After the success of software and business process outsourcing,
infrastructure and network management services (NMS) are said to be the next big
wave to hit the Indian market. Already Indian IT skills have had a resonating
effect across industries and with network management services it is well on its
way to get transformed into the control center for global networks.
The economic revival has given corporate houses some room to expand their IT
infrastructure and network. Therefore, the task of a CIO or the in-house network
manager becomes more complicated as the management keeps a tight control and
asks for the returns on investment made in network expansion.
"On a network the basic pipes and equipment are in place. There are
applications running on them too. But as number of users grow and pressure on
the network increases, network management would become critical," said
Subramanium V, head, integrated management solutions, Datacraft India.
As more and more business- and mission-critical applications ride on the
networks defying the geographical boundaries, companies cannot afford to
withstand network outages and application failures. "The dependency of
business processes on WAN infrastructure is increasing. To provide better
availability and reliability of networks to support businesses, organizations
would need network monitoring and management systems," said Tapan Bhat,
general manager, managed IT services, Wipro Infotech.
According
to a study by Infonetics Research, companies are losing almost 3.6 percent of
their annual revenue due to network downtime. Gartner says the RoI on
applications running on networks gets reduced by almost 25 percent due to lack
of effective network and system-management procedures.
Market
A Deutsche Bank report pegs the global NMS market at $80 billion. The Indian
share in this pie has been estimated to be $300 million with a projection to
grow in excess of $1 billion by 2007—08. Industry sources put the NMS
potential to over $126 billion with India not even capturing one percent market
share. The management services have been growing at 25—30 percent annually.
IDC believes the Asia-Pacific market (excluding Japan) could touch $333.9
million by 2007 at 13.8 percent compound annual growth rate (CAGR).
Key Drivers |
- Centralization of network operations for better control and effective operations - Need for real-time monitoring and alerting of network availability and performance - Asset and configuration management of all network devices - Automation of activities to reduce manpower dependency |
The NMS market is in its nascent stages and often network management is being
bundled with integration services or is part of the overall contract.
"Network management is part of a facility management contracts. As large
networks are established to connect large number of facilities, pure management
companies would come up, and this market would grow in the coming days,"
said Lt Col HS Bedi, managing director, Tulip. Indian companies have not yet got
on to the NMS bus and those who have started (like HCL, Wipro, Infosys, TCS, and
Datacraft) are trying to have a foothold by leveraging on their IT success.
However, companies like IBM, EDS, and CSC have moved in and are cashing on the
Indian skill and expertise.
Trend
The market has moved from mere network and infrastructure device management
to end-to-end network management. "Management services have moved from
being crisis management to becoming a specialized field. Earlier when device or
facility management was the main job, the complexity level was less. Now it
demands expertise and focused approach," said Sanjeev Nikore, founder
partner and chief operating officer, HCL Comnet.
The management service provider is not only expected to react and resolve the
problems, rather he should be able to predict the problem well in advance. The
buzzword is to identify the problem even before it happens and reduce the number
of trouble tickets. As the market grows and organizations integrate their
management requirements in their policy, standalone integrators and piecemeal
management solution providers have less chances of survival.
"The standards and certifications are already in place and awareness
level towards such services is increasing. The need is to incorporate better
tools for alerts and have better processes to handle situations," Nikore
added.
Factors Affecting NMS |
- Globalization - Componentization - Internet - User accounting and security - Speed of business - Emphasis on RoI |
There is also an increasing realization that with limited in-house manpower,
on-demand scaling the processes is difficult. There would be times when
utilization of network capacity would be less and would require less people to
monitor it. Organizations cannot cut or increase manpower with fluctuating
demand. "Professionals by nature are restive. If you do not give them
challenges and upgrade their skills with time, they tend to get bored and look
for other avenues. The management is free from these problems, if the NMS is
outsourced," said Subramanium.
The NMS service provider is not tied with one corporate and utilizes its
manpower and expertise to serve multiple business houses. They are in a better
position to interact with equipment vendors and technology partners to get
latest trends and also insights into future technologies. This helps in
constantly upgrading their skills and also keeping the customers educated. As a
service provider maintains a pool of talent catering to different customers, he
can shift workforce from low-demand to high-demand areas. This takes care of
capacity scaling too. After the business process, network management outsourcing
is the big thing companies are looking at. And as in any outsourcing decision,
here also bosses are skeptical about the credibility and ability to handle the
network and whether to do remote or within campus outsourcing.
Advantage India
India has already established itself as a leader in software and IT
services. It is looked at as a preferred outsourcing destination in back-office
processes, technical support, e-learning, etc. The country has the required
skilled and cost-effective manpower. The success stories of outsourcing from
India have established the trust in India's companies and its workforce. Add to
all this economic stability and policy support. A mix of all this is working the
dynamics in favor of India. The ITeS and IT sector have provided the ecosystem
for the management services to grow.
Good and reliable international connectivity is slowly converting India into
a nerve center of infrastructure and network management. The magic has worked
equally for foreign companies as well as domestic ones. MNCs like IBM, EDS, CSC
have established their base in India to serve their customers leveraging on the
local advantage.
Features of Good NMS |
- Fault management: Detection of equipment failures - Capacity management: Planning of infrastructure evolution - Configuration management: Administration of configuration changes - Security management: Control of access and content violations - Accounting management: Chargeback of network resource usage - Unlimited scalability: Built-in intelligence to handle scalability issues - Remote management: Distributed network should be managed from remote location - Portability: With mergers and acquisitions gaining momentum, it would be better to develop portable solutions for managing network infrastructure - Extensibility: Open standard platforms over which custom applications can be built - Auto correction: Self-correcting measures in case wrong configuration of the system - Easy user Interface: Functionalities for business users rather than networking professionals - Multiple grouping: It should allow the network to be grouped into various geographies to account for time zone differences, various distributed networks to take into account possibility of sharing information from extranets |
While Indian banks have been the front-runners in outsourcing network
integration and management, other sectors like manufacturing, services, and
telecom operators are slowly catching up. In fact, the network and
infrastructure deal between Bharti, IBM, and Ericsson is a landmark where even
the connectivity service providers are looking to outsource their non-core
activities.
Multiple- vs Single-Vendor Management
It is always good to have a single vendor managing all the infrastructure
and network requirements. But not all companies would be comfortable in handing
over the complete infrastructure to one management vendor. On the reverse side,
not all vendors would have the expertise in doing all kinds of management work.
Thus, many companies prefer discreet outsourcing instead of completely handing
over the network to one vendor.
In discreet outsourcing, certain portions or components of the network are
outsourced depending on the criticality of the applications running on that
part. "Of the total IT infrastructure outsourcing, end-to-end total
outsourcing is growing at 12 percent whereas discreet outsourcing is growing at
25 percent," Nikore added. Discreet outsourcing means the vendor is focused
and specialized in managing a particular component of the infrastructure and
hence does a good job. However, this might lead to multiple vendors handling a
single company. Not many may agree with this approach. "End-to-end
management should be done by a single provider as this ensures single window
handling of everything," said Subramanium. The whole of management work can
be broken into pieces and once an NMS company fulfills the service-level
agreement of one level only then does it moves to the next level of managing the
network, Subramanium added.
"A vendor knows his limitations and if he puts up the network he is in a
better position to take its responsibility. Cross-vendor services are still in
their infancy and would take some time to evolve. Till then single-vendor
management is best for the companies," said Sudhir Prasad, assistant vice
president, mobile networks, Siemens Public Communications Network.
NMS vs Telecom Operators
Some of the telecom operators have also been offering management services.
But in most of the cases, they are limited to managing the link or the
connectivity to customer premises. In the past, telecom operators were not even
bothered about managing, as they were limited to providing connectivity, and the
customer's team managed the rest.
On the other hand, telecom operators still have limited access to clients'
infrastructure, and their core business is providing communication links rather
than managing networks. They have to ensure that connectivity is up. But
operators like Bharti are doing network audits to understand the need of the
customer and then decide on the type of support they need. "When services
are sold, they comes with the end-to-end manageability too. Depending on the
deal size, it can form almost 15—20 percent of the contract," said Rajiv
Sharma, CEO, Bharti Infotel.
However, the operator does not do every thing by itself and on the quantum of
business the work is divided. "The customer premise equipment might be
managed by IBM, Wipro, or Datacraft and the access link can be managed by Bharti,"
Sharma added. In fact, the services offered by NMS companies and telecom
operators are complimentary and they do not pose any type of competition to each
other. Customers need to appreciate the differences that exist between
provisioning bandwidth and connectivity, and running of network operations. They
are two very different activities and it takes specialist service providers to
run network operations. "Telecom operators are more focused on selling
bandwidth and providing connectivity to the customers. We work with telecom
operators on many turnkey projects and we have our roles clearly defined and
there is no conflict," said Bhat. Just as leased line management services
are an integral part of network management services, the role played by service
providers is moving towards vendor management with telecom operators. There
exists a bilateral arrangement among service providers to reduce any overlap and
they work according to their core competence.