Growing complexity of business networks spells high growth for Networked Infrastructure Services, says IDC

The Networked Infrastructure Services Market, which comprises of

‘Network Consulting and Integration’ as well as ‘Network and Desktop

Outsourcing’ services, is expected to see a growth of 25.8% in current financial year

over FY 2000-01. Considering the general slowdown, this growth can be termed as healthy.

The findings are based on a massive survey by IDC wherein 1553 PC

owning SME and 129 PC owning large organizations, across top 8 cities of India, and over a

dozen leading IT service providers were surveyed. The results of the survey, contained in

a report titled ‘Networked Infrastructure Services Market in India: 2001’,

indicate that spending on Networked Infrastructure Services was Rs. 753 Crores in FY

2000-’01 and this is likely to increase to Rs.947 Crores in current fiscal,

indicating increase in its share from 15.3% to 16.4% of total IT Services spending.

The prime reason behind this growth is the fact that:

More and more organizations are deploying inter-organization and

intra-organization networks which coupled with a fast technology refresh rate lead to a

situation where heterogeneous hardware & technical environments are often found on the

same network.

This increasing complexity of networks demand services of professional

‘network integrators and consultants’ to build and ‘network and desktop

outsourcing service providers’ to maintain and run the same. The captive IT service

departments are no longer able to sustain these challenges, thereby forcing the

organizations to outsource these activities.

Banking/ finance is one of the biggest adopters of such services. Both

private as well as public sector organisations, are setting up more and more ATM’s,

thus providing customers with any-time-any-branch banking services. This means that they

not only have to hire a professional Network Consultant and Integrator, but also to

maintain the infrastructure, they have to depend on a service provider.

Some other trends identified in the research report include:

There is a clear shift away from simple ‘Annual Maintenance

Contract’, wherein the responsibility of service provider is limited to repair the

specific device that’s malfunctioning, towards more complex ‘Facilities

Management’, wherein the service provider is responsible for managing the complete

‘IT show’ in an organization including IT helpdesk, vendor management, asset

management, preventive and predictive maintenance, network optimizing and tuning,

guaranteed minimum service level agreements.

IT service providers have not only started to customize the service to

suit very specific needs of their customers, but also are focusing on extending their

geographical reach across the length and breadth of the country, even in remote locations.

Another interesting development pointed out in IDC report is the fact that the service

level agreements are changing from merely defining the acceptable service standards to

incorporating risk/ reward sharing clauses.

In order to remain competitive, IDC feels that the IT services

providers have to gear up to take care of the following two key success factors:

competency to provide plethora of services across vast geographic

spread

shifts in business model from providing services with pre decided SLAs

to partnering with the client organisations and share the business risk/ rewards.

Definitions:

Definitions of some of the key terms used in the study:

Small Organizations: Organizations having

upto 49 permanent and non-manual employees.

Medium Organizations: Organizations having

more than 49 but less than 500 permanent and non-manual employees.

Large Organizations: Organizations having 500

or more than 500 permanent and non-manual employees.