Injazat Data Systems

12 October 2010

The UAE-based firm will need to attract private sector clients to build on its current success

Company snapshot

Date established 2005

Main business sectors IT managed services

Main business region UAE

Chief executive officer Bala Pandalangat

Injazat structure

Information technology (IT) services firm Injazat Data Systems was set up in February 2005 as a joint venture between the Abu Dhabi government-owned investment vehicle Mubadala and US consultancy EDS, which has since been taken over by HP, also of the US. The company provides a mix of services, including consulting, project management, infrastructure, business process outsourcing, as well as data centre services.

Based in Abu Dhabi, the company employs about 600 people, of which some 26 per cent are nationals.

The company’s chief executive officer (CEO) Bala Pandalangat was appointed in September 2010. He joined from the Indian outsourcing company Wipro Technologies, where he headed up the firm’s Canadian operations. His appointment was part of a major management reorganisation under which the previous CEO Ibrahim Lari became managing director.

Injazat in numbers

600: Number of employees

AED380m: Cost of Injazat’s tier 4 data centre

45.5 per cent: Injazat’s share of the UAE’s IT outsourcing market

Sources: MEED; Injazat

Injazat operations

Injazat says it manages the IT services for more than 20 companies. Most of these are government-related organisations, including the culture and heritage authority, the ports authority, the water and electricity authority, the Health Services Company, Masdar and the recently established media zone, TwoFour54.

The company says it holds a 45.5 per cent share of the UAE’s IT outsourcing market.

Within its 17,000 square metres headquarters, Injazat has a 2,000 sq m two-level, data hall, which accommodates 840 server cabinets. These are a mix of 720 active cabinets, which house servers, and 120 passive cabinets, housing cables and other equipment. Within the active cabinets, it can manage up to 9,000 servers. Currently, it is running around 6,000 servers. 

The data centre opened in 2008 and was the Middle East’s first ‘tier 4’ facility, which represents the highest level of service provision. The centre was built by Abu Dhabi developer Aldar Properties, which Injazat also lists among its customers. The network infrastructure was designed and installed by the US’ Cisco and is based on its Service Oriented Network Architecture. The centre cost an estimated AED380m to design, build and equip.

Over the years, the company has signed service contracts worth AED2.5bn. It has a number of international certifications, including recent ISO certificates for IT Service Management and Information Security Management System standards.

Injazat ambitions

Injazat is currently considering plans to build and operate two more data centres in Abu Dhabi and Al-Ain. Each would be a tier 2 and 3 data centre – known as a multi-tier data centre- as the number of customers willing to pay for services in a tier 4 data centre is limited. The services offered by tier 2 and 3 data centres are cheaper and this will allow it to target a larger pool of potential customers.

Accumulative value of Injazat customer orders
first half 20102,500
Source: Injazat

The plans are awaiting board approval and a decision is expected later this year. If given the go-ahead, the data centres should be operational in 2012.

An obvious weakness in Injazat’s customer profile is that they are largely – if not exclusively – Abu Dhabi based and government-linked. While this provides a healthy revenue stream, it is a limited in the long term. The appointment of Pandalangat, who has 24 years’ experience in the IT industry and is a specialist in outsourcing and off-shoring, is a reflection of Injazat’s ambition to break into the private sector and to spread its customer base abroad.

Injazat server hall

Floor area 2,000 square metres

Total available server cabinets 840

Active server cabinets 720

Passive cabinets, which house cables and other equipment 120

Total server capacity 9,000

Current servers running 6,000

Source: MEED

GCC: More firms turn to IT managed services

The managed information technology (IT) services and data centre market in the UAE and wider Middle East is not as developed as in regions such as Europe and the US, but it is beginning to emerge. Many companies have been reluctant to outsource to third parties, partly through concern about how their data will be treated and secured.

The number of companies offering various managed IT services within the GCC is rising

But internally run data centres can be a drain on IT budgets, and it is not unusual to discover that companies do not have a clear idea of the cost of running such centres. This is because the utility costs – power and cooling – are often contained within a separate budget, masking the true cost of the data centre.

The number of companies offering various managed IT services and third-party data centres within the GCC is rising, and this will increase competition for customers, particularly if service suppliers such as Abu Dhabi-based Injazat Data Systems start to target additional geographies.

Injazat’s customer base is currently focused on Abu Dhabi, but an obvious market for it to target is Dubai, which has many large, well-established local and international companies.

In Dubai, however, Injazat would face tough competition from e-Hosting DataFort (EHDF). It offers a similar range of services as Injazat, including tier 3 data centre. Like Injazat, EHDF has strong government links. It is based in and is part of the Dubai free zone authority Tecom, which is owned by state firm Dubai Holding.

Injazat will have to work hard to win business from Dubai government departments, but the private sector should hold plenty of opportunities.

EHDF has already managed to tap into the private sector as well as winning contracts outside Dubai. In addition to Dubai government entities, its customers include Japan’s Panasonic, Kuwait National Petroleum, Qatar Foundation, Luxembourg-based ArcelorMittal and local Majid al-Futtaim Group. It has also succeeded in winning contracts from Abu Dhabi and the federal government, including Emirates Identity Authority, Abu Dhabi Media Company and Abu Dhabi Fund for Development.

Competition is increasing across the Middle East. Elsewhere in the GCC, Saudi Arabia has the most planned or operational data centres, with at least six already up and running and two more planned for development. New technologies are being introduced to manage facilities better and providers are driving to make their data centres more efficient in order attract businesses. The biggest IT trend within data centres currently is that of virtualisation – the ability to use a machine as if it were actually multiple machines.

Although cost was not meant to be the core driver to this, as data centre providers consolidate their servers into fewer, more efficient machines it also means that they can reduce their physical number and have the potential to cut the facility’s running costs.

For Injazat, its plan is to launch a virtual server as a service offering that allows customers to provide only their software applications, which then run on Injazat’s servers, rather than the actual servers as well. This is typical of its contracts today. 

It is an obvious step, and a service offering which, although in its infancy in the region today, will grow over the long term. It holds potential among new companies, which have yet to buy their IT infrastructure or among companies planning to rapidly expand.

With the expected rise in the number of data centres, price competition could also increase, giving customers some hard bargains. For providers that want to steer clear of price wars, it will force them to be more innovative with their service offerings.




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