November 2009 saw the introduction of Cisco’s Unified Computing System into Emerging Markets. There is an enormous hunger amongst customers across the region to future proof their data centers and improve efficiencies in their current data centers. For analysts that are not familiar with Emerging Markets (and those that are) I thought you might be interested to hear some of the regional market drivers shaping interest across the geography.
Fundamental to almost every conversation that Cisco has within Emerging Markets are the following trends and market considerations:
- Bandwidth constraints
- Skills shortages
- Incumbent Service Provider infrastructure and services sophistication
When it comes to the Data Centres, there are two additional considerations:
- Power shortage and availability
- Cloud model provisioning and adoption
Bandwidth availability and cost have long since been an Emerging Markets challenge. In the case of Africa however, the laying of the new undersea cable infrastructure around the continent places many countries on the precipice of a broadband explosion. The most recent of these cables to be completed in July 2009 is SEACOM. What does this mean? A high capacity cable capable of 1.28 Tb/s and a 17 000 km route that will link South Africa to Mumbai, India and Marseille, France via Mozambique, Madagascar, Kenya, Tanzania and Ethiopia (undersea portion > 13,500 kms).
Suddenly Service Providers are starting to realize the service and revenue opportunities in front of them, HDTV and Cloud model services to name a couple, but how will they manage to secure, store and maintain all this data? Enter the next generation data center. ..
Build it and they will come however does not work. Top of mind for many customers within this region are skill sets of the incumbent players to be able to effectively manage their precious data and so it leads to the out-tasking and outsourcing debate. The enterprise segment offers Telco’s the largest immediate revenue opportunity when it comes to outsourcing, however SP’s need to gain trust from businesses to outsource their systems, storage etc. placing security considerations right at the top of the agenda. SME’s on the other hand are perfectly poised to take advantage of SaaS type services, but cannot afford the current bandwidth charges associated with deploying many productivity enhancing applications such as unified communications. Until such time as SP’s are likely to yield commercial payback for their new outsourcing models, they will not be shifting the bandwidth cost savings onto the consumer. So the question remains where and when the pack of cards will begin to weaken and fall.
Furthermore, to run these next generation data centers, a significant amount of power is required. Power availability in many regions within Emerging Markets is a massive challenge. That said, there are some extremely power rich countries across the region, primarily located in the Middle East. Whilst Cisco’s product solutions enjoy state of the art power efficient designs which can help customers realize significant savings in power and cooling, there is also an obvious advantage to extending virtualization capabilities across country borders leveraging both power availability and skill sets.
I do believe that it is an over generalization to suggest a leapfrog trend is occuring towards server infrastructure deployment in Emerging Markets, particularly with regards to incumbent Telco legacy infrastructures, however, Challengers are fast realizing the opportunities in front of them (watch out for the mobile operators) and are aggressively pushing ahead with their NGN strategies. This is not going unnoticed by enterprises, incumbents or vendors across the region. Exciting times ahead…