While networking ties together all of the pieces of a digital enterprise, an added element is needed for all of this to come together: intelligence.
Basic automation has already emerged as a core requirement for networking an enterprise. The need to alter network configurations rapidly is exceeding the capabilities of even the most advanced manual processes. But as trends like big data, the Internet of Things (IoT), and mobile data services enter the mainstream, the network must respond not just to the expected connectivity issues of any given function, but to the unexpected ones as well.
And while networking ties together all of the pieces of a digital enterprise, an added element is needed for all of this to come together: intelligence. Networking is at the heart of digital transformation, and intelligent automation should be the ultimate goal for any enterprise that hopes to compete in the 21st century.
Fortunately, this does not have to happen all at once. The initial change will encompass human-driven automation, in which admins define the changes while software carries them out. What follows will be event-driven automation that has systems orienting themselves around different outcomes. Finally, we will have machine-driven automation that can learn and function largely autonomously. According to Wexler the ROI for network automation is extremely high, with payback in as little as six months and five-year returns approaching 350 percent.
A recent IDC survey reported that enterprises that have invested in modern network capabilities are seeing two to three times better revenue growth, customer retention, and profits than those that rely on legacy infrastructure, while at the same time seeing twice the success rate for transformation projects. With literally billions of connections coming online in the next few years, a network that cannot think for itself to some degree will be the chief barrier to everything from product and market development to customer engagement and strategic planning.
The cloud? To host or not to host? Each approach has its pluses and minuses. The cloud is a good way to get started, of course, but since data is all about scale, the cost can very quickly get out of control. On-premises infrastructure requires up-front capital, but modular hardware has brought costs down dramatically. And while the cloud lets one offload all the hands-on maintenance and management of data infrastructure, there is also something to be said for having that expertise in-house when it comes time to leverage data in novel ways.
As more and more of the enterprise data load gravitates to the cloud, the migration challenges start to mount. This is why data in the cloud has reached a tipping point: because normal data operations themselves are becoming increasingly cloud-native. And this need to keep data and analytics relatively close together will only increase as real-time performance requirements start to take center stage.
Still, to cloud or not to cloud your data is not a simple question. First, there is the decision as to which cloud, or clouds, to employ, and then the proper environment must be created. The right decision depends on multiple factors, including the time-to-valuethe business model, desired level of risk, ability to manage remote resource configurations and enforce consistency across architectural and DevOps teams, and the provider's ability to quickly implement the appropriate development, testing, and staging environments.
The ever increasing demand by enterprises to stay connected and the 4G invasion have spurred the growth of the networking market. Network is expected to be the next disruptor and the avenue for innovations, as organizations look to conquer its space in this highly competitive, analytical, and information-driven world.
In the networking space, routers play a critical role in dispatching data through the most efficient channels between networks. In 2016, the router market in India was worth 46.36 crore, according to IDC. In the last five years, the market has registered significant growth. Wireless routers dominate both in revenue and volume terms as compared to wired routers. The market is buoyed by several factors predominantly adoption of 3rd platform solutions such as cloud, mobility, big data and social business, internet enabled devices, Bring Your Own Device (BYOD), and growing number of SMEs in the country. Investments by service providers for the rollout of 4G expansion is also a key reason for the growth of the router market. India's rising internet penetration has spurred the market for routers and switches in the country.
Globally, Cisco leads the router market with a 63.6 percent share in the last quarter of 2016 driven by deployments in both the enterprise and service space, followed by Huawei and Juniper whose major deployments were in the service provider segment.
SD-WAN (software defined – wide area network) is a highly disruptive force that is dramatically reshaping the enterprise router market globally, with enterprise spending on SD-WAN growing at a compound annual growth rate (CAGR) of 76.2 percent from 2016 through 2020.
Enterprises have been relying on WAN networks to connect to their branch offices for ensuring uninterrupted connectivity to remote locations. For this, they had to invest heavily in WAN infrastructure and bear the resulting maintenance costs. SD-WAN has changed the landscape completely, by allowing enterprises to pay only for the functionalities, limiting the entire CapEx investment amounting to small routers. With a number of service providers offering varied and competing packaged service offerings, businesses can now pick the functionality they need and pay for what they use.
SD-WAN revenue will grow at the expense of traditional routers and by capturing funds that would have been spent on WAN optimization controllers, firewalls, and MPLS services. Global spending on software-defined WAN products will rise from USD 129 million in 2016 to USD 1.24 billion in 2020, as per Gartner. The overall branch office router market will experience a CAGR of negative 6.3 percent, and the legacy router segment will suffer a negative 28.1 percent CAGR over the four-year period.
The SD WAN technology is derived from the Software Defined Networking (SDN) technology; it utilizes software and virtualization technologies to create a WAN network that delivers faster, simpler, and cost-effective connectivity to businesses. It achieves this by decoupling network software controls from the underlying hardware and has four main characteristics – it must be able to support multiple connection types, it must be capable of dynamic path selection, must be easy to configure and manage, and should be able to support VPNs, and third-party services.
The traditional WAN networks are open to a growing number of users accessing it from multiple points and from multiple devices, therefore, there is a threat to the network security. SD-WAN resolves this issue by providing enhanced security, delivered centrally via an API to cover the entire WAN landscape with comprehensive security solutions such as encryption and app firewalling.
With SD-WAN, network managers have complete control over the entire network and all its components. This allows them to monitor the network in its entirety, optimize network usage, and ensure centralized implementation of operational and security policies.
For succeeding in today's digital market, businesses require greater agility, visibility, and performance and SD-WAN promises to transform the network landscape by providing premium, secure, and simple cloud-enabled WAN connectivity to these businesses.
Digital and network transformation initiatives and emerging software-defined architectures are leading to myriad new opportunities for networking vendors, service providers, systems integrators, and enterprises.
Ethernet switches provide a strong foundation to enterprises for transferring converged data, voice, and using video services. They are designed in a way to help users scale up their operations and deploy networking services without impacting network performance.
The worldwide Ethernet switch market (Layer 2/3) reported USD 24.4 billion in revenue in 2016, an increase of 3 percent over the previous year, according to IDC. It remained robust despite macroeconomic uncertainties around BREXIT and general concerns for the economy. Through the year, 10GbE, 40GbE, and other high-performance switches were key growth drivers for the market, reporting growth in unit shipments as well as revenues. Comparatively, sales and unit shipments for 1 GbE switches continued to decline.
The need to transfer more data has led to an industry-wide transition from the older 1GbE (GB Ethernet) switches to 10GbE and 40GbE switches for better performance, higher bandwidth, and lower latency. As the Ethernet switching market reaches a greater level of maturity from 1GbE to 10GbE, it is increasingly characterized by customers moving more quickly to higher speeds at lower port costs. While overall port shipments continue to grow, it is the revenues from the fastest speeds that continue to buoy the market.
Over the last few years, IT hardware manufacturers have observed a slowdown in product sales due to low global demand. This trend was evident in 2016, with global IT spend declining by around 0.6 percent to USD 3.38 trillion, according to a Gartner estimate. Networking hardware vendors including Cisco have not been immune to this change, and have reported revenue declines across multiple product lines over the years. Cisco has enjoyed a more than 60 percent share in the Ethernet switch market over the last few years, with all its nearest competitors –Huawei, Juniper Networks, and Hewlett-Packard Enterprise (HPE) – maintaining single-digit market shares in this market segment. However, Cisco's share in this market has fallen from around 75 percent in 2011 to just under 60 percent in 2016. Cisco's switching revenues fell three percent year-on-year (Y-o-Y) to USD 14.3 billion in 2016. HPE's revenues fell almost 30 percent Y-o-Y to USD 1.6 billion. Comparatively, Juniper's revenues grew 12 percent Y-o-Y to USD 860 million. Moreover, new entrant Huawei reported 60 percent annual growth in revenues to USD 1.7 billion in 2016.
Recent global vendor highlights. Cisco finished 4Q16 with a year-over-year decline of 2.8 percent in the Ethernet switching market and market share of 55.6 percent, down from its 57 percent share in 3Q16 and down from 59.1 percent in 4Q15. For the full year 2016, Cisco declined 3.7 percent over 2015, while recording 57 percent market share (compared to 60.6% in 2015). In the hotly contested 10GbE segment, Cisco held 53 percent of the market in 4Q16, finishing essentially flat over the previous quarter. Cisco saw its combined service provider and enterprise router revenue decrease 4.8 percent on an annualized basis, while its market share came in at 42.2 percent in 4Q16, down from 45 percent in 4Q15.
Huawei continued to perform well in both the Ethernet switch and the router markets. Huawei's Ethernet switch revenue grew 67.8 percent year-over-year in 4Q16, for a market share of 9.9 percent. For the full year 2016, Huawei's Ethernet switch revenues grew 61.8 percent, leading to a market share of seven percent, compared to 4.4 percent in 2015.
Hewlett Packard Enterprise's Ethernet switch revenue fell 2.2 percent quarter over quarter in 4Q16 and its market share stands at five percent in 4Q16, down from its 5.5 percent share in 3Q16 (HPE and H3C are tracked separately as of 2Q16).
Arista Networks performed well in 4Q16, with its Ethernet switching revenue rising 33 percent year-over-year and earning a market share of 4.3 percent. For the full year 2016, Arista grew 33.1 percent and recorded market share of 4.1 percent.
Juniper Ethernet switching increased 2.9 percent year-over-year in 4Q16, while decreasing 2.8 percent for the full year. Juniper also saw a 6.5 percent year-over-year increase in combined service provider and enterprise router revenues, with market share of 16.9 percent.
Communication network is the backbone of any infrastructure and the need for advanced and fast communication technique has continuously been increasing in the global market, hence the global structured cabling market is on the rise.
The global structured cabling market is likely to exhibit a CAGR of nine percent from 2016 to 2020. The market is estimated to clock a revenue of USD 13.13 billion by the end of 2020, according to MarketsandMarkets. The key drivers are drastic rise in internet penetration, high adoption rate of automation for home and industries, high bandwidth demand across the industries, rising trend of communication infrastructure, and also the convergence of data centers.
The most significant trend in the global structured cabling market is the increase in demand of optical fibers cabling market in the industry because of the need for higher speed data transfer. However, there are some key restraints which are inhibiting its growth globally including: high cost of optical fiber cable and its components, poor electromagnetic compatibility impedance tolerance of unshielded twisted pair cable because of which efficiency of communication decreases, fluctuations in the price of copper, compatibility issue of older communication infrastructure with the new one, and also the price issue among cable vendors because of intense competition.
A big push toward digitization by the government through its initiatives, Smart Cities and Digital India, has created tremendous growth potential for the structured cabling market in India. A smart city is based on a strong, reliable communication network that relies consistently on fiber optic cabling, which forms the backbone for future-capable wireless networks.
The structured cabling market in India is on a growth trajectory with fiber showing a surge in OM3 in data centers. With the emergence of newer fiber technologies, there will be greater use of these technologies in new projects but that will not reduce the importance of copper at least in the short run.
In the recent months, structured cabling has seen more implementation of AIM systems. This enables organizations to monitor their network and control it in case of any errors, hence it reduces downtime drastically. Developments in new Cat 8 technologies will help organizations in better data transmission but that is something for the future at the moment.
The ever-increasing quantum of data poses storage as a perpetual challenge for enterprises. With a changing technological landscape, the storage market is undergoing major transformation to meet this exponential rise.
Data storage market in India is projected to grow at a CAGR of over seven percent during 2016–2021. The market has grown significantly over the past few years, owing to generation of large volumes of data through various smart devices, growing need to enhance performance, rising mobility of devices, coupled with rising need to store, maintain, and back up data. Moreover, growing government focus toward digitizing India is further expected to generate huge volumes of data, and thereby fuel the demand for data storage solutions in India in the coming years.
Increase in data storage capacity to store customer data is becoming a necessity for organizations. Consequently, enterprises are increasing their IT expenditure in order to address the growing need for storage space. Additionally, the growing e-commerce sector and increasing penetration of smartphones among urban and semi-urban population are projected to significantly increase data storage requirements in the country over the next five years. External drives which include hard disk drives, solid state drives, and flash storage are the key revenue generators in India's data storage market. Though external storage as a segment is expected to continue its dominance in the country's data storage market, Cloud Storage is expected to witness significantly higher growth in the coming years. BFSI, IT and telecom, education, government, defense, healthcare, and retail sectors are some of the leading end-user segments for the data storage market in India. Few of the major companies operating in the country's data storage market include EMC2 India, NetApp India, IBM India, and HP Enterprises.
External storage. India's external storage market witnessed a growth of 13.8 percent year on year in vendor revenue and is estimated at 49.982 crores in the first quarter of 2017, according to IDC. In the last few years, India witnessed significant growth toward the adoption of next-generation storage devices and systems, where devices such as Network Attached Storage (NAS) are gaining momentum.
NAS systems, which were primarily used in large enterprises are now attaining acceptance in small and medium enterprises based on increasing awareness, declining prices, and introduction of entry-level NAS in Indian market. The market for NAS in India over the next six years is forecast to witness healthy growth attributed to increasing number of SMEs, rising IT budgets, and adoption of cloud-based systems.
NAS upto 24-Bay is led by players such as Netgear, QNAP, and Synology principally in 2- to 4-Bay NAS space. Additionally, companies such as Netgear and QNAP are expected to focus toward production/assembly of NAS due to growing demand in the country. Major vendors in Indian NAS (Up to 24-Bay) market include QNAP, Synology, Netgear, D-Link, Seagate, and Western Digital.
Cloud. With the advent of cloud computing, Indian companies are adopting cloud over traditional data storage architectures. As a matter of fact, the Indian enterprises are the highest adopters of public cloud solutions in the world. These are among the highest rates of adoptions and are better than markets such as the United States, the United Kingdom, and Japan, according to a survey conducted by Microsoft and market research firm Wakefield Research. Sectors such as healthcare, banking, financial services and Insurance (BFSI), e-commerce, startups, and government are the leading cloud adopters in the country. The public cloud services market in India is currently worth 1,213 crore, as per Gartner.
As Indian enterprises demand enhanced productivity and security, they are preferring hybrid cloud over public and private clouds. Hybrid cloud is an integrated service utilizing both public and private clouds to perform distinct functions within the same organization. The global hybrid cloud market is expected to reach 61,465 crore by 2021, according to MarketsandMarkets. The main reasons for adopting hybrid cloud are lowering total cost of ownership, facilitating innovation, enhancing operational efficiency, and meeting customer satisfaction. Cloud is the future but faces risk from security attacks which might prove to be expensive for companies. With the right set of compliance standards, secure connectivity, firewalls, and gateways deployed, cloud can prove to be an integral part of business enablement than merely technological innovation.
With businesses around the world changing at a fast pace, the dynamics built around them is changing rapidly as well. Enterprises are investing in technologies that are low on capital yet offer the best outcome on productivity. Over the last one and half decades, disruptive technologies in social, mobility, analytics, and cloud have emerged. Enterprises are leveraging on these to extract benefits on cost, efficiency, and value. While all of these are sweet spots for businesses, security remains an area of concern for all of them.
In the last decade, awareness among enterprises about cybersecurity has increased manifolds in India. Earlier there used to be one chief information officer (CIO), who would manage all angles of technology within a business. Now, however, most organizations have a chief information security officer (CISO) who is capable of strategizing on cyber security aspects with a separate budget he is armed with. Understanding the importance of cybersecurity in this era of digitization, the government has constituted a Computer Emergency Response Team, which will work in close coordination with all financial sector regulators and other stakeholders to ensure cyber security for the financial sector.
Securing the network of the enterprise continues to remain the basic cyber security arrangement in protecting digital assets. Network security in India has witnessed a great revolution, from antivirus and content filtration to next-generation firewalls. A new age firewall has become much more intelligent and is capable of identifying, stopping, and remedying threats entering into the network, thanks to the emergence of next-generation firewalls (NGFW). Globally, the NGFW market is expected to grow from USD 2.39 billion in 2017 to USD 4.27 billion by 2022 at CAGR of 12.3 percent, according to MarketsandMarkets.
Intrusion defense systems/intrusion prevention systems (IDS/IPS) and secure sockets layer virtual private network (SSL VPN) are other network security solutions that are becoming common in India. Enterprises in India are also adopting security information and event management (SIEM). SIEM allows a CIO or a CISO to look at data logs generated by all the devices operating inside an organization's network and also enables them to analyze and respond to real-time threats.
Globally, the cyber security market is estimated to grow from USD 122.45 billion in 2016 to USD 202.36 billion by 2021, at a CAGR of 10.6 percent, estimates MarketsandMarkets.
With cloud emerging as an enabler for businesses, cloud security is witnessing a major trend in the information security domain. SIEM, IAM, and emerging technologies are the fastest growing cloud-based security services segments, predicts Gartner. Email security, web security, and identity and access management (IAM) remain organizations' top-three cloud priorities. Mainstream services that address these priorities, including security information and event management (SIEM) and IAM, and emerging services offer the most significant growth potential. Emerging offerings that include threat intelligence enablement, cloud-based malware sandboxes, cloud-based data encryption, end-point protection management, threat intelligence, and web application firewalls (WAFs) are among the fastest-growing segments of cloud-based security services. Small and midsize businesses (SMBs) are driving growth as they are becoming increasingly aware of security threats.
With increased vulnerabilities across the world, enterprises will prefer vendors that showcase cyber security capabilities to fight advanced network threats.
Globally, the cyber security market is estimated to grow from USD 122.45 billion in 2016 to USD 202.36 billion by 2021, at a CAGR of 10.6 percent, estimates MarketsandMarkets.
With cloud emerging as an enabler for businesses, cloud security is witnessing a major trend in the information security domain. SIEM, IAM, and emerging technologies are the fastest growing cloud-based security services segments, predicts Gartner. Email security, web security, and identity and access management (IAM) remain organizations’ top-three cloud priorities. Mainstream services that address these priorities, including security information and event management (SIEM) and IAM, and emerging services offer the most significant growth potential. Emerging offerings that include threat intelligence enablement, cloud-based malware sandboxes, cloud-based data encryption, end-point protection management, threat intelligence, and web application firewalls (WAFs) are among the fastest-growing segments of cloud-based security services. Small and midsize businesses (SMBs) are driving growth as they are becoming increasingly aware of security threats.
With increased vulnerabilities across the world, enterprises will prefer vendors that showcase cyber security capabilities to fight advanced network threats.
Managed Print Services
The new world of managed print services (MPS) is defined by changing customer ambitions, new priorities, and a different set of challenges. As a consequence, organizations are looking for more flexibility in their MPS contracts, a better roadmap for innovation, and a clearer strategy for information management. This is changing the value proposition for MPS. Whilst MPS is delivering on cost-saving expectations, it must play a more important role in helping organizations realize strategic growth plans.
MPS brings together everything from printers and supplies to maintenance and support, under a single ongoing contract. MPS has been gaining momentum over the past few years as it offers benefits such as cost savings and energy efficiencies, primarily driven by rationalization of fleets and single points of contact for support. With increasing adoption of printing as a service, print-related expenses can be categorized under operational expenditures, which allows businesses to do away with significant capital investments in fleets. The MPS market is seeing shifts in terms of customers’ expectations, suppliers’ approach/strategy, and IT advancement. The global market for MPS is poised to register a strong CAGR of 14.8 percent during the forecast period from 2016 to 2024 and will reach USD 94.97 billion by 2024, as per Transparency Market Research.
India is an emerging market in the adoption of MPS. Enterprises are saving costs by shifting from CapEx to OpEx models and therefore assuring operational excellence. As a matter of fact, small and medium businesses in India are increasingly feeling the importance of managed printing services. MPS can help India SMBs leverage cost reduction and simplify the management of their imaging and printing environment.
By outsourcing printing, Indian SMBs are increasingly using the services and technical expertise of printing vendors, and are able to utilize their manpower more effectively. Another advantage of balanced deployments is that organizations can manage their printing and imaging needs with tailor-made solutions which are also scalable for future growth.
Another prominent trend is that Indian SMBs are not really interested in using device management infrastructure or workflow management. They mainly gravitate toward printing done on a pay-per-page basis. Document-intensive industries including education, healthcare and banking, financial services are the key growth drivers of managed printing services.
Evolving customer expectations. Though customers are convinced about the cost savings that MPS offers, they now demand additional results or output. They want tailored value added services from the vendors that will help them further grow their businesses. The so-called first version of MPS that offered simple printer rationalization and migration of usage to multifunction devices has become outdated. What customers now look for are more sophisticated managed document services that include scanning, storage, hybrid mail, and workflow solution.
The supplier landscape for MPS is dominated by original equipment manufacturers (OEMs). OEM companies are shifting their focus from the traditional rip and replace to walk in and take over. This helps them offer brand agnostic MPS programs to clients. As part of this strategy, some of the big OEMs are partnering with cartridge remanufacturers to be able to offer OEM alternative cartridge solutions. For instance, Printelligent, a remanufacturer, was acquired by HP in 2011, while Xerox acquired Laser Networks in 2012. This has enabled these OEMs to offer MPS programs that incorporate management of their own as well as third-party fleets (printers and copiers).
Vendors. Quocirca globally ranks Xerox as numero uno in the group of MPS providers, which includes vendors such as HP, Canon, Lexmark, Ricoh, and Konica Minolta. Xerox has built a credible and strong portfolio of services for organizations of all sizes, enhanced by an expanded range of workflow automation solutions. HP continues to enhance its MPS proposition, particularly around its workflow and security-led services. Ricoh has also added to its numerous service lines and is increasingly taking a more business-process-centric approach to MPS. Lexmark continues to stand out for its extensive software portfolio and industry expertise. Konica Minolta has expanded its MPS footprint, moving into the leader’s category. This has been boosted by continued investment in its information-management-led MPS offerings and its adjacent IT services capabilities
Challenges. The MPS market is still evolving and finding its way through several challenges. Firstly, a major threat comes from declining print volume backed by increased digitalization of office space, and adoption of small portable devices. Secondly, the increased commoditization of services is encouraging these vendors to focus on new sources of differentiation to gain maximum market share; and suppliers are molding their strategies accordingly. For instance, even though the per-page pricing model remains ubiquitous, providers are trying to add flexibility in service level agreement (SLA) arrangements and terms to offer pro-rated or slide formulas for minimum charges per device for pricing flexibility. Nevertheless, experts in the industry believe that owing to the significant role that printing plays in various business operations, companies will continue to be reliant on this function.
Communication and collaboration are the essential components in order to achieve business agility, which is the key to long-term competitiveness in this digital era. Seamless communication across the extended value chain – the ecosystem of business partners, suppliers, and customers, is becoming ever more important in today’s mobile, always-connected, always-collaborating work environment.
Unified communication (UC) is an ongoing process of convergence that is happening in the market, bringing together vendors, technologies, applications, processes, and users. It is an integration of all separate communications components into a homogeneous, efficient, productive user experience. UC solutions boost business productivity by providing anytime, anywhere, any device-type connectivity thereby increasing the staff’s level of engagement within the enterprise.
The capability of accommodating multiple functionalities of communication system on a single platform makes telephony an essential tool in UC. The telephony technology is expected to boost the UC market size due to its compatibility with automated transfer of fax, voice, or other information. Furthermore, the rising demand of IP and VoIP telephony in telecom and IT, BFSI, travel and hospitality, logistics, and transportation industries serve as a significant driving factor for the UCs market size. The global market for UC is forecasted to reach USD 28.69 billion by 2021, at a CAGR of 10.6 percent during 2016–2021.
The development of hosted, cloud-based as a service solutions means businesses of every size can deploy UC for a fraction of the cost of legacy on-premises PBX systems. Unlike those older systems, UCs as a Service (UCaaS) provides an entire solution from an externally hosted infrastructure. The only equipment residing on the site are telephone handsets and dedicated routing equipment. It also results in lesser set up and maintenance costs, flexibility, improved agility to change capacity, and a greater range of features and functionality that can be implemented in a phased approach as needed. While choosing a UC service provider, enterprise planners must look for expanded global capacity, better customer service and project management, an expanded set of APIs, and the ability to deploy a richer set of UC functionality led by mobility and video.
For businesses gradually migrating from premise-based UC solutions to hosted UC services, hybrid cloud deployment is an increasingly viable option. Though many enterprises may maintain a hybrid UC solution for a number of years, the strategic goal for most will be for UC software to be entirely in the cloud. A hybrid delivery model keeps your current infrastructure while gradually easing onto the cloud on the required terms. Consultants help in creating a strategic migration strategy for the company, resulting in a seamless integration of UC into the workforce.
The market for UCs solutions and services will continue to be highly dynamic during 2017. Mergers and acquisitions, wider availability of UCaaS, and hybrid deployments will drive greater demand for cloud-based communications services in businesses of all sizes.
Over the last two decades, enterprises have faced an uphill battle against complexity. As business demands have multiplied, scores of technologies have been implemented in an attempt to respond. By and large, this steady organic growth has resulted in data centers that are costly and complex, with overprovisioned physical configurations and siloed management. These days, with mobility, social business and big data analytics ratcheting up pressure for greater scalability, continuous availability and real-time responsiveness, the old data centers must be replaced.
The global data center networking market is likely to exhibit a CAGR of 15.5 percent between 2017 and 2025. At this pace, the market’s valuation is forecast to reach USD 228.40 billion by the end of 2025, from USD 63.05 billion in 2016, according to Transparency Market Research.
India is becoming a robust domestic data consumption market with digital data consumption expected to increase twice as fast as the worldwide rate from being around 40,000 petabytes in 2010 to 2.3 million petabytes in 2020. The market is expected to see a strong resurgence of growth-related projects across verticals viz., banking, insurance, telecom, and government segment and further with the liberalization of the information technology market, digital-commerce and social media, the quantitative impact of datacenter traffic is apparent.
The Indian data center infrastructure market is valued at Rs.1,475 crore and is poised to be the second largest market for data center infrastructure within the Asia-Pacific region by 2020. The network equipment segment is the largest segment of data center market by value with a major share of 46.6 percent followed by the servers and storage segments with share of 33.1 percent and 20.2 percent respectively, as per Infoholic Research.
Data center providers in India have improved their offerings dramatically in the past few years, providing high-grade facilities and going beyond colocation into cloud and managed services. Some of the providers include Sify, CtrlS Datacenters, Netmagic, NxtGen, Pi, Reliance Communications, and Tata Communications.
The top trends in the Indian data center market include virtualization, consolidation, and green computing. Other emerging trends such as data, network convergence, data center automation, and usage of Ethernet are expected to bring new trends in Indian data center infrastructure market. Very much like other markets worldwide, the primary focus of Indian enterprises is to reduce cost consistency in services which result in the consolidation of data centers.
A bigger focus on cloud, mobility, and analytics has made many organizations to rethink their data center strategies. Organizations in India are evaluating data center architectures that would provide them the agility, flexibility, and the scale desired for new application workloads.
Captive versus outsourced model. Data centers are usually operated using one of two main models: the first is for an organization to build, operate, and manage its own data center for internal purposes, known as a captive data center. The second is the outsourced model, where organizations lease space and hosting services from external data center providers.
Today, many organizations are moving from a captive data center model to outsourced model because of zero capital investment, high operational efficiency, and scalable infrastructure.
Localization. Over the past few years, multiple countries have enacted data localization laws. Also, due to regulatory and security reasons, many organizations in India, especially from the BFSI sector, are not willing to host their data in a data center that is out of the country.
As a result, the data center providers set up local data centers in India. Recently, Oracle declared its intention to set up a local data center to expand its cloud services. IBM already has two data centers in India (Mumbai and Chennai) and NTT Communications has three (Mumbai, Bangalore, and Noida).
Infrastructure as a service. In India, traditional data center outsourcing spending is forecast to reach Rs.3,745 crore in 2017, while cloud spending will total Rs.4,535 crore. By 2021, cloud computing and storage as-a-service will be nearly three times more common than traditional data center outsourcing, states Gartner. India will see Infrastructure-as-a-Service (IaaS) eclipse traditional data center outsourcing by the end of this year.
Modular data centers. The market size is expected to witness growth over the next five years owing to improvised scalability and portability coupled with the growing inclination of organizations toward the deployment of modular data centers. In addition, growing adoption of high-performance and energy-efficient data centers and the increasing need to lower the expenses associated with operations is further contributing to the growth of the modular data center market. Installation of these data centers can be done easily and include IT, cooling, power, and access control elements.
Globally, the modular data center market size is expected to grow from USD 13.07 billion in 2017 to USD 46.50 billion by 2022, at a CAGR of 28.9 percent, according to MarketsandMarkets. The growing requirement for scalable data centers, reduced CapEx, and the growing need for green data centers are the major growth drivers of the market. Industry players in the modular data center market include IBM Corporation, Cisco Systems, Inc., Huawei Technologies Co., Ltd., Schneider Electric, Baselayer, Hewlett Packard, Inc., and Dell Inc.
Equipment. Data centers have been switching to blade and blade-like servers replacing rack servers. The density and flexibility offered by blade servers make them increasingly popular for an enterprise data center. Globally, blades make up a small part of the total server market, but are growing as a percentage of those used by enterprise data centers, representing 14 percent of such sales today and expected to go to 20 percent by 2020.
Convergence. Hyperconverged and software-defined infrastructure act as the building blocks of next-gen datacenters, which according to IDC, will aim to drive more than 18 percent reductions in internal space and staff. Also, in next three years, rack-level, hyperconverged, and hyperscale bundles will account for approximately one-third of worldwide servers, storage and network deployments, driving changes in power and cooling design.
The market for global hyper converged integrated systems (HCIS) will grow 79 percent to reach almost USD 2 billion in 2016, propelling it toward mainstream use in the next five years, according to Gartner.
HCIS will be the fastest-growing segment of the overall market for integrated systems, reaching almost USD 5 billion, which is 24 percent of the market, by 2019.
The culture of business and environment has dramatically changed in the past few years. Presence of digitization and visual data sharing technology changes the business and shapes it in a new a way to achieve desired goals. Today the world is heading toward globalization, multinational enterprises are shifting toward video conferences and meetings in order to obtain effective results and decisions from off-shore branches. These factors enrich the culture of the business which helps to enhance the productivity of the business.
Video conferencing offers a feasible communication solution to offices that are located in different areas across the globe. Today vendors of video conferencing are offering flexible, managed, on-premise, and cloud-based deployment solutions. With the help of video conferencing, companies operating in different geographical locations can easily coordinate their business processes.
The global video conferencing market is predicted to progress from USD 3.7 billion in 2014 to USD 7.8 billion by 2023, growing at a CAGR of 8.50 percent during the period from 2015 to 2023 due to factors such as the increasing demand for scalable communication methods and the rising globalization of business organizations, as per Transparency Market Research. While the enterprise video conferencing market in the Asia-Pacific region is expected to register a CAGR of 9.2 percent during the period, 2015–2023, according to Research Nester.
The global video conferencing market comprises many players offering video conferencing infrastructure, networks, end-points, and services. With the industry shifting from hardware-based solutions to software-based video conferencing solutions, key players offer a wide range of video conferencing solutions to fit specific customer requirements. The key players in the video conferencing market include Cisco Systems, Inc., Polycom, Inc., Huawei Technologies Co., Ltd., Vidyo, Inc., Lifesize (Division of Logitech International S.A.), ZTE Corporation, Avaya, Inc., Microsoft Corporation, Adobe Systems, Inc., and InterCall (West Corporation).
In the third quarter of 2016, total worldwide enterprise video equipment market revenue was over USD 542 million. The revenue was derived from multi-codec telepresence equipment (USD 24.6 million), room-based videoconferencing systems (USD 372.6 million), personal videoconferencing systems (USD 37.8 million), and video infrastructure equipment (USD 107.5 million). Cisco, Polycom, and Huawei are the leading players for the video conferencing equipment market as of 2016, according to IDC.
There has been a rise in the adoption of various video conferencing services due to the increasing need to reduce travel expenses and operating costs. Increasing applications of video conferencing in the defense sector are expected to further propel the global video conferencing market. The rising expenditure in applications such as teleconsultation, patient monitoring, and diagnosis is also expected to increase the acceptance of video conferencing services. Use of video conferencing for other applications including webinars and distance learning is predicted to contribute toward the growth of the global video conferencing market. In the next few years, it is expected that video conferencing solutions will find their application in the media and entertainment industry, especially for broadcasting special interactive events.
Globally, video conferencing is reaching a tipping point in terms of its performance in 2017. However, emerging trends are eliminating common technical barriers and leading to solutions that are easy, effective, and affordable for businesses of all sizes. These developments include: WebRTC. Web Real-Time Communication is an open-source application programming interface (API) that enables real-time voice, video, and data communications through a web browser. This dramatically simplifies cross-platform communications.
Platform interoperability has always been an issue with video conferencing. Participants are often on disparate systems that make use of variety of video coding and decoding (codec) formats. Typically, these various media streams must be translated and converted to a common language through the use of a gateway. However, this is a resource-intensive process that can affect video and audio quality.
WebRTC eliminates all that because the browser contains all the underlying codecs as well as all the required encryption, bandwidth management, and NAT/firewall traversal tools. Statistically, the web conferencing software will grow at an annual rate of 8.4 percent in the coming years and will reach USD 2.41 billion in 2020.
Software-based codecs. Hardware codecs are dedicated chips that encode and decode a digital media stream. For a long time, it was really the only way to ensure a quality video session. However, these chips vary from vendor to vendor. There can even be variables between chipsets from the same vendor. That limits customization and creates platform compatibility issues.
Software codecs run on the CPU and were long considered to be too slow for heavy-duty video. However, dramatic improvements in graphics and CPU processing power over the past few years have altered the dynamic. Software codecs now offer more flexibility and more customization at a better price point with no discernible performance penalty.
Cloud-based platforms. A growing number of cloud-based solutions offer robust and flexible ways to utilize video conferencing. Video-Conferencing-as-a-Service (VCaaS) solutions allow you to access a feature-rich platform without investing in equipment or the technical resources to maintain and support that equipment.
For companies with existing investments, cloud-based integrations can connect your solution with UCs and collaboration platforms. For example, integrating Microsoft Skype for business with a cloud-based video service widens communication to mobile devices, room-based conferencing systems, chat clients, and third-party video clients, and even allows audio-bridging for mobile and landlines.
UC is becoming dominant in business telecommunications. The principal of UC is that all communications should be unified technologically in order to facilitate better communications and collaboration. Many top vendors are now offering cloud-based UC platforms (UCaaS), which enables video conferencing to be integrated with other forms of communication, such as texting, social media, and email.
In India, the UCs and collaboration market are projected to grow at a CAGR of over 12 percent during 2017–2023. While voice remains the primary means of communication, however, video-based UCs registered maximum market share in terms of revenues. With rising adoption of video conferencing across all major verticals, it is expected that video-based UCs would dominate the market over the coming years.
In India, there is more demand for multipoint video conferencing solutions that can accommodate higher number of participants for collaboration. Many vendors also offer hosted VC as a service that provides the scalability and technology support to execute these solutions at both enterprise and mid-segment levels. Greater adoption of mobility and higher demand for cross-platform content sharing are creating a diverse customer base and a higher demand for scalable and flexible services that are provided by software and cloud-hosted VC solutions.
Video conferencing may still be a work in progress in India, but it is clear that mainstream usage is inevitable. As solutions become more interoperable, reliable, and cost-effective, organizations will reap the benefits of a more collaborative environment.
Digital revolution is transforming many aspects of business and even whole industries. Digital transformation involves the use of digital technologies such as cloud computing, social media, mobility, and analytics. These technologies help enterprises to improve or add more features to their traditional business processes and also to maintain customer relationships.
The rapid evolution of processing power, storage technologies, and availability of high-quality broadband speed and big data have enabled the realization of cloud computing. It generally consists of three services, software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a- service (IaaS).
Cloud infrastructures are typically accessed using a pay-per-use model, unlike structures of payment that enable users to subscribe to vendor services for a set-price or subscription-based pricing models. Instead of purchasing cloud infrastructure from a provider, organizations can also build their own cloud infrastructure in their premises. An organization using a service provider cloud is termed as public cloud; when an organization uses its own infrastructure, it is termed as a private cloud; and when an organization uses bits of public and private infrastructure, it is termed as a hybrid cloud.
The global cloud infrastructure market is expected to be worth USD 209.66 billion by 2022, at a CAGR of 12.9 percent between 2016 and 2022. The growth of this market is majorly driven by increasing ICT spending and trend of big data and analytics; rising demand from organizations for agile, scalable, and cost-effective computing; increasing number of digital services and their applications; and high penetration of hybrid cloud. Cloud infrastructure services are generally used across all major verticals such as government, telecom, healthcare, banking, manufacturing, financial services, and others. The global adoption rate of cloud infrastructure services is increasing due to the growing implementation rate in Asia Pacific, Middle East & Africa, and Latin America regions. However, infrastructure complexity, data security implications, and limited control of cloud resources are acting as the restraints of the global cloud infrastructure market.
The major players in this industry are Hewlett-Packard, Amazon Web Services, Dell, Cisco Systems, Quanta Computer Inc., Foxconn Technology Group, Intel Corporation, and NetApp, Inc.
In the third quarter of 2016, HPE maintained a narrow lead over Cisco in the cloud infrastructure equipment market, while Dell EMC is now challenging the top two after the completion of their historic merger. Meanwhile, ODMs (contract manufacturers) in aggregate continue to increase their share of the market, driven by continued heavy investments in data centers by hyper scale cloud providers. Servers, OS, storage, networking, and virtualization software combined accounted for 94 percent of the cloud infrastructure market, with the balance comprising cloud security and cloud management. Based on segment, HPE has a clear lead in the cloud server segment and is a main challenger in storage, while Cisco is dominant in the networking segment and also has a growing server product line. Dell EMC is the second-ranked server vendor and has a clear lead on storage. Microsoft features heavily in the ranking due to its position in server OS and virtualization applications, while IBM maintains a strong position across a range of cloud technology markets, according to Synergy Research Group.
In India, the public cloud services market in India is expected to grow 35.9 percent in 2016 to total Rs.871 crore, according to Gartner, Inc. The highest growth will come from cloud system IaaS, which is projected to grow 45.5 percent in 2016, followed by PaaS, projected to grow 33.5 percent.
Rising availability of cloud services at economical price models and the ease of implementation are the major growth drivers for cloud services in India. In addition, increased government spending on new e-governance projects based on cloud technology and National Optical Fiber Network are also likely to drive the market for cloud-computing services in India over the coming years.
In order to utilize and harness the benefits of Cloud Computing, the government has embarked upon an ambitious initiative, GI Cloud, which has been coined as Meghraj. The focus of this initiative is to accelerate delivery of e-services in the country while optimizing ICT spending of the government.
It is imperative to keep in mind certain factors while adopting the cloud. Security over the cloud is one such factor vital for cloud adoption. Without security, no cloud service could be effectively offered, though it may satisfy the need for manageability and interoperability. Specially, the SMEs should have confidence that their data is secure in the cloud. Security is needed not only for data but also for services and application to avoid their usage beyond trust boundaries. Transfer of data, sharing of information, and use of third-party systems are areas of concern.
Interoperability issue is crucial to ensure that cloud service offerings are based on industry standards and are interoperable so that competition and fair value proposition in industry can be enforced. At present, due to lack of established industry standards within the cloud computing industry, public clouds are commonly proprietary to a great extent which poses a challenge on cloud consumers in case they want to move from one cloud provider to another. The consumers should be free to switch the cloud service provider if they are not satisfied. Interoperability may be needed at infrastructure level, platform level, and software/application level.
Big Data Analytics
Data is the lifeblood of any enterprise irrespective of its size. It holds greater potential to unlock new opportunities, scale into new heights, and uncover hidden challenges ahead. Most organizations understand this significance of data collection and aggregation. However, with increasing volume, velocity, variety, and veracity of the data, it is a huge challenge to manage this data and get the relevant business insights and intelligence from it. Data becomes big data here and it becomes challenging for an organization’s existing IT systems to ingest, store, process, and analyze it. This is where big data analytics becomes imperative.
Big data analytics is the process of collecting large chunks of structured/unstructured data, segregating and analyzing it and discovering the patterns and other useful business insights from it. It helps in determining which data is relevant and can be analyzed to drive better business decisions in the future. Many commercial as well as open source tools are available for big data analytics in organizations.
Big Data and Business Analytics (BDA) as an enabler of decision support and decision automation is now firmly on the radar of top executives. It is one of the key pillars of enabling digital transformation efforts across industries and business processes globally. Globally, BDA will reach USD 150.8 billion in 2017, an increase of 12.4 percent over 2016. Commercial purchases of BDA-related hardware, software, and services are expected to maintain a CAGR of 11.9 percent through 2020 when revenues will be more than USD 210 billion.
The industries that will be making the largest investments in BDA solutions in 2017 are banking, discrete manufacturing, process manufacturing, federal/central government, and professional services. Combined, these five industries will spend USD 72.4 billion on BDA solutions this year. The industries that will experience the fastest growth in BDA spending are banking (13.3 percent CAGR) and healthcare, insurance, securities and investment services, and telecommunications, each with a CAGR of 12.8 percent. The global leading vendors for data analysis solutions include Accenture, Deloitte, Hewlett-Packard (HP), IBM, PricewaterhouseCoopers (PwC), SAP, and Teradata, according to Technavio.
Big data analytics sector in India is expected to witness eightfold growth to reach Rs.107,200 crore by 2025 from the current level of Rs.13,400 crore, according to Nasscom. As a matter of fact, India is currently among the top 10 big data analytics markets in the world.
However, the data and analytics market in India is undergoing a significant change. Adoption of machine learning techniques for data management and analytics, better data storage, processing, and analysis solutions are a few of the changes. There is also a rapid shift to the cloud and hybrid data management through focused offerings, and the emergence of modern business intelligence (BI) platforms, smart data discovery, and self-service data preparation solutions, which are all fueling the next round of investments. Indian enterprises are focusing more on IoT data integration, data management, and analytics.
The Indian government has also adopted big analytics in its various initiatives, for example, Aadhar and Unified Payment Interface (UPI). The Comptroller and Auditor General of India (CAG), has drafted a Big Data Management Policy to improve its functions using big data. CAG aims to exploit the data-rich environment in the state and union governments, building capacity in the Indian audit and accounts department. Similarly, DISCOMs in India are capturing the data from sensors that are installed at the last mile of power consumption and analyzing it in association with historical power usage patterns to hypothesize what preventive measures can be taken for Aggregated Technical & Commercial (AT&C) losses.
Globally the trends, service/embedded analytics, and cloud-based analytics are transforming the industry. Increasingly businesses are realizing that best results from analytics can be derived when it is a natural part of the workflow. This is giving rise to the trend of embedded analytics, wherein an analytics tool is integrated into a business application instead of a separate platform. Embedded analytics makes features specific to an analytics platform available on a business app. Thus, there is no need to install or learn a new tool or adapt to another interface and structure. During 2017, trend for embedded analytics has gained momentum with companies expecting analytics to enrich every business process. The embedded analytics market is estimated to grow, at a CAGR of 13.6 percent and will reach USD 46.19 billion by 2021, according to MarketsandMarkets.
Another trend which is catching up with digital transformation is the cloud-enabled data analytics. The adoption of cloud BI and analytics tools as well as data management and integration technology began to accelerate in 2014. 2015 saw an influx of cloud BDA solutions from all of the large IT vendors. Cloud BI or Cloud Business Intelligence refers to cloud-based tools which change raw data into information. This information can be used by businesses to help cut costs, increase revenue, streamline inefficiencies, and formulate better organizational decisions. Cloud-based BI offers many advantages over on-premises-based BI. Cloud BI can be accessed easily, is less expensive, highly scalable, and relieves users from many administrative tasks associated with data management.
The cloud analytics market is expected to grow at a CAGR of 25.1 percent and will reach USD 23.1 billion in 2020. Through 2020, spending on cloud-based BDA technology will grow 4.5 times faster than spending for on-premises solutions, according to IDC.
With continuing growth being witnessed across the sectors, demand for uninterrupted power is growing in India. Despite, various government efforts toward increasing power generation over the last decade, there is still a huge mismatch between power supply and demand. Poor power infrastructure and high transmission losses are anticipated to drive demand for UPS systems in India over the course of next five years. Rising need for continuous and smooth power supply in various end use sectors including residential, commercial and industrial, provides huge growth opportunity for UPS manufacturers in India.
In particular, growing demand from IT/ITeS, BFSI, government sector, manufacturing, telecom, and energy sectors is expected to drive the UPS market in India in the coming years. On the contrary, advancements in telecom and IT sectors have swamped the market with new devices such as laptops, tablets, and smartphones, which does not require constant power supply, and are limiting the growth of UPS systems market in India. However, domestic as well as foreign players operating in this sector are constantly introducing new and innovative products to capitalize the existing as well as potential market.
The UPS market in India will reach Rs.800 crore by 2021, according to TechSci Research. Government’s initiative to computerize its various departments coupled with the National e-Governance Plan is expected to boost the demand for low-end UPS systems through 2020.
The major function of the UPS is to provide a stable and an uninterrupted power supply to the equipment to keep the activities running, the applicability of the electronic device is burgeoning in data centers, healthcare and medical, telecommunications, and other industries, etc.
The growing trend toward cloud computing, virtualization and the need for easy data availability is fueling the market for data center UPS. This has increased the number of UPS installations in organizations and has allowed them to use power effectively and efficiently. Enterprises are shifting toward cloud computing which is generating the need for data storage and safety. Other drivers of this market are an increase in adoption of services such as mobile computing, remote access services, and online services by enterprises.
The global UPS market is expected to witness steady growth and will post an impressive CAGR of over six percent by 2020, as per Technavio. Globally, APC (Schneider Electric), Eaton Corporation, and Emerson are the key players of the market.
However, the traditional UPS systems have problems related to the availability of system, failure of system, efficiency, and scalability, which can be overcome by the modular UPS system. This modular technique is an effective technology that can easily manage the scaling of power capacity and ensure continuous performance in data centers. The technologically leading companies are more focused on the modular UPS technology and are providing cost-effective, highly energy-efficient, and high-performance UPS solutions.
The modular UPS system comprises different small modules to create a big UPS systems. Each of the modules has all the hardware and software needed for an autonomous operation, with component distributed between different units. They are adapted so that the facility can be easily scaled up on later requirements just by adding new modules to the existing system. Additionally, they provide greater flexibility and reduce the complexity associated with installation, configuration, and maintenance of the system. As the modules are autonomous, they provide an excellent performance as compared to any traditional UPS system. However excess capacity in a complete autonomous module cannot be used by others resulting in underutilization of overall system.
The global modular UPS market in a growth stage, has the potential to replace the traditional UPS and provide high potential for growth and is expected to reach USD 2.5 billion by 2020, at a CAGR of 12.7 percent from 2015 to 2020, estimates to MarketsandMarkets. High penetration is expected in APAC, especially in China. It has high penetration potential in the market beyond 2017, owing to increasing end-user awareness levels and high demand for energy-efficient UPS systems.
Availability is the most crucial UPS parameter which is dependent on reliability and serviceability of the UPS system. The modular systems are highly reliable and any sort of service would only be limited to a particular module rather than the complete system. It is expected to be one of the most sought after UPS solutions in the medium and long term.
The traditional enterprise networking products, software, and services are seeing an annual growth of 1.45 percent increase or so, with servers seeing a decline since the last couple of years. Over the next five years, growth is expected to come from cloud, mobility, and big data analytics, which too need to be supported by the right infrastructure.
The enterprises are aggressively looking at investing in digital transformation. IDC forecasts worldwide spending on digital transformation (DX) technologies to be more than USD 1.2 trillion in 2017, an increase of 17.8 percent over 2016. IDC expects DX spending to maintain this pace with a CAGR of 17.9 percent over the 2015–2020 forecast period and reaching USD 2.0 trillion in 2020.
The technology categories that will see the greatest amount of DX spending in 2017 are connectivity services, IT services, and application development and deployment (AD&D). Combined, these categories will account for nearly half of all DX spending this year. The fastest growing technology categories associated with digital transformation over the five-year forecast are cloud infrastructure (29.4% CAGR), business services (22.0% CAGR), and applications (21.8% CAGR). And, despite a CAGR that is slower than the overall market (17.3%), AD&D spending will grow fast enough to overtake IT services as the second largest DX technology category by 2020.
IoT will also have major spends. Deloitte expects India to rapidly grow into a hub for IoT solutions. The market value of IoT is expected to reach Rs.60,300 crore by 2020.
Multiple diverse components from sensors that are bundled with products to networking gateways, telemetry for remote connectivity, infrastructure such as an IoT platform for storage and computing, and an analytics engine to bring out key insights from raw data need to be integrated together for an effective business value to deliver high-class operational performance. No single player can offer expertise in all these areas, states IDC.
From a technology perspective, hardware will be the largest spending category until the last year of the forecast when it will be overtaken by the faster growing services category. Hardware spending will be dominated by modules and sensors that connect end points to networks, while software spending will be similarly dominated by applications software.
No doubt, this represents a huge challenge for vendors that are dependent on legacy markets and technologies. They will have to reinvent themselves so that they may continue to have relevance in this disruptive scenario.