Connectivity is the lifeline of modern enterprises as it facilitates mission-critical business applications that directly affect companies’ bottom lines. Mobility and data management are the two primary requirements for enterprise connectivity.

Mobility applications are crucial for all companies, given that most of their day-to-day business activities are undertaken in real time and across geographically dispersed locations. However, consolidating all systems and processes to provide a unified experience across platforms is a major challenge, which makes data management a key issue. Managing all data from a “master” platform is crucial for the efficient functioning of businesses.

While mobility applications are driving bandwidth demand, the need for data backup is leading to the growing demand for data centres, both virtual and physical. In Asia alone, international bandwidth requirements witnessed a compound annual growth rate of over 55 per cent between 2007 and 2011, while the number of broadband subscriptions doubled to 250 million during this period. Therefore, enterprises are looking to service providers for robust network connectivity to help them handle more data at faster speeds, without affecting network performance.

In India, the demand for better and high-scale connectivity is growing across enterprise segments such as hotels, travel and hospitality; BPOs; educational institutions; manufacturing; retail; fast moving consumer goods; banking, financial services and insurance; IT/ITeS; and media and entertainment. Of these, media and entertainment companies were the early adopters of broadband technologies, given their need for on-the-go connectivity. Banking and financial institutions also need connectivity solutions due to their wide network of branches across the country. Several large- and medium-scale enterprises across these verticals are planning to deploy gigabit passive optical networks (GPON), unified communications platforms, and the multi-virtual routing and forwarding mediums.

For instance, the Taj Group, a major hospitality chain in India, plans to offer multiple IP-based services such as high speed internet access, IPTV, telephony, room management facilities, videoconferencing and video-on-demand on its network. While the group has been providing 1 Gbps bandwidth links to its customers over the past two years, the demand for a high bandwidth network to support quality services has been growing across its hotels, resorts and other facilities. Considering this, the group is looking to deploy the GPON network. Infosys BPO is also looking to deploy unified communications technology that enables and supports applications such as video, voice, email and chat. Meanwhile, Hindustan Copper Limited, a government-owned mining company, is replacing the obsolete components of its communications infrastructure to ensure IPv6 compatibility.

 Bandwidth on cloud

Cloud computing is fast emerging as a popular technology platform for companies globally. It works on the basis of a pay-per-use model that allows companies to utilise computing resources such as data storage, servers and applications on the internet, thereby minimising their opex and capex. However, the lack of data security and privacy could pose challenges for this market.

Business Software Alliance, a global non-profit IT alliance, has ranked India nineteenth among 24 countries in terms of preparedness for implementation of cloud computing. With an overall score of 50, India is ahead of China (47.5) and Brazil (35.1), but is ranked below advanced economies like Japan (83.3), Australia (79.2) and the US (78.6). This indicates the significant untapped potential in the Indian cloud space.

 Growing Ethernet adoption

In the past, organisations were forced to rely on highly shared and slow DSL, ageing Ethernet-over-copper, or expensive fixed-contract fibre due to their location. However, with the increasing use of technologies and applications such as telepresence, core banking, broadcasting, point of sale/asynchronous transfer mode (ATM) applications and content, organisations are migrating to IP networks.

In this backdrop, Ethernet, owing to its high bandwidth capability, is emerging as the preferred option for several enterprises in India, though several entities are yet to revamp their legacy Frame Relay, T1 and ATM networks. Ethernet can support the increasing bandwidth demand and growing cloud computing requirements. Therefore, all leading service providers in the country are strengthening their Ethernet capabilities.

Ethernet has been one of the fastest growing telecom segments globally as well. The Vertical Systems Group recently released a report, which estimates the global retail carrier Ethernet services market to be valued at $49.4 billion by 2017. The report further states that the Asia Pacific region, the largest market for Ethernet services, will continue to witness steady growth through 2017, with China and India leading the pack. The region was the first to adopt Ethernet services, and is characterised by scores of high-density metropolitan business centres.

Developing markets such as Brazil, Argentina and Colombia are also being targeted by global providers that are looking to expand in underserved markets. The US is another fast growing Ethernet market. In contrast, Europe has the weakest growth outlook due to its sluggish economy. Networking projects in the region have also been impacted due to capex reduction by governments, enterprises and small businesses across the Eurozone.

Optic fibre has been the most preferred option among the access technologies for Ethernet. Other access technologies including SONET/SDH, TDM, copper loops and coaxial cable are also being utilised for the same.

The market for Ethernet is very competitive with players from the US and Europe holding a large share. According to another Vertical Systems Group report, the top seven companies in this space are Orange Business Services (France), BT Global Services (UK), Verizon (US), Colt (UK), AT&T (US), NTT (Japan) and Level 3 (US). Besides, Cable & Wireless Worldwide (UK), Cogent (US), Reliance Globalcom (India), SingTel (Singapore), Tata Communications (India) and T-Systems (Germany) have a significant market share.

 Data centres

According to Nasscom, India’s data centre market was valued at about $2.2 billion in 2012. It is estimated to grow by over 8 per cent during the next three to four years. Firms are investing in both captive and third-party data centre set-ups. While larger enterprises prefer in-house data centres, small and medium-scale units cannot justify the costs for the same and, therefore, rely on the outsourcing model. Several players have lined up significant investments for tapping this market. For instance, Tulip Telecom intends to set up large data centres in Delhi and Mumbai over the next three years. The company owns about 1 million square feet of floor space across Delhi, Mumbai, Navi Mumbai, Bengaluru and Kolkata, with a total raised floor space of 500,000 square feet.

Sify Technologies is also looking to increase its data centre capacity. The company, which has been directing about 40 per cent of its total expenditure towards data centre capacity since 2007-08, has about 900,000 square feet of data centre space. Moreover, Software Technology Parks of India is setting up a 10,000 square foot data centre in Hyderabad for small and medium enterprises; and CtrlS, a Hyderabad-based data centre service provider, plans to add 5,500 racks in the next 8-12 months across Delhi, Bengaluru and Chennai. At present, the latter has a capacity of about 6,500 racks in Hyderabad and Mumbai.

As of December 2012, India had a total of 3.7 million square feet of data centre space. As per Gartner, this will increase to 6.3 million square feet by 2017.

 Conclusion

Overall, the need for connectivity, and the falling prices of access devices, especially smartphones and tablets, will continue to drive the demand for broadband services in the enterprise segment.