High growth for networked infrastructure services: IDC

NEW DELHI: 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 per cent in the

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 SMEs

and 129 PC owning large organizations, across top eight 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 crore in FY 2000-’01 and this is likely to increase to Rs. 947

crore in current fiscal, indicating increase in its share from 15.3 per cent to

16.4 per cent 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 and 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 organizations are setting up more and more ATMs, 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 say 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 organizations and share the business risk/rewards.