Specialization drives IT managed services market
Specific niche areas, such as printing, security and storage are emerging as strong growth drivers for the managed services market in India
While the overall IT Managed Services market continues to grow rapidly in India — this space is witnessing the emergence of specific niche areas within the IT managed services market. Analysts are observing a trend where organizations are breaking up their IT infrastructure management engagements into specific areas and outsourcing them to vendors that specialize in handling a specific function. Hot niche areas that are emerging in the managed IT services space include Managed Print Services, Managed Security Services and Managed Storage Services.
Perhaps, the most established niche is the Managed Print Services (MPS) space, which is dominated by vendors such as HP, Canon and Xerox. Reports by independent research and analyst firms confirm this demand. A report by Forrester Research estimates that the MPS market in Asia-Pacific (excluding Japan) will grow to USD 1 billion by 2012. The Indian market is expected to be the fastest growing market in the region, with a CAGR of 22.6 percent. Similarly, a report by the Photizo Group estimates that the managed print services market in India is growing at CAGR of 51 percent, and
is expected to be worth ` 1,530 crore in 2012.
While CIOs have traditionally looked at squeezing costs from their IT infrastructure, printing is one function that has traditionally been overlooked. Specialist players in this space are evangelizing clients on the huge cost efficiencies that can be gained by availing Managed Print Services. For example, pre- and postanalysis of some of HP’s managed print services customers’ imaging and printing operations reveal energy savings ranging between 30 percent and 80 percent, and reductions in paper consumption to the tune of millions of pages.
“Over the years, organizations have realized that delegating their printing and imaging portfolio will help them save 15-30 percent in cost,” opines Shekhar Agrawal, Director - Managed Enterprise Solutions, HP IPG.
A similar opinion is shared by Vishal Awal, Executive Director - Services, Xerox South Asia. He reveals that enterprises spend up to 2 percent of their revenues on running printers, copiers, scanners, fax machines and other devices that are often energy inefficient. “An office print optimization strategy can reduce this expenditure by as much as 15-25 percent while also decreasing energy consumed and waste generated. Additionally, employee productivity can be enhanced due to efficient management of print operations, and via innovative features like mobile and cloud-based printing.”
In India, there are several examples of firms that have shown that MPS delivers proven ROI. For example, by outsourcing its printing needs and management to Canon, mid-sized firm, MindTree, achieved more than 50 percent decrease in paper consumption and 25 percent reduction in printing costs, as well as savings of over USD 62,000. Similarly, KPO firm, Evalueserve has been able to save approximately 40 percent of paper usage due to forced duplex printing enabled by MPS. The firm has also managed to reduce the number of printers from 54 to 25, as the new arrangement provides the firm secure printing, which in turn allows the firm to share printers between multiple groups. The new printers consume low energy as compared to old printers, leading to 70 percent savings on electricity costs.
In an always on environment,
Organizations have realized that delegating their printing and imaging portfolio will help them save 15-30 percent in cost
Director - Managed Enterprise Solutions, HP IPG
enterprises cannot afford to have even a single moment of downtime. In addition, as storage volumes are growing at an exponential pace, enterprises have gradually started exploring options such as storage-asa-service and DR-as-a-service.
“Due to tremendous amount of growth in data, it’s predicted that data will grow to 2.3 billion petabytes by 2020. Today, we see that more and more enterprises in India are looking at outsourcing their storage and backup,” states Nikhil Madan, Director - North, EMC, India. To tap on this opportunity, EMC has partnered with vendor Tulip Telecom to offer managed on- demand storage services and Backupas-a-Service (BaaS).
Similarly, IBM is also betting big on cloudbased DR and BCP services. As a growing number of Indian enterprises are virtualizing their infrastructure, they are looking at options to backup their virtual machines. To address this market, IBM is providing SmartCloud Virtualized Server Recovery service. It is providing customers with a range of options, such as always available virtual machine, virtual machine available only for use during disaster and test, and virtual machine for importing server images and backup data from storage media. Should disaster strike, users can directly access their data on the cloud via a portal, eliminating the need for travel to the offsite location.
DR-as-a-service is a promising niche area that is showing good potential for adoption. For organizations that are struggling to monitor and maintain the Recovery Point Objective (RPO) and Recovery Time Objective (RTO), as per industry requirements, DR-as-a-service can prove an attractive option. If an organization outsources these services to a service provider, then as per the SLA, the vendor has to make sure that it meets the RTO, RPO and other business objectives. As most of the organizations do not have the
right IT infrastructure and expertise to maintain and meet the RTO and RPO requirements, this is fueling the need for outsourcing the requirements to specialist vendors.
SECURITY AS A SERVICE
This is another market that is on the verge of exploding. With the growing complexity of attacks, enterprises are forced to regularly upgrade their security infrastructure. This is fueling Indian enterprises to tie up with specialist providers to better protect their infrastructure and ensure compliance.
A case in point is iYogi, a firm which provides subscription-based tech support for PCs, connected devices and peripherals. The firm partnered with Verizon for enhan protection of its network and onl payment system. Today, Verizon is involved in providing iYogi with a range of managed security servic such as compliance to PCI DSS and ISO/IEC 27002, vulnerability assessment and investigative response services. Similarly, Religare has partnered with Tata Communications to better protec its critical network infrastructure business applications.
CLOUD AS A DELIVERY MOD
The huge popularity of cloud-bas technologies is also encouraging service providers to come up with new delivery models. “With cloud computing, the managed service offering is moving from a physical to a virtua environment. The organization has the option of outsourcing the whole infrastructure or a part of the IT environment to optimize th e
RISHIKESH KAMAT, Sr. Product Manager Infra Management & Managed Security Services, Netmagic Solutions Due to tremendous amount of growth in data, more and more enterprises in India are looking at outsourcing their storage and backup
Director - North, EMC, India
IT spends,” says A S Pillai, Senior Vice President – IT Services, Sify Technologies. For example, a bank can outsource specific IT workloads like Internet banking, asset management, mutual fund products and other small projects and not the core banking
Specialized managed service is complex and hence there is a need to define the exact SLAs
While the cloud is well-suited for delivering a commodity service to a large number of customers, delivering a specialized service is complex. “Specialized managed service is complex and hence there is a need to define the exact scope, roles and ponsibilities (SLAs),” says Rishikesh mat, Senior Product Manager nfrastructure Management Managed Security Services, Netmagic Solutions.
Organizations like Infosys have developed specialized offerings to target the rising opportunity in providing specialized services. “We have developed IT assets, which enable our customers o maximize their returns on eir IT infrastructure, as well as hance performance and improve mpliance,” states Chandrashekhar Kakal, Senior Vice President, Global Head of Business IT Services, Member, Executive Council, Infosys. The company has hnology platforms in the market ch as Infosys IT Asset Performance nagement, ProcureEdge and entEdge, which are hosted, erated and managed in the cloud d are offered to organizations on an tcome-based pricing model. Driven by increasing pressure on the companies to control cost in the wake of global economic slowdown and mammoth presence of the SMB market in India, analysts believe that the IT managed services market will experience huge growth in the domestic market.