IDCs: The Going gets Tough

The phenomenal growth of Internet Data Centers (IDCs) in
India led many to believe that this is the next gold rush. It seemed everyone
wanted to be in the web-hosting business. Data centers for collection, website
and applications hosting mushroomed around Mumbai. Data center stalwarts added
new centers while ISPs expanded into the business via new builds. The percentage
of the Indian sites hosted in India rose to 20 percent and it was expected that
we would reclaim 50 percent of the websites hosted in the US. That was before
the dotcom shakeout. Now, with all the hype and hoopla surrounding IDCs, the
real picture is emerging. Too many data centers and too few customers.

But the IDC space is still alive and kicking, thanks to
corporates looking at localized data centers. And many players are already
moving to corporate application provisioning. Many corporates are looking
outside their doors, as running web servers and the infrastructure is not a core
competency of most of these businesses.

And this is where the data center steps in with space,
equipment and human resources to handle these functions.

Corporates who are seriously considering an IDC as a business
partner are inundated by claims and counter claims made by many as a result of
cut-throat competition. While server co-location continues to be the bread and
butter of many IDCs, many are moving up the value-chain, as corporates demand
more value and care only from the services delivered. "I expect some
consolidation in the IDC market and the key differentiator would be the ability
to provide value-added services. An IDC needs to offer more than just
co-location and hosting, and move to on-site services", says Naresh Wadhwa,
vice president, sales, Cisco India.

Today, with so much competition in the data center business,
the success factors of the IDCs depend not only on the business environment but
also on their ability to provide excellent infrastructure. Service efficiency
and managed services are the other factors that will separate the boys from the
men.

"To ensure customer loyalty, it is necessary for an IDC
to differentiate itself from competition. Additionally, it should also be in a
position to quickly launch these differentiated services to ensure fast
time-to-market", adds Wadhwa. While pricing can also be a differentiator,
it is hardly a long-term proposition. Hence, IDCs will have no option but to
enable other forms of competitive differentiation, such as quality of service
and offering.

Building Blocks

As IDC is completely technology-enabled business, it is
important and critical to ensure maximum availability and optimal performance of
business-critical infrastructure. Besides, there are heavy dependencies on
non-IT sub systems such as UPS, which require to be managed along with other IT
elements.

But what is more crucial while building an infrastructure is
the network design. In order to build a successful web-hosting service, key
characteristics like traffic engineering, scalability, security and
manageability should be considered.

Traffic engineering is one of the most important factors that
needs to be considered in the IDC design. In the past, IDCs focused only on
reachability (sending the packet to its destination) and network layer
reliability. But delivering content reliably, understanding traffic flow and
potential bottlenecks are the only means through which an IDC can offer
potential new services.

Next on the priority list should be scalability, which must
be evaluated on more than just the ability to increase device performance and
link bandwidth. It must also be considered on a geographical basis. The ability
to replicate content across geographically dispersed data centers allows for
access to multiples of copies of content, to maximize availability.

Another important aspect of any large-scale network service
is manageability. Probably most important, is the ability to retrieve valuable
information from the network for planning and billing purposes. But the key
challenge facing IDCs is that of network security. "For many organizations,
their data is valuable and mission-critical. The customers need to be confident
that IDC will be there for them", says Wadhwa.

No wonder security is also one of the primary selling points
of IDC service providers. IDC security typically consists of three components–perimeter
security which consists of the firewall, intrusion detection and content
inspection; host security comprising active content inspection, anti virus and
access control; and administrative tools, which consist of user management,
directory management, audit and reporting.

More than Storage

How does an IDC differ from other online storage services
such as storage area networks and network access storage? "While SAN and
NAS are used primarily for storage needs of large enterprises and service
providers, IDCs host websites and act as convergence points for service provider
networks as well. With new world communications coming-of-age, all sorts of
service providers need to find places to connect with other service providers.
ISPs, application service providers, metropolitan broadband carriers and others
have to place their servers, switches and web-acceleration gear wherever they
can meet up with local and long-haul fiber builds. IDCs fulfill that need",
says Wadhwa.

Long Road Ahead

It is true IDCs have taken a quantum leap in the last three
years in terms of technology and the services offered. The evolution of IDCs
from pure information storehouses to complete solution and services companies
has happened in just one year.

Though the data center services market in India doesn’t
compare favorably with the US in terms of price, it is more to do with the fact
that bandwidth and hardware are cheaper there. Then there is the fact that IDCs
in India are a new breed of service providers going through the learning curve.
"I expect a wave of consolidation accompanied with market growth. For
instance, there is a pickup in the enterprise side of things where enterprises
themselves start to look at becoming service providers", points out Wadhwa.

Besides many telecom carriers are also looking at the IDC
route. According to the technology research firm Cahners In-Stat, "For the
past couple of decades, carriers have been evolving their networks from voice to
data and converged multimedia networks. The next stage in this evolution is to
offer value-added services for data customers. IDC has emerged as the key
vehicle for carriers to move up the value-chain to offer new services.

Cahners In-Stat Group estimates that worldwide carrier IDC
revenue for co-location, managed hosting, applications services, and storage
services will grow from $8.7 billion in 2001 to over $50 billion in 2005.

Needless to say, things are going to get tough for pure-play IDCs.

MT Jeevan

Basic Attributes of IDC Services

These services include: Floor space and/or rack units
where co-location customers can install any e-business infrastructure of
their choice.

Located in a secure data center with
reliable power and air conditioning. The
customers pays a subscription fee based on how much floor space or how
many
rack units they require to house their
equipment.

Customers may have the option to have their equipment
located in a secure cage or vault which is only accessible to their
personnel.

Network

Most service providers will bundle some form of
network service with their basic co-location services e.g. Internet
access is usually the major network service offered. Customers are
usually provided with one or more LAN interfaces which can communicate
with any other Internet attached device.

Some service providers may offer the capability for
customers to connect with an ISP of their choice from the IDC. This is
an attractive offer for customers who want Internet access diversity.

Some service providers offer the capability for
customers to have private network links on their own premises, to
facilitate remote systems management or connectivity to e-business
infrastructure located on their own premises.

System Management Support

Most service providers offer a range of system
management support services to help their customers remotely manage
e-business infrastructure located within the IDC. Typical management
services offered include:

• Rebooting servers on a scheduled basis or in
  response to a failure
• Monitoring network capacity utilization
• Monitoring availability of applications
• Monitoring performance of applications
• Load balancing of incoming traffic across
  multiple servers supporting the same application

Service providers that operate multiple IDCs may also
offer the capability to perform load balancing across servers located in
different IDCs or to route incoming requests to servers in the
"nearest" IDC

Managed Storage

Many service providers are now offering managed
storage services to complement their co-location, network and system
management services. Managed storage services provide a robust and
reliable storage infrastructure that customers can use as an alternative
to installing and managing their own storage infrastructure. Two types
of storage service are usually offered:

• SAN (Storage Area Network) services provide one
  or more logical "disks" that are attached to the customer’s
  servers via a SAN and replace directly attached disk devices
• NAS (Network Attached Storage) services provide
  storage "capacity" that can be accessed from the customer’s
  servers via a LAN (or SAN) using industry standard protocols such as
  Sun NFS, Transarc AFS or Microsoft CIFS/SMB

Managed storage services usually include backup,
redundancy (i.e. RAID) and can also support data replication if required
for e-business applications that must be highly available.

Content Delivery

Service providers who operate multiple geographically
distributed IDCs or who have a presence, are multiple IDCs operated by
other service providers. Content delivery services provide two major
capabilities:

• Distribution of content to storage facilities
  located at multiple IDCs
• Routing of requests for content to the storage
  facility located in the IDC best able to deliver the content with the
  desired level of performance

Such capabilities simplify the effort required to
deploy content-rich e-business applications in a manner that can provide
high levels of performance to end users located in multiple geographic
areas.

Managed Web Hosting

Many service providers support managed web hosting
services that are targeted at customers who want a more comprehensive
web hosting infrastructure and not a combination of the basic IDC
services. Managed web hosting services are usually categorized as:

• Dedicated: customers have their own dedicated
  web server(s). These are often procured on behalf of the customer by the
  IDC
• Shared: customers share a web server with
  other customers

Managed web hosting services usually include the
installation and management by the IDC of both the operating system and
web server application environment on each server. The services will
often leverage other services provided by the IDC such as storage
management and content delivery.

Managed Application Hosting

Managed application hosting services target the
emerging Application Service Provider (ASP) market. Hosting of common
business applications for use within a business, by its customers, its
suppliers and other business partners. Service providers often deliver
these services from their IDCs in partnership with application providers
who own the applications that are being hosted by the service i.e. an
ISV. Concept managed application hosting is similar to managed web
hosting but there are several important differences: The range of
applications that must be supported is usually much larger

• The service level agreements (SLAs) are often
  more stringent
• The network connectivity requirements are more
  complex as they often involve non-Internet links or secure tunnels
  over the Internet
• Implementation of the application in a customer
  may require extensive professional services to integrate the
  application with the customer’s business processes.

Contributed by IBM Information Technology Services