The much anticipated infrastructure refresh cycles and the new greenfield projects, which the government is planning to launch soon, will be the major drivers of growth for India’s storage and servers market.
The server and storage vendors have their eyes set on the programmes such as ‘Digital India’ and ‘Make in India’, both of which are expected to lead to the rise of a large number of greenfield projects. These projects will have extensive deployment of IT, and will to lead to a significantly higher demand for compute and capacity related solutions. After being flat in 2014, the server market is at the cusp of rapid growth in 2015.
The right combination of server and storage is important to deliver the desired performance, especially in the current environment where the enterprises are increasingly investing in virtualization technologies. The adoption of technologies such as cloud, mobility, big data and software defined everything is defining the growth of the overall industry, including servers, storage and networking infrastructure, and the management of data centers.
According to a recent IT Decision Makers survey by Dell, 98% of Indian IT decision makers feel that the data center management is important for their companies. 66% percent feel that mobility is the most important technology trend for their organisation. This is followed by Big Data (65 %) and Cloud Computing (63%). The survey results clearly indicate that to catch up with these technologies, the Indian organisations must get the basics of server and storage right.
Here is look at how these two critical elements of enterprise IT infrastructure fared in 2014.
The server market
In the third quarter of 2014, worldwide server shipments grew by 1% year-on-year, while the revenue moved upwards 1.7% from the third quarter of 2013, according to Gartner.
However, the India server market witnessed a double-digit growth in shipments and revenue. The server shipments in India grew 18.8% during the third quarter of 2014, resulting in a revenue increase of 14%. Most of this growth is being fuelled by hardware refresh and consolidation efforts, which slowed down during the first half of 2014. Though x86 servers fuelled the growth in third quarter with 18.9% year-on-year shipment growth, Unix-based hardware revenue also grew by 7.6% as compared to the last year.
According to Gartner, in terms of vendor performance, HP occupied the first spot, followed by Dell and IBM. HP dominated the market with its strong leadership in x86 server market. IBM is currently going through a major transition as the divestment of its x86 business gets taken care of.
Going by Gartner’s estimates, the Indian server market is expected to generate revenues of $677 million. This represents a growth of 3.3% in 2015 as compared to 2014. Gartner expects that this growth will mainly come from data center and infrastructure modernisation investments, mobility solutions, consolidation and virtualization.
An IDC report finds that x86 server market in India grew by 10% in terms of unit shipments in the third quarter (Q3) of 2014 as compared to Q3 of 2013. The report said the major contributors to this growth were professional services, communications & media, banking and retail verticals. It said that the non x86 server markets, however, saw a decline of 58% in terms of revenue in Q3 2014 as compared to Q3 2013 due to large refreshes in verticals like banking and telecom being on hold due to various factors.
Market Trends
Mehul Doshi, Country Manager, Data centre Solutitions, Fujitsu India, says, “For Fujitsu India, 2014 has been a good year on the server side. We saw a growth of about 8-10% both from revenue and units perspective. Several ERP led projects ensured growth for the sever business, especially the x86 servers.”
Interestingly, he points outs that this year there was no new trend of virtualization from either Citrix or Microsoft, so it did not eat into the server business.
He is of the opinion that with surveillance projects being adopted across the vertical, there is bound to be an increase in demand for servers. This is because more servers will be deployed for delivering better IOPS (Input/Output Operations Per Second) on the growing storage base.
Another exciting space that Doshi sees on the server side is from the High Performance Computing sector. He is of the view that the importance of high performance computing (HPC) is rapidly growing because scientific and technical problems are being studied on the basis of computer simulations. Such high performance computing requirements are emerging from areas like geospatial sciences, manufacturing, education and research.
Fujitsu is now setting up a High Performance Computing (HPC) Competency Centre in Bangalore to help scientists and engineers perform advanced computational work. In fact, he says, “With this Competency Centre, we believe that we can contribute to the government’s ‘Make in India’ project as the manufacturers can use this facility to develop prototypes of their products.”
Oracle’s Head of Systems Business, Amit Malhotra talks about another trend that seems to be getting prominent—this has to do with the pre-integrated hardware and software stacks called the Engineered Systems. “The adoption of these systems is fast catching up. Some IT tracking firms now look at these as a separate category,” he says.
“These engineered systems are complete solutions and pretested, so can easily be deployed, resulting in shorter time to market. In a conventional process, if one optimised hardware or software the result would be around 10-30% better performance, but these systems are capable of enhancing performance up to 10 times, at the same time reducing power consumption, all these combined lead to much lower TCO. We, in fact, have noticed a double digit growth,” Malhotra says.
Doshi, however, has a different point of view. He says that though these systems have clicked globally, the Indian market is yet to see a considerable amount of penetration of these systems. For Doshi new technologies like virtualisation and cloud are in vogue. He foresees change in the way enterprises have been buying servers and storage traditionally.
Storage
According to IDC’s Asia-Pacific Quarterly Enterprise Storage Tracker, the Q3 2014 India external storage market witnessed a double-digit quarter-on-quarter growth (in vendor revenue) and stood at $1.97 million though year-on-year was a de-growth.
Q3 2014 witnessed a recovery mainly due to some large multi-million dollar deals that were absent from last few quarters. The market is expected to revive in the coming quarters due to business favouring policies from government and large pending technology refreshes, though increased acceptability of cloud and need of infrastructure optimisation across organisations are posing hiccups to the traditional storage market growth.
According to a Seagate Research, Rajesh Khurana – Country Manager for South Asia (India & SAARC, ASEAN) Seagate Technology, says by 2020 about 56% of storage will be on cloud. Till a couple of years back most of the storage was happening in the compute space, but is no more the case now, all thanks to the kind of apps that we use now.
“About 6.5 ZB of unstructured data is expected to be stored in the cloud by 2020,” he says, adding that the organisations will have to prepare their infrastructure to support that.
Hence, optimisation and productivity have become the key priorities across organisations and this is resulting in increased adoption of technologies like virtualization, de-duplication, automatic tiering, compression and thin provisioning.
Flash storage is gaining foothold in Indian organisations, especially in verticals like communication & media, manufacturing, IT/ITeS and banking. Software defined storage is also slowly gaining traction and majority of the OEMs are developing a solutions-based-approach to cater to this demand.
David Chua, Director of Distribution Business, Asia Pacific South, HGST observes that this data deluge is not unique to India, but data is becoming more important than ever globally “Fuelled by the growing number of applications, devices and data types – not to mention the Internet of Things (IoT) – the amount of data being created and replicated is doubling every two years,” he says. A survey commissioned by HGST earlier this year, it has come to light that 86% of CIOs and IT decision makers believe that all data generated has value only if the organisation is able to store, access and analyse it optimally.
“This volume, velocity, longevity and value of data is putting storage at the heart of the data center, creating new opportunities for the enterprise storage industry,” says Chua.
Some of the popular themes that are emerging in the storage area pertain to analytics and mobility. “The trends that will drive enterprises in 2015 will essentially be related to Consolidation, Convergence, Mobility, Analytics and Compliance,” says Vinod Ganesan, Director Platform, Solutions & Services, Hitachi Data Systems.
Software play is becoming more and more critical for data centres today. This has prompted the storage vendors to experiment with software defined storage solutions. For instance, HDS launched the next generation enterprise platform the VSP G1000 , which according to the company is a paradigm shift in Enterprise Storage. “VSP G1000 is built on ‘Software Defined’ framework and leverages HDS’ Storage Virtualization Operating System capabilities,” informs Ganesan.
Stressing on software gaining role in helping enterprises increase the flexibility and RoI of their existing arrays, Santhosh D’Souza, Director – Systems Engineering, NetApp India, says, “Our FlexArray software virtualizes an enterprise’s existing storage arrays to streamline operations.”
D’Souza says, “Our strategy is straight, one OS is used to manage the internal storage and work with heterogeneous infrastructure. A solution can truly be defined as software defined storage solution if, irrespective of data residence, it can help manage and move data.”
Convergence, automation, integration
Manish Gupta, Director, Enterprise Solutions Group, Dell India, says, “Today’s data centers are evolving at a rapid pace and businesses are under extreme pressure to support existing application requirements while using IT in new ways, all within a financial constraint. For most enterprises, their business depends upon a well-functioning data center and they would prefer to reduce the complexity that comes with fragmented facilities in a data center. Organisations are focusing on data consolidation which helps them overcome complexities and thus improve operations.
Though most organisations prefer the data centre consolidation route to improve their operational efficiencies, it hasn’t had a big impact in the overall market for storage and servers in India. “Today we see emergence of new businesses and enterprises across the nation. What we expect to change in the coming years is the higher adoption of converged infrastructure solutions for new data centres where the operational silos that currently exist for server, storage and networking functions will give way to unified architecture. A unified approach will help customers to better manage, scale and budget the infrastructure requirements to meet the business needs.
Gupta says, “We have widened our reach. We have deepened engagements with existing customers asking for richer IT configurations for critical, higher-end workloads. Our innovative 13th generation PowerEdge server portfolio and the recently launched FX2 servers, which are a modular offering to fit any customer workload with its converged infrastructure including compute, storage and networking, are contributing to the overall growth of the enterprise segment for Dell India.”
Flash way
Another segment that is growing rapidly and thereby disrupting the storage ecosystem is Flash. IDC estimates that the all-flash array market will grow to $1.2 billion in revenue by 2015. It is being embraced by Indian companies across sectors.
“As flash becomes more pervasive, optimised, and affordable, new applications and new storage software stacks are emerging. These are built ground-up’ for solid-state. The flash storage has value in a number of implementations within and across the storage infrastructure—in storage systems, in servers, and in the network. A percentage of flash is almost always there in the storage solution, so that it can be used in combination with some intelligent management software, which will lead to both performance and financial improvements. This trend will grow stronger in 2015,” Abhijit Potnis, Director Technology Solutions – India and SAARC, EMC
According to IDC in 2014, 51% of data centres worldwide have deployed flash for improving I/O performance. In the next 12 months, the remaining 49% plan to consider it. In today’s fast-paced, “wait-less” business environment, not only must IT grapple with increased digital content, it needs to ensure real-time access to information that can potentially impact business competitiveness and bottom lines.
“Businesses today require faster and more robust storage than what most data centers can provide. To overcome the limitations of legacy storage and as in-memory solutions become a requirement for modern applications, modern CIOs are discovering how enterprise flash radically improves data center performance and efficiency,” says Vivek Tyagi, Director, Business Development, Commercial Sales and Support, SanDisk India.
Fast Future
Of late, the industry’s focus has been on bringing down the cost per TB. No doubt the disks are getting cheaper, but the sheer volume of data being churned and stored is so large that the management of these disks is getting expensive. Malhotra of Oracle says that to deal with issues like these we have to start bundling the management software. “The CIOs are not getting mindful of management bit as well, and are looking at TCO including the management cost,” he states.
Gupta of Dell says, “From our conversation with our customers, it is evident that with the advent of forces of Big Data, Mobility, Cloud and Software Defined Everything, the workloads are changing and shifting the ways in which IT infrastructure is being deployed.”
“The IT infrastructure requirement to meet these new age workloads are relevant to all the verticals such as BFSI, IT/ITeS, healthcare to name a few and we expect the growth in 2015 to be led by technology refreshes, which aided by higher adoption of these technologies in all the verticals,” he adds.
2015 will most likely see the emergence of the biggest flavour of the cloud—the hybrid. This opinion is being expressed by Potnis of EMC. He is of the view that by combining the best of the two worlds, the public and private clouds, the hybrid cloud space will see some kind of traction.
In 2015, HGST sees that helium HDDs will continue to play a more dominant role than air-filled drives in the Data Centres, as the former can provide the highest capacity per drive with more stable and reliable recording technologies. The lower power consumption of Helium-filled drives result in the highest enclosure and rack densities in the industry. Overall, these combined benefits deliver the lowest TCO per terabyte possible.
