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Rack and Enclosures: Stacking it Up
The forte of the unorganized sector till now, racks are now dominated by big names, and go hand in hand with power supply and backup solutions
Friday, August 03, 2007
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As real estate prices go through the roof, enterprises are realizing the importance of optimizing the availability of space and are looking for IT hardware which can take up less space, and with efficient mounting. This is where racks and enclosures come into the picture. Almost the entire set of IT and telecom hardware including PCs, servers, switches, routers and UPSes can be put in a systematic fashion in an enclosure providing a neat data center. Most of the solutions are server-vendor neutral. Considering the importance of growth of this segment, Dataquest is introducing Enclosures as a separate segment in this years Top 20. The sector, which was once the preserve of the unorganized sector, has now come to be valued by most leading players.

Rack Mounted
There are several reasons why enclosures have gained the kind of importance they attracting. Among the factors being actively considered by large enterprises aresystematic power and cable management, the need for cooling, the need for security, and scope for adding additional hardware without any major disruption in the work. Over and above, as businesses grow, so does the need.

  • The enclosures and racks market stood at Rs 400 crore

  • Power amanagement measures like APC and Emerson are getting into the market

  • With power supply and backup so closely linked to racks and enclosures, its no surprise that UPS vendors are the most active in the area

Rittal, APC, Emerson Power (India), APW President, and Valrack dominating the market. More and more IT hardware is getting stacked up one over the other not only to improve business efficiency but also to attain maximum space utilization given the fact that real estate costs have really shot up.

The Heat is On
Data center management acquired importance in order to ensure extended availability and reliability of business critical applications. There was a shift in the market with enterprises demanding more integrated solutions than individual products. Complex applications, faster processors, and high density servers becoming a norm in data centers, heat increasedputting pressure on racks to cool hot spots in order to ensure that the business process continuity.

In order to increase business efficiency, enterprises insisted more on server consistency and inclusion of dual servers to add another redundancy level while giving flexibility to fit in additional UPSes. There will be no single point of failure, thereby controlling data loss due to sudden power breakdown. But the dual servers meant more heat, in turn increasing pressure on cooling systems.

Thus, the thrust was more on rack solutions that would provide comprehensive cooling as well as power management solutions while ensuring availability and scalability. Apart from providing intact physical structure, racks became a critical product in integrating cooling, power, round the clock information, and also post purchase maintenance. The demand for integrated architecture also witnessed vendors introducing products to suit market needs. Data centers saw a rise over the years, good news for the enclosure industry. The effort always has been for more RoI out of the investments. Organizations devised cost effective methods to boost productivity.

The Enclosure Landscape*

Company

Revenue
(Rs crore)*

Market Share

Rittal

80

20%

APW President

80

20%

Emerson

40

10%

APC

40

10%

Valrack

10

2.5%

Others

150

37.5%

Total

400

Excludes internal and industrial enclosures
Source: DQ Estimates CyberMedia Research

The key verticals that drove growth were, BPO, IT/ITS, BFSI, telecom, government and education. With banks adopting core-banking solutions, the dependence on a central database increased. The demand from telecom industry was a result of an increase in the number of subscribers, who needed to continuously upgrade their IT infrastructure. Most of the state governments adopted e-Governance making upgradation imperative, while e-learning in India gained momentum with introduction of specialized courses, online teaching and easy access to global services.

Meanwhile, IT companies went on an expansion mode and opened up branches in major places. This resulted in increased dependency of these branches on the central database system pushing the need for companies to upgrade their infrastructure. The demand from BPO was the result of services this segment was extending in the fields of BFSI, telecom, manufacturing, healthcare, government and education. Enterprises thus went for infrastructure that ensured security of their data and applications.

APCs strengths lay in deployments in government and BFSI, while Emersons strength was in IT and Telecom segments. Rittal also made major deployments in the Telecom sector. Networking and telecommunications dominated APW Presidents business.

According to Dataquests Megaspenders Survey 2007, average IT expenditure across those 200-plus large organization recorded a 27% growth, touching Rs 34.08 crore in FY 07 compared to Rs 26.86 crore the previous year. This will have huge implications for the enclosure segment in the years to come.

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