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Remote Infrastructure Management
Remote in Control
The Indian Remote Infrastructure Management (RIM) space presents
plenty of opportunities for service providers and the market is expected to
grow as we march towards economic stability in 2010. By Rajendra Chaudhary
 In
the last three to four years, one key trend that has clearly had the most impact
on the infrastructure management outsourcing business is Remote Infrastructure
Management (RIM). The idea is simple, ‘manage all of IT remotely’
through advanced telecommunications technologies and the Internet. It is perhaps
this simplicity that works in favor of RIM more than anything. Today, RIM is
one of fastest growing services segments, not just here in India but globally.
NASSCOM estimates suggest that the global addressable market for RIM services
currently stands somewhere between $96-104 billion. Its recent findings show
that up to $26-28 billion’s worth of IT infrastructure management services
could be offshored, out of which up to 50% or $13-15 billion is likely to be
contributed by India by 2013. In terms of domestic opportunities, recent industry
numbers indicate that the Indian RIM services market stood at roughly Rs 550
crores in 2008 and is likely to grow at a CAGR of 30% over the next five years.
As a market segment, RIM is said to have grown at a
higher rate than the managed services market for the last couple of years. In
terms of vendors and service providers, the market up until recently was dominated
largely by bigger players like Wipro and HCL. However, a host of relatively
smaller, niche players have recently entered the space, making it a much more
open and competitive segment. Some of these smaller players include, MindTree,
Netmagic, Omnitech, CSS, and Glodyne Technoserve.
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 "The
RIM market in India is currently split between traditional IT outsourcing
MNCs and offshore providers. The two major delivery models include dedicated
teams that deliver direct cost arbitrage while utilizing customer-specific
processes, and shared teams that leverage standardized best practice processes"
- Nitin Mishra
Head of Product Management at NetMagic
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 "There’s
a gradual increase in their willingness to adopt RIM and we are growing
our remote business consistently and have a base of 100 plus Indian
customers across banking, telecom and manufacturing wherein
they are getting services delivered from our remote delivery
centers"
- Kiran Desai
Vice President Managed IT, Wipro Infotech
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According to Ram C Mohan, Senior VP and Head - Infrastructure
Management and Technical Support at MindTree, during the last few years, the
barriers to RIM have gone down considerably and there have been substantial
improvements in third party and proprietary tools for managing infrastructure
remotely. Improved performance and stability of international data telecom services
have ensured continuous access to the customer’s IT infrastructure and
consequently many smaller players have entered the market of late.
Elaborating, Nitin Mishra, Head of Product Management at Netmagic, informed,
“The RIM market in India is currently split between traditional IT outsourcing
MNCs and offshore providers. The two major delivery models include dedicated
teams that deliver direct cost arbitrage while utilizing customer-specific processes,
and shared teams that leverage standardized best practice processes. At Netmagic
we provide customers the flexibility to choose either dedicated or shared teams
depending on their business requirements and we are fully capable of undertaking
complete management of the customer’s data center, whether they are hosted
with us, with a third party or have their own captive facilities.”
Although the RIM business has not yet fully matured in India,
customers are fast realizing its benefits, opined Kiran Desai, Vice President
Managed IT, Wipro Infotech. “There’s a gradual increase in their willingness
to adopt RIM and we are growing our remote business consistently and have a
base of 100 plus Indian customers across banking, telecom and manufacturing
wherein they are getting services delivered from our remote delivery
centers.”
Market scenario in 2009
In 2009, as economies around the world shrank and companies looked for ways
to trim IT spending, CIOs became increasingly concerned about minimizing the
direct overheads of IT management. They looked for ways that would simplify
and lower the cost of managing IT operations while increasing the availability
of the same. RIM services, due to their inherent cost effective nature, found
greater resonance with most CIOs and businesses during this time.
Nick Sharma, CEO, CSS explained that while historically the RIM market in India
has lagged behind North America and Europe, there has been an interesting shift
more recently in terms of how Indian companies are evaluating, deploying and
even managing their IT infrastructure.
“The economic turmoil has caused CIOs to evaluate cost savings and efficiency
focused initiatives with tremendous vigor. As such, RIM services have jumped
to the top of the list of strategies for CIOs to achieve both cost savings and
to drive efficiency. We have seen a dramatic increase in interest in RIM over
the last 12-18 months and have succeeded in winning deals. The sales cycles
have lengthened as companies rigorously evaluate all spend, but the bottom line
is that there were far more takers for RIM last year than before,” said
Sharma.
Informing about how NetMagic fared in terms of its RIM business
in the last 12-18 months, Nitin Mishra said, “The recent economic turmoil
and resultant cost pressures have definitely helped grow our RIM business beyond
expectations. In fact, over the past 18 months we have witnessed a healthy,
double-digit growth in the area of pure play remote infrastructure management
services. If we take into account the management component within dedicated
hosting offerings, this growth figure could go up even further.”
- End users are becoming more ‘downtime
intolerant’
- E-mail is becoming mission critical
- There is a need to improve data center
efficiencies
- Green IT and the need for better power
management
- Enterprise mobility
- Adoption of virtualization techniques
at server, storage and desktop level
- Utility computing
- Source: Ram C Mohan, Sr. VP and Head - Infrastructure
Management and Technical Support, MindTree Ltd
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Expressing similar sentiments, A N Rao, Vice President, ITIS Practice, Cognizant
informed that in 2009 his company grew its RIM revenues well above the company’s
overall growth rate of 16.4% and that the RIM practice continued to be one of
the fastest growing practices within Cognizant.
According to Avinash Pitale, co-founder and Executive Director of Omnitech InfoSolutions
the sluggish economy saw Indian customers open up to the idea of RIM, especially
in the last few quarters.
“The economic slowdown has definitely forced the customer to look for cost
and service optimization without degrading service levels. RIM was the right
model for offering these objectives to Indian customers. The tanking economy
has, in fact, enabled a wider and quicker acceptance of RIM services by Indian
customers and we believe that it will grow even more as the economy gets back
on track,” commented Pitale.
Pitale also stated that customers were increasingly moving
towards umbrella contracts wherein they outsourced all their activities to a
single service provider who not only supported their hardware infrastructure
but also the software/application infrastructure.
| While the benefits of RIM are well understood
by most, it is also true that with the introduction of RIM an organization
is exposed to risks such as unavailability of systems, data loss, and misconduct
vis-à-vis organizational data. In the past, there have been incidents related
to service interruption, data loss, and security and upon closer inspection
it was found that in most cases it was either a lack of sound control mechanisms/policy
framework or some disgruntled employee that was the cause behind it.
The security risk and mitigations processes and
techniques are always referred to as a ‘journey’ rather than a onetime
implementation; hence a continuous measurement of security risk is of
prime importance. Most of these risks can be mitigated by establishing
proper governance structures as well as technical and process controls.
Primarily the organization will have to reassess the confidentiality,
integrity and availability (CIA) controls related to data.
For example, an organization willing to employ
RIM should consider establishing security governance policies and relevant
risk management practices that guide RIM decisions. This should include
practices for monitoring and controlling all aspect of RIM (people, processes
and technology) along with corrective actions to be taken against an undesirable
event or case of misconduct. There are framework solutions such as CobiT,
ISO27001 available to develop and implement such governance and controls.
Always look for a RIM service provider that can
provide its credentials and the ability to protect data from a CIA perspective.
It is extremely critical to have the organization’s internal controls
and the RIM service provider's internal controls work hand-in-hand to
mitigate any risks arising related to CIA.
It is also important to audit the RIM service provider’s
internal controls and practices on an on-going basis to ensure compliance
towards the agreed risk mitigation plan.
To sum up, the decision to opt for a RIM framework
is one that needs careful consideration as hasty decisions could cause
issues in the long run. Some challenges that a company could face when
looking into this option are:
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| Organizational Maturity |
The first challenge is that of maturity of operational
processes within the organization. Infrastructure is mostly built over time
and multiple silos of technology, functions, procedures and measures tend
to exist. |
| Policy Formulation |
IT policies are often created keeping in mind the
current scenario with a maximum outlook of five years. While this is realistic,
keeping in mind technological advances, the outsourcing of any aspect of
the business requires the IT policy to be much more dynamic to factor in
technological advances as well as market dynamics, changes in regulatory
environments and trade agreements. |
| Managing Access Controls |
Access controls are an extremely important aspect
of managing an RIM framework. Depending on the organizational structure,
information requirements can be varied and lead to a complex access control
system. |
| Security |
Security is one of the most (if not the most) important
aspect of any outsourcing framework. It has always been a huge concern for
customers leading them to keep mission critical applications internal. An
IT policy must always have a security policy as a subset of the larger IT
framework. |
| - Source: Vikram Watave, Vice President
- Solutions, Infrastructure Management Services, Patni |
Other factors at play
|
 "RIM
services have jumped to the top of the list of strategies for CIOs to
achieve both cost savings and to drive efficiency. We have seen a dramatic
increase in interest in RIM over the last 12-18 months. The sales cycles
have lengthened as companies rigorously evaluate all spend, but the bottom
line is that there were far more takers for RIM last year than before"
- Nick Sharma
CEO, CSS
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|
 "Always
look for a RIM service provider that can provide its credentials and has
the ability to protect data from a confidentiality, integrity and availability
(CIA) perspective. It is critical to have the organization’s internal
controls and the RIM service provider's internal controls work hand-in-hand
to mitigate any risks arising related to CIA."
- Vikram Watave
Vice President - Solutions, Infrastructure Management Services, Patni
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|
 "The
barriers to RIM have gone down considerably and there have been substantial
improvements in third party and proprietary tools for managing infrastructure
remotely. Improved performance and stability of international data telecom
services have ensured continuous access to customer IT
infrastructure and consequently many smaller players have entered the
market"
- Ram C Mohan
Senior VP and Head - Infrastructure Management and Technical Support at
MindTree
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However, while infrastructure management outsourcing occurred
primarily due to the lure of lower costs over the past 12-18 months, experts
suggested that there would be a completely different set of business drivers
fueling the demand for RIM services going forward.
Earlier, the remote model was mostly meant for network management while other
services like end user support, data center support, application support, etc,
were not so much focused on the remote model. Remote delivery for the end user
and data center management are becoming more common now. One of the newer trends
currently being witnessed is application management which is gaining importance.
Here customers are looking at the proactive management of applications including
their response time. There is also an increasing focus on business availability
as opposed to IT availability.
According to Kiran Desai, Vice President Managed IT, Wipro
Infotech, “We also see a good growth in managing handheld devices (PDAs
and smartphones etc.) and other mobile solutions through remote delivery. With
3G coming in fast, we can expect more applications on mobile platforms and hence
a huge opportunity in managing mobile devices. Moreover, we see a great
opportunity in non-IT devices management through remote; which broadly includes
Building Management Systems or BMS (HVAC, fire control systems, UPS, access
control). We also see opportunities in energy saving initiatives–i.e. monitoring
and management of small and medium server rooms.”
Offering further insights into the matter, MindTree’s
Ram C Mohan added, “In the current economic environment, focusing on core
competencies is the key to survival. Managing ever-increasing IT infrastructure
and shrinking budgets have forced corporates to devise a cost-effective and
proactive approach, thus distracting them from focusing on their core business.
In addition to this cloud computing, SaaS, smart data centers, peripheral apps,
software development and testing moving to cloud environments have all helped
create a perceptible need for remote infrastructure services.”
Mohan also said that as enterprises look to consolidate their
infrastructure and bandwidth, they are looking to invest in Infrastructure-as-a-service
(IaaS). With this, enterprises not only save on space costs but they also do
not have to worry about maintaining their infrastructure or other issues like
workforce, business continuity etc. This allows them to focus on their existing
infrastructure.
The promise of 2010
For all of these reasons, service providers are expecting great things from
2010.
Cognizant’s Rao for instance appears bullish and believes
that the company is well positioned to support clients in this space.
“There is significant growth in convergent telecom and
network management, database management, server, dynamic IT infrastructure and
data center services,” opined Rao. “Consulting and system integration
services around IT Service Management as well as virtualization solutions and
cloud computing are the other growth areas. Business KPI-aligned integrated
services form an aggressively emerging opportunity where Cognizant is taking
a leadership position. As multi-vendor deals take a larger share from single-vendor
mega deals, multi-vendor service integration is a rapidly emerging opportunity.”
Netmagic’s Nitin Mishra has forecasted a 30% YoY growth in its IMS and
RIM business. “Over the past couple of months we have seen RFPs coming
in for increasing deal sizes. Customers are requesting solutions and services
that go beyond the management of standalone systems to entire platform level
management. Complete IT transformation using new technologies such as virtualization
to increase efficiencies are also gaining ground fast,” he said.
MindTree’s Ram C Mohan said that though IT infrastructure is becoming cheaper
on the whole, the manpower to manage this infrastructure isn’t and Nasscom
expects revenue from remote infrastructure management services to more than
double over the next five years, reaching $15 billion by 2013
“MindTree is confident about RIM and the growing demand both in India and
across the world. The capabilities and process automation are RIM’s biggest
advantages. More verticals are looking at RIM services, be it banking, finance,
travel, transport or manufacturing,” he commented.
Harboring similar hopes, Nick Sharma, CEO of CSS remained cautiously optimistic
about the opportunities in 2010. He said, “We have seen three quarters
of increased activities and we expect the trend to continue throughout 2010.
We do think that enterprises are becoming more discerning in selecting partners
and that the winners will be those who bring sustainable value and constant
innovation into the mix, beyond simply size and girth.”
In conclusion, Sharma said, “For our traditional RIM services like server
management, database management etc. we expect the financial services sector
will be resuscitated in 2010. For our leading edge services like RIM for cloud
computing, automation etc we are expecting telecommunications, technology and
media verticals to be buoyant in 2010.”
rajendra.c@expressindia.com
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