Bandwidth 4-5 times cheaper abroad: Hosting cos
20-12-2009
It's much cheaper for them to locate in U.S., Europe
Many Indian players have entered the data center/hosting services market, attracted by the coming boom in cloud computing and software-as-a-service. However, most of them have found the going tough. Because, when comes to providing services like shared and dedicated hosting, co-location and even managed services like e-mail, Indian players have a distinct cost disadvantage compared to their U.S. and European counterparts
CRN's India office found many examples of this. When L Ashok, Managing Director of Chennai-based Futurenet Technologies, negotiated with a couple of leading infrastructure service providers in India, on a possible shift of his company's servers from US to India, he found that "the best price we were offered was four times more expensive than US. When we explored the market further, we found that we were getting a much cheaper deal from European data centers"
Nettigritty, one of Bangalore's biggest Web hosting players, also could not come to terms with the price disparity. The company eventually opted for a US data center.
NetsoftOnline, a Coimbatore-based reseller and Web hoster, says that despite several rounds of negotiations with many Indian data center companies, they decided to stick to their overseas partners."Shifting servers to India would have meant paying nearly five times more" explains Arvind Swamy, Sales Manager with NetsoftOnline.
But why is India so expensive? "It's a chicken and egg story. Theoretically, we should be able to offer rates that are much cheaper than anywhere else. Most costs that go into a data center?be it real estate, electricity, or manpower?are lower in India compared to the US. The cost of hardware and software cannot be very different. However, data center players here are hit because of an important infrastructure cost and that is connectivity" opines Swamy.
D Venkatesh, Director of Mumbai-based Softcell Technologies that runs a hosting business in both US and India agrees. "If you discount the bandwidth costs, there is little that differs between India and US data centers" he says. Softcell manages almost 500 servers and 40 racks across multiple data centers in US and India.Hosting in India or US, Venkatesh believes, depends largely on the type of applications customers want to host. "If a customer consumes huge volumes of bandwidth, then US is the place to host"
"When our client Rajshri Productions?a movie production and distribution house?wanted to employ a data center for their movie content, we suggested they host in US, as their requirement involved large amount of data transfers. But when LG India needed us to manage their hosted ERP?where bandwidth consumed was quite low, but the criticality of the data was paramount?we chose an Indian data center. We had complete control of the infrastructure with our people managing things" says Venkatesh.
Ashok of Futurenet feels that if Indian companies can sort out the bandwidth tangle, then the country can be a leader in the infrastructure services market. "The number of services and the opportunity that exist is incredible. We have such talented and dedicated manpower, and we can offer services that most western economies cannot offer"
Venkatesh points to another key differentiator, "From our experience, data centers abroad have already set practices including compliance rules, which are a few notches above India" However, P Sridhar Reddy, CMD, Ctrl S Data Centers, a Hyderabad-based Level 4 data center service provider, begs to differ. "Our cost of power, infrastructure and manpower is lower when compared with international data centers. We can guarantee 100 percent uptime and also offer services that are incomparable to those offered globally"
Anurag Vinod, Senior Marketing Manager at Net4 India, says the quality of service offered by Indian companies is on par with their US counterparts if not better. "One of the key parameters of quality is latency. On an average a surfer sitting in India accessing a Web site hosted in a US data center, takes between four to 14 hops more compared to accessing the site in India" he argues.
"Clearly there is latency while accessing a Web application overseas, which you can save on when hosting in India for the Indian users. Maximum latency in India is 20ms against 260-300ms for US" adds Sharad Sanghi, CEO, Netmagic Solutions.
Sanghi expects India to emerge as a hub for providing infrastructure services sooner than later. "There is a huge infrastructure built out happening in this sector. We've seen a considerable drop in bandwidth costs. It is now just four times more expensive than US rates. Earlier, it used to be almost 10 times the rate. As more and more entities switch servers to India, we'll see hosting volumes go up and costs go down"
Source: www.crn.in
Many Indian players have entered the data center/hosting services market, attracted by the coming boom in cloud computing and software-as-a-service. However, most of them have found the going tough. Because, when comes to providing services like shared and dedicated hosting, co-location and even managed services like e-mail, Indian players have a distinct cost disadvantage compared to their U.S. and European counterparts
CRN's India office found many examples of this. When L Ashok, Managing Director of Chennai-based Futurenet Technologies, negotiated with a couple of leading infrastructure service providers in India, on a possible shift of his company's servers from US to India, he found that "the best price we were offered was four times more expensive than US. When we explored the market further, we found that we were getting a much cheaper deal from European data centers"
Nettigritty, one of Bangalore's biggest Web hosting players, also could not come to terms with the price disparity. The company eventually opted for a US data center.
NetsoftOnline, a Coimbatore-based reseller and Web hoster, says that despite several rounds of negotiations with many Indian data center companies, they decided to stick to their overseas partners."Shifting servers to India would have meant paying nearly five times more" explains Arvind Swamy, Sales Manager with NetsoftOnline.
But why is India so expensive? "It's a chicken and egg story. Theoretically, we should be able to offer rates that are much cheaper than anywhere else. Most costs that go into a data center?be it real estate, electricity, or manpower?are lower in India compared to the US. The cost of hardware and software cannot be very different. However, data center players here are hit because of an important infrastructure cost and that is connectivity" opines Swamy.
D Venkatesh, Director of Mumbai-based Softcell Technologies that runs a hosting business in both US and India agrees. "If you discount the bandwidth costs, there is little that differs between India and US data centers" he says. Softcell manages almost 500 servers and 40 racks across multiple data centers in US and India.Hosting in India or US, Venkatesh believes, depends largely on the type of applications customers want to host. "If a customer consumes huge volumes of bandwidth, then US is the place to host"
"When our client Rajshri Productions?a movie production and distribution house?wanted to employ a data center for their movie content, we suggested they host in US, as their requirement involved large amount of data transfers. But when LG India needed us to manage their hosted ERP?where bandwidth consumed was quite low, but the criticality of the data was paramount?we chose an Indian data center. We had complete control of the infrastructure with our people managing things" says Venkatesh.
Ashok of Futurenet feels that if Indian companies can sort out the bandwidth tangle, then the country can be a leader in the infrastructure services market. "The number of services and the opportunity that exist is incredible. We have such talented and dedicated manpower, and we can offer services that most western economies cannot offer"
Venkatesh points to another key differentiator, "From our experience, data centers abroad have already set practices including compliance rules, which are a few notches above India" However, P Sridhar Reddy, CMD, Ctrl S Data Centers, a Hyderabad-based Level 4 data center service provider, begs to differ. "Our cost of power, infrastructure and manpower is lower when compared with international data centers. We can guarantee 100 percent uptime and also offer services that are incomparable to those offered globally"
Anurag Vinod, Senior Marketing Manager at Net4 India, says the quality of service offered by Indian companies is on par with their US counterparts if not better. "One of the key parameters of quality is latency. On an average a surfer sitting in India accessing a Web site hosted in a US data center, takes between four to 14 hops more compared to accessing the site in India" he argues.
"Clearly there is latency while accessing a Web application overseas, which you can save on when hosting in India for the Indian users. Maximum latency in India is 20ms against 260-300ms for US" adds Sharad Sanghi, CEO, Netmagic Solutions.
Sanghi expects India to emerge as a hub for providing infrastructure services sooner than later. "There is a huge infrastructure built out happening in this sector. We've seen a considerable drop in bandwidth costs. It is now just four times more expensive than US rates. Earlier, it used to be almost 10 times the rate. As more and more entities switch servers to India, we'll see hosting volumes go up and costs go down"
Source: www.crn.in
