The Hindu Business Line : For a share of the pie...

Twelve years ago, when Anant Gupta, Chief Operating Officer, HCL Comnet, met a client at Wall Street, the latter scoffed at the idea of offshoring some of the infrastructure management functions to India. Invited to have a look at the facility himself, the would-be client came down...

And HCL began its remote infrastructure management (RIM) services.

Today, RIM accounts for 12 to 15 per cent of the company's revenue.

And the phrase is resounding through IT corridors, with major companies HCL, Infosys, Wipro, TCS and Cognizant going into it in a big way.

TCS, for example, has 2,200 employees working on RIM services alone across centres in Bangalore, Chennai and Budapest, as also with infrastructure inputs from Kolkata and Delhi. HCL has about 3,000 people dedicated to pure RIM, and 9,000 overall in infrastructure management.

Going by a Nasscom report, about 40 to 60 per cent of the overall infrastructure management services (IMS) pie could be `efficiently delivered through a global delivery model.'

A release from HCL says the market size of IMS has been quoted by various experts as anywhere between $86 billion and $150 billion, which translates to a market potential for RIM of approximately $55 billion.

P.R. Krishnan, Vice-President and Head of Infrastructure Services, TCS, however, believes that even this is a conservative estimate.

When 40 to 60 per cent is mentioned to him, he says, with an inflexion of surprise in his voice, "Are you sure about that? I believe it is probably a lot higher."

He explains that the figure could be anywhere between 50 and 90 per cent, depending on the function being offshored. Any server, database or storage-related function, for example, could have as much as 60 to 80 per cent delivered through a global model.

The percentage is restricted in some cases due to regulatory issues, he says, with certain functions necessarily having to be performed by US citizens, or European citizens, as the case may be.

This is a key reason for TCS setting up a centre in Budapest.Sean Narayanan, Vice-President and Practice Head, IT Infrastructure Services, Cognizant, says the offshorability percentage decreases as you move up the value-chain. "A complex platform migration, for example, would require a higher onsite/offshore ratio than help-desk solutions," he adds.

What it involves

But what does it consist of? RIM involves remotely monitoring and managing the infrastructure components, which includes the prevention and patching up of problems.

This could involve management of operating systems, databases, applications and workflow processes.

Gupta of HCL explains that there are five technical tracks involved in infrastructure management — end user computing, data centre services, networks, security and application management. HCL has been offering RIM services for the last 10 years, beginning with managing networks and moving to security devices and server platforms since two-and-a-half years ago.

Expanding further on the pyramidal value chain, Narayanan from Cognizant says the RIM service portfolio can be seen as a pyramid with basic, large volume operations such as helpdesk and desktop support, server and network monitoring at the bottom, and services such as architecture design, platform migration, SAN or Data Center consolidation at the top end.

Cognizant offers a full portfolio of services across this pyramid, but focuses more on the application infrastructure, which would include data centres, database and IT operations, he says.

Manpower issues

There are some manpower issues, with RIM perceived as heavy network/mainframe-oriented, a supposedly complex service. "We need to demystify RIM to bring about process maturity through an iterative procedure," says Krishnan.

"Our customers don't simply want cost reduction - we must add value, which comes through process maturity."

Anant feels operation discipline is another key factor. "The culture is very different, you need to have a mindset that is very disciplined," he says.

Nevertheless, RIM is being seen as the next big thing. The Nasscom report says that currently the RIM business out of India is approximately $200-$300 million.

Narayanan says that by the end of 2006, Infrastructure Services delivered from India to global companies may surpass $1 billion, and that the market for offshore infrastructure services is nearly doubling year on year.

TCS expects to double revenue from RIM alone from $140 million last year, exclusive of possible acquisitions.

It is a potentially large pie, but as of now, HCL claims itself to be the market leader.

Without mentioning figures, Anant says, "There is no published data, but of the 10 serious deals that have come to India, we have bagged seven."

abhinav@thehindu.co.in

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