Trend

DR services in demand

The likelihood of a disruption and compliance requirements are propelling companies down the disaster recovery services road, says Sushma Naik

An IDC Asia-Pacific report says that the DR market will grow from $551 million in 2001 to $1.3 billion by 2006. Further, it is estimated that India and China will emerge as the two biggest markets in the region with a CAGR of 46 percent and 36 percent respectively. DR planning becomes critical for services-based enterprises that deal with sensitive data. IDC says that the growth of DR services will be fuelled by the region’s healthy demand for services that guarantee business continuity to customers.

As Indian enterprises outsource their DR requirements to specialist service providers, the fortunes of system integrators and data centre companies that offer DR services are headed north. Sify, NetMagic and Reliance Infocomm report that the number of customers signing up for DR services is rising. For instance, Comsat Max, which started its DR practice a year back, signs up a customer every 45 days for its DR business. NetMagic’s DR practice has grown 40 percent in 2004. Sify has seen a 50 percent growth for its DR services in the past two years.

The regulatory driver

RBI guidelines require banking and financial institutions to have a disaster recovery plan in place. SEBI has introduced similar guidelines for mutual fund companies. Frost and Sullivan says that the average spending of a company in the banking, financial services and insurance (BFSI) space in India on disaster recovery is $0.44 million. Almost all computerised banks have DR and contingency planning procedures in place.

“While the guidelines exist for certain sectors in India, [DR] is still not mandatory, ” says Sharad Sanghi, MD and CEO, NetMagic Solutions. He goes on to add that most enterprises, now, have a better appreciation of the risks they run and are consequently implementing DR systems.

The rising sales of DR products is a good indicator of the growth in the disaster recovery market. Says Vivekanand Venugopal, sales director, SAM solutions, Hitachi Data Systems, “Our disaster recovery solution business is growing by 40 percent year-on-year.” Similarly, StorageTek has grown by 25 percent in the past four years and it has over 200 DR installations in India.

A suite of services

Some customers are opting for disaster recovery sites to ease traffic congestion on their primary site Sunil Gupta Head, Marketing and Product Management, Internet Data Centre Reliance Infocomm	Many Indian CIOs are keen to outsource their DR activities as it proves to be a cost-effective option Avinash J president Hosting Services Sify

DR services are provided keeping in mind a company’s size and business needs. While most service providers offer end-to-end services, clients can choose services in isolation. Says Joyjit Chatterji, VP, Comsat Max, “We design, implement, monitor and manage DR solutions and our clients can choose individual components of a DR solution such as setting up alternate servers, installing replication software and an alternate network or a site.” Additionally, once the solution is implemented, it must be tested and disasters simulated (mock drills). The learnings from the system’s performance during the simulation exercise are then incorporated to modify the DR plan. Organisations can choose to set up alternative DR sites in their company premises at a different location or decide to host their data at a service provider’s data centre. “Many Indian CIOs are keen to outsource their DR activities as it proves to be a cost-effective option,” remarks Avinash J, president, Hosting Services, Sify.

Data centre players and system integrators are customising their services depending upon customer requirements. For e.g., NetMagic offers a modular disaster recovery plan that lets customers pick and choose different components. Its services such as data replication on to servers hosted at the NetMagic data centre are popular with small and medium businesses (SMBs). Reliance Infocomm offers a customised plan for customers. It starts with a few terabytes and scales-up as their needs grow. Storage can also be customised. Sify’s customers, who are in the first phase of implementing a DR solution, prefer offsite storage on tape.

DR as a concept is also being used by Indian organisations to distribute the load on their servers. Says Sunil Gupta, head, Marketing and Product Management, Internet Data Centre, Reliance Infocomm, “Some customers are opting for disaster recovery sites to ease traffic congestion on their primary site.” Avijit Basu, country manager, Network Storage Solutions, HP India says that companies having more than one data centre in the same city are moving their data centre to another city to ensure redundancy and load balancing.

DR for SMBs

The concept of having a DR plan is becoming prevalent in SMBs. Says Alok Shende, director Technology Practice, Frost and Sullivan, “As rules and regulations apply to every organisation competing in the market, the concept of DR is also being adopted by SMBs in the banking and BPO space.” This trend is not seen in manufacturing where only the larger companies have gone in for DR.

“The size of the organisation is not really relevant while planning for DR and business continuity. It’s an organisation’s dependence upon its data and the losses that it will incur due to downtime that is critical,” says Agendra Kumar, country manager, Veritas. As companies in the banking and BPO space have no choice but to follow the rules and regulations as specified by law or by their clients, there is an increased demand for DR services irrespective of the size of the company in these industry verticals.

Another sector that is driving the market for DR services is energy. Most companies in the energy sector do not think twice about spending crores of rupees on setting up DR sites.

“If we are doing Rs 100 crore of business per day and a downtime of a few hours will cost our organisation Rs 10 crore, then cost becomes a non-issue. Depending upon the business need, all costs in DR are justified,” says M D Agarwal, chief manager, IS, refinery systems, BPCL. Additionally, all enterprises and industry verticals that are e-commerce-enabled are adopting DR. For example, the airline industry where different airlines have now commenced online booking operations are investing in outsourcing DR requirements. With the rise in outsourcing and regulatory compulsions, the market for DR services is set to explode in a big way.

sushma@expresscomputeronline.com