquisitions are key propellers for Indian IT firms as they help companies to enhance their foothold in domestic market along with the added advantage of resourcing. The biggest advantage of this acquisition is the direct entry to US markets where Infocrossing has strong foothold. Also, the company can leverage its hosted and managed services to provide IT outsourcing solutions.
3. The another key acquisition was made in BPO segment. In July, this year WNS Holdings Ltd. announced its plans to acquire BPO business of UK based insurance major, Aviva. WNS acquired Avivas BPO business Aviva Global Services for USD 228 million. Under the purchase agreement, company took over all shares of AGS and took complete control over operations in Bangalore, Colombo, Pune and Chennai. Beside these captive operations, the WNS will offer BPO services to Avivas UK and Canadian operations.
These were the acquisitions that transformed the Indian IT scenario and made Indian companies to unfurl their flag of expansion on foreign lands. Such acquisitions offer not only a strong presence in domestic markets but also provide them chance to be renowned as global brand.
Friday, October 3, 2008
Market Turmoil Could Mean Boost for India's IT Industry
Source-PC World, sep,16,2008
India's IT and outsourcing industry could see a mid-term boost from the current turmoil in the financial markets, the president of India's National Association of Software and Services Companies (NASSCOM) said Tuesday.
"I think there will be a short-term blip," said Som Mittal, speaking at a Tokyo news conference. "I think there will be more control processes that will be put in, which will all be IT and system-driven, so I think there will be more changes that would happen and for that I think there is more work."
"I'm not looking at this change as an opportunity, none of us should. But I'm sure it will lead to one because there would be systems and checks and balances and technology should be brought in to do this," he said.
Investment bank Lehman Brothers collapsed over the weekend after investors lost confidence in the 150-year old bank and it failed to find a buyer. At about the same time Bank of America reached a deal to acquire Merrill Lynch and insurer American International Group searched for and found a US$20 billion [b] financial lifeline.
The knock-on effects to India's IT industry from the failure of any one company or even a lull in business in a sector will also be offset thanks to the diversification that has happened in recent years, said Mittal.
"We are doing work in healthcare, utilities, transport, airlines. They may also have some impact but they are growing. From a business perspective our diversity will help," he said.
Within the banking sector in particular the work done by Indian IT companies is an integral part of their operations so this should also help insulate them further, he said.
"The work [the bankrupt companies] were doing still has to be done," he said. "Someone still has to run banking, and I think we're and integral part of that supply chain. The amount of supply chain processing that is done for these banks will still have to be done and will increase."
Mittal, who previously headed Hewlett-Packard's Asian operations, is in Japan to meet with local business leaders and political figures as part of an attempt to grow the market for Indian outsourcing in Japan
India's IT and outsourcing industry could see a mid-term boost from the current turmoil in the financial markets, the president of India's National Association of Software and Services Companies (NASSCOM) said Tuesday.
"I think there will be a short-term blip," said Som Mittal, speaking at a Tokyo news conference. "I think there will be more control processes that will be put in, which will all be IT and system-driven, so I think there will be more changes that would happen and for that I think there is more work."
"I'm not looking at this change as an opportunity, none of us should. But I'm sure it will lead to one because there would be systems and checks and balances and technology should be brought in to do this," he said.
Investment bank Lehman Brothers collapsed over the weekend after investors lost confidence in the 150-year old bank and it failed to find a buyer. At about the same time Bank of America reached a deal to acquire Merrill Lynch and insurer American International Group searched for and found a US$20 billion [b] financial lifeline.
The knock-on effects to India's IT industry from the failure of any one company or even a lull in business in a sector will also be offset thanks to the diversification that has happened in recent years, said Mittal.
"We are doing work in healthcare, utilities, transport, airlines. They may also have some impact but they are growing. From a business perspective our diversity will help," he said.
Within the banking sector in particular the work done by Indian IT companies is an integral part of their operations so this should also help insulate them further, he said.
"The work [the bankrupt companies] were doing still has to be done," he said. "Someone still has to run banking, and I think we're and integral part of that supply chain. The amount of supply chain processing that is done for these banks will still have to be done and will increase."
Mittal, who previously headed Hewlett-Packard's Asian operations, is in Japan to meet with local business leaders and political figures as part of an attempt to grow the market for Indian outsourcing in Japan
Thursday, October 2, 2008
India’s Managed Service Market Growing 25% Annually
Business Standard, sep, 02,2008
The India Managed IT Services market is expected to grow at a compoud annual growth rate (CAGR) of 24.9 per cent to become a $2.78 billion (Rs 12,232 crore) industry by 2010, says IDC making it one of the fastest growing markets in the Asia/Pacific region.
The total India Managed IT Services market in 2007 was estimated to be $1,170 million (around Rs 5,148 crore) with managed network services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 per cent of the total India domestic IT Services market, which crossed $5 billion revenues in 2007.
The report notes that the notion of managed services is no more just hype or an industry buzzword. Initially, the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure.
Praveen Sengar, Senior Manager, Software and Services Research, IDC India, said: "While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone."
Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at CAGR of 31 per cent and 28 per cent respectively, over the next three years (2008-2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’.
The India Managed IT Services market is expected to grow at a compoud annual growth rate (CAGR) of 24.9 per cent to become a $2.78 billion (Rs 12,232 crore) industry by 2010, says IDC making it one of the fastest growing markets in the Asia/Pacific region.
The total India Managed IT Services market in 2007 was estimated to be $1,170 million (around Rs 5,148 crore) with managed network services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 per cent of the total India domestic IT Services market, which crossed $5 billion revenues in 2007.
The report notes that the notion of managed services is no more just hype or an industry buzzword. Initially, the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure.
Praveen Sengar, Senior Manager, Software and Services Research, IDC India, said: "While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone."
Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at CAGR of 31 per cent and 28 per cent respectively, over the next three years (2008-2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’.
HP to Increase Presence in the Next-Generation Data Center Market
HP has recently announced the growth of its next-generation data centers customer base with the signing of contracts with over 60 customers to provide them with data center design services. Organizations across 12 industries in 27 countries which include companies such as Credit Suisse, UBS, Digital Realty Trust and Power Loft have signed up with HP’s subsidiary, EYP Mission Critical Facilities (EYP MCF), for its data infrastructure services.
EYP MCF provides strategic planning, design and operations support to help companies transform their data centers, optimize energy efficiency and enable business growth. Over 500 companies have worked with the company to design their data centers, command and control centers, trading floors, and supercomputing sites. Owing to increase in the demand for mission-critical services projects, HP plans to broaden its EYP MCF services availability to more countries.
“Companies from all over the world are turning to us to design and build the next-generation data centers required for high-density scalable computing,” said Peter Gross, Chief Executive Officer, EYP Mission Critical Facilities. “By offering customers the right solutions to complex energy-efficiency and optimization challenges, we are giving them the keys to adapt and transform to meet changing business needs,” added Gross.
HP’s recent EYP MCF agreements include the one with Power Loft to design a data center for the company which specializes in the development and ownership of high-density, high-security data centers. EYP MCF also designed and provided engineering consulting services on the company’s first data center, located in Virginia, U.S.A. Both the facilities will be LEED (Leadership in Environmental Design) certified and, upon completion, will operate using 52 percent less power than comparably sized data centers.
The company’s other EYP MCF projects include, designing a leading technology company’s energy-efficient technology infrastructure at its U.S. headquarters, providing mission-critical consulting services for a Tier IV data center master plan across a top U.S. university’s statewide, multi-campus data center environment, designing a high-profile, energy-efficient data center in Iceland, offering reliability levels from Tier I to IV and LEED Platinum certification and providing consultation services to global financial services firm UBS on its data center design
EYP MCF provides strategic planning, design and operations support to help companies transform their data centers, optimize energy efficiency and enable business growth. Over 500 companies have worked with the company to design their data centers, command and control centers, trading floors, and supercomputing sites. Owing to increase in the demand for mission-critical services projects, HP plans to broaden its EYP MCF services availability to more countries.
“Companies from all over the world are turning to us to design and build the next-generation data centers required for high-density scalable computing,” said Peter Gross, Chief Executive Officer, EYP Mission Critical Facilities. “By offering customers the right solutions to complex energy-efficiency and optimization challenges, we are giving them the keys to adapt and transform to meet changing business needs,” added Gross.
HP’s recent EYP MCF agreements include the one with Power Loft to design a data center for the company which specializes in the development and ownership of high-density, high-security data centers. EYP MCF also designed and provided engineering consulting services on the company’s first data center, located in Virginia, U.S.A. Both the facilities will be LEED (Leadership in Environmental Design) certified and, upon completion, will operate using 52 percent less power than comparably sized data centers.
The company’s other EYP MCF projects include, designing a leading technology company’s energy-efficient technology infrastructure at its U.S. headquarters, providing mission-critical consulting services for a Tier IV data center master plan across a top U.S. university’s statewide, multi-campus data center environment, designing a high-profile, energy-efficient data center in Iceland, offering reliability levels from Tier I to IV and LEED Platinum certification and providing consultation services to global financial services firm UBS on its data center design
India's IT services market to grow to $8.1 billion by 2011
BANGALORE, 29 AUGUST 2008
The IT services market in India is estimated to grow from US$4.1 billion in 2007 to $8.1 billion in 2011, representing a compounded annual growth rate (CAGR) of 18.6 per cent from 2006 to 2011, according to the latest research by Springboard Research, a leading innovator in the IT Market Research industry. As per Springboard's report, titled 'India IT Services Market and Forecast 2006-2011', IT Services growth rate in India is well above the 10.5 per cent CAGR of overall Asia Pacific market and it makes India the fastest growing IT Services market in the Asia Pacific (excluding Japan) region.
According to the report, the Indian IT Services market is heavily dominated by infrastructure Services, which are estimated to garner 54 per cent of the market in 2007. Springboard further forecasts the segment to grow in line with the overall market and reach $4.27 billion by 2011. However, Applications Services with a CAGR of 19.6 per cent remain the fastest growing market segment, while IT Consulting -- typically used by vendors as entry point to reach clients in India -- is estimated to grow from $0.22 billion in 2007 to $0.40 billion by 2011.
"India is the epicenter of growth in Asia Pacific IT Services marketplace," said Sanchit Vir Gogia, Senior Research Analyst for Services at Springboard Research. "Not only is the India IT Services market forecast to be the fastest growing in the region, the country also has a rather unique position in the worldwide outsourcing arena through a well-educated and language-proficient workforce, that sets it apart from other Asian competitors," Gogia added.
The IT services market in India is estimated to grow from US$4.1 billion in 2007 to $8.1 billion in 2011, representing a compounded annual growth rate (CAGR) of 18.6 per cent from 2006 to 2011, according to the latest research by Springboard Research, a leading innovator in the IT Market Research industry. As per Springboard's report, titled 'India IT Services Market and Forecast 2006-2011', IT Services growth rate in India is well above the 10.5 per cent CAGR of overall Asia Pacific market and it makes India the fastest growing IT Services market in the Asia Pacific (excluding Japan) region.
According to the report, the Indian IT Services market is heavily dominated by infrastructure Services, which are estimated to garner 54 per cent of the market in 2007. Springboard further forecasts the segment to grow in line with the overall market and reach $4.27 billion by 2011. However, Applications Services with a CAGR of 19.6 per cent remain the fastest growing market segment, while IT Consulting -- typically used by vendors as entry point to reach clients in India -- is estimated to grow from $0.22 billion in 2007 to $0.40 billion by 2011.
"India is the epicenter of growth in Asia Pacific IT Services marketplace," said Sanchit Vir Gogia, Senior Research Analyst for Services at Springboard Research. "Not only is the India IT Services market forecast to be the fastest growing in the region, the country also has a rather unique position in the worldwide outsourcing arena through a well-educated and language-proficient workforce, that sets it apart from other Asian competitors," Gogia added.
Wednesday, October 1, 2008
10 Biggest Concerns of a Customer While Outsourcing
1. How reliable is the vendor?
Ask the vendor for details such as number of years in business, number of employees, financial background and so on. Get a thorough picture of the vendor's history.
2. Does the Vendor provide quality products/services?
Vendors need to provide solid customer references as well as emphasize the processes that are followed within their organization to ensure quality products and services. Certifications such as ISO 9000 and CMM from independent agencies go a long way in providing customers with this assurance.
3. What is the Life Cycle cost of the Products/Services provided?
Cost is obviously a key reason to outsource. But while choosing a service provider, make sure you look at hidden costs from maintenance, connectivity/infrastructure, training, transition etc. instead of just the obvious costs such as licensing and consulting costs.
4. Will the vendor be able to meet delivery deadlines?
Make sure vendors promise realistic commitments taking care not to overstretch resources to a point where quality might suffer.
5. How safe is my data?
While addressing these data privacy related concerns, make sure your vendor meets your requirements in critical areas related to infrastructure security (Firewalls, Access Controls, Data Encryption, etc) as well as those that are human resource related (Pre-Recruitment checks, Non-Disclosure agreements, etc.)
6. What kind of risk am I taking on with this vendor?
Ensure that vendors provide evidence of Business Continuity/Disaster Recovery plans and risk mitigation plans. These arrangements go a long way in minimizing business risk.
7. What are the effects of the vendor’s employee attrition on me?
Ensure that vendors have cross-trained employees and have maintained sufficient buffer capacity to take care of such events.
8. Will the vendor be fair and transparent in his financial dealings with my organization?
Vendors need to be fair in matters related to invoicing especially in Time and Material type of contracts. Again, check with previous client references to ensure that the vendor is fair and transparent in his financial dealings.
9. Does the vendor comply with statutory laws and regulations?
If your vendor is not compliant with statutory laws, you stand a chance of being held responsible for violations of laws or regulations carried out by vendors. Increasing public scrutiny has ensured that customers are morally, if not legally, responsible for their vendor’s actions with respect to environmental damage, working conditions, etc. Therefore, make sure that none of the vendor's actions violate established laws.
10. Does this vendor’s culture match that of our organization?
A certain degree of ‘fit’ must exist between the two organizations in terms of work ethics and culture for smooth interaction. The best indication of this is your vendor's initial communication with you.
Ask the vendor for details such as number of years in business, number of employees, financial background and so on. Get a thorough picture of the vendor's history.
2. Does the Vendor provide quality products/services?
Vendors need to provide solid customer references as well as emphasize the processes that are followed within their organization to ensure quality products and services. Certifications such as ISO 9000 and CMM from independent agencies go a long way in providing customers with this assurance.
3. What is the Life Cycle cost of the Products/Services provided?
Cost is obviously a key reason to outsource. But while choosing a service provider, make sure you look at hidden costs from maintenance, connectivity/infrastructure, training, transition etc. instead of just the obvious costs such as licensing and consulting costs.
4. Will the vendor be able to meet delivery deadlines?
Make sure vendors promise realistic commitments taking care not to overstretch resources to a point where quality might suffer.
5. How safe is my data?
While addressing these data privacy related concerns, make sure your vendor meets your requirements in critical areas related to infrastructure security (Firewalls, Access Controls, Data Encryption, etc) as well as those that are human resource related (Pre-Recruitment checks, Non-Disclosure agreements, etc.)
6. What kind of risk am I taking on with this vendor?
Ensure that vendors provide evidence of Business Continuity/Disaster Recovery plans and risk mitigation plans. These arrangements go a long way in minimizing business risk.
7. What are the effects of the vendor’s employee attrition on me?
Ensure that vendors have cross-trained employees and have maintained sufficient buffer capacity to take care of such events.
8. Will the vendor be fair and transparent in his financial dealings with my organization?
Vendors need to be fair in matters related to invoicing especially in Time and Material type of contracts. Again, check with previous client references to ensure that the vendor is fair and transparent in his financial dealings.
9. Does the vendor comply with statutory laws and regulations?
If your vendor is not compliant with statutory laws, you stand a chance of being held responsible for violations of laws or regulations carried out by vendors. Increasing public scrutiny has ensured that customers are morally, if not legally, responsible for their vendor’s actions with respect to environmental damage, working conditions, etc. Therefore, make sure that none of the vendor's actions violate established laws.
10. Does this vendor’s culture match that of our organization?
A certain degree of ‘fit’ must exist between the two organizations in terms of work ethics and culture for smooth interaction. The best indication of this is your vendor's initial communication with you.
Monday, September 29, 2008
HCL assesses green quotient of enterprise data centers
HCL Technologies unveiled its Green Datacenter Services featuring a unique Datacenter Green Quotient Assessment Framework.
The launch took place during Computerworld's Green IT Symposium, September 17-18, 2008 at Gaylord National Resort and Convention Center, National Harbor, Maryland, where HCL is participating as a Platinum Sponsor.
HCL Technologies' suite of Green Datacenter Services will help enterprise IT organizations reduce their companies' environmental impact through assessing, planning, and implementing green initiatives around their DC environment.
A key highlight of this offering is HCL's Green Datacenter Assessment Framework, which helps enterprises find out the environment friendly status of their data centers.
Commenting on this theme, Anubhav Saxena, Associate VP—Business Development and Customer Advocacy, HCLT ISD said, "Data center is the heart and headquarter of all IT activity and hence from the perspective of sustainable IT, achieving energy efficiencies within the data center is key to a successful green IT policy. We at HCL recognize this enterprise imperative and have therefore built a unique suite of services, which offer 360-degree solutions for data center greening and seek to provide cost savings to the tune of 20-30 percent in DC operations. We are privileged to have given the opportunity to display our capabilities at an esteemed event such as this."
HCL has recently become a member of the US Green Building Council. The company is also the first in India to have a comprehensive environment management program and to be ISO14001 compliant with a comprehensive policy on Waste of Electrical and Electronic Equipment (WEEE). HCL, in alliance with Tata Energy Research Institute (2007 Nobel Prize winner), is also an active member of ICSD (India Council for Sustainable Development), a non-government organization working towards the ultimate 'Green Goal' of Government of India by participating in various sustainable development projects at various levels.
The launch took place during Computerworld's Green IT Symposium, September 17-18, 2008 at Gaylord National Resort and Convention Center, National Harbor, Maryland, where HCL is participating as a Platinum Sponsor.
HCL Technologies' suite of Green Datacenter Services will help enterprise IT organizations reduce their companies' environmental impact through assessing, planning, and implementing green initiatives around their DC environment.
A key highlight of this offering is HCL's Green Datacenter Assessment Framework, which helps enterprises find out the environment friendly status of their data centers.
Commenting on this theme, Anubhav Saxena, Associate VP—Business Development and Customer Advocacy, HCLT ISD said, "Data center is the heart and headquarter of all IT activity and hence from the perspective of sustainable IT, achieving energy efficiencies within the data center is key to a successful green IT policy. We at HCL recognize this enterprise imperative and have therefore built a unique suite of services, which offer 360-degree solutions for data center greening and seek to provide cost savings to the tune of 20-30 percent in DC operations. We are privileged to have given the opportunity to display our capabilities at an esteemed event such as this."
HCL has recently become a member of the US Green Building Council. The company is also the first in India to have a comprehensive environment management program and to be ISO14001 compliant with a comprehensive policy on Waste of Electrical and Electronic Equipment (WEEE). HCL, in alliance with Tata Energy Research Institute (2007 Nobel Prize winner), is also an active member of ICSD (India Council for Sustainable Development), a non-government organization working towards the ultimate 'Green Goal' of Government of India by participating in various sustainable development projects at various levels.
Thursday, September 25, 2008
Data Center Hosting Provider
Friday, September 05, 2008
This is a new category that we've added to the Most Wanted IT Brands analysis this time. The number of data centers is increasing in the country, and companies have a lot of interest in hosting various services with them. Around 62% of the respondents to our survey said that they're likely to choose a data center hosting provider in the coming 3 months, and a nearly equal percentage of them saying that they already host some of their services with one. At an overall level, all brands seem to be gaining pull, but need to put in more effort in order to become more persuasive. One more interesting thing we observed in this segment is that brand loyalties amongst the users of data center hosting providers is very high. Very few people actually switch out. This is interesting but not surprising, because such services are long term contracts, which take a long time to get in place, making it very difficult to shift out.
Three brands managed to gather sufficient votes for us to analyze in the survey this time. Out of these, VSNL is the most future ready brand. As it's the oldest player in the game, it enjoys the highest degree of persuation. Most of the CIOs who recall it on top of mind also say that they're likely to use its data centre hosting services. Its brand pull situation however, is a concern area. Though there are usres likely to switch to it, there are more users switching out of it. Maybe it's because there are better facilities coming up for data center hosting, which are giving VSNL competition. VSNL enjoys a brand loyalty of 78% amongst its existing users, with only 5% users likely to switch to other brands, and another 17% who're not sure which brand to shift to.
Just behind VSNL is Sify, which is another brand that's been in the market long enough to understand its ups and downs. It is however far behind VSNL with a future readiness indes of 38%. It's the third most persuasive brand of the lot, and does need to work toward improving the same. The same goes for its brand pull as well, where though there are more users likely to switch in to it than switch out, the number needs to ramp up significantly.
Even the brand loyalty figures for Sify aren't as good as the other players. It has 47% brand loyalty, but there's a catch. Currently, none of its existing users said that they're likely to move out of it. There is however, a massive 53% of the respondents who are not sure whhich brand to switch out to. So Sify should try and make the best of this situation before competition does. At a distant number three is Reliance Infocomm with a relative future readiness index of 35. It's the second most persuasive brand of the lot, and records the highest brand pull. Its brand pull is also better than Sify's at 56%, with only 6% users who're likley to switch to other brands and another 38% who are not sure.
Three brands managed to gather sufficient votes for us to analyze in the survey this time. Out of these, VSNL is the most future ready brand. As it's the oldest player in the game, it enjoys the highest degree of persuation. Most of the CIOs who recall it on top of mind also say that they're likely to use its data centre hosting services. Its brand pull situation however, is a concern area. Though there are usres likely to switch to it, there are more users switching out of it. Maybe it's because there are better facilities coming up for data center hosting, which are giving VSNL competition. VSNL enjoys a brand loyalty of 78% amongst its existing users, with only 5% users likely to switch to other brands, and another 17% who're not sure which brand to shift to.
Just behind VSNL is Sify, which is another brand that's been in the market long enough to understand its ups and downs. It is however far behind VSNL with a future readiness indes of 38%. It's the third most persuasive brand of the lot, and does need to work toward improving the same. The same goes for its brand pull as well, where though there are more users likely to switch in to it than switch out, the number needs to ramp up significantly.
Even the brand loyalty figures for Sify aren't as good as the other players. It has 47% brand loyalty, but there's a catch. Currently, none of its existing users said that they're likely to move out of it. There is however, a massive 53% of the respondents who are not sure whhich brand to switch out to. So Sify should try and make the best of this situation before competition does. At a distant number three is Reliance Infocomm with a relative future readiness index of 35. It's the second most persuasive brand of the lot, and records the highest brand pull. Its brand pull is also better than Sify's at 56%, with only 6% users who're likley to switch to other brands and another 38% who are not sure.
India Targets $15 Billion From Infrastructure Management
Indian outsourcers already have a large share of outsourced application development and maintenance and are dominant in business process outsourcing. The country is now targeting a larger share of the market for remote infrastructure management services (IMS), and is planning to more than double revenue from these services to US$15 billion by 2013.
IMS involves managing an enterprise's core IT systems, including hardware, software, connectivity and people. The IMS industry is moving towards a remote delivery model where services are increasing delivered from low-cost locations by service providers and wholly-owned services subsidiaries of user companies, according to a report released Thursday by India's National Association of Software and Service Companies (Nasscom).
Customers in the US and Europe are increasingly willing to outsource IMS to offshore locations, because the data does not move out of the home countries, and is only managed remotely, said Siddharth Pai, a partner at sourcing consultancy firm,Technology Partners International (TPI) in Houston, Texas.
In India, IMS business is going both to Indian outsourcers, and the Indian operations of large IT services companies, Pai said. Because of the large staff component involved in IMS, there are cost benefits in outsourcing IMS to low-cost, offshore locations like India, he added.
Research done by management consultancy firm McKinsey for Nasscom, suggests that the IMS business could generate between 325,000 to 375,000 jobs in India by 2013, as 70 to 75 percent of the roles in IMS can be moved offshore.
Low-cost locations, including India, have so far captured a mere $6 to 7 billion [b] of the IMS opportunity.
Indian outsourcers have so far learned to price their services on the basis of staff time utilized. They now have to learn more sophisticated pricing that takes into account other parameters like amount of computing power being managed, if they are not to risk losing money in the business, Pai said.----PC WORLD, Feb 2008
IMS involves managing an enterprise's core IT systems, including hardware, software, connectivity and people. The IMS industry is moving towards a remote delivery model where services are increasing delivered from low-cost locations by service providers and wholly-owned services subsidiaries of user companies, according to a report released Thursday by India's National Association of Software and Service Companies (Nasscom).
Customers in the US and Europe are increasingly willing to outsource IMS to offshore locations, because the data does not move out of the home countries, and is only managed remotely, said Siddharth Pai, a partner at sourcing consultancy firm,Technology Partners International (TPI) in Houston, Texas.
In India, IMS business is going both to Indian outsourcers, and the Indian operations of large IT services companies, Pai said. Because of the large staff component involved in IMS, there are cost benefits in outsourcing IMS to low-cost, offshore locations like India, he added.
Research done by management consultancy firm McKinsey for Nasscom, suggests that the IMS business could generate between 325,000 to 375,000 jobs in India by 2013, as 70 to 75 percent of the roles in IMS can be moved offshore.
Low-cost locations, including India, have so far captured a mere $6 to 7 billion [b] of the IMS opportunity.
Indian outsourcers have so far learned to price their services on the basis of staff time utilized. They now have to learn more sophisticated pricing that takes into account other parameters like amount of computing power being managed, if they are not to risk losing money in the business, Pai said.----PC WORLD, Feb 2008
India’s Managed Service Market Growing 25% Annually
The India Managed IT Services market is expected to grow at a compoud annual growth rate (CAGR) of 24.9 per cent to become a $2.78 billion (Rs 12,232 crore) industry by 2010, says IDC making it one of the fastest growing markets in the Asia/Pacific region.
The total India Managed IT Services market in 2007 was estimated to be $1,170 million (around Rs 5,148 crore) with managed network services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 per cent of the total India domestic IT Services market, which crossed $5 billion revenues in 2007.
The report notes that the notion of managed services is no more just hype or an industry buzzword. Initially, the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure.
Praveen Sengar, Senior Manager, Software and Services Research, IDC India, said: "While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone."
Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at CAGR of 31 per cent and 28 per cent respectively, over the next three years (2008-2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’
The total India Managed IT Services market in 2007 was estimated to be $1,170 million (around Rs 5,148 crore) with managed network services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 per cent of the total India domestic IT Services market, which crossed $5 billion revenues in 2007.
The report notes that the notion of managed services is no more just hype or an industry buzzword. Initially, the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure.
Praveen Sengar, Senior Manager, Software and Services Research, IDC India, said: "While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone."
Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at CAGR of 31 per cent and 28 per cent respectively, over the next three years (2008-2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’
Data centre outsourcing can work
Business Standard
The complexity of business demands, cost constraints, data growth and staffing issues are driving companies to outsource their data centre operations or specific tasks like email, web or help desk services to third-party vendors, also called managed service providers (MSPs).
These MSPs include Reliance Communications [Get Quote] (RCom), Tata Consultancy Services [Get Quote] (TCS), Bharti, Netcore, and Ctrl S. The biggest outsourcers are enterprises, banks and financial institutions at 28 per cent, followed by manufacturing -- 25 per cent, public sector -- 18 per cent, telecom -- 9 per cent and retail -- 8 per cent.
A data centre is essentially a computer room, a physical facility that allows a company to store and manage servers, networks and other computer equipment in a controlled-environment.
Ayyappa Nagubandi, Managing Director, Nowpos, a Hyderabad-based voice technology company, which outsources its data centre jobs to Ctrl S, admits it's cheaper "and saves recurring operation costs of managing an in-house data centre".
Niranjan Prasad, Director, Metamind Software, another Ctrl S client says: "Outsourcing jobs to a third party means reliable power supply, sufficient bandwidth, ample disk space, reliable security etc and not only server upkeep. It is a complete hostage facility. It hosts enterprise-level applications for, which we are not technically equipped."
According to a Symantec report, IT managers in the Asia-Pacific region rely on outsourcing data centre operations more than their peers.
Currently, India's data business is pegged at $983 million (around Rs 4,000 crore), which is a mere 2 per cent of the world market share. Web research firm Data Monitor predicts that this business will grow at 22.2 per cent per annum.
The Indian managed services market is currently dominated by telecom companies as it is a value-added attraction for their customers who may already be subscribing to various telecom facilities like broadband and leased lines.
"Globally, web hosting is an increasing trend. Besides that, data centre services are seeing more growth among other managed services, "Abid Qadiri, Vice President -product management (Managed Services), Tata Communications, says.
Soumitra Agarwal, Marketing Director-India, NetAppa -- partner of Tata Communications in providing storage services -- agrees with the view.
Shantanu Ghosh, Vice-President, India Product Operations, Symantec Corporation, notes that the Indian data centre market opportunity is expected to be driven by increasing supply and decreasing cost of Internet bandwidth and domestic companies hosting their mission-critical applications such as ERP and CRM in third-party data centres.
In the 2008-09 Budget, the government announced a Rs 275-crore (Rs 2.75 billion) package for setting up state data centres, which is expected to give this trend a further boost.
"As bandwidth prices fall to around Rs 6000-8,000 per Mbps per month, India becomes an attractive destination for hosting," says Sreedhar Reddy, Chief Managing Director, Ctrl S Data Centers, a Hyderabad-based service provider in data centre solutions.
Naresh Singh, principal research analyst in the enterprise network services and infrastructure group of Gartner, an IT research and advisory company, says: "The market will grow faster because of two developments: more and more foreign companies are hosting web content from India and the trend will grow steadily over 4-5 years."
The complexity of business demands, cost constraints, data growth and staffing issues are driving companies to outsource their data centre operations or specific tasks like email, web or help desk services to third-party vendors, also called managed service providers (MSPs).
These MSPs include Reliance Communications [Get Quote] (RCom), Tata Consultancy Services [Get Quote] (TCS), Bharti, Netcore, and Ctrl S. The biggest outsourcers are enterprises, banks and financial institutions at 28 per cent, followed by manufacturing -- 25 per cent, public sector -- 18 per cent, telecom -- 9 per cent and retail -- 8 per cent.
A data centre is essentially a computer room, a physical facility that allows a company to store and manage servers, networks and other computer equipment in a controlled-environment.
Ayyappa Nagubandi, Managing Director, Nowpos, a Hyderabad-based voice technology company, which outsources its data centre jobs to Ctrl S, admits it's cheaper "and saves recurring operation costs of managing an in-house data centre".
Niranjan Prasad, Director, Metamind Software, another Ctrl S client says: "Outsourcing jobs to a third party means reliable power supply, sufficient bandwidth, ample disk space, reliable security etc and not only server upkeep. It is a complete hostage facility. It hosts enterprise-level applications for, which we are not technically equipped."
According to a Symantec report, IT managers in the Asia-Pacific region rely on outsourcing data centre operations more than their peers.
Currently, India's data business is pegged at $983 million (around Rs 4,000 crore), which is a mere 2 per cent of the world market share. Web research firm Data Monitor predicts that this business will grow at 22.2 per cent per annum.
The Indian managed services market is currently dominated by telecom companies as it is a value-added attraction for their customers who may already be subscribing to various telecom facilities like broadband and leased lines.
"Globally, web hosting is an increasing trend. Besides that, data centre services are seeing more growth among other managed services, "Abid Qadiri, Vice President -product management (Managed Services), Tata Communications, says.
Soumitra Agarwal, Marketing Director-India, NetAppa -- partner of Tata Communications in providing storage services -- agrees with the view.
Shantanu Ghosh, Vice-President, India Product Operations, Symantec Corporation, notes that the Indian data centre market opportunity is expected to be driven by increasing supply and decreasing cost of Internet bandwidth and domestic companies hosting their mission-critical applications such as ERP and CRM in third-party data centres.
In the 2008-09 Budget, the government announced a Rs 275-crore (Rs 2.75 billion) package for setting up state data centres, which is expected to give this trend a further boost.
"As bandwidth prices fall to around Rs 6000-8,000 per Mbps per month, India becomes an attractive destination for hosting," says Sreedhar Reddy, Chief Managing Director, Ctrl S Data Centers, a Hyderabad-based service provider in data centre solutions.
Naresh Singh, principal research analyst in the enterprise network services and infrastructure group of Gartner, an IT research and advisory company, says: "The market will grow faster because of two developments: more and more foreign companies are hosting web content from India and the trend will grow steadily over 4-5 years."
Data Center outsourcing takes center stage
Outsourcing data center operations in toto is catching on amongst Indian organizations as setting up one’s own data center is an expensive proposition both in terms of money.
The operational costs of Indian Data Centers (DC) are increasing which is pushing DC managers to outsource their DC operations in toto. The increasing cost of power, cooling, raw space, security issues and management are all fueling this trend in India. Additionally the initial high capital costs, management and staff costs, which crop up while running one’s own data center are factors that are leading company’s to think outsourcing. Routinely adding new services or upgrading to the latest technology is not always feasible; sometimes it requires bringing down the DC. Today service providers specializing in data center outsourcing are emerging, as there has been a significant increase in DC maintenance cost, which is high for Indian organizations. The challenges in managing in house data centers have forced them to give the work to Managed Service Providers (MSPs). Adopting changing market dynamics and benchmarking the infrastructure space combined with increasingly tight budgets have led to the creation of a scenario in which it makes sense for organizations to outsource this service to a co-location, carrier-neutral DC. Not every enterprise will have the resources and know-how to deal with these issues. This is why it is important to examine a data center sourcing alternative as part of a company’s overall IT strategy. Adopting these innovative strategies to develop a data center that’s aligned with business goals can give businesses a lasting competitive advantage.
The likes of Bank of Baroda, Bank of India and Britannia have outsourced their data center requirements to HP. Then there are others such as Moneycontrol, IBN Live, Johnson Tiles, WorldSpace Radio, Indiainfoline, TELCO, Travel Guru and Yatra that have outsourced their DC requirements to specialized MSPs such as NetMagic Solutions. Express Computer probed deeply into the aspects pertaining to the outsourcing of DC requirements to third party specialist firms by organizations and the reasons for this trend.
Owning data centers is a difficult proposition
As per research conducted on behalf of HP it was estimated that more than one-third of Chief Information Officers (CIOs) believe that in two to five years their DC will be unable to meet the rapidly growing demand for business services and applications and solutions for building a next-generation DC. The research pointed out that a large number of companies are facing the challenge of transforming their technology infrastructure environments into agile, energy-efficient and cost-effective assets to drive business growth. Increased pressure is being placed on CIOs to deliver more business services at a reduced cost, while at the same time DCs are approaching the limits of their energy, cooling and space resources. The research estimated that over 50% of large enterprises would face DC floor space shortage in the next five years and by 2010, more than half of all DCs will have to relocate to new facilities or outsource some applications to third party players. The report also observed that over the next five years, power failures and limits on power availability will halt DC operations at more than 90% of all companies and that in the next two to five years present day DC will be incapable of dealing with the rapidly growing demand for services and applications. Globally many CIOs are aiming at reducing the number of DCs that their companies operate through transformation including improving technology, increasing productivity and lowering overhead and management costs which includes improving technology, increasing productivity, lowering overhead and reducing management costs. These findings are not very different in India. Large enterprises have already started the feeling the heat.
Barry O’Connell, Director of HP’s Consulting and Integration Business Unit, explained, “DC operations are core to an organization’s business and there are certain elements of risks involved when they built their own DC. Risks can be in the form of choosing an appropriate location and maintaining uptime based on business requirements. Nowadays customers have the liberty to exercise different sourcing options, which help them, define as to what part of the DC operations they would like to outsource. Customers are looking towards an optimized DC environment by outsourcing it.”
There have also been environmental concerns and DCs are under increasing pressure to reduce their carbon emission footprint and dispose off old computing equipment in a safe and eco-friendly manner. To meet these evolving demands, DCs are aiming to achieve near continuous availability, increase capacity and efficiency, and become greener. Unused capacity, redundant functionality, inefficient or outdated designs, an ever-growing number of assets, and aging servers make these environments complex and expensive to manage and maintain as well as difficult to scale. In addition, power costs are rising steadily, leading to exorbitant electric bills.
There have also been concerns about building DC skill sets, which are a challenge for organizations. Sharad Sanghi, Chief Executive Officer and Founder NetMagic Solutions, explained, “Building skill-sets to run DC operations is a challenging aspect for many Indian organizations. Different skill-sets to manage databases and applications are required in a DC environment, which is not only costly but also hard to come by and also puts an additional burden on an organization’s IT budget. Skill-sets are also required to design and execute a modern day DC.”
The operational costs of Indian Data Centers (DC) are increasing which is pushing DC managers to outsource their DC operations in toto. The increasing cost of power, cooling, raw space, security issues and management are all fueling this trend in India. Additionally the initial high capital costs, management and staff costs, which crop up while running one’s own data center are factors that are leading company’s to think outsourcing. Routinely adding new services or upgrading to the latest technology is not always feasible; sometimes it requires bringing down the DC. Today service providers specializing in data center outsourcing are emerging, as there has been a significant increase in DC maintenance cost, which is high for Indian organizations. The challenges in managing in house data centers have forced them to give the work to Managed Service Providers (MSPs). Adopting changing market dynamics and benchmarking the infrastructure space combined with increasingly tight budgets have led to the creation of a scenario in which it makes sense for organizations to outsource this service to a co-location, carrier-neutral DC. Not every enterprise will have the resources and know-how to deal with these issues. This is why it is important to examine a data center sourcing alternative as part of a company’s overall IT strategy. Adopting these innovative strategies to develop a data center that’s aligned with business goals can give businesses a lasting competitive advantage.
The likes of Bank of Baroda, Bank of India and Britannia have outsourced their data center requirements to HP. Then there are others such as Moneycontrol, IBN Live, Johnson Tiles, WorldSpace Radio, Indiainfoline, TELCO, Travel Guru and Yatra that have outsourced their DC requirements to specialized MSPs such as NetMagic Solutions. Express Computer probed deeply into the aspects pertaining to the outsourcing of DC requirements to third party specialist firms by organizations and the reasons for this trend.
Owning data centers is a difficult proposition
As per research conducted on behalf of HP it was estimated that more than one-third of Chief Information Officers (CIOs) believe that in two to five years their DC will be unable to meet the rapidly growing demand for business services and applications and solutions for building a next-generation DC. The research pointed out that a large number of companies are facing the challenge of transforming their technology infrastructure environments into agile, energy-efficient and cost-effective assets to drive business growth. Increased pressure is being placed on CIOs to deliver more business services at a reduced cost, while at the same time DCs are approaching the limits of their energy, cooling and space resources. The research estimated that over 50% of large enterprises would face DC floor space shortage in the next five years and by 2010, more than half of all DCs will have to relocate to new facilities or outsource some applications to third party players. The report also observed that over the next five years, power failures and limits on power availability will halt DC operations at more than 90% of all companies and that in the next two to five years present day DC will be incapable of dealing with the rapidly growing demand for services and applications. Globally many CIOs are aiming at reducing the number of DCs that their companies operate through transformation including improving technology, increasing productivity and lowering overhead and management costs which includes improving technology, increasing productivity, lowering overhead and reducing management costs. These findings are not very different in India. Large enterprises have already started the feeling the heat.
Barry O’Connell, Director of HP’s Consulting and Integration Business Unit, explained, “DC operations are core to an organization’s business and there are certain elements of risks involved when they built their own DC. Risks can be in the form of choosing an appropriate location and maintaining uptime based on business requirements. Nowadays customers have the liberty to exercise different sourcing options, which help them, define as to what part of the DC operations they would like to outsource. Customers are looking towards an optimized DC environment by outsourcing it.”
There have also been environmental concerns and DCs are under increasing pressure to reduce their carbon emission footprint and dispose off old computing equipment in a safe and eco-friendly manner. To meet these evolving demands, DCs are aiming to achieve near continuous availability, increase capacity and efficiency, and become greener. Unused capacity, redundant functionality, inefficient or outdated designs, an ever-growing number of assets, and aging servers make these environments complex and expensive to manage and maintain as well as difficult to scale. In addition, power costs are rising steadily, leading to exorbitant electric bills.
There have also been concerns about building DC skill sets, which are a challenge for organizations. Sharad Sanghi, Chief Executive Officer and Founder NetMagic Solutions, explained, “Building skill-sets to run DC operations is a challenging aspect for many Indian organizations. Different skill-sets to manage databases and applications are required in a DC environment, which is not only costly but also hard to come by and also puts an additional burden on an organization’s IT budget. Skill-sets are also required to design and execute a modern day DC.”
Monday, September 22, 2008
Data center outsourcing on the rise in India
Estimates put the third party data center market including co-location services, hosting services and managed services in India at $150 million [2007]. With a projection of an average CAGR of 36% over the next two years, the verticals that outsource the most are BFSI and manufacturing together accounting for about 53% of the market.
Companies in India, like those elsewhere, have to move swiftly to adapt to change, seize new opportunities and meet the demands for increased productivity and reduced costs. Data center outsourcing is the outcome of this requirement.
Before considering the case for outsourcing, we need to understand what drives corporations to outsource their data centers at all, particularly given their fears about data security, reliability and intellectual property. Clients look to data center outsourcing when they face one or more of the several issues like cost pressure, increasing management time and high investments in technology and infrastructure.
Here are the figures for the 2006 and 2012 (projected) popularity of data center outsourcing across various verticals.
Verticals 2006 2012
Financial Services 28% 33%
Telecommunications 9% 11%
Manufacturing 25% 24%
Energy and Utilities 4% 3%
Healthcare 4% 5%
Media and Entertainment 1% 2%
----------Source: Datamonitor
Companies in India, like those elsewhere, have to move swiftly to adapt to change, seize new opportunities and meet the demands for increased productivity and reduced costs. Data center outsourcing is the outcome of this requirement.
Before considering the case for outsourcing, we need to understand what drives corporations to outsource their data centers at all, particularly given their fears about data security, reliability and intellectual property. Clients look to data center outsourcing when they face one or more of the several issues like cost pressure, increasing management time and high investments in technology and infrastructure.
Here are the figures for the 2006 and 2012 (projected) popularity of data center outsourcing across various verticals.
Verticals 2006 2012
Financial Services 28% 33%
Telecommunications 9% 11%
Manufacturing 25% 24%
Energy and Utilities 4% 3%
Healthcare 4% 5%
Media and Entertainment 1% 2%
----------Source: Datamonitor
Wednesday, September 17, 2008
Data Center Market India
INDIA DATA CENTRE MARKET SET TO REACH USD 1.5 BILLION BY 2010; POWER CHALLENGES REMAIN CRITICAL:
A new report from consulting company and data centre market specialist BroadGroup finds that the India market is experiencing substantial growth and will reach more than USD1.5 billion in value by 2010. Yet power supply remains a critical challenge for the country.
Based on a study detailing the profiles of 34 players, the study reveals that while growth is occurring at unprecedented levels, challenges remain particularly those relating to infrastructure, power – and the quality of power –and land availability.
Technical space will nevertheless more than double over the next two years. Fuelled by offshoring, overseas MNCs, and domestic demand, data centres in India have experienced significant growth over recent years, and as the survey reveals, new build and plans for new build are well advanced producing a spike in space that will more than double current capacity.
The core of the report details profiles of 34 players in India, both overseas and domestic, and the report examines current availability, location and expansion plans. The scale and capacity of the international ambitions of the top five players is supported by significant and growing demand from the local market. Although Global MNCs are becoming selective about the robustness of power supply, security and green credentials, overseas systems integrators and consultancies are sustaining and expanding their investments in India.
“India has the opportunity to become a global hub,” commented Frank Booty, editor of Data Centre News. “India’s language capabilities, skill levels, culture and governance are suited to the country becoming a global hub. It also has a resilient economy driving domestic demand for services. Until now much of the data coming out of India has been stored on servers in the US.”
Data Centre build however over the coming years will need to reflect the Green standards increasingly included in corporate RFPs, and there is an urgent need to address how the infrastructure will cope with the levels of power demanded by these plans. Corporates will also need reassurance about data loss and disaster situations.
In common with data centres globally, India data centres confront the challenge of cooling. Growing alarm expressed by interviewees for the report focused on the dollar/rupee spending on blade servers today, which embeds two to four times more power consumption in the same or less space, than was required by the equipment being replaced.
The report is the first to assess a complex and fast changing market but one that contains significant opportunities for companies engaged in the sector from the operators themselves through to a huge business for air conditioning companies and UPS suppliers.
Further information on the report can be found at http://www.datacentres.com/reports/dcindia08.asp.
Major Players in India:
A new report from consulting company and data centre market specialist BroadGroup finds that the India market is experiencing substantial growth and will reach more than USD1.5 billion in value by 2010. Yet power supply remains a critical challenge for the country.
Based on a study detailing the profiles of 34 players, the study reveals that while growth is occurring at unprecedented levels, challenges remain particularly those relating to infrastructure, power – and the quality of power –and land availability.
Technical space will nevertheless more than double over the next two years. Fuelled by offshoring, overseas MNCs, and domestic demand, data centres in India have experienced significant growth over recent years, and as the survey reveals, new build and plans for new build are well advanced producing a spike in space that will more than double current capacity.
The core of the report details profiles of 34 players in India, both overseas and domestic, and the report examines current availability, location and expansion plans. The scale and capacity of the international ambitions of the top five players is supported by significant and growing demand from the local market. Although Global MNCs are becoming selective about the robustness of power supply, security and green credentials, overseas systems integrators and consultancies are sustaining and expanding their investments in India.
“India has the opportunity to become a global hub,” commented Frank Booty, editor of Data Centre News. “India’s language capabilities, skill levels, culture and governance are suited to the country becoming a global hub. It also has a resilient economy driving domestic demand for services. Until now much of the data coming out of India has been stored on servers in the US.”
Data Centre build however over the coming years will need to reflect the Green standards increasingly included in corporate RFPs, and there is an urgent need to address how the infrastructure will cope with the levels of power demanded by these plans. Corporates will also need reassurance about data loss and disaster situations.
In common with data centres globally, India data centres confront the challenge of cooling. Growing alarm expressed by interviewees for the report focused on the dollar/rupee spending on blade servers today, which embeds two to four times more power consumption in the same or less space, than was required by the equipment being replaced.
The report is the first to assess a complex and fast changing market but one that contains significant opportunities for companies engaged in the sector from the operators themselves through to a huge business for air conditioning companies and UPS suppliers.
Further information on the report can be found at http://www.datacentres.com/reports/dcindia08.asp.
Major Players in India:
- Reliance Data Center ( Reliance ADAG group)
- Tata Communication ltd
- Sify
- NetMagic
- Net4India
Data Center Outsourcing
Outsourcing Data Center operation is gaining its ground in India. Not only large enterprise but SME's are also outsourcing their some or full data center infrastructure to third party.
Estimates put the third party data center market including co-location services, hosting services and managed services in India at $150 million [2007]. With a projection of an average CAGR of 36% over the next two years, the verticals that outsource the most are BFSI and manufacturing together accounting for about 53% of the market.
Benefits of Data Center outsourcing:
- Lower TCO
- Uptime guarantee for server and network through continuous power, redundancy etc.
- Better security and scalability
- 24X7 support
- Compliance
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