Indian data center networking budgets focus on virtualization in 2011

Growing implementation of server virtualization in India boosts demand for data center networking products in 2011-‘12, as per survey.

According to the Data Center Purchasing Intentions Survey 2011-’12 conducted by, over 70% of Indian organizations will increase spend on data center networking products from 5% to more than 25% during this financial year. The survey results show that networking budgets will majorly focus on implementation of server virtualization.

The survey was conducted with 415 respondents (ranging from mid-level IT managers and system administrators, all the way up to IT executives) from a wide range of industries like business services, financial institutions, telecom players, consultancy firms, and Government. The revenues of these companies ranged from $50 million to $500 million, and included organizations with headcounts of more than 10,000 employees. A majority of these organizations had up to 10 branch offices (28% of participants), followed by businesses with 11 to 50 branches (18%).

As shown by the Data Center Purchasing Intentions Survey, 54% of respondents are interested in deploying server virtualization as one of the main data center networking technologies for FY 2011-’12. Of the surveyed networking professionals, 59% intend to purchase products related to storage networking, server virtualization, data protection, security and video surveillance. This resultant demand for storage is high, as many organizations opt for storage consolidation during (or after) implementation of server virtualization. Although server virtualization does result in optimization on the physical server front, use of centralized storage like the storage area network (SAN) is critical to ensure optimal performance levels. 

During the last year (2010-’11), Indian organizations spent the maximum amount of time and networking resources on technologies such as server virtualization (35% of respondents), data protection (29%), and storage networking (22%). This further validates the increased purchase of data center networking products during 2011-’12. Server virtualization utilizes the maximal amount of networking resources due to the increase in number of hosted production applications per physical server, which requires higher amounts of bandwidth per host.

A prerequisite for successful implementation of server virtualization is the accommodation of infrastructural changes such as new server hardware, virtual machine (VM) administration rights, applications shifted on VMs, and other such aspects. According to a majority of the respondents, server virtualization will require increased bandwidth (69% of respondents), application performance monitoring (46%), and purchase of updated network hardware (31%). Enhancing security is also part of the changes driven by server virtualization for 25% of the respondents during 2011-’12. During the next 12 months, apart from server virtualization, desktop virtualization (19.04 %) will drive demand for wide area network products.

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