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