BANGALORE, INDIA: After business process outsourcing (BPO) and application development and maintenance (ADM), it's now the turn of remote infrastructure management service (RIMS) to rule the offshore outsourcing space.

According to Nasscom, India is likely to capture $13-15 billion of the $26-28 billion worth RIM industry by 2013.

Enterprise special: Managing the infrastructure

However, on a global footing, India is still miles away from the standards that its Western counterparts have set in terms of RIM outsourcing. Indian RIMS providers have always been the takers of asset-light model, where they don't own IT infrastructure and people required for this service.

“Though the Indian outsources have moved from on-site staff augmentation to offshore/remote management models, they have been staying away from large deals involving asset or people transfer,” observes V M Kumar, chief marketing officer, Microland.

Kumar further explains that this is because Indian companies lacked the strong balance sheets required to acquire assets and people.

This explains why India saw a large uptake of asset-light model. However, today they have realized that asset-heavy deals are a necessity to win large contracts and increase market share.

"There are still large opportunities in outsourcing engagements that involve asset and people acquisition. Once the economic recovery starts, we may see a resurgence of large deals involving asset transfer entered into by the Indian majors too," Kumar adds.

RIM destinations: India still the favourite
If going by Nasscom's report, then India is all set to capture 50 percent of the global RIMS market in a couple of years ahead.

However, many other offshore destinations, such as in New York, Tokyo, London, South-East Asia, Toronto, Singapore, Philippines, China, Eastern Europe, and South America, have mushroomed in the recent past and are seen as a major threat for India's first slot, as the favourite RIM offshore destination.

Despite this, India still manages to keep the booty, notes Hans Rooijmans, head, Infrastructure Management, Logica.

“A comparative assessment of low cost locations indicates that India remains an attractive destination for RIM. One-third of all IM deals in the UK are won by Indian companies who deliver remote management. This trend is now observed in other parts of Europe as well,” Rooijmans notes.

He further explains that factors such as a vast talent pool, strong history of off-shoring excellence in ADM and BPO, and  credible set of vendors and offerings, transparency and governance maturity, acts in the favour of India to prove its competency in the space.

RIM: Not without challenges
Though RIM offers several advantages such as it has got its own share of challenges as well.

“Lots need to be done to strengthen India’s standing as a RIM destination. A well-known obstacle to growth is the lack of infrastructure, particularly,  power and telecom. India also does not match other low-cost locations that have encouraged growth through tax incentives,” Kumar says.

Bandwidth is an issue that Indian businesses have been facing for a long time.

“This is more because people are supposed to pay for the bandwidth they use. However, once broadband becomes pervasive, this won't be an issue any longer. Moreover, in future, this cost component will play a smaller role,” opines Sridhar Iyengar, VP, Global Solutions, Zoho Corporation.

Security is another factor that prevents the further traction of the remote model. The very word 'remote' sends down jitters down the spines of businesses.

“The adoption levels of RIM in Europe is very less. Despite awareness about the benefits of remote management services, the EU data protection regulations have been very tight. However, today, risk perceptions about remote infrastructure management are going down, and we will see increasing adoption of the RIM model by European companies as well,” adds Kumar.

Rooijmans notes that although some companies have concerns about the safety of off-shoring IM, the industry has now matured to a stage where international standards, adequate security measures, building trust factor and new technologies can ward off these fears.

“Soon customers would like to buy IM as a service and not in a T&M modeL. Non T&M models are already the norm in the RIM business. Prevalent models are ‘per-device pricing’ and transaction based pricing models. New models such as value pricing or gain sharing are also evolving,” says Kumar.

Moreover, as Rooijmans explains it, eighty per cent of all IM activities will be done remotely and RIM will be the default standard for managing IM in the near future. It will no longer be optional, but inevitable.