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The year 2002–03 saw networks getting increasingly complex. Also, a shortage of qualified IT staff prompted Indian businesses to actively outsource their network management needs to network management service (NMS) providers. Coming at a time when the industry was reeling under the effects of the slowdown, the demand for network management services provided a much-needed market opportunity for a number of Indian network integrators who branched out into this lucrative business space. The total network management services market last year was pegged at Rs 171 crore, with leading integrators like HCL Comnet and Datacraft dominating the market.

Visible Trends
The NMS market in 2002–03 was therefore dominated by the likes of HCL Comnet, Datacraft, Wipro Infotech, Satyam Infoway, GTL, Microland, Comsat Max, CMS, and Bangalore Labs. In addition, NCR and Euro Networks built their reputation by managing hosts of ATM networks of different banks. For most Indian businesses, of the overall networking costs, almost 40 percent is going into administering and maintaining the network.

While cost was definitely a strong motivation for Indian businesses to outsource their network management needs, there were other compelling reasons too. Organizations without qualified staff and resources necessary to manage their networks increasingly found outsourcing an attractive option. Also, outsourcing provided a significant competitive advantage for most companies who looked at rapidly expanding their networks across the country.

There was an exponential demand for managing enterprise network services such as LAN, WAN, VPNs, VoIP, intranets and extranets for deploying various applications. Some of the NMS vendors like HCL Comnet and GTL even offered value-added services like disaster management as part of their service bouquets. Even traditional VSAT players like Comsat Max and Gujarat Narmada Fertilizer Corporation (GNFC) joined the NMS bandwagon. With years of experience in the VSAT space, Comsat Max was in a position to provide customers a complete end managed digital network for data, voice and video transmission.

Indian corporates, faced with the cutthroat competition and the growing dependence of businesses on networks, started getting their branch offices networked. A key sector was banking, where large PSU banks pushed on the back foot by nimble private players, started setting up large networks. While SBI increased its branches by 900, Punjab National Bank and Syndicate Bank ramped up their networked branches by 400 and 85 respectively. More significantly, their purchase orders mentioned that the networks would have to be managed end-to-end by the service providers. Automatically, this created the rationale for most integrators to seriously look at NMS as a profitable business line since they had to develop the expertise to deliver their existing contracts.

Another key factor driving the NMS space last year was the lack of will on the part of corporates to keep on upgrading their technology infrastructure. On the other hand, most of the serious NMS vendors kept on investing substantially in technology and in constantly upgrading their skill sets to address emerging issues in network management. This made most of them an ideal choice when it came to outsourcing network management needs.

The NMS space is expected to accelerate faster than other markets in Asia-Pacific. Pure-play players like Microland and Bangalore Labs are looking aggressively at tapping new emerging verticals. The potential in the Indian market was considered very high in the BFSI, call center, and service provider segments, as also in the courier services and FMCG companies. The opportunity in the banking and financial services vertical turned out to be extremely good, as competition forced banks to ramp up their networks. The same was true for call centers, where international as well as local WAN connectivity was mission-critical, especially for those who were multi-functional.

Vendor Infrastructure and Clients
It is difficult to make a clear estimate of market shares of various NMS players since many of them are still clubbing the revenues with their integration business. However, among companies who are already providing NMS revenues under a separate head, Datacraft emerged on top with nearly Rs 56 crore worth of business followed by HCL Comnet, which did business worth Rs 32 crore. Others like Wipro Infotech, Bangalore Labs, Ramco, Comsat Max, and Sify were in the Rs 12–14 crore bracket.

In terms of infrastructure, all major players invested substantially in establishing their NOCs. HCL Comnet provides support to its customers through its NOC that provides end-to-end WAN management services. One of HCL Comnet’s largest projects worth Rs 3.14 crore in 2002–03 was for Punjab National Bank. It also had Fabmart, TVS–Suzuki and Indiatimes among its customers.

Datacraft also set up its NOC in Bangalore through which it offered its STARtrac management services. A large chunk of its Rs 88 crore integration project for SBI was contributed by the NMS sector. Datacraft even launched its own iBOSS integrated network management system (iNMS) tool. Sify came up with ‘Beacon’, a product for network management. The Hindu newspaper group became the first buyer of Beacon, while other clients included British Council India Library, New India Assurance, ABN Amro Bank, Amul, and ISRO.

Wipro Infotech’s NMS service also offers special emphasis on security, as its NOC in Bangalore has the capacity to continuously manage and monitor 1,000 firewalls. Some of Wipro’s clients include Apnaloan.com, Essar Group, INDAL, Kotak Securities, ICICI, LG Soft, i-flex, HDFC, KPMG, Canara Bank, Hadia Petrochemicals and Seagram Manufacturing. Microland used Wipro’s NOC to service clients like Blue Dart, IDBI Bank, and Procter & Gamble.

GTL’s NoC in its Mahape facility is used for remotely managing the networks of about 10 of its blue chip clients. These include since centre operations and network security on a 24x7 basis that involves trouble ticketing for leased lines.

Bangalore Labs too invested substantially in setting up its International Management and Resource Center (IMaRC), a vendor-plural NOC facility. Some of its primary customers are Pidilite, Shoppers Stop, Hathway, and IIM Lucknow.

Comsat Max, through its 24x7 NOC in Delhi, services clients like Hero Honda, Thomas Cook and Exide, while Ramco has clients like Bombay Stock Exchange, Indian Oil, Amara Raja Batteries, Ericsson, Coca-Cola, AirFreight, Hughes Escort, ONGC and Tata Institute of Fundamental Research. Even banking service providers like NCR and EuroNetworks have joined the NMS fray. While NCR manages the entire ATM network for SBI and HDFC among others, EuroNetworks manages the shared ATM network for IDBI Bank, Standard Chartered, Citibank and UTI Bank.

Rajneesh De