Infrastructure Management Services The Third Wave...

No
wonder then that it is viewed as a very lucrative division of IT to set foot in
and is no longer a playground for leading systems integrators of the country.
The next rung of service providers are looking at increasing their pie in the
IMS segment as far as enhancing revenues is concerned.

There are several reasons why Infrastructure Management Services (IMS) is a
huge opportunity for the channel community to explore. But the most pertinent
fact is that it offers unparalleled business prospects for solution providers,
both nationally and globally.

In fact, according to market reports, IMS is touted as the third Indian
services wave creating a sensation in the global markets. First was the software
services boom, followed by call center and BPO services growth in the country
and now, IMS is being the big bet in the market.

IMS is a broad term that includes comprehensive services. It refers to the
day-to-day management of IT infrastructure needs of any organization. It covers
the entire spectrum of IT infrastructure including network, server, desktop,
databases, application as well as administration and security.

IMS offerings differ from one service provider to another, based on their
expertise and skill sets and also client needs. The key services in this space
are consolidated services desk, end-user services and data center services,
among others. The onsite, remote and combined service delivery model allows
customers to choose the mode that best suits their business requirements.

Overall, IMS covers and includes service desk management, call management,
escalation management, change management, email and tele support,
hardware/system maintenance, troubleshooting, health checks and performance fine
tuning. Other features that are a part of IMS are system administration,
software installation, configuration and maintenance, security remediation,
backups/restores, network monitoring and management, basic reporting, advanced
services and intrusion detection services. Database management, performance
analysis, bench marking and testing, data back-up management, managed
information security services, policy management, asset management, capacity
planning and vendor management services fall into the purview of IMS too. That
is a seemingly vast gamut of services to offer!

Lots of space to play in

Globally, the IMS market is projected to be at $100 billion while India's
current size is estimated at $500 million. According to Gartner, by 2006
infrastructure services delivered in a global delivery model from India to US
companies will surpass $1 billion. IMS is considered to be the growth engine for
the IT services companies in India for the next few years.

According to Dataquest, the Indian IT services industry clocked a revenue of
Rs 16,072 crore for 2004-05, exhibiting a growth of 39%, of which facilities
management grew to Rs 1,138 crore, packaged software implementation grew to Rs
1,530 crore and managed services touched Rs 485 crore.

Meanwhile, a Gartner report on 'Discrete IT Services Outsourcing', says
it is another model of outsourcing, which firms are looking as an option to make
use of. The report shows a $16 billion opportunity of IT management and
operations in the US market alone.

In India, currently, the IMS revolution is still at the nascent stage and
today, it accounts only, on an average, 15%-20% of the SI's total turnover.
However, solutions providers are working hard to increase this share (IMS
revenue in total turnover). The reason is simple. They all foresee it bolstering
their margins and profitability.

"We are into organized services (IMS) since 1996. Our services cover
proactive monitoring, availability and performance, which helps customers to
have the right `End User Experience'," said Atul Hemani, Director of
Mumbai-based Omnitech InfoSolutions. Presently, IMS accounts for only 14% of the
company's total turnover, which it plans to double within the next couple of
years, while the absolute value will go up by 250%.

Ashtech Infotech, another Mumbai-based company, is currently offering IMS,
but only for data and not voice services. "Our skillset is primarily on
compute (Windows/ Linux and Solaris), storage management, backup/ recovery,
network management, database administration (MS SQL / Oracle) and performance
audit," said Vinod Menon, Director (Technology Solutions), Ashtech Infotech.

Other big daddies in this space include Accel ICIM Frontline, Wipro Infotech
and Network Solutions (Netsol). Recently, Chennai-based Precision TechServe also
charted out plans to double its IMS revenue from the current 20% to 40% in the
next couple of years. Though this sounds like a very ambitious plan, the company
is confident of achieving it as it claims to offer end-to-end services.

Bangalore-based Netsol offers managed services through a hybrid model
(primarily remote and partly onsite) and a totally remote model depending on the
customers' business needs and based on their IT infrastructure. "We are
one of the early movers in this space and have more than 75 customers, offering
service for the last eight years. We offer end-to-end services covering the
entire life cycle of the IT infrastructure from monitoring, management and
optimization," said Navin Kotian, Business Manager (IT Services), Netsol.
Last year, IMS contributed 30% to Netsol's total turnover, which it plans to
increase up to 50%, in the next three years.

Similarly, Accel Icim is also working on a larger plan to improve its
services revenue and the IMS roadmap for the next three years. In the first
year, it hopes to make Rs 50 crore, while it will touch Rs 60 crore in the
second year. It projects a revenue of Rs 75 crore in the third year, which will
take the IMS contribution to 30% in the overall turnover.

Opportunities and challenges

Though the opportunities in this field are immense, there are an equal
amount of challenges. To start with, IMS needs a significant initial investment
and skilled resources from the solution provider's end. As a result, many
solution providers are trying to build world-class facilities
(technology/management centers) at their place.

Also, in-house training, a continuous learning process, is very important to
build and sharpen the skills among the available talent pool. More than
training, retention of employees is the considered as the biggest challenge.
Process adherence is also considered as another key challenge.

"Opportunities in IMS are humungous but the challenge is in managing the
human resource. Getting the right skills, training and retaining them are real
tasks. The ever increasing complexity of the IT infrastructure and the shortage
of qualified and experienced skills pose a great challenge for the service
providers," said P Ramesh, Director, Precision Techserve.

As IT and business strategies have become more intertwined over the past
decade, different phases in outsourcing have prevailed, moving from a
cost-focused approach to one of business value. Discerning organizations are now
recognizing the need to leverage IT outsourcing partnerships as key catalysts to
drive business strategies. More and more organizations across the world are
realizing the need to outsource their IT infrastructure to a trusted vendor, not
just for the cost benefit but more so from a better quality and service delivery
perspective. "Wipro has successfully countered the challenges of managing
the IT Infrastructure of organizations by continuously innovating on the service
delivery model," said Deepak Jain, General Manager and Business Head
(Managed IT Services), Wipro Infotech.

There is a huge market for IMS services both nationally and internationally.
SIs of the likes of Netsol have built their global management center to offer
remote management services. "The remote IMS business, according to
analysts, is a bigger opportunity than the software services business. We, at
Netsol, are able to differentiate our services in the market, through
specialization in both IMS and remote management service, using the IP that we
have built," said Navin. However, the company is finding a bigger challenge
in scaling up the operations.

Remote infrastructure management

Remote infrastructure management (RIM) is still a small part of India's IT
business with a select few players in the fray. But the potential is huge. As
per IDC estimates, more than 85% of infrastructure components can be managed
from remote locations. RIM is said to reduce the cost of operations and
infrastructure management by 40%-60%. It is thus considered as a next major
services outsourcing that would happen in India and advancement of
telecommunication and Internet facilities have really opened the gateways.

One of the leaders in service providing, CMC believes that RIM is a
cost-effective way for managing data and that it plans to enhance its RIM
services through its tie-up with TCS. "A new dimension we are getting in is
offering offshore outsourcing for backend operations to global clients. This
will help in better disaster recovery," explained Prabhat Mitra, Executive
VP and Global SBU Head-Infrastructure and IT-Enabled Services, CMC.

"Leveraging on our current IMS expertise, we are in the process of
setting up a Remote Infrastructure Management Services center in Chennai, with
an investment of around Rs 6.5 crore. This center would be operational by this
year-end and would serve clients in India and abroad. We would provide service
desk support, network operations support, security operations support, server
administration and application support out of this center," said Ramesh.

Wipro is offering remote management services through its Network Operations
Center (NOC). Similarly, Netsol also has a Global Management Center (GMC) in
Bangalore.

3Ps—People, process and product

IMS is mainly dependent on People, Process and Product. The 3Ps constitute
an integral part of service and its success. Every service provider has to keep
in mind that the 3Ps are the key drivers in a successful IMS delivery. They
should have an effective combination of people, processes and tools to ensure
that the customers' infrastructure is always up and running.

CMC is proud of the fact that it is a vendor-neutral company. "Because
of the diverse range of products that we use, our personnel are technically
sound and have multi-faceted skills. Thus, they are as proficient in open-source
as they are with any other operating system," commented Prabhat.

"Wipro's winning strength has been its people and this success is a
result of its ability to attract, develop and retain the best technical and
managerial talent. Wipro is assessed at PCMM Level 5 and our stringent quality
processes like ITIL, Six Sigma, ISO, BS7799 and BS15000 help us improve
productivity and process efficiency in business," remarked Deepak. The
company believes in leveraging on technology heavily in terms of automation. It
has partnered with all leading third-party enterprise management software
vendors of the world.

Like Wipro, other SIs are also trying to focus on building and strengthening
their 3Ps. "Accel clubs the strength of its well-defined processes, people
and technology to deliver the best services to its customers. On the product
front, we have our own solution-Sure Serve, for IT helpdesk and facility
management services. We also provide solutions based on HP OpenView, CA
Unicenter and Tivoli, as per the customer requirements," said NR Panicker,
CEO of Accel ICIM Frontline.

Many SIs have built their own products for specific needs of the customers.
They integrate their software, with other products and services, to give a
complete end-to-end solution to the customers. Omnitech recently launched an
appliance-OmniMonitor, powered by SiteScope, for monitoring services. "OmniMonitor
is a brick-size device, which sits into the client's network locally or
remotely and monitors over 1,200 parameters without installing any agent on any
of the systems. It monitors across the layers and gives alerts through mail, SMS
and voice et al. The product also comes with a dashboard (optional) to have a
360-degree graphical view with drill down to component /item level," said
Atul.

The vendor products are available in whole range and some of the leading
brands include HP OpenView, IBM Tivoli, TrackIT, LANDESK, Microsoft SMS, Fluke
Inspector, Real Secure IDS Suite, Sonicwall, Computer Associates Arc Serve and
Veritas, to name a few.

"HP strongly believes in the philosophy of IT Service Management (ITSM).
In fact, ITSM forms a very integral and basic part of HP's Adaptive Enterprise
Vision. We have been developing our practices around this area for more than a
decade now, and all this while we have chaired and lead many standards bodies in
this specific area of ITSM. We provide services in the 'People, Process,
Product'-the three pillars of ITSM," said Bithin Talukdar, Market
Development and Alliances Manager, Software Global Business Unit,
Hewlett-Packard India Sales.

ITSM as a process

IT Service Management (ITSM) is a framework that defines how service
management is applied within an organization. Being a framework, it is
completely customizable for application within any type of business/organization
that relies on IT infrastructure.

Service Delivery is the management of IT services and involves a number of
management practices, such as capacity management, continuity management,
availability management and IT financial management et al, where the service
level agreement (SLA) between the service provider and customer is the key
component. "ITSM and service delivery are two very critical parts of IMS
and they need to be complied as per ITIL guidelines. It is also important to
have at least one BS15000 personnel in the organization," emphasized Atul.

GOPI KRISHNA in Chennai with inputs from Amishi Shah in Mumbai,
Subbalakshmi BM in Bangalore and Zia Askari in New Delhi.