As Indian companies expand to multiple locations and come out to upgrade
their network and IT infra structure, the network integration business surely
has sunny days ahead.
After the dotcom bust and slowdown in the telecom sector, the market again
seems to be picking up and companies across all segments are busy evaluating
revamping of their network.
The companies are ready to invest in fresh round of network integration and
there is enough cash in the market for renewed research and development in this
field.
"In last couple of years, companies have started investing in network
upgradation. This trend would continue for another two–three years. Add to
this RBI guideline on banks' IT infrastructure and network, and the boom in
IT-enabled and BPO services. All this is fuelling the growth of network
integration market," said Arup Chakraborty, general manger, network
services, HCL Comnet.
However, the growth is not limited to just revamping and upgradation.
Companies are going beyond the local area networks and asking to connect their
offices over a wide area network. This has increased the market scope and even
telecom companies and equipment vendors-apart from IT and technology companies-have
pitched in with end-to-end integration and management solutions.
Countering the Competition
Though the pure-play integrators admit to increased competition, they are
confident of retaining their market share. The reason for this confidence
emanates from the fact that the network integrators (NIs) have developed domain
expertise in their field. Whereas the new integrators in the market,
particularly the OEMs and telcos, would have to start from scratch. Also, till
now the NIs have shared a good relation with the OEMs and have been the biggest
consumers of their products. The vendors would definitely not want to disturb
this balance.
Further the new players are typically offering managed services in a WAN
environment, where as traditional network integrators have been operating in the
LAN space and are now looking at WAN.
With CIOs/CTOs looking at consultation, evaluation, rollout (integration),
and management from the same company, the companies who can offer best in breed
services are set to succeed.
Many vendors do not get involve in the integration services themselves and
sub-contract it to a pure-play NIs with their own equipments.
"This limits the choice of the client who is now increasingly looking at
utility-based buying and pricing," Chakraborty added.
Buy SLA, not Equipment
The biggest shift that has come in the network integration market is that
the CIOs/CTOs are now looking at maximum return on their investment and are
buying service level agreements (SLA) rather than the equipment. For segments
like banking and ITeS, where operations are mission critical, 99 percent uptime
is taken for granted.
Buying of SLAs has brought in the outsourcing phenomenon where the network
integrator gives consultation and evaluates, integrates, and manages the network
for the client. He takes the technology risk and assures business availability
of the network.
More
and more buyers are looking at the network uptime and application delivery
rather than racking their brains on the type and brand of equipment being
supplied.
"Demands have moved from product commissioning to network and
infrastructure commissioning on a large scale and single point of
accountability. The client wants one vendor to do consulting, integration and
support," said Sanjesh Gupta, business head, SI services, Wipro.
The customer is no longer looking at multiple vendors and companies to deal
with, he wants a single contract taking care of all his needs. "In the 90s
the customer was looking for vendors who specialized in individual active or
passive components. As IT infrastructure grew rapidly, the complexities have
also increased exponentially. This has generated the need to have a single owner
for deploying and maintaining the new complex networking solutions," said
Sandeep Ganguly, senior manager, Hughes Escorts Communications.
While the integrator assuring reliability, it wins the space to choose
best-in-market equipment and is not tied to a particular vendor. This technology
agnostic stand by the customers is also paving the way for pay-per-use and
pay-by-success kind of business models.
"It is important to have a single NI or SI since multiple vendor
integration is complex and the clients should focus on business problems rather
than integration issues," Gupta said.
The integrator should consider the requirement of the customer and decide
accordingly, instead of safeguarding the OEMs interests.
"The CIO/CTO is under tremendous pressure to justify the investment and
therefore expects his NI to have a thorough understanding of long-term business
requirements of the organization," said SK Jha, regional director India,
SAARC, and, Middle East, 3D Networks.
This concept of a total solution provider has also led to a segregation of
market according to the sectors being served. Not every network integrator can
serve all the market segments. It has to develop the understanding and domain
knowledge of a particular industry. And today, the customer wants his NI to
understand his business needs for better service.
"NIs today are partnering with multiple OEMs to meet the customer's
expectations. Though the delivery models are still evolving to meet the
expectations," Ganguly said.
As companies go out to network their front offices and dealer networks, the
demand for single-window dealing is on the rise. Accompanying this comes the
24x7 helpdesk, which is usually remotely managed.
In fact, the management part of the network is also getting remotely done.
And, as long as the SLA gets fulfilled and total cost of ownership is low,
customers are also happy.
"The high levels of skill sets, expertise, and certifications ensure
that the customer investment is optimized and maximized for return on
efficiency, investment, and scalability," Jha said.
Anurag Prasad
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