I recently had the opportunity to attend the F5 Networks event in Bangalore and interact with its senior marketing and sales team. One thing that kept boomeranging during the entire session was the idea that “load balancers are a dead commodity” and it is high time for organizations and data centers to move on to more advanced tools like application delivery controllers (ADCs).
Now, is this just another marketing and sales trick to kill traditional tools and make room for new fancy stuff — or does this really hold water? There is no second thought on the fact that ADCs are the future and that they unleash new capabilities beyond just “network load balancing.” But is the market for load balancers really dead? In my opinion, the answer is “Not very soon.” I see various reasons for this:
Load balancers have reached commodity status. Load balancer vendors are cutting their margins and dropping their prices for these boxes to an all -time low; there will never be a better time for organizations to invest in them. This is especially true for a country like India, where there exists a long tail of SMBs who haven’t really invested a penny in similar solutions.
ADC is a relatively nascent technology that is more complex to sell. Network companies like Cisco Systems or Radware often target load balancers at network administrators of an organization, marking a clear buyer/seller situation. In comparison, selling an ADC requires an OEM to target multiple stakeholders within the same organization. For a successful ADC deployment, network and application administrators within the organizations need to come together to really understand the problem, be clear on the responsibilities, and have a holistic approach to application deployment — something that most Indian organizations clearly lack today.
Japan-based NTT Data recently took a step towards expanding its IT capabilities in India, acquiring a 74% stake in Netmagic Solutions. This marks another important event in the third-party datacenter services market in India. In early 2011, Tulip Telecom acquired a data center facility in Bengaluru at a value of approximately US$46 million. This year, with this deal, NTT Communications not only gets access to Netmagic’s seven Indian data centers, a platform offering public, private and hybrid cloud services, but also inherits the capability to address the fast-growing South Asia data center services market.
Netmagic’s acquisition has long been speculated. The firm has the right set of service offerings, technical capabilities, and local coverage, but it lacks the financial muscle power of its competitors (including Reliance Communications and Tata Communications). Netmagic would have had a tough road ahead in the Indian market without external help. So I believe that this acquisition also comes at the right time for Netmagic Solutions.
Here is a quick look at what this acquisition brings to both companies:
Stronger foothold in the Indian market with access to 1000-plus customers.
A critical piece for its Asia-focused cloud strategy and a step closer to its objective of having 20% of its total revenues outside of Japan in 2013.
Better servicing capabilities for NTT’s global accounts based out of India.
Financial muscle to compete in and penetrate further the India market.
Access to knowledge base and technology from NTT Data and its numerous IT subsidiaries.