Network management services: growing glory

Network Management Services (NMS) has grown from its role of providing basic uptime services to an integrated service with more focus on application response management. It helps analyze information to optimize network performance, detect problems in real-time, diagnose problems and analyze the traffic in the network, and at times, helps identify protocol- or application-specific traffic.

Its ability to discover the complete networks automatically, capture and store device-specific information and set thresholds so that errors or abnormal behaviors could be detected, have made it a must-have for any organization targeting smooth IT functioning.

There has been an increased intolerance among enterprises towards downtimes and IT failures. Instead of reacting to a problem, their focus remains on proactively addressing networking needs, leading to increased demand for NMS. Thus, apart from base level uptime service for the network, bandwidth management optimization, enterprises are service is now looking for an integrated performance management and application response time services so that the applications are available at a predictable and consistent manner.

NMS is moving from pure play network uptime to integrated service delivery. Organizations are looking towards correlating between different towers of the IT setup and trying to actualize the application availability. Application response time is driving the game. With infrastructure getting more robust, the trend has shifted from network and linkup time to application response time. People are also looking at services management rather than pure play network management.

According to VOICE&DATA estimates, the NMS segment grew from Rs 526 crore in FY '05-06 to Rs 709 crore in 2006-07, a 34.8% jump, which is a very healthy sign.

BOOSTERS

In FY '06-07, large organizations with huge and widespread networks focused on Quality of Service (QoS) to ensure enough lanes for high-priority traffic. They also had to design strict Internet usage policies. Increased demand from the international customers on regulatory compliance requirements drove policy designs related to information security.

Adoption of core banking solutions, even by smaller co-operative banks, fuelled the requirement for networks, and therefore, network management solution. In the co-operative bank segment, however, network management is currently limited to router and switch AMC, BSNL/MTNL liaison and some level of network security management.

Established network management products from HP, CA and IBM found many takers. Offbeat solutions such as Open NMS didn't become as popular, mainly because of lack of easily available support. Though there were some big ticket complete IT Infrastructure outsourcing deals this year as well, in general, the industry continued to look for 'Selective Sourcing' of services.

Significant activity was seen in organizations' movement from traditional telephony to IP based telephony. Therefore, there was a requirement for use of network management solutions to establish voice quality.

Global demand for services increased, resulting in ITIL adoption. Moreover, computers, processors, storage, networks and databases are becoming virtualized. Network speeds are increasing. New standards, such as IPv6, will help enable all forms of data and voice. Distinctions between transports for storage, data and voice devices will disappear. SOA is emerging for more rational compartmentalization, standard interfaces, centralized repositories and standard means for integration. New models are emerging, including hosted network and security offerings for applications, increased outsourcing of IT processes and services and more applications outside of corporate networks. All these developments acted as boosters for the NMS market today.

The global market too continued to look towards outsourcing commoditized 'Incident Management' services to low-cost markets. There was an increase in demand for remote Network Operation Center and security operation center in terms of 'incident management. Integrated services also picked up globally.

THE WINNERS

HCL Comnet topped the NMS segment with revenues of Rs 220 crore. Wipro Infotech was second, with revenues of Rs 186 crore and a growth of 40.9%. However, gtl clocked the highest growth in the industry at 80.3% and revenues of Rs110 crore.

Wipro Infotech bagged two largest deals In BFSI vertical for NMS perspective. One of them probably being the largest deal picked up in last 3 year in Enterprise Management system space in India. It also provided Enterprise Management Solution to Dena bank which s in final stages of deployment.

In FY '06-07 GTL re-established a brand new and reengineered NOC that achieved BS15000 certification, ensuring higher value to customers.

Datacraft entered a global service alliance with Cisco for managed network services and bagged large deals in managed services, including MNC banks, and ITeS companies like CTS and Genpact, and leading service providers.

It also deployed the first Cisco WAAS solution, one of the largest in India, for a back office contact center, which was a joint venture between a major US financial giant and a leading Indian ITeS company.

It also entered into a managed network management services contract with India's leading service provider. It won a managed service contract for an additional 1,000 branches of State Bank of India (SBI).

GTL, on the other hand, expanded its existing engagement to large customers such as Asian Paints and also offered management services for product and IT services. In FY '06-07, it added three new insurance companies and one large bank to its customer list.

VERTICAL CONTRIBUTION

The biggest contributor to the NMS segment was the BFSI complete financial vertical including banking, finance, securities, investments and insurance. It has been on a major investment spree with core banking picking up pace. Similarly, insurance companies are also looking at core insurance, because of which they have felt the need for centralizing the entire IT infrastructure and have, therefore, required NMS. The other vertical that contributed heavily to this segment was government.

CHALLENGES

Despite the promising growth, the NMS market faced a number of challenges. The increasing complexity of networks was the biggest of these, which makes monitoring network performance and QoS a challenge. Second, the mindset of the enterprise is not open to spending on NMS. Though the network is a critical component and without it business operations are vulnerable, the cost of network management using standard products and dedicated skilled resources is higher than what organizations would like it to be. From the organizations' perspective, network management services from an NOC using offbeat products would be a good combination.

Another big challenge is the base telecom infrastructure, which is not up to the mark. Moreover, there are SLAs that are in milli-seconds, and today's tools based on MIB polling with 5-minute intervals simply are too slow to manage these types of applications traffic.

WHAT LIES AHEAD

In the future, the NMS segment will see system integrators aligning with service providers to manage enterprise customer networks. A large number of organizations will source some part of their network management and operations to a third-party provider. New services such as application dependency mapping, configuration management, cross-domain analytics, application flow management, out-of-band will gain traction.

Presently, India forms a significant though small part of the global NMS scenario. With globalization and more and more companies aiming to achieve global standards, the NMS market is bound to grow and the potential is large. The growth in the next financial year will be driven by factors such as centralization of processing power, ITIL, multisourcing, WAN optimization and acceleration. In fact, The market is expected to grow to Rs 1,000 crore, which signals a bright future for the industry.

Source: Voice & Data