Captive DataCenter Market - India 2011

According to IDC India captive data center make up four-fifths of the market and is expected to touch $1.68 billion by 2011, growing at a CAGR of 19.9 percent and grew at an average of 1.6x the IT market. Nearly 85 percent large enterprises had a captive data centre in 2010. Manufacturing, BFSI, Telecom and Government are deploying captive data centers the most due to regulatory requirements, data confidentiality, data storage and back up, disaster recovery, high internal data control and data security concerns. Captive centers are expected to grow at CAGR 16% in next two years.

Key Captive Players

Last two years saw large captive data centers being deployed by big banks and state governments. Indian banks like SBI, ICICI Bank, Indian Bank, PSB, and Bank of Baroda have their own data centers. Financial regulations, data confidentiality, strict internal controls and data safety are the reasons for their own data center. Insurance giant LIC also runs its own data center and data warehouse. BSNL, Bharti Airtel, Reliance Communications and Tata Communications are the leading telecom operators that have captive data centers and also offer hosting services to their clients through these centers.

State governments in India have started deploying data centers and the State Data Center policy under Ministry of IT (MIT) with Rs. 1623.20 Crores outlay over a period of 5 years is investing in SDC. According to MIT as on 2nd September 2011, SDCs in 14 States have been operational (Gujarat, Tripura, Rajasthan, West Bengal, Tamil Nadu, Puducherry, Andhra Pradesh, Meghalaya, Karnataka, Manipur, Orissa, Sikkim, Haryana, and Kerala). SDCs in 4 States are under implementation (Nagaland, Maharashtra, Uttar Pradesh, and Andaman & Nicobar). User Identification Authority of India, which issues Aadhaar cards, is also setting up data centers at various locations to store the captured citizen data.

Captive Data Centers -Issues

Running a captive data center involves huge infrastructure cost in terms of Land, buildings, servers and networking equipment, security personal, power and generators cost, electronic surveillance. Apart form these complexity costs like installation, maintenance and monitoring requires highly skilled technical professionals, Data protection and software experts, data warehouse and storage experts, etc. There has been pressure on the enterprises and governments to reduce their costs due to the recent debt crisis which has slowed the economic growth, raised inflation and overall GDP growth slowing down.

Consolidation of data centers, virtualization and optimizing the existing data center assets and leverage the data center to increase the productivity and contribute to the organizational growth are the key focus areas in captive data centers. But consolidation is not an easy process which involves adoption of new technologies, highly skilled technology consultants, and hardware and network storage equipment costs. Consolidation has to be carefully planned so that the organizations benefit. Building and Managing data centers involve huge costs in terms of infrastructure, human, technology and maintenance costs, enterprises are looking to outsource data center operations or use hosted data center services to overcome the cost burden. This option is available for those enterprises where there are no regulations insisting on a captive data center setup.