High growth for networked infrastructure services: IDC

The networked infrastructure services market, which comprises of 'Network Consulting and Integration' as well as 'Network and Desktop Outsourcing' services, is expected to see a growth of 25.8 percent in the current financial year over FY 2000-01. Considering the general slowdown, this growth can be termed as healthy.

The findings are based on a massive survey by IDC wherein 1553 PC owning SME and 129 PC owning large organizations, across top eight cities of India, and over a dozen leading IT service providers were surveyed. The results of the survey, contained in a report titled 'Networked Infrastructure Services Market in India: 2001', indicate that spending on networked infrastructure services was Rs 753 crore in FY 2000-'01 and this is likely to increase to Rs 947 crore in current fiscal, indicating increase in its share from 15.3 percent to 16.4 percent of total IT Services spending.

The prime reason behind this growth is the fact that an increasing number of organizations are deploying inter-organization and intra-organization networks which coupled with a fast technology refresh rate lead to a situation where heterogeneous hardware and technical environments are often found on the same network.

This increasing complexity of networks demand services of professional 'network integrators and consultants' to build and 'network and desktop outsourcing service providers' to maintain and run the same. The captive IT service departments are no longer able to sustain these challenges, thereby forcing the organizations to outsource these activities.

Banking and finance is one of the biggest adopters of such services. Both private as well as public sector organizations, are setting up more and more ATM's, thus providing customers with any-time-any-branch banking services. This means that they not only have to hire a professional network consultant and integrator, but also to maintain the infrastructure, they have to depend on a service provider.

Some other trends identified in the research report include a clear shift away from simple 'Annual Maintenance Contract', wherein the responsibility of service provider is limited to repair the specific device that's malfunctioning, towards more complex 'Facilities Management', wherein the service provider is responsible for managing the complete 'IT show' in an organization including IT helpdesk, vendor management, asset management, preventive and predictive maintenance, network optimizing and tuning, guaranteed minimum service level agreements.

IT service providers have not only started to customize the service to suit very specific needs of their customers, but also are focusing on extending their geographical reach across the length and breadth of the country, even in remote locations. Another interesting development pointed out in IDC report is the fact that the service level agreements are changing from merely defining the acceptable service standards to incorporating risk/ reward sharing clauses.

In order to remain competitive, IDC feels that the IT services providers have to gear up to take care of the following two key success factors:
competency to provide plethora of services across vast geographic spread shifts in business model from providing services with pre decided SLAs to partnering with the client organizations and share the business risk/ rewards.