Remote infra management is the next big thing in tech business

Remote infra management is the next big thing in tech business
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First Published: Tue, Jun 24 2008. 08 49 PM IST

Updated: Tue, Jul 01 2008. 06 04 PM IST
New Delhi: Managing computer servers, networks and desktops remotely from locations such as India will be the next big business to emerge in offshore tech services, industry experts say, and companies such as HCL Comnet Systems and Services Ltd, Satyam Computer Services Ltd and Wipro Ltd are gearing up to address this market—projected to reach at least at $13 billion (Rs55,770 crore today) by 2013.
(POISED FOR GROWTH) The global market for what is called remote infrastructure management (RIM) tech services has grown from $2 billion in 2006 to up to $7 billion estimated this year.
India, which provides about two-thirds of the world’s offshored tech and backoffice services, is well positioned to maintain its 50% market share of the RIM market, according to trade body National Association of Software and Service Companies, or Nasscom.
During 2005-08, RIM revenues in India more than tripled from $1billion to $3.6 billion. And, by 2013, the opportunity could be between $13 billion and $15 billion, and create up to 375,000 new jobs, predicts Nasscom.
Companies such as HCL Comnet, a unit of HCL Technologies Ltd, India’s fifth largest tech services firm by revenues, are ahead in the race to capture a lead in the RIM business. The firm intends to leverage its six-year presence in RIM, backed by nearly a decade’s experience of managing infrastructure for Indian clients before that, as it aims to double its business in three years. HCL Technologies earned $207 million, from July 2007 to March this year, from its RIM business.
“We want to grow faster than the market to address a significant portion of the $13 billion to $15 billion India opportunity by 2013,” said Anant Gupta, president of HCL Comnet. The market for RIM services is expanding at 60% annually.
In Hyderabad, Satyam’s infrastructure management services team has seen a surge in offshored RIM services in the last 4-5 years.
Such infrastructure management work constitutes around 4.3% of Satyam’s overall revenues, translating roughly into $90 million to $100 million. Around 80% of this business comes from RIM services, up from one-tenth a decade ago.
This surge in work managed offshore in India “has happened because RIM tools have evolved and global customers are more confident about offshoring,” said Srinivas Anappindi, head of Satyam’s infrastructure management service business.
In Bangalore, 70% of the revenue of Wipro Ltd’s infrastructure tech management business comes from RIM clients. The business earned around $400 million in 2007-08.
“With the criticality of IT to business having gone up significantly in the last few years, RIM has almost become mandatory for clients today,” said Anand Sankaran, chief executive at Wipro Infotech, the Asia tech business arm of Wipro. For Wipro, the domestic RIM business is doubling.
Analysts elaborate on three triggers for the sharp growth in RIM services in the last few years. “As more sophisticated machines are being used today, it is easier to manage these remotely. It’s more about having a sense of break and fix, and, lastly, there is a recognition of the fact that security can be provided offshore,” said Siddharth Pai, managing director of TPI Advisory Services India Pvt. Ltd, an outsourcing consultant.
The RIM growth wave follows the application development and maintenance (ADM) and business process outsourcing industries that have put Indian service providers on the global map. “Infrastructure management is different from ADM, as it has the ability to price on a per machine or per network basis as against per person, and is completely usage based,” Pai said, referring to potential for leveraging on service-delivery efficiencies.
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First Published: Tue, Jun 24 2008. 08 49 PM IST