INDIA: Large enterprises in the US and Europe have taken a lead in outsourcing their infrastructure management to companies like IBM, HP and EDS (now part of HP), or even Indian IT services vendors like HCL, TCS, and Wipro. The model succeeded in providing huge cost savings and increased efficiency besides allowing them to focus on their core business.
Talking about India, about five years back larger organizations were managing their IT infrastructure through a dedicated IT department, that was initially created to provide services to internal customers. The only part which was outsourced was the annual maintainable contracts primarily for hardware related issues. No wonder, both MNC and Indian vendors saw an opportunity to replicate their global success into the Indian market. Thus infrastructure management services started to take root, driven primarily by the telecom and BFSI verticals.
Some banks however chose to set up their own data centers, and are still reluctant to outsource infrastructure services to third parties. Security is the key reason why they have chosen to own rather than outsource the hosting capabilities. Girish Krishnamurthy, managing director, Kaseya India, a provider of remote management software, traces the evolution of infrastructure management services: Companies were earlier following break-fix model and called service providers when they needed them. But now the outsourcing model is fast replacing it.
Customers changing priorities are also becoming more refined. Says Deepak Jain, vice president, professional services division, Wipro Infotech, Earlier, customers used to define the scope of work in infrastructure management. Now customers are saying they dont want to define, but insist that their business should be up and running and the service provider should do whatever it takes to achieve that.
Dataquests survey of CIOs (at the DQ-CIOL C-Change event held in Kathmandu in February, 2009), clearly revealed the pressure that enterprises are under on account of the current economic scenario, and the likely impact on overall IT budgets. The reality is that almost all verticals are feeling the pinch and CIOs are busy strategizing to manage their costs better. This is contrary to the situation in the last few years when IT budgets were on a high. This period also saw several transformational outsourcing deals which included the big bang ones in the telcom space. Some of the leading ones included IBM (Airtel, Vodafone, and Idea cellular), HP (Britannia and Godrej), Wipro (Aircel). These were primarily IT transformation deals which also included infrastructure management services.
The players
Both the MNC (HP and IBM) and Indian vendors (HCL, TCS, Wipro) are actively engaged in offering infrastructure management services in India. Incidentally, they are also leading players in the space for their global business. IBMs customers include pure Indian enterprises as well as MNCs who have their presence in India.
Infosys, a relatively late entrant into the domestic IT services market, is aggressively looking at this market. Binod HR, head, India business unit, Infosys Technologies says Yes, we were late in our focus on the domestic market but our plans and strategies are in place and we hope to gain good market share in the next 2 to 3 years. As of now, Infosys does not report its India revenue but plans to do that once it gains some market share.
Wipro Infotech, the domestic arm of Wipro, has major focus on infrastructure management services in India. If Wipros revenue split between onsite and remote is anything to go by, one can safely assume that the trend is toward going for remote. Wipro, in fact, is about to commission its two data centers, one in Mysore and the other in Noida, which will act as remote management centers for the services which it will offer.
HCL Technologies (which traces its foray into infrastructure management services in the form of the first HCL Comnet deal struck with the National Stock Exchange in the early 1990s) is one of the earliest Indian players in the space starting with networking but later diversifying into an integrated portfolio. Says Kiran Bhagwanani, country manager, India & Middle East (IME) for HCL Technologies, Infrastructure management is in HCLs gene and we have been doing remote management from day one of our operations.
There are also third party data center players who have created state-of-the-art hosting capabilities and are now trying to leverage that and offer infrastructure management services. The ones beginning to provide competition to IT services companies include Reliance Data Center, Bharti Airtel and Tata Communications.
Netmagic, which traditionally started as a hosting services provider during the dot com boom and survived, has now diversified its offerings by leveraging its hosting capabilities to offer remote infrastructure and management services. Its clients for remote services include its existing hosting customers, but the company is now exploring this as an independent offering. Informs Nitin Mishra, head, product marketing, Netmagic Solutions, Netmagic, We are seeing interest for remote services from finance and brokerage firms, and some of the Internet start-ups in India. Datacraft also offers what it calls infrastructure operations and outsourcing services.
