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Trends like IP transformation, security concerns, ever increasing complexity, and loaded networks have been fueling the growth of network management services (NMS) in India. IP transformation has been an important driver of NMS. For companies spread across locations, upgrading traditional networks is a pre-requisite for greater control over operations, which provides employees with greater autonomy and flexibility, improved productivity, reduced costs, and enhanced customer service. Deployment and managed network outsourcing is expected to be a fast growing area.

Managed telephony, VoIP and managed security are also generating a lot of interest among enterprises. Applications such as hosted and shared mail as well as other hosting and sharing applications are also becoming a part of network management. This is likely to increase the scope of work for existing service providers and the industry expects to see an overlap in services provided by different IT and telecom vendors in the future. Expansion in the role of managed service providers as end-to-end service providers is also fast picking up. Companies are now looking for solution providers whom they can completely outsource their network management. They also want the solution providers to remotely manage and monitor client desktops, servers, network devices, applications, network infrastructure, datacenters and virtually the entire ICT infrastructure of the company.

Outsourcing network services to India is catching up as a practice and global companies are now becoming confident about Indian IT solution providers to manage their networks. Several North American and European firms are realizing the potential of network outsourcing services in offshore locations like India. Many Indian IT companies have extended their gamut of services to include running network operation centers for global customers. These help to not only improve productivity and cut costs on infrastructure, but establish cost efficiency and quality.

According to VOICE&DATA estimates, the NMS market in 2007-08 showed a healthy acceleration of 25%, but the growth rate in FY 2008-09 saw a dip in the segment with a growth of 12%. Wipro Infotech, which had been fighting for the top slot in this segment, nudged HCL Comnet to the second spot. Estimates show that Wipro grew by 28%, with a revenue of Rs 334 crore during FY 2008-09, while HCL Comnet saw a revenue growth from Rs 275 crore in FY 2007-08 to Rs 330 crore in FY 2008-09. Datacraft, another contender in this segment, saw an increase in its growth rate from 32.5% in FY 2007-08 to 34.3% in FY 2008-09.

Melitta, a German company which is famous world over for household and catering products, has modernized its communications infrastructure with a data center solution provided by Nortel.

The developments in the NMS market have been quite interesting and marked by some impressive deals.

Big Deal
Nortel Networks recently set up a Global Network Operations Center (GNOC) at Bengaluru to provide management and support services for communications networks of enterprises and carrier customers across Asia, Europe, and America.

In April 2008, Datacraft won a project worth over $1 mn from Citigroup owned YOU Telecom. This project will involve implementing and supporting a cable modem technology solution that will empower high quality Internet solutions for data and voice services across eleven cities in India.

Datacraft also designed and implemented a performance management solution for Indonesian fiber optic based network provider ICON+, in order to improve quality of service, streamline service analysis and reduce operating costs. The $1 mn contract was completed in four months.

Wipro Infotech developed an integrated Police Information System. This end-to-end online application software covers all important activities related to the day-to-day functioning of the police departments including back-end administrative processes of general administration, finance and stores, etc. The processes have been automated to ease the tasks of administration and record keeping, thereby bringing in operational efficiency throughout the police department. Currently, the application is in a pilot stage.

Last year, the IT solution provider implemented Oracle's PeopleSoft Enterprise Human Capital Management 9.0 for Jammu and Kashmir Bank. This solution will help streamline the HR management of the bank, which has a workforce of more than 8,000. This will also enable the cutting down of paper work to a large extent and reduction of manual work, thereby lending alacrity to HR processes.

For Wipro Infotech, a large IT outsourcing contract came from Spencer's Retail, which has massive expansion plans of reaching out to 1,000 stores by end of 2009. HCL Comnet bagged projects from NIC and UBI. On the other hand, Tulip Telecom, a new player in this segment is managing three large banks and four SWANs.

Managing for Tomorrow
According to IDC, in 2009, domestic IT/ITeS market will grow at 13.4% as against 17.3% in 2008. However, the network management is expected to grow by 23%, beating the average growth of the domestic IT/ITeS market.

The Indian market has tremendous potential as most enterprises are looking for an integrated solution to replace the individual management tools that they currently use for individual devices. Multi-service platforms presents complex network management challenges for service providers. Each new function of the network involves different issues and objectives, which often call for targeted applications for rapid implementation. Continuously increasing network traffic, shortage of skilled workers and need to focus on core activities are the primary drivers of network management services and this will continue in the coming year too. Further, factors such as increasing penetration of broadband, online collaboration, e-commerce, and globalization are also driving the demand for these services.

Heena Jhingan
heenaj@cybermedia.co.in