Data centre investments in 2009 were largely linked to reducing cost and increasing productivity. Despite an overall revival not much is likely to change in 2010 as organisations continue to build on existing infrastructure, says the industry.
The face of the data centre arena has changed in the Middle East.
Over the last 12 months, the organisational data centre has gone through multiple modifications and taken on several technologies and procedures that are likely to affect business processes way into the future. Leading among these are efforts to virtualise, a shift to green computing and overall consolidation within the data centre.
"Green networking has been a major development in recent times. Green IT saves money and, apart from costing less to implement, energy-efficient networking can also provide management tools that enterprises can use to reduce on-going energy consumption. The availability of single-pane network management systems means that data centre s have been able to improve the business efficiency of networks," said Mahmoud El Ali, 3Com GM for MENA.
Chandan Mehta, product manager for Fujitsu Technology Solutions states: "The biggest development has been virtualisation and how effectively customers can use their existing infrastructure to get more out of investments. This automatically brings a lot of advantages like cost savings, greener systems, and less power consumption."
"Several interrelated factors affected data centres in 2009 globally - and, consequently, also in the Middle East. First, the need to be more efficient has driven the trend to blade servers and server virtualisation. Together with enhanced storage virtualisation systems - and the accompanying trend towards cloud computing - the data centre is driving much higher utilisation rates in computing, storage and I/O," said Mashood Ahmad, regional MD of Ciena.
"The biggest challenge has been the exponential growth of businesses in our region over the last few years that put pressure on CIOs to upgrade their network infrastructure. This is mainly due to deployment of new applications that are hungry for processing resources and most importantly storage capacity. Data centre consolidation and virtualisation are the answers for CIOs to accelerate the optimisation of resources while lowering costs," said Samer Shaar, Juniper Networks' regional director for the Middle East and Pakistan.
The driving factor for most of these changes has been an over-riding business priority - optimising costs. And this sudden attention to costs has in turn been fuelled by the economic slowdown.
"Today's CIOs have a tough role to play. The business is pressuring them to accelerate growth, reduce IT costs, and manage risks in the short term. But, they must keep an eye to the future as well by improving business processes and enabling new business models. Yet while business demands are increasing, technology budgets are decreasing," stated Rasheed Al Omari, adaptive infrastructure lead at HP's enterprise business.
Anthony Harrison, server and storage management expert at Symantec MENA points out: "The slowdown has meant that all investments need a solid business case and a break-even period of months instead of years. There are only limited opportunities for re-architecting systems for greater operational efficiency without making changes.
These changes can affect people, process, technology or all three, all of which have their associated costs. Where that cost sits and how visible it is makes a big difference. For example, we are seeing lots more interest in the ability to move items from the capital expenditure budget to the operating expenditure one."
Walid Moussa, manager of the technical sales support unit at Emirates Computers comments: "The bigger the enterprise, the bigger the headache of building and managing a data centre, and more importantly the bigger the cost. Thus, larger enterprises would pay more attention to solutions that would bring their running costs and TCO down, along with enabling easier management and ensuring a greener effect."
Echoing the sentiments of his peers across the region, Mohammed Thameem Rizvon, group IT manager at Kamal Osman Jamjoom states: "In 2009, most organisations have focused on improving utilisation and efficiency with whatever resources they have, rather than investing anew. This year our business exercised caution on CAPEX projects and we took this opportunity to stabilise our systems and improve their efficiency and utilisation. We also started to look for efficient ways to manage the data centre through external hosting, virtualisation, consolidation etc."
Yes, the recession is indeed causing enterprises to look at their IT spend with new eyes. The question of how though, splits the entire industry clean in the middle among those who believe it has driven investment in solutions that will help cut cost in the long run by improving productivity, and those who state that organisations are cutting back on cost by clipping money spent on new products.
Whichever faction one belongs to, they all agree on the challenges that IT managers had to face down in the last year to ensure a running data centre. And what exactly did they have to handle? It would seem everything from inadequate electricity to inefficient management.
Rizvon says:"The general challenges we faced with our data centre related to power, cooling and capacity planning. The need for virtualisation also became obvious - if not a full-fledged one, atleast an interim solution with existing infrastructure."
"The greatest challenges that regional organisations have faced in the last year are issues and outages caused by improper planning and investment in the infrastructure and data centre environmental strategy. Issues surrounding consistent power supply to the infrastructure manifest themselves through overutilisation of the power capacity, often due to the poor distribution of equipment in each data centre rack. This is compounded by insufficient cooling leading to hot spots, and of course overheating creates further outages.
These sorts of issues can be avoided with some foresight and the correct infrastructure and environmental strategy being in place. Additionally, macro-level regional challenges with the lack of diversification of power and telecommunications supply into customers' data centre facilities remains a key issue, particularly in the UAE," said Chris Carter-Jones, principal solution consultant at Intergence Systems Middle East.
"There are several challenges including ensuring uptime and availability, adhering to SLAs, minimal data centre space, not enough managed service providers in the data centre space, lack of proper redundancy in connectivity infrastructure, lack of SLAs from telecom providers due to unhealthy monopolies and lack of specialised skills in the newly developing areas," stated Mustafa Kaddoura, CTO of Smartworld. The issue that refuses to go away - personnel.
"The greatest challenge faced by regional organisations with their data centres is still the shortage of qualified resources that are trained and certified in delivering the next generation application and infrastructure," says Juniper's Shaar.
Symantec's Harrison agrees: "One particular concern is the skills market in the region and the difficulty in retaining staff that you have trained; many people see certifications as a stepping stone to a better paid position. The impact of this is to make customers reluctant to invest in training, which means they cannot retain the in-house capability to fully exploit the software investments they have made. In turn, this leads to more projects that do not deliver the expected benefits, and a greater emphasis on ensuring costs are fully justified."
Aziz Ala'ali, regional director, MEA at Extreme Networks rightly points out: "Cost of downtime is lost revenues, lost credibility and lost clients, which happens to be the greatest challenge faced in the Middle East today. And the first step to avoid data centre downtime is to house your critical systems in a computer room with multiple power feeds, generators, UPS systems and cooling."
While Ala'ali's suggestion remains a distant dream for most IT managers, the ones who do get all of this in place struggle with the subsequent management of the same.
"One of the biggest challenges once you build your data centre is to manage it. Having the right skillset could be problematic and very challenging. Thus we see companies relying on a managed services approach," said Moussa.
Valid as they are, all of the above could be just symptoms of a deeper problem - a mindset that refuses to disappear.
"In the Middle East, data centre owners are playing catch-up - they want all of the benefits that their counterparts in mature markets are achieving with their data centre transformation initiatives, but without having to go through all of the hard lessons that have had to be learnt.
This applies to all major architectural shifts, such as adoption of cloud computing - everyone is standing at the edge, waiting for someone else to dive in, and once they do, everyone else watches to see how they do and then dives in too. Each development goes through the same typical cycle of excessive hype, slow regional adoption and gradual acceptance, but it is very easy to get drawn into the next big thing. And each of these developments bring their own additional challenges such as management and standards adoption," states Harrison.
The 2010 revival
The curtains are almost down on 2009. However, the industry is being careful about predicting a bright future for data centres and linked investments, in 2010, considering the fact that there is no sign of the prevailing challenges being solved in the near future.
"Gartner predicts a 3.3% increase in global IT spend next year. However, the market will not recover to 2008 revenue levels, and 2010 will be about balancing cost and growth," said El Ali.
Moussa adds: "Data centre investments would vary greatly depending on the size and priorities of organisations. That said, it is more probable to see government bodies and public organisations spend more on data centre solutions during 2010 then private organisations mainly because of budget constraints and financial challenges."
"We see a big shift in organisational buying behaviour in 2010. Most of them today are looking at buying technology as a service, like software or platform as a service. Many are looking at converting their CAPEX into OPEX, and considering outsourcing to reduce their TCO," said Smartworld's Kaddoura.
Rizvon agrees: "My advice to CIOs in the region would be to think twice before building their own data centre s as hosted options are improving. Also seriously consider virtualisation as it is key to managing data centre costs and server resources."
Harrison sums up the possible investment-mood of 2010 thus: "People are far more cautious than they were when times were good, so the name of the game is evolution, not revolution. No-one has the appetite to embark on large, long-term projects that require disruptive changes to business practices. They want to see a strategy covering the short-, medium- and long-term options available so that they can make the appropriate business case arguments at the appropriate time.
That means lots of small bets with lower risk and fewer large gambles that could make or break a business. Projects with short pay-back periods will get early finding in 2010 because that will allow mid-year assessments of success and how to spend to the rest of the budget for the year."
These statements are valid only for the rather large organisations in the region. The on-the-ground situation for the majority of SMBs in the Middle East will be far worse.
The final say? Though economic revival is already visible and will, in all likelihood, increase its pace in 2010, this is unlikely to be felt in fresh data centre investments in the same year. Tight budgets will remain a factor to be contended with for every CIO in the Middle East, and this means the industry will have to wait another 12 months for the general revival of the economy to be fully-reflected in the IT spend of organisations.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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