Discounting the downturn

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ZAFAR: The market is really starting to move again, especially in the last couple of weeks with banks lending again.

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MACKENZIE: We cannot grasp the next wave until we unbind ourselves from PC by embracing today’s technologies.

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KILANI: Everybody knows that not every datacentre server is being fully utilised nor are they all suitable for virtualisation.

The datacentre is the nerve centre of the modern enterprise - but also requires some of the most expensive infrastructure. Given the current economic climate, Nathan Statz finds out if datacentre spending will be a victim of the crunch.

When the giants of Wall Street started to tumble like a chain of dominos in 2008, the world held its collective breath and the markets are still yet to exhale. News bulletins about Meryl Lynch and Lehman Brothers used to be accompanied by investment bankers in tailored suits smirking with the confidence of a firmly entrenched seven figure income - not so after September.

Six months on from the tumble of Manhattan's finest the Middle East is starting to move beyond damage control and into long-term assessment, particularly when it comes to looking over the pricey datacentre strategy.

"In the last couple of weeks the market has really started moving again, which is a good sign, and the banks are being more flexible dealing with the consumers and the corporates," says Dr. Usman Zafar, managing director of Al Taqnyah Business Solutions.

The financial crisis came at an unusual time for Zafar, as he was overseeing the implementation of a new document management system. This meant that two decade's worth of data had to be processed and this had the effect of generating additional storage requirements.

Zafar explains that this put the company in a unique situation, with the crisis going on and additional storage requests landing on his desk. Despite the fact that the troubles of financial heavyweights were primetime news each evening, those storage needs still had to be filled and would not go away on their own.

"We didn't feel that bad because we have a huge backlog conversion and when we reached that stage we definitely needed to expand our storage capacity," he adds.

While the company does not run an internal datacentre yet, according to Zafar the current facilities and the local infrastructure are antiquated within all the companies Al Taqnyah oversees. This has lead to a new datacentre being incorporated into the company's five year strategy, with a real possibility of outsourcing the requirements.

"We have already evaluated a couple of datacentres in the United Arab Emirates like eHosting DataFort. Those datacentres are providing very good services but outsourcing is under consideration - depending on our future business growth," adds Zafar.

Al Taqnyah's experience merely highlights a larger trend - that the amount of data being produced is increasing and this leads to organisations needing a place to store that data irrespective of the crisis.

"There is a huge requirement for storage across all industries. As per IDC and other analysts this data growth is an average of 60%-70% year-on-year and in the Middle East we saw over 70% in several industries," explains Said Akar, technology solutions manager for the UAE, Saudi Arabia, the Arabian Gulf and Levant at EMC.

But storage is not exempt from the travails current economic climate, as EMC chairman Joe Tucci noted during his whirlwind tour of the region in April.

"Nothing is recession proof. Storage may be a little bit better than the average, but it won't be immune," he said.

Chandan Mehta, product manager at Fujitsu Technology Solutions explains that the biggest changes to existing datacentre strategies is unscheduled delays to planned refreshes of technology.

"In the Middle East we have some projects in Dubai getting delayed, we see a shift in our discussions for other parts of the GCC in terms of reviewing everything that has been on the drawing board," he says.

"The only motivation for [CIOs] to purchase new infrastructure would be something that reduces their operational expenditure and gives them a return on investment within as short a time frame as possible," he adds.

Focusing on reducing costs is nothing new - datacentre managers have been watching the red numbers climb and fall in the ledger column for years, though the financial crisis has made those eyes suddenly much more hawkish. It is only natural that with global economic turmoil comes fists that are wrapped tighter around each penny and will only loosen their grip for the guarantee of a quick and substantial return.

Mehta believes that costs have been an issue since time immemorial, even in periods of economic prosperity; however what CIOs are looking at now is more cost-effective storage and exploring virtualisation.

When all the whispering around the water cooler is about how much coin needs to be saved, it is no surprise that the vendors change their tunes to suit. Much of the promotional spiel is now about how much you can save instead of how great the features on their latest product are. But where do those savings come from? More specifically, is it worth ponying up the initial investment now in order to realise reduced operational costs later?

"My advice to CIOs would be to re-examine at all technologies currently available in terms of servers. Do a cost analysis in terms of how effective it would be to implement new infrastructure?" says Fujitsu's Mehta.

EMC's Akar believes the key is to focus on the long-term plan and to make sure your strategy fits in with your needs. This means approving measures that achieve cost reductions and business results in the short term, but also factoring in the long term data requirements of the business.

"The key IT words - and this is applicable to the long and short term - is to consolidate, virtualise, automate and de-duplicate whenever you can," he says.

The counter argument to this is not to consume any of the organisation's profits on new infrastructure and coast along with what you have. While this means that your operations team won't be unwrapping any fancy new server boxes any time soon, it also ensures that you are not incurring new infrastructure expenses in the short term.

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