Changing mindsets drive services market in India

Pragati Simlote

HP Business and IT Services delivers enterprise-class IT infrastructure management & consulting, support, outsourcing, managed, financing and deployment. The company is betting big on the Indian market and expects the services revenue to become 40 percent of its Indian enterprise business revenue in the next two years.

In an interview with CyberMedia News, HP Services VP Kapil Jain elaborates on the various services that HP offers to its customers and shares his company's plans for the year. Excerpts:

How has HP Services grown over the last year?



HP has had a good year and India was the fastest growing country in the world for the company. In India, rapid growth was seen across all businesses. From a revenue perspective, HP services contributes about a third of the enterprise business revenue, while worldwide this ratio is around half. So we have a lot of catching up to do in terms of revenue.
Last year, 40 percent of the new enterprise business that we booked was services. New business in services grew 50 percent year-on-year. In two years time, we expect services revenue will catch up to 40 percent and hopefully in another three years time we would be in the 50 percent range. Our enterprise business is also growing rapidly and we have doubled it in the last three years. Within this, services is growing even more rapidly, so we expect to have a rapid ramp up in the growth of services.

What kind of services do you provide?



Foundation services is one, which we do very well, and HP is considered No 1 worldwide and in India in this segment. These services are around hardware infrastructure - going all the way to mission critical services. Things that we do and are not very well known are consulting and integration and outsourcing services. These are two pieces of our services side, which are growing most rapidly.

How has the market place changed overtime?



Companies are now trying to tap the potential that exists in the Indian market place. India has always been spoken about as a potential outsourcing destination. There has been a fundamental change in the last three-four years and we see this potential is beginning to get realized. Our customers are now beginning to take decisions that they were uncomfortable about before. Public sector organizations are also going in for transformational outsourcing, which was unheard of earlier. Fundamentally, the changes are happening in telecom, manufacturing and public sector.

What is driving the services market in India?



Indian customers are looking for value — an all-encompassing solution rather than point solution. People have now realized the need for an enterprise wide, integrated solution, which helps businesses.
Secondly, there has been a change in mindset with people feeling little more comfortable to get professionals to do a work rather than doing it in-house. Thirdly, external factors like globalization are also driving the need. Finally, it is the speed: The desire to make the change very quickly due to the competitive pressures from outside that is driving this market.

What is HP doing to tap this opportunity?



Market space in India is changing rapidly and we are taking the right steps to make the necessary investment to address the changed market. Three years ago HP in India was not known in financial services. But we saw a huge opportunity in this space and decided to make the necessary investment in India for putting together the necessary skills, creating expertise, leveraging HP's knowledge bases worldwide and bringing in experts to help us around.

In the telecom segment, we had the advantage of having HP intellectual property. HP has very specific solutions in both technology and business side and that are helping us leverage our assets to help our customers.

What is the way going forward for HP Services?



From services perspective, we will continue to be specialist on the infrastructure side. We want to enhance this through more innovative things we are doing in terms of business.

We are also looking at the vertical aspect of the biz. The investment that we made in BFSI to get to where we are today has been successful for us and we are looking at investment in other areas.

In telecom, we already have IP. We lack IP in the public sector, which encompasses government, railways, defense, education, healthcare, etc. We are making investment in these areas to grow the business, as we see tremendous potential here. We are also focusing on the manufacturing segment. This segment is like an ocean so we are selecting certain segments like automotive, basic industries, etc. in which we are making the necessary investment to grow the footprint.

Do you have any plans of tapping the SMB segment in India?



SMBs can be small or large. It could be a Rs 100 crore company, but can be treated as SMB. The requirements of such companies are significant and complex, so there is a need, which is not yet fulfilled. Addressing this market place has to be different, and an efficient way has to be found to fulfill the need. We plan to find new ways to work with our partners to fulfill that need. I must admit that we are not yet successful in this segment. We have to define our strategy as growth this segment is not only growing but has sustainable growth.