STORAGE INDUSTRY in 2015: The Indian Context

Recovering from a dip in 2014, the storage Industry in India seems to be looking ahead in 2015.  This is due to a fresh cycle of investments and new technologies like cloud based technologies, e-commerce couple with optimization of new infrastructure like virtualization, there is a renewed demand for storage. Ashok Subramanian presents a brief analysis of how it has taken shape so far.

The single biggest challenge of the IT industry is data growth. Storage growth in India has gone through a sinusoidal curve in spite of this constant demand.

Data growth is the biggest data centre hardware infrastructure challenge for large enterprises, according to a new survey by research firm Gartner Inc. 47% of the respondents to a survey conducted over 2013 ranked data growth in their top three challenges. With spending returning to more normal levels after a couple of down years because of the economy, 62% said they plan to expand hardware capacity at existing data centres by the end of 2015; 30% plan to build entirely new data centres.

“As the global economy began its revival, organizations have started identified the need to return to growth path and are now challenged with the learnings of further optimization while focusing on expansion,” says Gunasekaran Ramaswamy (a veteran of 15 years in Indian storage industry who has worked in EMC, Hitachi and Veritas, and recently launched storage brand Fractalio)..

In 2014, many data centre managers were forced to defer infrastructure upgrades and postpone their upgrade plans because of tight budgets according to the survey. As a result, they are today burdened with an aging legacy infrastructure and also facing the situation where end of support is in sight.

Since this cannot continue, inevitably today’s need will be upgrades, and vendors like EMC, HP, NetApp, IBM, Hitachi – and system integrators are planning to take the product – as the storage solutions that they propose should be efficient and scalable- to meet the next wave of growth. They also are ready for some really hard price negotiations, Gunasekaran says.

This data growth impacts not only budget but also the overall situation – related to storage and backup hardware, software, related maintenance, integration and operations. Whether one is prepared or not, data growth in enterprises ranges from 30% to 50% according to the 2013 Gartner survey. This is mainly due to explosion of unstructured information such as electronic mail and compliance requirements – due to various government and industry regulations.

Gunasekaran points out a unique response by the IT managers for this explosive growth, it appears that most IT managers don’t see this as a unique problem, but completely expected. This is in the context of managing budgets on infrastructure spends vs data growth. The method they have chosen is to archive and “data parking” approach. Data parking essentially means putting data in the back burner so it is easily accessible whenever required, but doesn’t take up active storage space, whenever they want. A significant portion of the storage budget of an enterprise will go into data parking he says. The factors for driving this change are constant focus in improving end user satisfaction, removing unwanted data even before storing – containment and business continuity

“Once this data parking plan is in place, enterprises, especially financial institutions, don’t have to worry about data centre capacity,” says Gunasekaran.

The major investments are towards application consolidation, server and storage virtualization and data archiving. The next three years will see a mild increase in storage spends – but lot of questions will be asked before the purse strings are released.

In other industries like e-commerce, e-magazine, social networking there will be a burst of storage growth. Storage in the cloud is becoming increasingly utilitarian as the costs of storage declines and more mobile applications access content over the Internet. We will see that cloud based storage will become popular from garages to online service providers – like Microsoft, IBM, Google and Amazon.  These content distribution systems over the internet will create more opportunities for backup and recovery.

Now cloud storage will use the latest technological advances in virtualization, data de-duplication to make the most use of physical storage, thereby increasing the ROI on storage investments. Software defined storage will allow more on the fly management, and cost effectiveness in provisioning simultaneously. Most of the data, not accessed frequently will be stored in SATA hard disk drives and low cost optical tape drives.

Another area of storage capacity growth is the security industry. With safety norms being implemented both as a need and as a requisite for compliance, data from video cameras and sensory networks have created a further demand. This will proliferate over the next few years, according to Gunasekaran.

A third area of opportunity for storage expansion is Internet of Things. IOT, as it is called, captures data from sensory devices and perform analytics and reporting over. With the number of devices that will perform the IOT function expected to cross 1.2 billion by 2018, there is a significant amount of data that will be generated.

Considering all this, there is a fast growth of need for frequently accessed content. This has led to the burst of flash memory based storage as an important layer in enterprise storage landscape. Technologies like PCI-e shall come back to play.

Since the Mumbai floods of the last decade, where many disaster recovery systems did not work, there is a serious awareness about data storage and management with respect to business continuity, he says. This has led to data dispersion across sites. Major players that storage user generated content has created distributed storage architecture that spans across sites, even geographies.  India, in particular, is seeing a massive explosion of user generated content. Combining the need for resilience, this has thrown a new imperative across cloud based service providers.

As Gunasekaran analyses the numbers, he summarizes that India’s external enterprise storage systems market is expected to witness a year-on-year growth in 2015.  According to IDC report, the marginal decline in the year 2014 has been associated with adoption of cost saving measure like data compression and virtualization. This has bucked the traditional buying trend. However, with a new government in place, new projects and storage technology refresh, adding to e-commerce and social networking growth will boost demand in the second half of the current year.

Banking, Telecom, E-commerce, Manufacturing and Government will be the key sectors.  The sinusoidal curve will see a dip in the next year, with two juxtaposing factors. Gunasekaran explains “data explosion vs data parking will be the barometer for data growth. With flash memory technology for frequently used data and low cost disk / tape solutions holding the two end of the spectrum, the priority for each enterprise will determine where the storage investments will go.”

“The area that storage vendors need to focus on, is to position the right solution based on the industry and customer needs. A deep understanding of the existing investments, the short term and long term needs will enable this. There is a thin line between acceptance and rejection of solutions,” Gunasekaran says. The reason is attributed to an increased demand for ROI from the management.