Harsimran Singh, New Delhi, December 28, 2008
The Economic Times
Blue, green, yellow and orange. Thousands of multicoloured wires pour down from behind tall black racks, stacked in rows, bathed in white light in a giant hall. Hundreds of tiny green bulbs blink simultaneously in servers stacked in the racks on top of a white hollow floor which circulates chilled air from beneath, creating an image, straight out of a Hollywood Sci-Fi. Trillions of megabytes of binary data circulates in the servers in India’s largest data centre at HP R&D Tech Labs, about 16 kilometres from the heart of Bangalore. Welcome to the world of Remote Infrastructure Management (RIM)!
Despite the economic slowdown, infrastructure management services (IMS) is becoming a lucrative vertical for Indian IT. According to Nasscom, the remote IMS business out of India currently stands at $200-300 million but has a market potential of $55 billion globally. Several such critical data centres in the US, the UK, France or China are being monitored and maintained by Indian engineers out of Noida, Bangalore, Gurgaon and Chennai.
Says HP Tech Labs director Mohan Murthy: “We have the capability of monitoring, shutting down and fixing bugs in the servers by remote login from our home or any part of the world. Only in cases of a loose wire fault or physical damage do we need a human being. The need for lesser number of people saves a lot of cost and thus makes it an attractive offering for clients.”
Remote Infrastructure Management (RIM) is a part of the IMS, which Nasscom estimates to have a market potential of $150 billion. On the other hand, Forrester estimates IMS to have a market size of $111 billion and Gartner $80 billion. Datacentre outsourcing, network management, IT security outsourcing, telecom and application monitoring and management fall under the purview of IMS.
In India, IT companies have hopped on to the IMS bandwagon as it gives an edge to companies in Europe or US planning to save up to 60% costs in their IT management. Says Satyam Infrastructure Management Services global head Nick Sharma: “We provide end-to-end infrastructure services that encompasses plan, build, operate and manage life cycle. The key focus areas are end-user computing, data center, helpdesk and IT services management, identity and access management, managed security.”
According to a recent study by Nasscom, the total addressable RIM market is estimated to be $96-104 billion globally. Of this about 70-75 % of infrastructure management roles can be offshored and India stands at an opportunity to realise $26-28 billion of this by 2013 with a CAGR (combined aggregate growth rate) of over 30%.
In the last 15 years, the Indian IT industry has latched on to opportunities thrown up by the global IT spenders. Initially, it was project-oriented onsite work (also involved bodyshopping), followed by Y2K, then the BPO buzz, then offshoring, and now it is IMS.
McKinsey & Company partner Vivek Pandit said: “India is once again well positioned to capture a disproportionate share of this growth by 2013 i.e., $13-15 billion and in the process create 325,000 to 375,000 jobs.”
All Indian IT majors have strong plans to enter the Tech IMS space. For instance, Wipro acquired Infocrossing for $600 million and expects it to give a strong boost to its plans to capture leadership in the IMS space. Infosys, Mindtree, HP, Patni, etc have set up IMS divisions. Infosys has plans to create similar revenues from Tech IMS within the next five years as from other businesses.
The HCL Comnet facility situated in Noida handles RIM for many global investment banks, pharma companies, technology-consulting firms. HCL has some customers like AMD, Autodesk, Dixons (UK), Skandia(UK) and Bears and Stearns. The facility adheres to strict norms and doesn’t even allow visitors on the campus. The remote management sections of each client are also secured from another.
“Today, the industry is becoming more mature to offer full services. They offer a spectrum of infrastructure services right from the data centres through the end user computing spectrum including the network security, database operation and support,” says HCL Comnet AVP Maninder Singh.
“For application operation and support, we are seeing consolidation and virtualisation really coming on to the mainstay. The traditional outsourcing model, which was very asset-heavy, is losing steam. People are seeing the asset-light model being beneficial,” he adds.
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