The growth in the country’s data centre space is driven by increasing requirements from sectors such as manufacturing, telecommunications, financial institutions and services. Service providers such as Reliance Communications, Tata Communications, Sify Technologies and Tulip Telecom have rapidly expanded their data centre business. Moreover, large enterprises across various sectors are investing in data centres in order to improve disaster recovery and meet business continuity requirements.

However, there are some key concerns and challenges regarding the establishment and management of data centres. In April 2012, Cushman and Wakefield released its Data Centre Risk Index, which ranked India 29th amongst 30 countries. The index took into consideration various risk factors such as energy costs, bandwidth, ease of doing business, labour costs and political instability. The main factors that resulted in India’s low ranking are the high costs and inadequate availability of energy. The index report, however, has predicted that the market will witness steady growth in the next four to five years.

tele.net takes a look at some of these issues, current business practices as well as possible solutions in the Indian data centre market…

Issues and challenges

Huge investments are required for setting up and managing data centres. For instance, Tulip Telecom has invested Rs 4.5 billion in its data centre in Bengaluru – Tulip Data City (TDC). The company plans to invest another Rs 4.5 billion over a period of three years. Meanwhile, Tata Communications has estimated an investment requirement of Rs 15 billion over the next five years for its data centre business. Accordingly, the company has decided to hive off its data centre business into a separate subsidiary.

Further, rising real estate costs, especially in the metros and major cities, pose a challenge for organisations looking to set up data centres. Industries such as manufacturing, IT and banking, financial services and insurance are the key data centre clients in India and most of these business hubs are located in cities like Mumbai, Delhi, Bengaluru and Hyderabad, where escalating property costs are a major issue.

Besides huge investment in physical infrastructure, rising energy costs are the biggest challenge for the Indian data centre industry. The energy consumption of data centres has increased considerably with the growth in the quantum of data being processed at these centres. For insance, once TDC in Bengaluru becomes fully operational, it is expected to use peak power of 100 MW. Currently, energy costs constitute around 50 per cent of a facility’s lifetime operational costs. Moreover, given the erratic and unstable power supply scenario in India, most companies have set up a backup mechanism by deploying generators and resorted to alternative energy sources. Both these options have, however, burdened the company’s books.

Besides, cooling systems also affect power consumption in data centres. Dual-core and quad-core processors in the servers directly affect the power required per square foot. The use of higher density cabinets and racks in data centres is expected to increase in the coming years, which will affect the amount of power and cooling required.

Another challenge facing the industry is the lack of skilled manpower. Indian data centre managers need to become process oriented without compromising on the flexibility of their existing systems. Moreover, an improved structure needs to be introduced in the areas of change management, problem management and software/hardware refresh.

Further, only 5 per cent of the total corporate data centres in the country operate in a professional environment. Most companies run their data centres in an ad hoc manner in commercial buildings where their offices are located. Also, Indian data centres do not have sufficient software tools to automate data centre environments. The investment in automation tools – that assist in network optimisation, application delivery and performance management – is limited.

The cost of adoption and integration of new technologies in hardware, software and facilities management is a major concern for vendors, and they are exploring ways to realign their pricing strategies and business models to ensure profitability.

Business practices and solutions

Despite several issues and challenges, data centres are set to emerge as one of the most important business segments in the country given the need to manage the ever-growing data traffic amongst all business verticals. The government can help the industry by providing network connectivity and improving the power supply situation. Besides, organisations have started adopting several business practices and are leveraging various technologies and processes across data centre infrastructure to bring down costs and protect information and applications, enhance data centre service levels, improve storage and server utilisation, and manage physical and virtual environments. The companies are increasingly focusing on areas such as improving IT system efficiency, storage management, disaster recovery, data protection and maximisation of resources.

Storage management at data centres is critical because storage capabilities are often underutilised. Several tools are available that provide data centre managers visibility of their storage environment and help them understand which applications are connected to each storage resource and how much storage is being utilised by these applications. This information improves organisations’ decision-making capabilities and is often used for predicting future capacity requirements.

Further, storage management solutions have advanced capabilities such as centralised storage management, online configuration and administration, dynamic storage tiering and multi-pathing, data migration, and local and remote replication. These capabilities help organisations reduce their operational and capital costs across the data centre.

Clustering solutions, which support multiple operating systems, physical and virtual servers as well as a wide range of hardware configurations, are being deployed to maximise resource utilisation. These tools streamline efficiency by monitoring the status of applications and automatically transferring them to an alternative server in case a fault occurs in the existing one. For disaster recovery purposes, clustering tools can be combined with replication technologies to fully automate the process of replication management. Further, these tools enable the application start-up without the need for complicated manual recovery procedures. Thus, disaster recovery solutions enhance administrator efficiency by providing a single tool for managing both physical and virtual environments. Data protection is also being ensured to contain the costs associated with managing and archiving data. This helps in meeting internal service level agreements (SLAs) and external governance requirements.

Besides lowering costs through increased IT efficiency, organisations are also adopting virtualisation and green practices to use hardware resources efficiently. Server and storage virtualisation can improve existing hardware utilisation and thus reduce the requirement of additional resources to some extent. Several companies are resorting to server and storage virtualisation as a part of their cost containment strategies. Virtualisation also optimises the usage of critical resources, reduces equipment utilisation rates, enables infrastructure consolidation and helps reduce heat and power consumption. However, a key challenge in this scenario is the complexity introduced by the virtualisation of IT infrastructure. Thus, companies will need to implement a management framework that provides architectural flexibility while supporting virtualisation platforms and physical environments.

The focus on green IT practices is driving efficiencies in the Indian data centre services market. Adopting green practices results in significant reduction in power usage by the installed IT equipment. Multiple strategies are being implemented as a part of the green IT process, which include optimisation of data centre layout and electrical design with efficient components, air-conditioning design as well as the deployment of adequate monitoring and control systems.

The way forward

Data loads will continue to increase in the coming years. Data centre services are expected to witness higher uptake over the next five to seven years. However, high data centre costs and inefficiencies in infrastructure management pose serious challenges to business growth. Data centre managers have started focusing on increasing IT efficiency and implementing cost containment strategies.

Going forward, data centre service providers are expected to protect increasing volumes of data and mission-critical applications, manage complex and heterogeneous environments, meet challenging SLAs, and implement a variety of emerging green business initiatives. Virtualisation and green initiatives will be the key to improving the cost efficiency of data centres. Further, tools are being developed to improve power efficiency and infrastructure management, which will result in overall system efficiency and reduced costs.