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Press Release

India Third Party Datacenter Services to be US$1.1 Billion Market by 2015: Springboard Research

Adoption of new business models, automation technologies – a step towards “Cloud Services”

Published On: 11/26/2010
Geography: India/South Asia
Technology: Services

New Delhi, November 26, 2010 - The India third party datacenter services market is estimated to be US$1.1 billion by 2015, representing a Compounded Annual Growth Rate (CAGR) of 29% over the five-year period 2010-2015, finds Springboard Research, a leading innovator in the IT Market Research industry. The overall India datacenter services market was estimated at US$244 million in 2009.

Springboard Research found that growth in third party datacenter is primarily driven by the need of businesses to rely on the expertise of a service provider as in-house management becomes either too costly or too inefficient. This especially holds true in an environment of continuously changing technology and increasing complexities. Moreover, enterprise managements are focused on reducing their upfront capital investments (capex), and therefore are increasingly looking to outsource their datacenter needs - which is both cost effective and resource efficient. The respondents cited “lowering total cost of ownership” and “access to best of services with an agile IT setup” to be the key reasons for opting third party service providers .

According to Springboard Research,  the investment in datacenter services as a percentage of total IT budget is expected to increase from 24.2% in 2010 to 29.8% in 2011. The increased investment in datacenter clearly shows the renewed focus of CIOs to ensure availability of information to the decision makers at all times.

“With almost 65% to 75% of the allocated budget being spent on maintaining the datacenters, organizations are now seeking alternatives to bring down this percentage in order to have more capital available for innovation and for further growing their business”, notes Seepij Gupta, Associate Research Manager, IT Services at Springboard Research. “Third party service providers should differentiate themselves by providing a future roadmap to their clients, in addition to solving their current problems and thereby creating a long term relationship”, advised Mr. Gupta.

Mr. Gupta further added, “Consolidation, optimization and productivity will be the key areas of focus for enterprise managements in the near future. Captive datacenters will undergo optimization and will aim to consolidate and leverage their existing assets, while third party datacenters will build capacities aimed towards cloud services - especially Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS)”. 

The bigger picture: Journey towards “Cloud”

The adoption of new business models like “pay per transaction/ use” coupled with technologies like virtualization by Indian organizations are paving the way towards cloud-based services. As high as 70% of the respondent organizations rated ‘server virtualization’ and ‘consolidation’ high on their priority list for future investments. This clearly is the first step in the journey towards 'Cloud'. Currently, the Indian organizations might not have cloud on their immediate agenda for budget allocations, but will soon step onto this bandwagon.

“Though infrastructure management currently contributes maximum to the discrete outsoucing revenue, the future growth lies in application management”, notes Frederic Giron, Vice President, IT Services at Springboard Research.

Mr. Giron further added, “Many of the third party datacenter providers have already launched their cloud services and are witnessing early success across industry segments. As the industry matures, we would see a definite shift from co-location services, which currently contribute more than 55% to the third party services revenue, to managed services and cloud based services”. 


About Springboard Research

With visionaries others pursue, methods others neglect and ideas others don’t consider, Springboard Research not only seeks to lead an industry - we seek to transform it. Leveraging our pioneering research model and industry thought leaders, Springboard provides greater insight, analysis, and innovation specific to global emerging markets. Working with leading technology vendors, IT professionals, and local channels, Springboard Research helps our clients lead, rather than follow, market trends.

Springboard Research has a global presence with research centers in Australia, China, India, Japan, Malaysia, Pakistan, Singapore, the UAE, and the US. We have been acknowledged as an emerging leader and for the last three years been named a “Rising Star” in the global IT market research industry by Outsell, the leading research and advisory firm for the information industry. For more information and access to Springboard’s research, please visit www.springboardresearch.com

Media Contacts

Jonita Dhani, Marketing Executive    
Springboard Research

[email protected]

Frederic Giron, Vice President - IT Services    
Springboard Research

[email protected]

Seepij Gupta, Associate Research Manager - IT Services   
Springboard Research

[email protected]
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