Housing Development Finance Corp. Ltd. (HDFC Bank), one of India's
largest banks, is adding two new branches weekly to its 680 offices
in 228 cities across India. To support this growth, the firm's IT
infrastructure and notably its storage requirements are booming.
"We're up to 300 terabytes (TB) from 100 (TB) a year ago … Our
biggest challenge now is how to manage this large infrastructure
and to find the people," according to Harish Shetty, vice president
at HDFC Bank.
The firm just deployed a 1,488-port 4 Gbps Fibre Channel storage
area network (SAN) from Brocade Communications Systems Inc.,
doubling its available SAN ports while at the same time
consolidating the number of devices on its network. And instead of
buying from four storage suppliers, IBM, Sun Microsystems Inc.,
Hitachi Data Systems Inc. (HDS) and Hewlett-Packard Co. (HP), it's
consolidated around two –HDS and IBM. "Integration becomes a lot
easier this way," and also reduces the bank's requirement for
specialist skills, Shetty said.
Finding qualified people that have more than a rudimentary
knowledge of storage is an issue for companies in India as they are
growing at a clip and need more long term, strategic planning to
make better IT decisions and get more out of their investments.
Overall, the "storage IQ in the country is pretty low,"
according to Manish Goel, vice president and general manager of
data protection solutions at Network Appliance Inc. (NetApp) "There
needs to be a fair bit of hand-holding to deploy and optimize large
environments."
Soumiatra Agarwal, general manager of NetApp's operations in
India, agreed that finding people and training them is one of the
company's biggest challenges.
The main reason for the skills shortage in India is not a lack
of available talent -- the country produced 400,000 engineers last
year -- it's keeping hold of this talent that's the problem.
India's brain drain has been going on for decades and continues
today as countries, including the U.S., Australia and the U.K.,
offer more opportunities and a better lifestyle. This is gradually
changing as the growth in the Indian economy improves the standard
of living in the region. A second drain on resources are company's
like Tata Consulting Services Ltd., India's largest software
company, that plans to add 30,000 people to its current workforce
of 72,000. Tata, InfoSys Ltd., Wipro Ltd. and others steal the
lion's share of engineers that stay in India, attracting them with
high salaries and benefits that match any U.S. firm. This leaves
the rest of the market in India struggling to find people.
This summer, EMC Corp. committed to double its existing
investments in India from $250 million, announced in February 2005,
to over $500 million by 2010. The company recently launched EMC
Academy Program (EAP), the industry's first program aimed at
developing a resource pool of skilled storage professionals in the
region. EAP has partnered with 26 educational institutes across
India so far.
Terabyte growth soars
Predictably, India's growth in terabytes shipped is greater than
the growth in end-user revenue, according to Graham Penn, associate
vice president for Asia Pacific storage research at IDC Corp. Total
storage revenue forecast for 2006 is $256.9 million, compared with
$198.6 million in 2005. Meanwhile terabytes shipped jumped from
17.6 million in 2005 to 27.2 million in 2006 and is forecast to hit
206.4 million TB in 2010, a compound annual growth rate of
63.5%.
To put this in perspective, the total disk storage systems
market worldwide grew to $5.9 billion in the second quarter of
2006, up 6% from the prior year's quarter. And total disk storage
systems capacity shipped worldwide was 704 petabytes (PB), a growth
rate of 51.5% from the same quarter a year ago.
India, therefore, is still a small percentage of these overall
numbers, but it has tremendous room to grow, according to Penn. He
has noticed significant growth in external storage as users in
India make the transition from storage internal to a server,
(mostly x86 servers) and embrace networked storage. Fibre Channel
SAN revenue for 2006 is forecast to hit $122.7 million, while
network attached storage (NAS) will bring in $48.3 million, and
iSCSI SAN, $8.6 million, according to IDC.
Overall, India is the second fastest growth market in the Asia
Pacific region, after China, and it is now the fourth largest
market in Asia Pacific (excluding Japan) after China, Australia and
Korea, Penn said.
Many of the internal inhibitors to India's growth are being
addressed, including inconsistent and ever-changing government
policies, inconsistent sales tax structures in different states,
difficult logistics and transit times, relatively high interest
rates, and customs duties on capital goods are now confined to
certain pockets.
Variable power supplies adding to capital equipment and
operating costs can still be an issue. And border security concerns
also have the potential to divert attention from infrastructural
investments, analysts noted. But overall, there are strong
indications that India's investment in storage is growing and
paying off.
@29178 Historically, India has preferred one-stop-shopping for
IT equipment. Being so far away from the major technology
suppliers, most companies chose a single vendor and a single throat
to choke for all service, maintenance and support issues. This
favored the systems companies, notably HP, which has a huge
presence in India. Analysts said that trend is changing as the
market matures and organizations are looking to upgrade their
environments. For storage specialists, like NetApp and EMC, the
picture looks bright.
"India is one of our fastest growing markets," NetApp's Goel
said. The company has about 300 customers in the region, buying a
mix of SAN and NAS products. Since India opened its market to the
outside world in 1992, multinationals have poured into the country
in a bid to tap the subcontinent's growth and its abundant supply
of low-cost, highly skilled workers. Often these organizations
simply carried over their architectures from the U.S. "Texas
Instruments Inc., Oracle, Morgan Stanley, General Electric Co. … If
they bought NAS from us in the U.S., that's what they've installed
in India," Goel said. Meanwhile, the Indian-based verticals –
financial services, telecom and government-run industries including
oil and gas – are not constrained by the "old way of doing things,"
he said, and therefore tend to purchase more leading-edge
technologies.
The gap between what's being deployed in the U.S. vs. India is
closing, according Shyam Gopal, country manager for India, at
Brocade. Releases are available in India at the same time as the
U.S. "as business is global and people have to compete," he said.
While most companies are behind the curve for high-end software
functionality like data lifecycle management or continuous data
protection products, they are beginning to ask questions about it,
vendors say.
On a related note, most major storage vendors are building a
direct presence in the area and are working with local integrators.
This is broadening access of the latest storage hardware and
software products to more customers. "The big cities have become
saturated because of the high growth," said Manoj Suvarna, country
manager for HP StorageWorks in India. HP is pushing into Tier-2
cities, including Hyderabad, Pune and Chandigarh, to find new
business. Some states have created special economic zones and are
offering tax rebates for businesses that set up in these cities. HP
is following this development.
More challenges
Remote connectivity is patchy in India, so where a hub and spoke
architecture is common in the U.S., there are more distributed data
centers and storage islands in India. "Connectivity is less
reliable," NetApp's Goel said.
The labor to capital ratio is also very different to the U.S.
The pressure to eliminate operating costs is lower in India as
labor is so much cheaper, although steadily rising. The bigger
concern is skills, which is why customers look for reliability.
"Nondisruptive operations are more important, as there aren't the
people available that can manage the systems," Goel added.
Furthermore, the market is more price sensitive than the U.S.,
as the price of equipment is the same in India as in the U.S., but
staff are paid in rupees. Technology is therefore a larger
proportion of a company's overall spending, which creates enormous
pricing pressure.
That said, it's no longer sufficient to be lower cost, companies
are looking for a partner to help them understand how to manage
their infrastructure. "They deployed technology at such a
tremendous rate, it's breaking through the streets in Bangalore,
and now they are saying OK, help me control this growth," Goel
said.