Accounting for the largest share of 67 percent in World market for IT infra sourcing, India is on a steady path of digitization. As mobile and internet penetrates into virtually every organization, the trend represents a huge opportunity for both the vendors and enterprises endorsing and adopting on premise, cloud or hybrid IT.
IT Infrastructure has redefined how businesses operations are conducted in today’s enterprises. In fact, so important it is to enterprise businesses that IT Infrastructure Services has emerged as the fastest growing sector today. So much so that as per Gartner, the Indian IT infrastructure market is expected to reach $1.93Bn this year with a projected sum of $2.13Bn for 2020.
The Indian enterprise sector has been gaining rapid momentum of late as the focus on optimizing infrastructure and operational costs been rapidly increasing. Organizations have started to bring in next-gen data centers to process the heavy data transfer requirements of operations day in day out. The networking requirements have escalated network speeds and in turn made way for more efficient infrastructure hardware and software.
“Enterprises have chosen to use public cloud services for new digital, initiatives while using private cloud for more traditional, core application workloads.” –
Andy Stevenson
Head of Middle East and India
Managing Director for India
Fujitsu
According to a study by Indian Brand Equity Foundation (IBEF), India is the world’s largest sourcing destination for the information technology industry, accounting for approximately 67 per cent of the $124-130 billion market. Additionally, public cloud services revenue in India is expected to reach $1.26 billion in 2016, with a growth of 30.4 percent YoY. The public cloud market alone in the country was estimated to staggeringly treble to US$ 1.9 billion by 2018 from US$ 638 million in 2014. The main drivers for continued growth of data center co-location and hosting market in India are increased penetration of internet (including in rural areas) and rapid emergence of e-commerce.
IT Infrastructure in Enterprises Today
The rise of technology trends like Cloud and BYOD have transformed the face of IT infrastructure. Traditionally infrastructure involving an intricate system of servers, storage devices and networking equipment has now been replaced by the dynamic phenomenon of IaaS: Infrastructure as a service. Large installations have been replaced by small datacenters and public clouds. Enterprises no longer have to invest on infrastructure before using new software licenses as this can now be done through a cloud with the infrastructure delivered as a service from the vendor.
“Enterprises require mobilization of data and content to be delivered securely, where cloud plays a major role.”
Srikant Attravanam
Director – Platform Solutions and Services
Hitachi Data Systems, India
In one of the most recent corporate stories, the founder of one of the world’s biggest on premise IT services vendor Oracle quite famously turned its approach to Cloud and literally urged its customers to move to the cloud with Oracle. This development and massive new offering from Oracle comes on the back of an indirect reversal from the way the company denounced the cloud business just a few years back. The cloud based IT infrastructure has taken the enterprise world by storm as corporations have been widely embracing concepts like IaaS, SaaS and PaaS.
“Public Cloud is increasingly becoming relevant for Datacenters and IT leaders in India.” –
Naveen Mishra
Research Director
Gartner
However, though impactful, not all functions of an enterprise are suited for Cloud. Many organizations have started using IaaS balanced with modernized robust infrastructure to deliver agility, cost and quality of service. This brought around a new concept of Hybrid IT. According to research firm Gartner, the emergence of bimodal IT has led to lot of investments in Mode 1, and is an increasing focus on building Mode 2 infrastructure. The traditional IT infrastructure market includes server, storage and enterprise networking equipment. Aman Munglani of Gartner says, “In 2016, data center modernization will continue to be key driver for infrastructure spending in India. Automation and orchestration are becoming high priorities for Indian leaders as well. Software defined infrastructures, and an increased focus on disaster recovery and business continuity, will also lead to an increased spend on infrastructure.”
However, recent happening show that areas such as cloud, software defined storage, software defined network together with integrated systems have been the areas of investment for enterprises. Gartner’s research experts also say that the public cloud is increasingly becoming relevant for data center managers and IT leaders in India. Additionally, although it is still relatively small, DevOps is another space which has gained momentum within IT operations teams in India. As part of the IT infrastructure, enterprise networking was the biggest segment for investment within the Indian IT infrastructure market in 2016 with the revenue expected to top $848 million. On the other hand, revenue from storage part of the IT infrastructure is on the downside, and expected to dip from $262 million in 2016 to $253 million this year. The decline is being suggested to be impacted by improved price performance. Going further, it has been observed that enterprises investments in software defined storage has been on the upside as they evaluate alternate, cheaper devices, such as flash storage.
Changing face of IT Infra Business: IaaS
Infrastructure-as-a-Service or IaaS is a seamless way of delivering cloud computing services (including storage devices, networks and servers) on demand. The concept is witnessing massive growth backed by the rising demand to reduce capex on IT hardware to store data, generated through various smart devices by individuals and enterprises. As Fujitsu’s Andy Stevenson says, “It’s the perfect service for organizations that have a greater need for cloud than hardware. IaaS will exhibit significant growth of around 35-40%, and be one of the largest growth areas of overall public cloud services, worldwide.”
With the influx on IaaS, the market dynamics too have altered. Old stalwarts like IBM, VMware and Cisco have been replaced by new entrants like Amazon Web Services, Microsoft and Google as leading players in this space. This has led to further proliferation of IaaS as a mainstream choice for organizations. Easily available low-cost infrastructure, transparency in utilizing the services and their costs, with high scalability and instant implementation along with pay per use model are some of the key drivers for this market. As Stevenson puts it, “Many large enterprises have chosen to use these public cloud services for new, often digital, initiatives while using private cloud for their more traditional, core application workloads.”
One trend that is expected to gain prominence is the adoption of the Hybrid IT model. The challenge of adopting Hybrid IT will be experienced by larger commercial and public sector bodies that previously invested in on premise existing IT. The hybrid model is appealing to enterprises because of its combination of legacy IT along with Public, Private and managed cloud services. Stevenson continues, “Organizations will recognize that a Hybrid IT approach will allow them to achieve maximum gain from the existing IT while being prepared to expand into new areas. We believe in future, more and more enterprises will go the private route, and subsequently hybrid.”
The Market – Global and Domestic
IaaS market at the global level is estimated to be around $22.4Bn and has been experiencing rapid growth recently. The Infrastructure as a Service market worldwide is majorly dominated by players such as Amazon, Microsoft, Netmagic, Google & Rackspace. However, there has been a steady influx of a number of new players offering low-cost infrastructure support in terms of storage devices, servers and network equipment. The sector has had high traction due to continuous innovation in centralized data storage capacities, servers and applications to increase operational efficiency with no additional capital outlay for enterprises infrastructure.
With the exponentially increasing number of connected users, over 200 million, IaaS adoption in India is gradually gaining momentum. With greater connectivity comes a greater need to store the data generated every minute through the multiple smart devices used by enterprises and individuals alike. This is catalysing India into one of the foremost markets for IaaS. Fujitsu’s Stevenson says, “The dynamic business environment found in India is a great match for IaaS adoption. Whether a new start-up or a rapidly growing business looking for IT infrastructure with low overheads matched to their business levels – IaaS delivers. Organizations of all sizes can benefit from the fact that IaaS services are delivered from datacentre locations that would generally be of a quality higher than may achieved from locally hosted infrastructure. The rapid adoption of mobile also means that users of IaaS hosted applications could also remove one of the potential barriers cloud services – indeed actually making cloud service more suitable.”
Quite literally, India has been bouncing ahead of most economies in the widespread adoption of mobile in all aspect of community and business life. As mobile and cloud services are complimentary in nature, therefore use of all types of cloud service, i.e. IaaS, PaaS and SaaS are expected to accelerate in the near future. However, Gartner also forecaster that the growth of IT infrastructure initially would be slow till say 2020, climbing at a pace similar to the 1% hike from 2015 to 2016. The deterrent forecast to the growth in the Indian IT infrastructure market might initially pose significant challenges to the players in the space including Cisco, HPE, Juniper Networks, Huawei, Lenovo, Oracle, IBM and Dell-EMC among others but once proliferation occurs the market is expected to gain traction. Gartner Research Director Naveen Mishra believes, “Public Cloud is increasingly becoming relevant for Datacenters and IT leaders in India. This is an area where enterprises are focusing heavily in terms of their optimization efforts and evaluating software defined networking as this is becoming a barrier for seamless digital experience.”
On Premise to Cloud: Organizational Challenges
With the recent developments in the space, Cloud-based IT infrastructure has taken momentum due to a number of pros like cost-effectiveness, ease of installation, scalability and mobility. Stevenson continues, “This has led to the rise of Hybrid Cloud where organizations leverage different cloud models depending on considerations such as the application, their attitude to risk, or maybe restrictions they may have on data location and residency.”
For organizations already using o premise IT services, the biggest issue when transitioning to cloud is the cost aspect. “There is the big challenge of expenditure for enterprise’s migration from premise infrastructure to cloud. Along with the existing investment poured into the infrastructure, the cost of moving the workload to loud can be a major concern in terms of skills as well as management tools,” adds Stevenson. Additionally, the data carried by the infrastructure is sensitive and confidential. Therefore multiple red tapes and authorizations have to be surpassed in order to complete the process. The next challenge comes in finding the right and skilled resources to handle the transition, and ensure that the work carries on.
Hitachi Data Systems’ Srikant Attravanam gives an overview of the current scenario, “Organizations are adopting different cloud models to support their business effectively. Enterprises require mobilization of data and content to be delivered securely, where cloud plays a major role. According to the 2015 Economist Study conducted by Hitachi, about 70 percent of organizations use private clouds for file storage, archive, big data repository, collaboration and productivity. Cloud Products, Solutions and Services are designed to help customers reduce risk as they enable shift to cloud elasticity and pay-as-you-go efficiency without compromising business-critical services and service levels.’’
Industry Advice to CXOs
When adopting cloud-based services in their enterprise’s IT infrastructure, it is crucial for the CXOs handling the IT end to be fully aware of the dynamics of the technologies in use. There need to be a well administered strategy with clarity on what the implementations bring to the organization. For a cloud based IT infrastructure to be successfully implemented, a CIO should be well aware of the industry and should only choose an IaaS vendor, the offerings of which are in line with the IaaS expectations of the enterprise. Fujitsu’s Andy Stevenson says, “IaaS has brought about a radical change in the manner we purchase and manage our IT infrastructure. There are certain things that CXOs should be mindful of while selecting their IaaS vendor. Firstly, the CXO as well the vendor should have clarity about the business objective, as to what they hope to achieve with this service. Secondly, the CXO should ensure that he has all the levels of access required to along with the knowledge of possible modifications that the software might require.”
A CIO is responsible for the relationship between the enterprise and the vendor. It is he who needs to have all aspects of the technology transfer under his nose. IT decision makers should have a thorough understanding of the processes and aspects like security, maintenance and overheads, cost effectiveness and ROI. “Security and cost are other important factors to be kept on priority. Vendors often repackage and resell from various parties, therefore the CXO should know who exactly owns the infrastructure that he is purchasing while being aware of the vendor’s support and monitoring system,” adds Andy Stevenson.
It is but unavoidable that some parts of their organizations IT infrastructure needs to be on cloud. The concept of Hybrid IT is not just the next step in IT infrastructure but the way forward for organizations seeking to scale business operations and grow at a rapid pace. “To remain relevant, Indian IT organizations need to shift rapidly to a new paradigm that supports the rapid pace and new technologies of the digital enterprise that also incorporates traditional, mission-critical IT systems and applications,” opines HDS’ Srikant Attravanam, “Diversified products and solutions with proficiency in Data Analytics, Internet of Things, and connected intelligence help organizations to design, deploy and leverage economically superior storage architecture.”
As Enterprises Mature
It is predicted that in the next 5 years, the IT infrastructure will become fairly commoditized and price competitive – with the small but well equipped and resourceful pool of major global players and with them a mix of local application specific players addressing challenges around specific areas in conjunction with the local target markets. Stevenson further adds, “A lot of the infrastructure will be subsumed as an element of a broader service as organizations buy SaaS and use PaaS for building their apps. IT infrastructure is crucial for the success of an organization.”
As per a report from E&Y, India’s strong and flourishing SME sector is expected to scale heights and achieve high IT expenditure growth rate, of which over 50% is projected to be attained from hardware. This adoption will offer a wealth of opportunities to IaaS vendors to provide these SMEs with viable cloud options, thus expanding their base in the sector. Internet service providers, especially telecom ISPs, shall also drive this initial growth of IaaS in the country. As bandwidth creators, bringing cloud and IaaS into their fray will not only help raise the bandwidth usage but also expand the customers’ switching costs.
Concepts empowered by Cloud technology like mobility, BYOD, IoT and Big Data have given organizations new avenues to amplify productivity and efficiency by seamlessly streamlining the operations and the workforce. Having a hybrid infrastructure lets organizations push the consuming and scalable tasks to the cloud-based IaaS, keeping the core applications on the on premise IT infrastructure.
The idea of cloud should not be to move forward choosing it as the better option over the traditional server, storage and networking equipment combinations but rather CIOs and IT Decision Makers should carefully understand the capabilities of the offerings and how they would benefit the specific applications or operations of the enterprise. Only then will it be possible to be sure which aspects of the business are better served on premise and which needs the scalability and accessibility of the cloud. The key for having a seamlessly productive IT infrastructure is having a well-planned Hybrid IT Infrastructure where an organization uses a mix of the on premise, public cloud and the private cloud in a way that each specific task or application uses the apt infrastructure to enable it to better solve the purposes of the organization.
IT Infrastructure Skills for the CIOs/ITDMs
Cloud Security
Software Defined WANs
Cloud Service Broker
Next-gen Firewalls
Cloud Managed Networking
Collaboration
Mobile Device Management
Malware Sandboxing
Application Containers
Data Center Switching
Growth Drivers for Hybrid
Low-cost infrastructure
Transparency in Service Utilization
High Scalability & Accessibility
Instant implementation
Cost-effective Pay as You Go Models
