After the success of software and business process outsourcing, infrastructure and network management services (NMS) are said to be the next big wave to hit the Indian market. Already Indian IT skills have had a resonating effect across industries and with network management services it is well on its way to get transformed into the control center for global networks.

The economic revival has given corporate houses some room to expand their IT infrastructure and network. Therefore, the task of a CIO or the in-house network manager becomes more complicated as the management keeps a tight control and asks for the returns on investment made in network expansion.

"On a network the basic pipes and equipment are in place. There are applications running on them too. But as number of users grow and pressure on the network increases, network management would become critical," said Subramanium V, head, integrated management solutions, Datacraft India.

As more and more business- and mission-critical applications ride on the networks defying the geographical boundaries, companies cannot afford to withstand network outages and application failures. "The dependency of business processes on WAN infrastructure is increasing. To provide better availability and reliability of networks to support businesses, organizations would need network monitoring and management systems," said Tapan Bhat, general manager, managed IT services, Wipro Infotech.

According to a study by Infonetics Research, companies are losing almost 3.6 percent of their annual revenue due to network downtime. Gartner says the RoI on applications running on networks gets reduced by almost 25 percent due to lack of effective network and system-management procedures.

Market
A Deutsche Bank report pegs the global NMS market at $80 billion. The Indian share in this pie has been estimated to be $300 million with a projection to grow in excess of $1 billion by 2007–08. Industry sources put the NMS potential to over $126 billion with India not even capturing one percent market share. The management services have been growing at 25–30 percent annually. IDC believes the Asia-Pacific market (excluding Japan) could touch $333.9 million by 2007 at 13.8 percent compound annual growth rate (CAGR).

The NMS market is in its nascent stages and often network management is being bundled with integration services or is part of the overall contract. "Network management is part of a facility management contracts. As large networks are established to connect large number of facilities, pure management companies would come up, and this market would grow in the coming days," said Lt Col HS Bedi, managing director, Tulip. Indian companies have not yet got on to the NMS bus and those who have started (like HCL, Wipro, Infosys, TCS, and Datacraft) are trying to have a foothold by leveraging on their IT success. However, companies like IBM, EDS, and CSC have moved in and are cashing on the Indian skill and expertise.

Trend
The market has moved from mere network and infrastructure device management to end-to-end network management. "Management services have moved from being crisis management to becoming a specialized field. Earlier when device or facility management was the main job, the complexity level was less. Now it demands expertise and focused approach," said Sanjeev Nikore, founder partner and chief operating officer, HCL Comnet.

The management service provider is not only expected to react and resolve the problems, rather he should be able to predict the problem well in advance. The buzzword is to identify the problem even before it happens and reduce the number of trouble tickets. As the market grows and organizations integrate their management requirements in their policy, standalone integrators and piecemeal management solution providers have less chances of survival.

"The standards and certifications are already in place and awareness level towards such services is increasing. The need is to incorporate better tools for alerts and have better processes to handle situations," Nikore added.

There is also an increasing realization that with limited in-house manpower, on-demand scaling the processes is difficult. There would be times when utilization of network capacity would be less and would require less people to monitor it. Organizations cannot cut or increase manpower with fluctuating demand. "Professionals by nature are restive. If you do not give them challenges and upgrade their skills with time, they tend to get bored and look for other avenues. The management is free from these problems, if the NMS is outsourced," said Subramanium.

The NMS service provider is not tied with one corporate and utilizes its manpower and expertise to serve multiple business houses. They are in a better position to interact with equipment vendors and technology partners to get latest trends and also insights into future technologies. This helps in constantly upgrading their skills and also keeping the customers educated. As a service provider maintains a pool of talent catering to different customers, he can shift workforce from low-demand to high-demand areas. This takes care of capacity scaling too. After the business process, network management outsourcing is the big thing companies are looking at. And as in any outsourcing decision, here also bosses are skeptical about the credibility and ability to handle the network and whether to do remote or within campus outsourcing.

Advantage India
India has already established itself as a leader in software and IT services. It is looked at as a preferred outsourcing destination in back-office processes, technical support, e-learning, etc. The country has the required skilled and cost-effective manpower. The success stories of outsourcing from India have established the trust in India's companies and its workforce. Add to all this economic stability and policy support. A mix of all this is working the dynamics in favor of India. The ITeS and IT sector have provided the ecosystem for the management services to grow.

Good and reliable international connectivity is slowly converting India into a nerve center of infrastructure and network management. The magic has worked equally for foreign companies as well as domestic ones. MNCs like IBM, EDS, CSC have established their base in India to serve their customers leveraging on the local advantage.

While Indian banks have been the front-runners in outsourcing network integration and management, other sectors like manufacturing, services, and telecom operators are slowly catching up. In fact, the network and infrastructure deal between Bharti, IBM, and Ericsson is a landmark where even the connectivity service providers are looking to outsource their non-core activities.

Multiple- vs Single-Vendor Management
It is always good to have a single vendor managing all the infrastructure and network requirements. But not all companies would be comfortable in handing over the complete infrastructure to one management vendor. On the reverse side, not all vendors would have the expertise in doing all kinds of management work. Thus, many companies prefer discreet outsourcing instead of completely handing over the network to one vendor.

In discreet outsourcing, certain portions or components of the network are outsourced depending on the criticality of the applications running on that part. "Of the total IT infrastructure outsourcing, end-to-end total outsourcing is growing at 12 percent whereas discreet outsourcing is growing at 25 percent," Nikore added. Discreet outsourcing means the vendor is focused and specialized in managing a particular component of the infrastructure and hence does a good job. However, this might lead to multiple vendors handling a single company. Not many may agree with this approach. "End-to-end management should be done by a single provider as this ensures single window handling of everything," said Subramanium. The whole of management work can be broken into pieces and once an NMS company fulfills the service-level agreement of one level only then does it moves to the next level of managing the network, Subramanium added.

"A vendor knows his limitations and if he puts up the network he is in a better position to take its responsibility. Cross-vendor services are still in their infancy and would take some time to evolve. Till then single-vendor management is best for the companies," said Sudhir Prasad, assistant vice president, mobile networks, Siemens Public Communications Network.

NMS vs Telecom Operators
Some of the telecom operators have also been offering management services. But in most of the cases, they are limited to managing the link or the connectivity to customer premises. In the past, telecom operators were not even bothered about managing, as they were limited to providing connectivity, and the customer's team managed the rest.

On the other hand, telecom operators still have limited access to clients' infrastructure, and their core business is providing communication links rather than managing networks. They have to ensure that connectivity is up. But operators like Bharti are doing network audits to understand the need of the customer and then decide on the type of support they need. "When services are sold, they comes with the end-to-end manageability too. Depending on the deal size, it can form almost 15–20 percent of the contract," said Rajiv Sharma, CEO, Bharti Infotel.

However, the operator does not do every thing by itself and on the quantum of business the work is divided. "The customer premise equipment might be managed by IBM, Wipro, or Datacraft and the access link can be managed by Bharti," Sharma added. In fact, the services offered by NMS companies and telecom operators are complimentary and they do not pose any type of competition to each other. Customers need to appreciate the differences that exist between provisioning bandwidth and connectivity, and running of network operations. They are two very different activities and it takes specialist service providers to run network operations. "Telecom operators are more focused on selling bandwidth and providing connectivity to the customers. We work with telecom operators on many turnkey projects and we have our roles clearly defined and there is no conflict," said Bhat. Just as leased line management services are an integral part of network management services, the role played by service providers is moving towards vendor management with telecom operators. There exists a bilateral arrangement among service providers to reduce any overlap and they work according to their core competence.

Anurag Prasad

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