PUNE, INDIA: According to a study conducted by Frost & Sullivan, the demand for data centers and managed service is on an over all rise in various markets of the world, South Asia, Middle East and India included.

The study attributes this to tough economic conditions which force organizations to explore models that would enable them to stay ahead of the curve by adopting the latest technology at an affordable cost.

Companies are hoping to leverage the expertise of these service providers such as operations, data, computing and networking. Moreover, rapidly changing technology requires personnel with advanced skill sets. These bases are to be constantly updated. As a result, organizations are looking to engage service providers who can provide them with adequate levels of service guarantees and help transformation to an OPEX model from a CAPEX one.

According to a Frost & Sullivan study, the South Asia and Middle East market for third party data center services stands at USD 230.2 million and is growing at a CAGR of 27.9 per cent. The managed services market in India stands at USD 4001 million and is growing at a CAGR of 23.8 per cent.

According to Saumya Upadhyaya, industry analyst- ICT Practice, Frost & Sullivan, South Asia and Middle East, "The global economic downturn has made enterprises adopt a cautious mode in IT spending. Disaster recovery services are driving up the adoption of third party data center services by large enterprises. Infrastructure and desktop management services are the key services being increasingly adopted by enterprises from the managed services portfolio. "

In India, with the demand for data center space being higher than the supply, most current market participants are running at close to 80-90 percent capacity.

They have already started bookings for their planned expansions. In terms of floor space, third-party data center is expected to grow at 37.4 percent, close to 1.5 times faster than that of captive data centers. Service providers are enhancing their channel partnerships to cater to the largely untapped SME segments.

The Sri Lankan market, though initially slow, is slated to witness considerable growth in the near future. The third-party data center market is forecast to grow at close to 18 percent. A number of Indian companies are considering entering the Sri Lankan data center market.

Managed network services are a key managed service offering of service providers. There is significant interest in application services like messaging, collaboration, and Customer Relationship Management (CRM) in the data center management and desktop management space.

In fact, Sri Lanka can potentially be seen as a disaster-recovery destination for South Asian markets.

The Egypt market is at a nascent stage. Most customers are primarily domestic and managed services are mainly offered on the hosted format. The key service offerings in this region are disaster recovery, backup services, managed network, and security solutions. The North Africa and Middle East regions are prospective target markets.

The Saudi Arabian market is also in its nascent stage, largely dominated by local companies with a regional presence. Till recently, most data centers were captive, that is, internal to an enterprise. This trend is slowly changing with the benefits of moving to an OPEX model becoming more evident to enterprises.

The UAE market is witnessing a huge traction with most of the third-party data center participants considering expanding their data centers by close to double in the next few years.

High demand has resulted in close to 90 per cent occupancy of the data centers and pre-booking of expandable space. Amongst managed services, data center management services are primarily preferred by customers along with considerable interest in network, voice, and security management. The managed services space is expected to grow at 25.7 per cent.