This document discusses the benefits and considerations of outsourcing data center operations. It notes that outsourcing can help avoid capital expenditures and issues around limited IT skills and technology challenges. However, there are also cases where maintaining internal data centers makes sense due to assets, custom systems, security, or regulatory requirements. The document then summarizes trends in the global and Asian data center markets and drivers of outsourcing like cost savings, performance, and new technologies like virtualization and green IT. It profiles Tata Communications' data center strategy and global footprint to provide outsourcing services.

1. Consider Outsourcing
Vinay Nagpal
Director, Product Management
Hosting & Data Center Services
Tata Communications
Computer World Forum
Data Hot-House Summer 2008
©2008 Tata Communications, Ltd. All Rights Reserved

2. Considering Outsourcing?
Why buy the cow if you need only the milk?
Why run your own data centers when you can just pay to have your
machines hosted or have your computing resources supplied as a
utility?
There are cases where it may make sense to have your own farm!
2

3. The CIO’s conundrum
“Need to show the value of IT to the business”
“Need IT infrastructure to support mission critical applications"
“SLAs aligned to needs of the business? – the performance – cost trade-off”
“Business needs changes implemented quickly – but we need to get it right”
“Users are getting more and more demanding. There is a deluge of
information to manage, and the underlying infrastructure is complex"
“Our internal admin costs are too high”
“We need to improve business performance”
“We don’t know what we have got out there”
“We need to be more customer oriented”
3

4. Global Data Center
Marketplace

5. The New World
Globalization Web 2.0 India & China
5

6. Data Center Market Trends
Various ‘Sourcing’ models
Enterprise data center/IT consolidation
Convergence of network & IT realms
SPs adopting Virtualization/SaaS
Utility Computing
Increased volume of digital media
Flexibility and support to scale IT
infrastructure – web, apps, databases
Increased power/cooling requirements
Space constraints driving next-generation
data center
6

7. Business Drivers for Outsourcing
7

8. Global Data Center Market
IDC has forecast that the market will grow from $29.57 billion in 2005, to
$48.37 billion in 2010 (CAGR of 10%).
Worldwide IT and business services: Focus on SMEs, global assets, global
sourcing for innovation, and industry focused BPO
IDC’s latest forecast for the Asia/Pacific market (excluding Japan) in IT
Services: 2010 China will overtake Australia
In 2011 India will overtake Korea to become the third largest market in the
Asia Pacific region.
8

9. India and China will improve their position in the APAC DC market
APAC Data Center Market Split by Country (%)
INDIA Data Center Outsourcing ($ million)
“As China and India increasingly
redefine the future of technology
and innovation, knowing how to
map a course into that future will
be a core competency of the most
accomplished travelers”
… Gartner
Source: Gartner
9

10. Asian Data Centre Space Forecast: 2006 to 2010
4500 China
4000 Hong Kong
3500 Indonesia
India
3000
Japan
2500
Korea
2000 (South)
Malaysia
1500 Philippines
1000 Singapore
Taiw an
500
Thailand
0
2006 2007 2008 2009 2010
Chart 1 - Data Center Space Grow th Forecast 2006-2010 by country
(Source: BroadGroup)
10

11. Asian Data Centre Market Forecast: 2006 to 2010
Country 2006 2007 2008 2009 2010 CAGR%
China 600 725 900 1150 1450 35
Hong Kong 1100 1200 1300 1550 1750 13
Indonesia 320 360 400 480 530 40
India 1900 2500 3000 3500 3700 24
Japan 3800 3900 4000 4100 4200 3
Korea (South) 1000 1150 1250 1350 1400 10
Malaysia 900 1200 1300 1400 1500 15
Philippines 900 1000 1100 1150 1200 8
Singapore 1300 1500 1600 1700 1750 9
Taiwan 800 850 900 950 950 5
Thailand 1100 1150 1200 1250 1300 5
Total 13420 15335 16950 17330 19580 11.5
Asia Data Center Space Forecast 2006-2010 (figures in '000 square feet)
Space forecasts are based on carrier neutral facilities, carrier owned data centers, and space provided by hosting or IT service firms.
11

12. Drivers of Data Center Growth
Outsourcing of IT and application development demands infrastructure
Globalization & and managed services
Outsourcing
Entry into new markets requires IT infrastructure and capabilities
Regulation & Alternate IT infrastructure and services for business continuity and
Business compliance, particularly for Banking and Financial Services companies
Continuity Data privacy and security issues
Serve customers quickly and locally to improve experience
Time to Market Application and services roll out to emerging markets such as India,
Considerations China and South East Asia
Data Center Infrastructure easily available for applications
Rising costs of real estate and power
Reduced IT
Technology obsolescence, manpower churn, management overheads
Budgets
Skills of M&E – not necessarily core to IT
12

13. Challenges in building your own Data Centers
Availability and cost Space size and scalability
Real Estate Proximity to fiber and Commitment - contract vs. lease
choice of providers Statutory approvals and regulations
Heating, Venting, Air Power infrastructure and costs
Core Infrastructure Conditioning (HVAC) Fire suppression
Security (manned, Environmental controls – M&E
access, surveillance)
3 P’s: Pipe, Power, Ping Maintenance
Operations 24x7 support (3 Shifts) Monitoring
Security Staffing and retention of skills
Multiple vendor contracts
13

14. Selection criterion to Outsource IT infrastructure
Location:
Globally expansive footprint
Ability to deliver consistent services across multiple regions
Data centers in mature markets and emerging markets
Connectivity:
Highly available, secure and integrated network
People:
Technically competent IT staff
IT infrastructure and management:
Well-defined and flexible roadmap
Operational efficiencies
Adherence to compliance
Financial Viability
14

15. …and sometimes it makes sense NOT to Outsource
Assets on the ground
Custom/legacy system requirements
Security requirements
Extent and depth of management oversight
Regulatory and compliance issues
TCO consideration
Footprint and facilities requirements
15

16. Data Centers Outsourcing Options in Asia Pacific
Australia & New Zealand Hong Kong & Singapore
Good IT infrastructure Good IT infrastructure
Experienced IT staff Experienced IT staff
Good service quality Excellent network coverage
Network latency – far from Asia Good language skills
No direct routes connecting India & High labor & real estate costs
China
South Korea, Japan & Taiwan India & China
Good network to China & HK Growing markets
Service quality and network Service quality improved but
performance are good inconsistent
Far from South Asian countries IT skills are improving
Limited capacity to India Limited international connectivity
High labor and real estate costs Huge domestic market
16

17. Tata Communications in
the Data Center Market

18. Vision
Deliver a new world of communications to advance
the reach and leadership of our customers.
Emerging Markets
INDIA, ASIA incl CHINA, SOUTH AFRICA
NEW WORLD OF
NEW WORLD OF
COMMUNICATIONS
COMMUNICATIONS
Converged IP Managed
Solutions Services
18

19. Tata Communications Data Center Strategy
Data center infrastructure in key geographies
Global Footprint Presence in both developed and emerging markets
Leverage extensive global network integrated with data centers
Integrated with Network Services: IP, MPLS, Ethernet WAN for DC and end sites
Network Services Carrier diversity to support redundancy requirements
Consistent Data centers are based on consistent standards – Tier 3 specifications
Service Based on global and industry standards – ISO 20000, 27001, SAS70
Capabilities
Out-tasked Managed IT infrastructure services – servers security and network
Managed Managed Hosting and Storage
Standards-based management for consistent service capability
Services
Captive Data Leverage in-house experience and expertise along with partners to build
Centers captive data centers
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20. Data Center Services and Capabilities
Multiple hosting and colocation facilities
Infrastructure Network Colocation and IT Hosting suite of services
Data Centers build to Tier 3 standards
Integrated with backbone network
Racks and cages
Remote Hands Services
Colocation
IP and Bandwidth Services
Managed Security- Firewalls, DDoS, and UTM
Managed Hosting Services – Servers, Storage, Security, Network
Virtualization, DB, Dual Site Recovery Replication in development
Hosting 24 x 7- operations, management and monitoring and OS level
Services management; Linux, Solaris, Windows, AIX
Centralized Management Platform with customer view portal
20

21. Tata Communications – Global Footprint of Colocation and Hosting Facilities
UK
Stratford, London
Highbridge EUROPE
Peterborough Lisbon, Portugal
Seixal, Spain
Derio, Spain
NORTH AMERICA
Canada
• Montreal
• Toronto
INDIA ASIA PACIFIC
USA Shinagawa, Tokyo
• Mumbai
• New York, NY Toyohashi, Japan
• Chennai
• North Alameda, LA Singapore
• Delhi
• Santa Clara, CA
• Bangalore
• Portland, OR
• Hyderabad
• Wall, NJ
• Pune
• Guam
21

22. The Road Ahead…

23. The Next Wave Driving Data Center Outsourcing
Energy use and power and cooling management and optimization
Green IT New IT systems and infrastructures; alternate sources of power
Cost reductions and savings; environmental impact
Logical server installed base growth: 65 million versus 45 million of
physical server install base by 2010
Virtualization Virtual Data Center; from consolidation to dynamic flexible infrastructure
Anywhere Enterprise; DC, Application, Network and Desktop virtualization
Captive Data BO, BOT models; for the enterprise, but operated, managed as a service
Centers Issues of capacity management, infrastructure upgrades, aligned to
business needs
Anytime, anywhere information availability drives shift towards policy-
Security based security management and administration
Application/ Networks make it a reality; network as a delivery platform; orchestration of
Content Delivery virtual resources
23

24. Summary
Key drivers for Data Center Outsourcing
Cost savings by avoiding capex investment
Limited IT skill-set
Technology challenges
Improve performance and availability of IT systems and websites
Asia Pacific region is positioned to take a significant portion of Global Data
Center Market
Singapore is currently the regional hub of Data Center business
Increased focus on emerging markets – India & China
24

25. Thank you!
Vinay Nagpal
Tata Communications
www.tatacommunications.com