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The IM market matures
The infrastructure management market in India saw healthy
growth in 2005. Analysts predict that the trend will continue this year as organisations
feel the need to automate processes while controlling costs. Shivani Shinde
reports
 The
infrastructure management (IM) market in India has continuously shown an upward
trend in recent years. Two of the reasons for the upswing in the adoption of
IM were the large-scale expansion of business units into branches that had to
be networked, and the growing regulatory environment.
According to Kapil Dev Singh, Country Manager, IDC India,
“In 2003 the market was just out of a slowdown. It was a phase when strategic
choices were made and trends were at the tipping point. 2004 and beyond was
predicted to be a period to start operations on these strategic decisions and
trends were predicted to enter the mainstream. Year 2006 will see some of these
key trends witnessing further traction and will be governed by the underlying
theses of mobility, convergence and IM.”
Dr T R Madan Mohan, Director, Consulting, Information Communications
& Technologies Practice, Frost & Sullivan, says that the IM solutions
space had a healthy spend of about $207 million, and forecasts about $281 million
for 2006. “Businesses are expected to make more investments in storage
driven by compliance requirements and the increasing penetration of mobile applications
in enterprises. The cumulative growth rate in the IM space has been around 23
percent, the major driver being storage and BI. Storage, which jumped to $53
million, saw Indian enterprises’ storage requirements touching 8,200 TB,”
he says.
The other point that stood out in the Indian IM space has
been the acceptance of outsourcing. Earlier, IM in India meant vendors deploying
tools within organisations to manage infrastructure. Today, Indian organisations
are increasingly moving towards outsourcing IM to a service provider for either
remote or onsite management services.
Aldrin D’souza, Country Manager, Tivoli, IBM Software
Group, IBM India explains, “The first trend, in-house deployment of IM
tools, was led by the telecom and XSP sectors, which were faced with the task
of managing large and complex IT networks. Initial trends were extensive usage
of freeware-based tools which gradually shifted to mature enterprise management
offerings from prominent players in the industry.” Other than these two
sectors, the other vertical that went head-on in adoption of this model was
the BFSI segment followed by IT/BPO.
The second trend, which is outsourcing of IM services, has
seen an increased degree of adoption across almost all the other industry segments
like manufacturing, utilities, healthcare, travel and hospitality. “The
key driver of outsourcing in this industry has been a conscious decision to
focus on the core business and outsource IM services to a specialist service
provider in that domain. Hence, almost all of the top 10 IT services organisations
in India are today offering managed infrastructure services using a combination
of remote-management services from a network operations centre and onsite deployment
of people, processes and tools,” explains D’souza.
Growing need
With large-scale automation, organisations are increasingly
dependent on these automated applications, and downtime is not accepted at any
point.
Comments Rajendra Dhavale, Consulting Director, CA India
and SAARC, “Companies having increased their IT investment in infrastructure
are focussed on building up a robust, scalable and future-proof infrastructure
framework to support their business growth plans. This is precisely the reason
why IM and investments in related technologies will hold centre-stage for an
IT manager/CTO when he is looking at mapping out his IT investment list.”
Some of the key drivers for the growth of IM have been high
investment in IT infrastructure from sectors such as banking, BPO and telecom;
statutory guidelines from government bodies like RBI; alignment of business
systems with global trends; and the need for always-on, always-available IT
infrastructure.
Ranajoy Punja, VP, Marketing, Cisco Systems India and SAARC
feels that the growth of the IM sector has been what it has so far because organisations
have increased their deployments and because systems are getting complex. “Besides,
when organisations realise that a particular aspect is not of their core competence
they prefer that someone else manages it,” he explains.
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According to the Forrester Wave: Global Delivery
Infrastructure Management Q4 2005, Indian companies like HCL, Infosys,
TCS, Satyam, Wipro and Patni have been strong performers in the IM space.
IM typically governs five operations: mainframe,
data centre, network (voice and data), desktop and help-desk operations.
Despite their heritage in the applications space, Indian vendors receive
most attention from companies that are considering offshore infrastructure
outsourcing because the Indian telecom infrastructure is now ready for
IM. Since the government monopoly in the sector was lifted in 1998, the
Indian government has taken several steps to spur investment in the telecom
sector. And while there is always a race between demand and supply, vendors
have aggressively built network capacity.
Consider the following: VSNL has more than 100
STMs landing in India providing an estimated 15 Gbps of capacity. But
private companies like Bharti, in partnership with Singtel, have built
an 8.4 terabyte i2i submarine cable connecting Chennai with Singapore
with only a small part of its actual bandwidth in use.
Indian providers have established multiple relationships
with $1 billion-plus companies in the application outsourcing market.
As organisations face pressure to cut costs, they turn to their trusted
offshore providers to explore infrastructure-related opportunities. Offshore
firms, long known for their applications skills, have been training their
people in hardware and other aspects of data centre management. As a result,
the providers are capable of staffing remote-monitoring engagements with
an infrastructure-savvy staff.
Selective sourcing provides an opportunity for
offshore providers to win business. Firms increasingly want to use multiple
providers in outsourcing engagements, rather than having one provider
who manages the entire infrastructure stack. When clients separate remote-monitoring
from physical maintenance of equipment, the offshore providers can compete
effectively against domestic players like EDS.
As a result, Indian providers are competing for
outsourcing deals that are up for recompetition/renewal, hoping that organisations
will break them up into selective chunks to increase competition and vendor
accountability. These are the deals for which we will see the most offshore
competition—existing deals already have benchmarks in place, and
in some cases have transitioned employees to a previous outsourcer, removing
a political barrier associated with offshoring jobs.
Indian providers are using their application development
and maintenance relationships to cross-sell into IM, but as can be seen
from our analysis of revenues, we estimate that HCL, Infosys, TCS and
Wipro all have sub-$100 million infrastructure outsourcing businesses.
Meanwhile, the combined remote infrastructure outsourcing work that the
US and Europe-based vendors have outsourced to India, plus the work that
captive centres of multinational corporations perform from India, will
total $1 billion in 2005.
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More than just network
"In India our product range has always been in demand, but lately
we have seen that customers are considering our services range too"
-Kapil Jain
Vice-President
HP Services |
Companies are realising that though IT is a necessity it is
not their core focus area. Experts predict that organisations might just move
away from the IM model (that concentrated on tools) to the services model.
For instance, look at HP Services. For HP worldwide, the
largest amount of business comes from the services sector rather than the products
sector. In India, the ratio of services to products had been a third to two-thirds.
However, Kapil Jain, VP, HP Services says, “In India our products range
has always been in demand, but lately we have seen that customers are considering
our services range too.” This he feels is due to the transformation businesses
are undergoing today. He opines that since there is unpredictability in the
market today, it makes sense for companies to look at solutions like IM. “Organisations
are expecting huge growth. The time-to-market is getting important for organisations
as they need to introduce products or deliver a new set of services faster—and
all of this puts pressure on the IT department,” he says.
The challenge facing CIOs in 2006 will be to deliver higher
IT service-level performance to meet diverse business needs while lowering the
cost of infrastructure. Users have realised that their IT infrastructure has
become complex over a period of time as they continue to add different types
of servers, storage and software.
“CIOs are trying to create a frictionless infrastructure.
Companies need to be flexible, fast and informed to survive in the flat global
economy. They are on a mission to build a technology base that will not impede
the free flow of information, the availability of applications, or the malleability
of bus-iness processes,” comments Dhavale.
Besides combining broadband and mobile technologies with
e-commerce, companies want to reach customers anywhere and provide all kinds
of services, information and marketing formulas. By running supply-chain and
logistics systems over their networks, corporates seek to integrate partners,
outsourcers and suppliers into their operations. Portals and collaboration software
can allow employees to use the same systems wherever they go.
The main concern CIOs have is whether they will make enough
progress in building flexible infrastructure, and whether it can be achieved
with today’s technologies. Or will new problems cause delays, raise costs
and cast doubts on the entire effort? Adding to the uncertainty are problems
that commonly trouble CIOs—management and employee resistance, difficulties
finding the right technical talent at a reasonable wage, and vendors who can’t
deliver what they promise.
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IDBI selected IBM Global Services to consolidate
its IT infrastructure, including building and providing service support
for a data centre and disaster recovery site. The 12,000 sq ft level–3
data centre is located at Belapur, Navi Mumbai, and houses IDBI’s
entire IT infrastructure running all mission-critical applications and
storing records. The 5000 sq ft disaster recovery site located in Chennai
is designed to restore systems in less than 24-hours in the event of a
natural or unnatural disaster. This contract is worth Rs 56 crore ($12.8
million) for a period of five years.
IBM Global will source and implement the infrastructure
consisting of IBM eServer p5 (Unix servers), eServer xSeries, enterprise
management software, Tivoli software, storage, security, networking, etc,
and also non-IT infrastructure including fire alarm systems, precision
air-conditioning and intrusion detection systems, and also support it
for a period of five years.
Says Sanjay Sharma, Corporate Head Technology Officer,
IDBI, “With the consolidation by IBM, we are technologically fortressed
to help prevent loss, damage or destruction of our customers’ data,
information or records in the event of a disaster. Now, in case of the
outage, our critical systems and data can be completely restored. Moreover,
our investment in this infrastructure will support our aggressive growth
plans.”
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SMB driving force
Everyone agrees that the Indian SMB segment is huge, and
that this will be the next segment where we will see prominent players trying
to woo prospects. Says Punja, “Though the SMB market is vast, they have
their own requirements. With growing reach they are getting into automation
and deploying network solutions, but they want things to be simple and manageable.
Let’s remember one thing: they do not have large IT departments.”
IBM too has a focussed offering for SMBs through its IBM
Express initiative. Explains D’souza, “These businesses need automated
tools to ensure that their applications, servers and network are going to be
available and secured for the business to keep moving. Tivoli has been known
in IT management solutions for large enterprises, so with the expertise and
knowledge we learned from those large corporations we designed a new set of
products specifically for the mid-market customer, bringing the best practices
we know along with the ease of use, installation and quick implementation.”
Says Dhavale, “Ask just about any SMB owner what keeps
him up at night, and you’re likely to get a earful about virus attacks,
lost data or the challenges involved when upgrading PCs. According to the Yankee
Group Survey on the SMB segment (2004), 67 percent of SMBs said that protecting
their businesses from security breaches was the top IT priority, followed closely
by backing up and restoring data (60 percent). Nearly 55 percent of the SMBs
said that they planned to upgrade their PCs in 2005.”
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The Department of Information Technology (DoIT),
Government of Punjab, decided to adopt a state-of-the-art, proactive information
technology monitoring mechanism. The motive was simple—to deliver
efficient services under the Government to Government (G-to-G) and Government
to Citizens (G-to-C) initiatives.
To accomplish this, the DoIT had to connect and
automate various government departments. It needed to formulate and implement
policies, procedures and guidelines for the adoption of a management information
system. Additionally, as the network supports business-critical processes
ensuring that services are available to citizens.
Proper bandwidth utilisation is an important task
for the DoIT. “In the legacy IT environment, there was no provision
for historical reporting to prevent network outage and downtime. The network
was heterogeneous, which made the monitoring of various network elements
a daunting task,” explains Nirmaljeet Singh Kalsi, DoIT’s Director-cum-Secretary.
“Managing IT assets was yet another crucial challenge. There was
constant demand to maintain, update and upgrade the software and the inventory
on the desktops across the secretariat. The virus and spam control wasn’t
effective either, thus making it difficult to troubleshoot critical bugs.”
This resulted in a slow response time when addressing problems related
to desktops, network nodes, viruses and spam.
A complete and integrated solution
The DoIT evaluated various offerings and determined that CA’s
solutions fulfilled all their requirements. It implemented Unicenter Network
and Systems Management (Unicenter NSM) and the Unicenter Network and System
Management Network Performance Option to centralise the management of
its networks and assets. These products ensure the health, performance
and availability of their business critical applications, as well as help
optimise bandwidth utilisation. The ability to conduct a root-cause analysis
allows them to pinpoint the exact cause of a problem and reduce downtime.
eTrust SCM scans all incoming e-mail traffic using
the policies and rules defined by DoIT to match its requirements. In addition,
it scans outgoing traffic for confidential, protected information, and
monitors it for compliance. “When done manually, it wasn’t easy
to maintain records of all the assets. There were many instances of missing
components of hardware. Instances of pilferages were common,” recalls
Kalsi.
The automation provided by these solutions has
allowed the IT staff to be proactive in their management of the infrastructure,
and freed their time to focus on core business issues.
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IM and storage
Frost & Sullivan predicts that storage and BI will be
the next segment where IM tools will make a splash. Though no audited figures
are available, D’souza believes that under IM, automation (network &
systems management) presents the largest opportunity for all players, while
storage management has shown the highest growth rate over the last few years.
With mobility becoming an intrinsic part of organisations,
managing data is becoming crucial. Technology innovations such as continuous
data protection are being offered by vendors in storage solutions. The technology
captures and backs up changes in files as they occur or soon after they occur.
When this technology is deployed, if you experience a power loss, system failure
or virus at any point in the day, you can recover data at a point just minutes
or even seconds before the data loss occurred.
- Increased corporate reliance on eBusiness
- High investments in IT infrastructure from cash-rich
sectors like banking, finance, telecom and BPO
- Growth of the Internet coupled with the deployment
of mission-critical applications such as supply chain and ERP
- Statutory guidelines for infrastructure management
from government bodies such as the RBI
- High level of committed SLAs from service providers
- Need to justify IT costs and maximise Return
on Investment
- Aligning business systems with global trends
- Increased awareness of the benefits offered
by infrastructure management solutions
- Need for always-on, always-available IT infrastructure
- Heterogeneous IT environment at geographically-spread
locations making it imperative for centralised control and management
- Corporates becoming future-wise and investing
in future-proof technologies
- Fear of revenue loss and image/brand loss due
to system downtime or network outage
Source: Cisco
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Trends
Punja says that enterprises are looking at a single platform
solution that is comprehensive and reliable.
Though the services model is being adopted it will take time
to hold ground. As Mohan predicts, “The IM space will continue to be dominated
by tools, so industry, especially SMBs, may not opt for a service model. However,
cluster-based solutions may embrace service blueprints. Micr-osoft, IBM,
Oracle, Sun and HP are the prominent tool players, and several Indian ISVs are
key partners in implementation. Some of the Indian software players like Wipro
and MindTree have built key tools for specific markets.”
D’souza feels that organisations are looking for solutions
that will help them effectively and efficiently deliver IT services that are
aligned with business priorities; quantifiable process performance for end-to-end
process measurement and quantification; greater value of existing investments
ensuring tighter integration across technology, information and people; and
an increase in IT organisational productivity focussed on the alignment of IT
silos through data and workflow integration.
In India, awareness of the ITSM and the ITIL framework have
also led to the adoption of IM. This has largely been fuelled by the efforts
of IM vendors in the market who have educated customers on the merits of adopting
ITIL-based ITSM. “It is not uncommon to find IT managers who have completed
the ITIL foundation course, and are keen to put in place measures for implementing
ITIL within their organisations,” observes D’souza. Even though initially
confined to companies offering infrastructure and service management services,
it has gradually begun to see adoption by non-IT companies too.
shivani@expresscomputeronline.com
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