Rack and Enclosures: Stacking it Up

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.

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 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.

Whats In

The trend was the deployment of a combination of different types of
rack-mounted equipment as companies went for multiple IT and networking
equipment. These require different open frame and rack enclosures. Customer
needs have undergone a change. They are not looking out for closets, but racks
that will be have provision for comprehensive cabling solutions for data cables
and powerboth inside and outside. These high density solutions that can be
deployed in blade servers; powering solution for power distribution and power,
and cooling solutions for AC and air distribution. Increased deployment of blade
servers by enterprises will increase the demand of racks with cooling solutions.
With the affordability issue addressed, SMBs will also go for servers in order
to improve efficiency and address the issue of space utilization.

Similar to structured cabling, enclosure manufacturers are
governed by certain standards, mainly according to the one set by the EIA
(Electronic Industries Alliance). All racks and enclosures equipment
manufactures have to adhere to the standard EIA-310-D (see box) which strictly
stipulates equipment width and height. Equipment depth has not yet been defined.

The Market

The market as per Dataquest estimates stood at Rs 400 crore. It is
very fragmented in nature and it is only recently that some of the established
names in power management are getting into the business. Emerson, a leading
player in the power space entered into the enclosure space in 2005 with the acquisition
of Knurr AG of Germany. The solutions from most players were targeted at SMBs
and large segments based on their needs. In addition to involving in direct
selling, Emerson identified system integrators who provided sales support.
Rittal, traditionally into the industrial enclosure space, also ventured into
the IT/BPO space seeing a big market here. To ensure business continuity and
meet the demand challenges, Rittal established modification centers and
warehouses at Faridabad, Pune, Bangalore and Chennai. Rittal got large orders
from Reliance Infocomm and ABB. It also came up with its cooling liquid package.

APW-President almost exclusively caters to the IT/BPO space.
While APC largely plays into a niche portion of the enclosures segment catering
to cooling needs of data centers. APC diversified into total solution involving
providing rack and enclosure support for its products and services. Its Network
Critical Physical Infrastructure (NCPI) solutions are targeted at large
enterprises for data center management. APW President went for contract
manufacturing capabilities and also develop of kiosks.

A sudden surge in demand is something enclosure vendors are
trying to cope with by increasing their manufacturing capacity and improving
warehousing facilities.

Chethana Gadiyar

chethanag@cybermedia.co.in