NETWORKED INFRASTRUCTURE SERVICES: Opportunities Wide Open

The rapid growth of the Internet and the

"digitalization" of the data, has resulted in the growing need for

mission-critical networking solutions in the market. Today, centralized

operations, a 24/7 uptime and mission-critical applications running on networks

have to be supported by strong infrastructural backbones in large and small

organizations. This has resulted in the growing demand for networked

infrastructure services (NIS) offering a vast spectrum of opportunities for

network integrators and channel partners.

Players like Wipro Infotech, Network Solutions, PAM Networks,

Computer Factory and ITM Technologies are focused on the NIS market to achieve

greater revenues and better market share. The notable aspect here is that many

channel partners with expertise in network implementation and financial

strengths are getting into the business of offering these services. But before

talking about the opportunities available in this segment, it is important to

understand the different functional elements existing within this space. The NIS

market comprises consultation and planning architecture for implementing

networks. NIS also covers networks, servers, data and desktop outsourcing.

According to Suneeth Kumar, GM, Computer Factory, services that

can be outsourced to service providers include network management, facilities

management and monitoring services, which are currently offered by several

leading network integration companies in the country.

Wipro Infotech and PAM Networks for instance, provide a whole

range of managed offerings under the networking arena, which include onsite and

offsite services. Also several companies in the country offer remote services,

which are clubbed as value-added, high-end services and are bundled along with

infrastructure or conventional services like network integration.

Market synopsis



According to an IDC survey, the NIS market is expected to grow by 25.8

percent in the current financial year. Considering the general slowdown, this

growth can be termed as healthy. IDC’s survey indicates that spending on

networked infrastructure services was Rs 753 crore during 2000-01 and is likely

to increase to Rs 947 crore in the current fiscal.

This indicates that NIS’ share has increased from 15.3 percent

to 16.4 percent of the total IT services spending. This can also be noted in the

growth recorded by several network integrators.

Wipro Infotech, for instance, recorded a 77 percent year-to-year

growth during last quarter. Computer Factory, on the other hand, increased its

network service revenues by 25 percent last year and PAM Networks recorded a

growth of about 24 percent during the same period.

Factors favoring growth



The prime reason behind this growth is the fact that more and more

organizations are deploying inter-organization and intra-organization networks.

Today’s networks which work on newer technologies can take heterogeneous

hardware and different technical environments.

This increasing complexity of networks demand services of

professional network integrators and consultants. Many organizations are now

outsourcing their networks/desktop maintenance, opening a gamut of opportunities

for service providers.

Banking and finance is one of the biggest adopters of such

services. Both private as well as public sector organizations, are setting up

more and more ATMs, thus providing customers with any-time-any-branch banking

services. This means that they not only have to hire a professional network

consultant and integrator, while maintaining the infrastructure, but also have

to depend on a service provider.

Export oriented and manufacturing units are also identified as

niche verticals for service providers in this space. PM Prabhu, MD, PAM Networks

explains, "The demand from manufacturing units is driven by factors like

multiple location presence and computerized distribution network."

Current trends



One of the trends identified in this space is the clear shift from simple

annual maintenance contracts, wherein the responsibility of service provider is

limited to repairing the specific device, towards more complex facilities

management (FM). Under FM the service provider is responsible for managing the

complete IT network in an organization including IT helpdesk, vendor management,

asset management, preventive and predictive maintenance and network optimizing

and tuning, among others.

IT service providers have not only started to customize the

service to suit very specific needs of their customers, but also are focusing on

extending their geographical reach across the length and breadth of the country,

even in remote locations.

Another interesting development pointed out in IDC report is the

fact that the service level agreements are changing from merely defining the

acceptable service standards to incorporating risk/reward sharing clauses.

Opportunities for channels



In order to remain competitive, network integrators and channel partners in

this space have to gear up to take care of the following two key factors:

• Competency to provide a plethora of services across vast
  
  geographic spread.

• Shift in business model from providing services with
  
  pre-decided SLAs to partnering with client organizations and share the
  
  business risk/rewards.

Says Anand Sankaran, Head - Sales and Marketing, Professional

Services, Wipro Infotech, "The NIS market could be a big one, provided

players in this space are focused on addressing key concerns related to cost

savings, reliability, service uptime, trust and security."

Besides the expertise of network integrators and channel

partners in delivering these services, success would also depend largely on

their ability to notch up alliances with Internet infrastructure service

providers, including data centers and bandwidth providers. In other words, their

ability to leverage the existing infrastructure rather than creating them will

pay off in the longer run.

Business with SMEs



SMEs could be a good business opportunity for channel partners who are

planning to venture out into the NIS space, as the degree of customization of

services is low when compared to the requirement of big organizations. Less

customiza-tion would mean replication, resulting in low cost of operation for

partners.

However, the market is huge for network integrators/channel

partners who plan to provide facilities management services for data centers and

call centers. "These market segments hold significance as a value-added

service to provide differentiation to them from their competitors in the

market," observes Anand. Also the increase in the online business would

drive the demand for these services from data centers and other IT-enabled

services markets.

"People who specialize in security services and load

testing for e-businesses have a good opportunity in the near future. The shift

would be towards service providers who have the capabilities to provide a range

of services under one umbrella," says Sanjay Prasad, CEO, ITM Computers.

Though the future of partners in the NIS space depends on

delivering solutions as per customers’ requirements. But what is beyond doubt

is that with an increasing dependency of enterprises and SMEs to stay connected

to the rest of the world, the demand for NIS services will only grow further.

–Sunila Paul in Bangalore