iDC will be the driving force for emerging IT utility services infrastructure--IDC

The traditional IT industry is set to experience the transformation to a computing utility service model with the advent of Internet Data Centers (iDC). Computing services are increasingly delivered from a remote or third-party iDC, from which end users access applications, content and storage capacity. This can be compared to the service model of telecom companies where infrastructure is owned and managed by the service provider, the end user avails the services only.

IDC in one of its latest research report titled, 'Internet Data Center Services Market in India: 2001' has studied the developments taking place in the iDC market from the perspective of both iDC market space players and the end users in the medium and large enterprises. The findings are based on a survey of 500+ medium and large enterprises and close to 10 market players.

The iDC services are classified under two sub categories, Outsourcing services and Utility- based services. Outsourcing services include the management of customer owned or leased systems, the iDC takes responsibility for managing the client's IT and network systems- the computing infrastructure- based on customer defined SLAs. Utility- based services on the other hand are delivered when the iDC owns the infrastructure and leases back to the customer the IT or network capacity.

The iDC market in India is slated to grow at a CAGR of 53 percent from Rs 164.1 crore in 2000- 2001 to Rs 1394 crore in 2005-06. Though currently the market is dominated by the Outsourcing services and the share of Utility services is less than 10 percent, the later is likely to grow at a much faster rate during the projection period. Currently, most of the iDCs in India are dependent on the provision of outsourcing services such as co-location, however, the iDCs would themselves have the ownership of most of their services and hardware in the near future.

While a few big players currently dominate the market, the competitive climate looks to change over the next few years with the small and nimble players posing a tough fight for the bigger players.

IDC in its end user survey gauged the awareness level of the iDC concept amongst the corporates. Awareness of iDC offerings and its benefits has been found to be low and is an issue, which needs to be addressed with priority. There has been significant variance in the same by size of the organization. 37 percent of the large organizations have been found to be aware compared to only 14 percent of the medium ones. This is primarily due to the reason that till now most of the iDCs have made efforts to target large sized organizations only.

The highest awareness was found to be amongst the Internet/ dotcom/ telecom at 51 percent. Organizations owning websites or using enterprise applications showed higher level of awareness.

Of those organizations having their own web sites, majority is hosting their websites with ISPs, only a few have availed iDC services. When exposed to the concept of iDC, though 36 percent of the medium and large organizations liked the concept, only 1.1 percent had shown willingness to adopt the same. IDC feels with growing need to outsource, as users' IT infrastructure becomes more and more complex, iDC services will find more takers. This will be more towards utility-based services. IDC feels Internet Data Center players would need to invest in the resources, infrastructure and systems needed to meet this demand.

Majority of the organizations who have adopted or planning to adopt iDC services is not able to verbalize the details on various services and applications. Large organizations seem to be more forthcoming in their responses. On an overall basis the most preferred services offered by iDCs are hardware and software support, consulting, application development and deployment and design services.