Tomorrow's SMB Elixir

Infrastructure management (IM) is one area that
has emerged as a must-have for organization of
all sizes. In recent times, the global recession that impacted the bottomline of almost every enterprise and industry, was a major driving force for the growth of the IM sector. In fact, the IM industry is one of the few areas that have demonstrated accelerated growth in the last two years. As organizations everywhere looked towards increasing efficiency and improving productivity while at the same time drastically cutting down on their IT spends, IM provided new and innovative models, to meet the information technology needs of the enterprise.

As per a Zinnov Consulting study on infrastructure management services (IMS), the Indian vendors account for a market size of $1.4 billion, growing at a CAGR of 44 percent. According to PR Krishnan, VP and Global Head-IT Infrastructure Services, TCS, customers today are opting for IM rather than standalone solutions, as these solutions introduce silos. The end-to-end IM approach holistically addresses operational efficiencies, thereby streamlining new solutions and bringing benefits to customers. And apart from the large ones, the demand for infrastructure outsourcing is also coming from the SMBs.

Moreover, IM is witnessing growth not only in the private sector but in the public sector as well. Both at the state and the national level, the government has floated many projects, that involve complex IT infrastructure that needs to be monitored, to make sure adherence to stringent service levels. One of the key trends in IM is remote infrastructure management (RIM), which involves monitoring and managing major IT and infrastructure components of an organization, remotely. In fact, many companies have achieved twice the growth in RIM, compared to application development and maintenance.

“Opportunities presented by the global economy and the technology need of Indian companies within the small and medium ranges have provided the most scope for growth of RIM in India,” said ER Ashok Kumar, VP-Cisco Services, Cisco India and SAARC. Ivy Rajesh, VP and Country Head-Industry Solutions Business, HCL Technologies added, “RIM is gaining acceptance in the market and is considered to be the growth driver of managed services. It has had a significant impact on global IMS services, changing industry economics and customer expectations. India is becoming a significant beneficiary of this shift.”

The Indian RIM market has seen rapid improvement, especially in the telecom sector and its increased reliability has led to off shoring of complex and critical services like datacenter management, server, and storage management. Some of the core RIM services such as infrastructure architecture and projects, managed security services, and managed network services are slated to grow faster than other standard RIM services because of the increased confidence of customers in remote delivery.

Avinash Pitale, Joint MD of Omnitech InfoSolutions, further believes that improved SLAs, reduction in delivery cost and diversity of operation have driven RIM market globally as well as in India. Today, the availability of various low-cost RIM tools has made RIM services support very cost-effective and that is certainly accelerating the RIM service requirement exponentially. If taken a look at some of the strategies being adopted by vendors in this space, we will find that apart from providing very technology-focused services, vendors are looking to provide business solutions through the IM model such as security/threat management services and network management services. And to meet the need and requirement of enterprises, vendors have also introduced multiple solutions to the market, tailored to each vertical and have come up with new models of engagement such as pay per-port/per-user/per-month. “Vendors like CSC have developed deep partners and alliance relationship, to always get the best of the breed tools and related expertise to bring continuous improvements for its customers,” highlighted Kothandaraman Karunagaran, VP-Global Infrastructure and Enterprise Services, CSC India.

Meanwhile, cloud computing and virtualization are seen as technologies in IM that are slated to change the market dynamics. These technologies enable vendors to provide solutions via 'anything-as-a-service' model in the likes of software-as-a-service and platform-as-a-service, where companies would only 'pay for usage' or on a 'pay-per-month' basis. “Proactive enterprise management platforms, self healing tools, which can prevent problems from occurring, pro-active monitoring tools, automation tools, SLA management tools, ITIL-based service desks, remote management of desktops, and cloud monitoring tools are some of the technologies that are going to play a crucial role in IM,” asserted Ram Mohan C, Senior VP and Head-Infrastructure Management and Technical Support, MindTree.

The game changers

Contrary to popular belief, implementation of IM is not restricted to large system integrators or infrastructure service providers only. Even the lesser known solution providers have joined the fray, including the likes of Associated Business Computers, who believe that for a long time, IM was limited to procurement and installation of hardware and software assets. As one of the leading solution providers, the company is definitely thinking of IM as a solution and is offering this to its customers. Of late, it has been working in this area with a handful of clients, wherein it is managing right from inventory planning till inventory disposal of its clients. In the recent times, the company has successfully rendered IM solutions to three clients each belonging to a different segment altogether; ranging from Health & Wellness to Engineering & Manufacturing to Government Organization.

For one of the healthcare industry giants, it encompassed designing, implementing and managing all the IT components namely network, computing, servers, storage, and security. It also provided Facility Management Services to this client. It has also implemented software IM utilities to automate and fasten the management and troubleshooting cycle.

The Manufacturing & Engineering one was a multi location project. The client was facing trouble in managing their vast network spread over more than 3 cities. Here, the company started with connecting all the locations and network with MPLS cloud. The next step was to consolidate the data. It included designing NAS and SAN gateway solutions. It made sure that every single bit of data that flows should be protected. This is the case of RIM, as it is managing it from its site itself through IM utilities. All the updations, be it on patch level, OS level or firmware level, are being done from the company's end. It is remotely managing around 500 nodes.

The third project was with one of the Government Defense Organization, wherein it has implemented FMS. Due to their vast spread out campus space, it was getting difficult for the IT manpower to reach to the point of problem. The company sorted this out with its RIM solution. Though due to secrecy mandate, the servers and the data are hosted at the site itself, but everything is managed from a single point. It has also deployed and managed virtualization solutions at this site. Right now, IM contributes around 10 percent in its overall business model, but going forward, it is aiming for at least 35 percent. “Traditionally, we have been involved in projects that were a part of IM, but they were in a disintegrated manner. We were doing this unconsciously without dedicatedly and deliberately focusing on IM. But now the scenario has undergone a complete change. Today, IM enjoys a major part of our focus and action. We have been redesigning our model around this activity for some time now, ” added Sujeet Narula, CEO of Associated Business Computers.

Going forward, IM will be one of the company's core focus areas in 2011, as it is making itself adept and skilled in terms of structure, manpower and other tools that are needed to excel in this space.

Targus Technologies, is another solution provider, who has started providing IM solutions to its customers around server and network management. In fact, it is witnessing 100 percent growth YoY in this space. It has further added its strength on application support and security infrastructure solutions as well. The company believes, that today's customer needs those solution providers or partners, who can support end to end IT infrastructure. And it helps its customer organizations to adapt ITIL compliant processes and engage in SLA-driven commitments. Till date, the IM solution part is about 25 percent of its overall business, which it believes will definitely increase to 50 percent in the coming years. Targus is currently working on different aspects of IM solutions. While keeping security-as-a-solution in mind, it has done various projects on virtualization, applications and server consolidations. And the verticals it has recently covered include telecom, packaging, consumer durables, and insurance sectors. “Most large enterprises and medium-sized companies have deployed multiple types of IT infrastructure management solutions. The top perceived benefit for adopting IT infrastructure solutions is the ability to expand operations, as needed, with the requirement of minimal administration. In IMS, the supplier assumes operational responsibility of certain end-to-end functions related to the IT infrastructure,” asserted Amarjeet Walia, Senior VP at Targus Technologies.

Delhi-based Netlink Business Systems, considers itself as one of the pioneers in this space. Apparently, it has productized the concept of IM in 2001 and used to call it 'Total IT Infrastructure Management Services'and focused on all the four components of it, including design, deployment, delivery, and optimization. The company is of the view that today, it is all together a separate domain. There are integration companies, that talk only about the design part of it, or only about the design and deployment parts. However, the most significant part of delivery has become a very small fraction of the entire package for most of the integration companies. “I believe delivery mechanism is the most important part of the pyramid. Apparently, the fact is that it does not need rocket science. We have our focus towards all the four components,” opined Rajesh Bakshi, CEO, Netlink Business Systems.

Netlink's main focus has been towards the education segment along with corporate and hospitality sectors. In the education sector, in the last two years, it has done deployments at around 12,000 schools pan India, wherein it has deployed the complete IT infrastructure. And education sector is one segment wherein it will have its continued focus in the coming years as well. In terms of mind share, IM enjoys around 80 percent and in terms of turnover, it will be approximately 20 to 25 percent of its overall business model. In future, Netlink's focus is going to be towards providing complete IT-enabled services at the customer side. Bakshi believes, that the way IT is going to shape up in the coming years, it will definitely bring distributed IT infrastructure management opportunities for the solution providers.

Another Delhi-based solution provider, Zest Systems, is gradually gearing up to make a mark for itself in this domain. It has done deployments in this space in the education and hospitality sector. One of the major projects executed by Zest, worth $4 million, was for providing infrastructure across 14 locations for an educational institute. Besides, it is remotely managing the IT infrastructure of a hotel located at around 240 kilometers from the city of Mangalore. The company has also entered into a contract with a leading infrastructure company to provide IT set ups for the toll plazas being deployed by the company. Apparently, it has already set up the IT infrastructure at one such toll plaza in Noida, Uttar Pradesh and is in the process of setting up the same at plazas in Rajasthan, Karnataka, Tamil Nadu, Andhra Pradesh, Gujarat and Maharashtra.

In the current fiscal, the company has made a strong bid to win large government tenders and has assigned a dedicated team for that purpose. In states like Uttarakhand and Himachal Pradesh, Zest is in the stage of convincing the government that this is the way their IT infrastructure can be managed in a more effective way. “Today, we are gradually moving from capex to opex model. As the SMB growth story is written throughout the world, people cannot afford heavy investments in IT. So, it is best to manage your IT on an opex model, as it does not invite outright investments. In the next couple of years, we will see IM becoming the next big thing in the field of IT. And I am sure that by 2012, this concept will consolidate and we will be the top few SIs in this space,” pointed out Rajeev Mehta, MD, Zest Systems.

One of the country's largest solution providers, Progressive Infotech, is also having a large presence in the IM space. It is seeing customers in the government and public sectors opting for outsourcing of IT infrastructure management. The company continues to grow at about 35 percent in this area. And in the overall business model, the share of IM is about 25 percent in terms of topline revenue. Of late, Progressive has had some good win in the public sector, wherein it has signed a multi-year agreement with the aviation department and others. And not only in India, it has also recently bagged a large order from the government sector in the Middle East. “IM is definitely a growth sector and over the next five years, we will see a double digit growth in this area. There is strong adoption because of the increasing complexities in running any business and the cost factor. IM brings in tremendous value to any company's RoI. Since this is our core area of focus, we will continue to invest and grow. Today, a lot of work is done on site but as we go along, this space will get blended with remote services,” said Prateek Garg, MD and CEO of Progressive Infotech.

Bengaluru-based Frontier Business Systems is also not far behind its competitors in providing IM solution to its clients. Though it has started offering the services only last year, it has been a steep learning curve for them as a solution provider. The company views IM as one of the most important emerging services and revenue generators of the future. Frontier has been involved in three types of deployments. One is the RIM where it manages all aspects of client's infrastructure from its Managed Services Operations Center (MSOC); the second one is in-house infrastructure management, wherein it provides consultancy services on IM to the clients and also assist them to deploy and manage the IM platform; and lastly, Hybrid infrastructure management which is a combination of RIM along with on-site engineers at the client's premises. “In the Indian market, there are no dominant players. Infrastructure management services is a focus area for Frontier in the coming financial year. Automation in infrastructure management and compliance is going to be an important service in the coming years as well,” added Ravi Verdes, Director and CEO, Frontier Business Systems.

The Champ

Taking cue from the work being done by these solution providers in the IM space, Associated Business Computers certainly bags the top slot. It is definitely a cut above the rest, as it has the zeal to make it big in this segment.

Nivedan Prakash
(nivedanp@cybermedia.co.in)