1

Project Report

TOPIC:

“REMOTE IT Infrastructure Management ”

Project Guide: Mr. D.P. Goyal IMT, Ghaziabad

Prepared By: P.R Jairaman EM- 04037 PGDBM (P/T)-2004-2007

Institute Of Management Technology Post Box No: 137 , Raj Nagar

Ghaziabad (U.P) 201001

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1. Abstract

The recently launched NASSCOM-McKinsey Report 2006 yet again reaffirmed views of the

global gurus that Remote Infrastructure Management (RIM) Services are all set to become the

next star of the Indian IT Industry. It clearly states that “going forward, the more traditional IT

outsourcing service lines such as hardware and software maintenance, network administration and

help desk services will account for 45 per cent of the total addressable market for offshoring and

are likely to drive the next wave of growth. . Service lines that have driven recent growth, i.e.,

application development and maintenance (ADM) and R&D services are already 30-35 %

penetrated and are not as likely to grow dramatically”.

The Remote/offshore part was easy with BPO having already paved the way for proving service

delivery effectiveness from an offshore location and with the advent of sophisticated tools and

technologies that enabled remote IT management the proposition was further solidified.

International research firm IDC also declared that “more than 85% of infrastructure components

can be managed from a central remote location. These components encompass servers/systems,

databases, networks, storage, security, applications and e-business infrastructure. Through

managing these components from a remote location, companies can cut down their cost of

infrastructure operations and management by 40-60 %, also gaining access to expert ‘skill-on-tap’

on a 24x7 basis”

For decades the global giants who had been ruling the Infrastructure Management Services (IMS)

market boasted of a very rigid model of service delivery to companies; which is often termed as

the ‘Traditional IT Outsourcing Model’. In the traditional outsourcing model, a third party service

provider would take over the entire IT assets of an organization and run it with a combination of

on-site and near-shore services. This approach came with a ‘lock-stock-and barrel’ proposition,

wherein the entire IT operation was handed to an outside provider with complete loss of control

and flexibility on the part of the CIO.

Remote Infrastructure Management Services ensure that enterprises enjoy an effective, efficient

and productive IT infrastructure operation, while optimizing its investments in technology,

people and processes and guaranteeing greater quality and increased end user delight.

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2. Declaration This Project Report is submitted in total fulfillment of the requirements for PGDBM

(P/T) at IMT, Ghaziabad. I declare that this Project Report is my own work and that it

does not contravene any academic offence as specified in the University's regulations.

No portion of the work presented in this report has been submitted in support of another

award or qualification at either of the partner institutions or elsewhere.

I confirm that all this work is my own except where indicated, and that I have:

Clearly referenced/ listed all sources, as appropriate

Referenced and put in inverted commas all quoted text (from books, web, etc)

Given the sources of all pictures, data etc. that are not my own

Not made any use of the report(s) or essay(s) of any other student(s) either past or present

Not sought or used the help of any external professional agencies for the work

Acknowledged in appropriate places any help that I have received from others (e.g.

fellow students, technicians, statisticians, external sources)

I understand that any false claim for this work will be penalized in accordance with the

University regulations.

Confidentiality I confirm that this Project Report does not contain information of a commercial or

confidential nature or include personal information other than that which would normally

be in the public domain unless the relevant permissions have been obtained.

Copyright The copyright for this Project Report remains with me.

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3. Acknowledgements

The inputs obtained from the consultations and researches were used as the basis for

arriving at the recommendations on the road map for the proposed Remote IT

Infrastructure Management – A revolutionary Mega trend in the field of IT Infrastructure

Management: Research Project.

I wish to express our sincere gratitude and indebtedness to our course instructor Prof.

D.P. Goyal for his invaluable guidance and support throughout the course of this

project. His able mentorship was instrumental in the successful completion of the project.

I would also like to thank all my friends and classmates and colleagues who helped me

whenever I needed them and enriched my work with their invaluable suggestions.

I also wish to express my gratitude to my colleague Mr Atul Kumbhkarni for his valuable

suggestions which helped in enriching this Research Project.

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4. Contents 1. Abstract ........................................................................................................................... 2 2. Declaration...................................................................................................................... 3 3. Acknowledgements......................................................................................................... 4 4. Contents .......................................................................................................................... 5 5. Introduction..................................................................................................................... 6

Outsourcing to India can be categorized in the following manner: ................................ 6 Infrastructure outsourcing representing almost 1/3rd of the total outsourcing market... 6 5.1: Approach to Assignment: ........................................................................................ 7

6. REMOTE INFRASTRUCTURE MANAGEMENT...................................................... 8 6.1: Evolution of RIM..................................................................................................... 8

6.1.1: Maturity of the offshoring (Global Delivery) model: ....................................... 8 6.1.2: Technical feasibility:......................................................................................... 9

6.2: The Existing Scenario.............................................................................................. 9 6.2.1: Remote Infrastructure Management Services................................................. 10

6.3 Why Remote Infrastructure Management:.............................................................. 12 6.4 Growth Aspects:.................................................................................................. 13

7. Sourcing Models Prevalent ........................................................................................... 15 8. RIM – The India Advantage .......................................................................................... 18

Manpower: ................................................................................................................ 18 Location : .................................................................................................................. 18 Infrastructure:............................................................................................................ 18

8.1 RIM – Beyond a niche IT space: a great career opportunity .................................. 18 8.2 The Road Ahead ..................................................................................................... 21 RIM Adoption Scenarios: ............................................................................................. 21

9.Competitor Tracking ...................................................................................................... 23 9.1 Global Delivery Infrastructure Management Evaluation........................................ 26 9.3 INDIAN VENDORS REPRESENT A VIABLE OPTION.................................... 27 VENDOR PROFILES .................................................................................................. 28

9.3.1 TCS. ................................................................................................................. 28 9.3.2 Wipro. .............................................................................................................. 33 9.3.3 Infosys Technologies ....................................................................................... 37 9.3.4 HCL Technologies. .......................................................................................... 41

9.4 Latest figures disclosed during Jan-Apr 2007 ........................................................ 43 10. Methodology............................................................................................................... 44 11 References.................................................................................................................... 45

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5. Introduction The scope of this project aims to understand a new trend in the field of IT Infrastructure

Management called Remote IT Infrastructure Management, which usually caters to the

needs of large organisations having a Global Presence, by managing their IT

Infrastructure remotely.

Infrastructure Management Services encompasses a broad range of services. It refers to

monitoring and management which includes maintenance, administration,

troubleshooting, and performance enhancement of the IT Infrastructure of any

organization. It covers the entire spectrum of the IT Infrastructure including helpdesk,

End User Desktops, sever and storage, databases, telecoms, Network, Security,

Application Operations et al.

Infrastructure Management Services is not a new phenomenon, for several years,

companies have been working hard to reduce the cost of operating the IT Infrastructure –

Datacenters, networks, databases, and business support software tools. The customers

who were early adopters of IMS were driven by the need to focus on their core

competencies and give away the non core functions to service providers. This was the

genesis of some early service providers like EDS, IBM etc.

Outsourcing to India can be categorized in the following manner:

Infrastructure outsourcing representing almost 1/3rd of the total outsourcing market.

43%

33%

0

0.1

0.2

0.3

0.4

0.5

IT Infrastructure IT ADM G&A outsourcing

Estimated worldwide outsourcing market size2005; Percentage

100% = ~US$328 billion

Business Process Outsourcing

Infrastructure Outsourcing

Application Development and Maintenance1

24%

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5.1: Approach to Assignment:

The first stage of the assignment, involving the design of a road map for the planned research project was executed primarily through interactions with key people at HCL Technologies, one of India’s Premier IT Services Provider.

• Identify the key objectives of their Infrastructure Services Division. • Determine the main functions, structure of the and its branches/ units. • Assess the current state of ICT infrastructure services scenario in India.

Secondary research was conducted to identify the best practices used in a similar context elsewhere – domestic. HCL’s proprietary knowledge base and experience gained through many years of involvement in complex organisation wide operations effectiveness initiatives with various organisations across the globe were leveraged to identify the prevalent practices in similar organisations and in HCL itself. The inputs obtained from these consultations and researches were used as the basis for arriving at the recommendations on the road map for the proposed Research Project to be submitted in complete fulfillment of the requirements for PGDBM (P/T) at IMT, Ghaziabad .

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6. REMOTE INFRASTRUCTURE MANAGEMENT Remote Infrastructure Management services consist of remote (outside the physical

premises of a company’s facilities) monitoring and managing the infrastructure

components and taking proactive steps and remedial actions across the IT landscape. The

remote monitoring and management is undertaken through a combination of

offshore/nearshore/global delivery center which is often termed as an Offshore

Management Center (OMC), where skilled staff of a service provider monitor and

manage the infrastructure, ensuring uptimes and availability.

Some of Infrastructure management services that can be delivered remotely are Network

Management Services, Datacenter Outsourcing, Helpdesk outsourcing, Desktop

Outsourcing, Storage outsourcing, IT Security Outsourcing, LAN outsourcing, WAN

outsourcing, Database and Application Monitoring & Management.

6.1: Evolution of RIM Gartner Inc., a business intelligence firm, had indicated in its research that around 32% of

a CIO’s IT budget was spent on internal resources to monitor and manage IT. This area,

being a significant chunk, was also the area that required immediate decline.

Once IMS outsourcing became a norm, RIM followed as a natural progression, offering

an alternate model of delivery. Some of the key factors that have acted as a catalyst for

the RIM being accepted worldwide are:

6.1.1: Maturity of the offshoring (Global Delivery) model: As companies face continued pressure to cut costs, they have started including

infrastructure-related opportunities in their offshoring requirements. This also allows the

customer to gain from the scale of operation as is evident from the various multi service

deals that have been won by India based Service Providers. ABN Amro deal with Wipro

being the biggest.

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6.1.2: Technical feasibility: The myth that a IMS outsourcing is associated and bundled with the physical assets of the

IT department and the Datacenter and therefore precludes offshore delivery has been

broken. It is estimated that between 60-70% of the IT services surrounding the

datacenter, specifically the support functions of monitoring and management can be

executed remotely due to the improvements in the remote-monitoring and diagnostic

capabilities of leading System and Network management tools.

Reasons like emergence of Business Continuity Services, globalization, increased

awareness of RIM market and availability of low cost countries is forcing buyers to think

of new ways to service users 24x7 across the globe while increasing efficiency and

effectiveness. Moreover organisations are opting for RIM due to advanced security

technologies to mitigate risk due to offshoring. But foremost, Indian companies striving

to move beyond application services and repeat their success in new

opportunities/markets like RIM.

6.2: The Existing Scenario With the advancement in processes and tools and the proven maturity of Global Delivery

for IT Infrastructure Services, today RIM is becoming a strategy of choice for CIOs

across the globe who are keen to take advantage of the labor arbitrage without

compromising on quality and responsiveness of services.

Today, Offshore vendors have started to invest aggressively both in infrastructure talent

and highly available network connectivity globally. At the same time, automation tools,

more effective processes, and onshore consolidation efforts have made corporate IT

departments increasingly comfortable with locating more of their infrastructure

support personnel remotely from assets and users.

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Infrastructure Outsourcing market: Representing All PlayersInfrastructure Outsourcing market: Representing All Players 2005; Percentage

100% = US$109 billion = US$109 billion

24%

1%

75%

RIMO

IMS

Traditional IO

6.2.1: Remote Infrastructure Management Services Desk Management

Call Management

Escalation Management

Change Management

Email And Tele Support

Hardware/System Maintenance

Troubleshooting

Health Checks

Performance Fine Tuning

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Other Features That Are A Part Of RIM Are

System Administration

Software Installation

Configuration And Maintenance

Security remediation

Backups/Restores

Network Monitoring And Management

Basic Reporting

Advanced Services And Intrusion Detection Services

Database Management

Performance Analysis

Bench Marking And Testing

Data Back-up Management

Managed Information Security Services

Policy Management

Asset Management

Capacity Planning

Vendor Management Services

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6.3 Why Remote Infrastructure Management:

• Remote Infrastructure Management Services (RIM) is evolving at quick pace.

According to IDC, in a study, estimated that more than 85% of infrastructure

components can be managed from remote locations.

• Service providers are doing big ticket investments to develop their delivery

capabilities.

• In next 2-3 years large clients will be expected to deliver remote infrastructure

delivery service as a requirement in the majority of new outsourcing deals

• Infrastructure services delivered in a global delivery model from India to US

companies will surpass $1 billion.

• RIM presently contains high risk for global delivery of services. But clients

are relying on service providers to help manage and insulate them from risks.

• High probability that in next 5 years 50% of the labor hours for global IT

infrastructure service delivery will shift from on-site support to remote

delivery.

• Increased globalization of organisation hence need for 24X 7 Services.

• Low cost geographies like Indian with robust Infrastructure and Human

Capital capabilities.

• Advanced Security Technologies to mitigate risk due to offshoring.

• Pro-active management by means of enterprise management tools.

• Emergence of Business Continuity services.

• Need for repeatable, replicable service based on ITIL Model.

(ITIL: IT Information Library)

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6.4 Growth Aspects:

IMO market shares3

Percentage

US$460M1

US$720M2

Others

100%= 100%=~US$26 billion

Infrastructure Management Outsourcing market

2010; percentage

Offshore suppliers (RIMO model1)

Traditional suppliers

(IMS model)

Wipro

TCS

HCL

Infosys

Satyam

20% 21%

17% 19%

16%

13%14%

11%6%

4% 3%2% 3%

19% 18%

14%

FY 2004 FY 2005

PatniMicroland

97%

3%

Representing local (offshore) players.

Traditional suppliers (IMS model)

Offshore suppliers (RIMO model)

20%

80%

0%

20%

40%

60%

80%

100%

Infr

astr

uctu

re M

anag

emen

t O

utso

urci

ng m

arke

t 20

05; P

erce

ntag

e

14

Traditional suppliers (IMS model)

Offshore suppliers (RIM model)

10% CAGR

RIMO market growth

US$ billion

~60%

0.5 0.81.4

2.3

3.7

5.9

8.6

2004 2005 2006 2007 2008 2009 2010

25 26 28 30 32 35 37

2.33.7

5.98.6

1.40.80.5

2004 2005 2006 2007 2008 2009 2010

61%

7% CAGR

26 27 29

32 36

4146

Cur

rent

ann

ual G

row

th R

ate

com

pari

ng T

otal

Out

sour

cing

Su

pplie

rs a

nd R

emot

e Su

pplie

rs.

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7. Sourcing Models Prevalent Model 1: Global Outsourcing Under this broadest outsourcing model, client companies effectively hand off the entire

IT department to the service provider. In this case, most firms retain only a reduced IT

management organization. Nowadays, this approach has become increasingly

uncommon. Some companies in the US and the UK, in particular, opt for this model, but

their Continental European counterparts rarely go down this path. The approach only

makes sense when the client company already has a global outsourcing strategy, not only

for IT, but also for other activities. In some cases, the client company and the service

provider create a joint venture that hosts the former IT department. The two most

common brakes are depending on a single service provider and lack of experience or

confidence in creating a joint venture. Global outsourcing should be aligned with the

buyer company’s strategy: It makes sense when the enterprise — looking beyond just IT

— massively outsources all noncore-business activities and very specialized processes. A

proportion of such deals rely on the client and service provider forming a joint venture to

ease asset and staff transfer and limit potential regulatory issues.

Model 2: Infrastructure Outsourcing Rather than opt for global outsourcing, many companies have found it easier to isolate

and outsource only their IT infrastructure. Workplace management (desktop and laptop

management) is usually subject to a separate contract, either with the same or with a

different services firm. In the meantime, they retain their applications under in-house

management. As for global outsourcing, this approach requires specific preparation for

the staff transfer when the relationship first begins, and the joint venture approach crops

up frequently to ease asset and staff transfer. Separating infrastructure and applications

requires stable and well-defined processes supporting interfaces between infrastructure

management and application management.

Model 3: Vertical Outsourcing This model involves outsourcing a vertical stack of technology elements devoted to a

specific activity within the client company. Workplace management can be one of these

vertical activities. When they separate systems in this way, companies can also consider

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outsourcing the associated business process — as in business proce

his is the business of specialists (payroll managem

ss outsourcing (BPO).

ent, logistics, check processing,

ccess of this model is related to BPO growth — which

operations. Integrating

rvices in this case requires a solid management effort, with a significant internal team.

ice integration task to one of the outsourcing

me applications under in-house management.

ithout suffering the complexities of the best-of-breed approach, companies can select

. Also, many companies that opt for this model keep

T

call/support centers, etc). The su

differs dramatically between the US/UK and Continental Europe. The typical

relationship involves significant staff transfer to the service provider.

Model 4: Best-Of-Breed Selective Outsourcing Selective outsourcing currently dominates the market. Many companies expect better

results when they select the best service partner within each specific service category.

These companies customarily separate: hardware and operating systems (mainframes,

servers and Unix, servers and Windows); the main middleware categories (like security

management, storage management, collaborative tools and messaging, and integration

tools); and application categories (generally vertically). Some companies fragment even

further: They establish a separate outsourcing relationship for each of the following

domains according to the expertise of the provider: system management (hardware and

operating system) and hardware maintenance; application testing, maintenance, and

operations; and middleware customization, management, and

se

A few companies outsource this serv

providers or an external consulting firm. Eg, ING has retained Accenture to lead several

other service providers in a workplace services environment. Companies that opt for the

selective sourcing approach must have the right evaluation criteria to effectively select

best-of-breed vendors, domain by domain.

Model 5: Combined Infrastructure And Vertical Applications In this model, companies select a single service provider for infrastructure management

— or two when workplace management is separated — and several specialists for

application management, while retaining so

W

key partners for vertical domains

some strategic applications internal, for example R&D and CAD/CAM software in the

aerospace and automotive industry, or financial asset management in the banking

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industry. In this model, the ability of service providers to work together, and the ability of

the client to control them, remains a challenge

Model 6: Horizontal Outsourcing In this model, companies select a single service provider for application management

(developing, maintaining, and running applications) and another one for infrastructure

t is separated. This situation is often a management — two if the workplace managemen

second phase after infrastructure outsourcing (Model 2). Some people consider this

model a variant of Model 5, pushed to the extreme. This strategy requires selecting the

rare services firm that is able to cover all the vertical specificities of the client. However,

some service providers have built application centers able to deliver all the applications

services, backed up by expertise centers.6 The main challenge of this model is the ability

of the two service providers (handling infrastructure and apps, respectively) to work

together, with limited client arbitrage. Few outsourcing clients currently pursue this

approach.

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8. RIM – The India Advantage Manpower:

India has highly skilled labour pool which has ability to cater to global clientele. India

has witnessed a healthy growth in the number of its IT professionals. From a base of

6,800 knowledge workers in 1985-86, the number is projected to increase to 650,000 IT

software and services professionals by March 2003. It is estimated that out of the 650,000

knowledge workers, almost 205,000 are working in the IT software and services export

industry; nearly 160,000 are working in IT enabled services 25,000 in the domestic

software market and over 260,000 in user organizations.

Location :

Low cost, easy accessibility of India as a location and emerging centers of excellence

with multiple cosmopolitan cities is another very significant pull factor for India as a

destination of choice.

frastructure:In

he Indian telecom industry is one of the fastest growing industries. With the entry of

lobal players there has been tremendous infusion of capital and creation of best of breed

infrastructure. India’s capability, experience and depth in this space has challenged the

traditional IT service providers across and range of services.

8.1 RIM – Beyond a niche IT space: a great career opportunity

One of the important drivers that make RIM an attractive career is the exciting and

challenging environment it offers to professionals.

A career in the Remote Infrastructure Industry also offers a continuous learning curve to

its practitioners. Being responsible for 24X7X365 monitoring and management of IT

Infrastructures of global enterprises RIM experts have to consistently upgrade their

knowledge and grasp of new technologies entering the IT Infra space. Our employees

have to keep themselves abreast of the new as well as legacy technologies, thus ensuring

a continuous process of learning and growth inside the system.

T

g

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Further, it gives a graduate engineer an opportunity to earn anywhere between 5-7 lakhs

after a reasonable level of experience and grow to the level of a Manager or Consultant in

span of 5 years through focused growth programs. For experienced

professionals, the compensation is even more attractive and the growth opportunities

nds and shrinking budgets. The

to evolve an IT infrastructure management strategy that leverages existing

eyond costs that RIM brings.

er satisfaction:

•

Risk Mitigation:

Inc

Shi

• To support customers’ transformational objectives

a very short

include leading worldwide Projects and Technology practices.

There are many such unique aspects of this Industry which translates into a ‘hot’ career

aspect for IT professionals.

Benefits

Cost reduction has been a driver for decades in the IT infrastructure space as CIOs

around the world continue to face increasing user dema

challenge is

investments, with increased service levels for end-users, improved end-user response

time through proactive management, and increased flexibility at reduced costs.

But there are benefits b

Increased custom

• Shift from reactive to proactive management through increased automation and

reduced human intervention.

• Measurable metrics to track service levels

Real time control and visibility into the operations through reporting portals

• People independent operations

• Focus on creating DR Operation Centers and processes that ensure business

continuity

rease coverage to 24x7:

• Clients seek 24X7 Follow-The-Sun Model coverage and global footprint

ft from Technology to Business Optimization

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Red

Fle

of outsourcing a specific

and cost predictability making companies more agile.

Qu ge

Dom

s access to experts on a 24X7 basis.

constantly updated with the latest technology trends

and the customer benefits from this “expertise on tap”

stomer retains control of its strategic

components such as physical IT assets, technology refresh, policy and architecture

. This visibility further enables them to take control of the situation, make

estments in IT, and improve current service levels.

under tough, black and white and precise service level agreements, with

pliance and downtimes.

uce IT budgets hence impacting the bottom-line

• Concerns regarding enhancing service levels with no increase in IT Budgets

xibility

• Through the Co-Sourcing model, enterprises have an option

function, several functions or entering the engagement in phases. This provides

clients greater scalability

ality and Process ed

• Quality technology, people and processes defined by ITIL (IT Infrastructure Library),

which ensures faster problem resolution. In addition to these standards, a known

knowledge base of errors and standard operating processes provide continuous

learning and ensure that the problems get the attention of the right expert,

ain expertise and dedicated skill-set

• A good RIM service provider gives the customer

Moreover, these specialists are

Visibility and Control:

• Through collaborative sourcing the cu

which provides visibility into the availability, performance and utilization of each

component

informed decisions on future inv

SLAs and Best Practices

• RIM works

penalties on Non-Com

These value propositions result to two distinct demands of customers:

1. Cost Reduction (30%-40% app)

2. Optimization that leads to transformation

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8.2 The Road Ahead More and more global enterprises are seeking transformational benefits like those being

provided by vendors like HCL from their existing outsourcing partners. Also, the sheer

of such offshoring deals will see a rise with a number of large engagements

se IT transformation and provider of transparency into IT

bler of the enterprise IT transformation through

buyers to consider RIM as an

alternative to full-scale Infrastructure Outsourcing including lower

degree of misalignment of supplier incentives around cost-cutting

Both offshore and traditional suppliers realize the opportunity and

ctively invest in missing pieces of the puzzle by ramping up their

number

coming up for renewal in the next 2 years.

RIM Adoption Scenarios:

RIM market adoption can follow several scenarios, ranging from pure labor arbitrage to

enabler of the enterpri

infrastructure.

RIM can continue growing based purely on a labor-arbitrage business

model similar to Application Development and Maintenance (ADM)

Outsourcing.

RIM can become an ena

IMO suppliers expanding their capabilities into the consulting part of the

IT transformation business.

Several factors are likely to attract

and asset- reductions, ability to retain IT assets still enjoying the

advantage of productivity improvement and labor arbitrage, and

better applicability of IMO model to support new and emerging

technologies due to non-asset-oriented nature

a

efforts and capabilities

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IMO suppliers can leverage their knowledge of buyers’ operations and cross capabilities

and IT is complicated by the presence of two

disconnects:

disconnect between business process and supporting IT systems

disconnect between business and IT workloads leading to lack of

understanding of IT efforts and costs by the business

f Service-Oriented Architecture (SOA) and multiple IT

transparency frameworks (e.g., IT Service Catalog)

great deal about the buyer’s infrastructure and

become well-positioned to tackle the business/IT transparency

to offer business users additional value from transparency into IT infrastructure

Linkage of business

leading to unnecessary complexity in conducting business tasks

The technical solutions to these disconnects are emerging in the

form o

By taking on monitoring and remote-management functions, IMO

suppliers can learn a

challenge

23

9.Competitor Tracking Indian Market Scenario

Major pla

the US are als in India.

These 4 playe d

are categorized based on their service offerings in the Europe Market.

While outsou

companies re

over the past 18 m warm to the idea of moving selected infrastructure

management tasks to offshore or nearshore locations. The underlying aim is clear: By

adding the offshore labor arbitrage to the equation, clients are hoping to reap further cost

benefits from infrastructure outsourcing. During recent months, the two types of service

providers — large, traditional on-site outsourcers and Indian offshore service

providers — have been busy ramping up their remote infrastructure management

resources and capabilities.

Encouraged by the early successes of their remote infrastructure service offerings across

North America, Indian vendors are now setting their sights on Europe. To achieve rapid

growth in what still constitutes an emerging market, Indian service providers have made

significant investments in the necessary resources and capabilities; this makes

transitioning selected infrastructure management tasks to their control a sound and viable

proposition.

yers in the Indian Market targeting the top companies in EMEA, APAC, and

o the top players in IT

Infosys

Wipro Technologies

TCS

HCL Technologies

rs provide a range of offerings in IT Infrastructure Management an

rcing across Europe has become an accepted approach for helping

duce their infrastructure management costs, European clients have begun,

onths, to

24

Physical infrastructure management resources have been established.

dian offshore providers have invested heavily in their data centers, network operation

training centers for infrastructure management staff. Most of

orks.

Remote ma ties have evolved.

The great m established strong ties with the leading

systems m the latest versions of their remote

management technologies. In addition, most Indian providers have invested in

compleme s to enhance the transparency of their

rvice delivery.

Most of the leading Indian vendors have become fairly proficient in infrastructure

Local support and recovery functions are being set up.

ognize the critical need to maintain a strong

local delivery and customer management presence across Europe. Most companies,

IT operations. While application services

like custom development and software maintenance are currently the main source of

revenues for offshore providers today, European end users have started to show

In

centers (NOCs), as well as

the data centers and NOCs today use state-of-the art equipment and are linked to highly

redundant and reliable telecommunication netw

nagement capabili

ajority of the Indian vendors have

anagement tool vendors to leverage

ntary reporting tools and dashboard

se

Infrastructure delivery expertise has matured.

services delivery and are seeking ways to optimize operations in the same way that they

optimize applications. To this end and to develop credibility and capability, they have

made significant investments in resources and processes around the IT Infrastructure

Library (ITIL) and the BS 15000 IT Service Management Standard. Furthermore, some

companies are leveraging Six Sigma to drive continuous improvement of their end-to-end

service delivery

All of the Indian service providers today rec

therefore, have invested in additional local language support and operation centers,

mainly across Eastern Europe. In addition, most vendors will provide on-site support

services through their own personnel or through dedicated local partners.

European firms continue to grow their use of offshore outsourcing as an effective way

to achieve cost savings and build successful

25

significant interest in remote infrastructure services over the past 18 months.

ing engagements.

vendors to help them with smaller

ing small selected remote management tasks.

onitoring and management tasks for

desktops, servers, mainframes, and network components in limited numbers to Indian

tsourcing help desk operations to Indian providers. Unless they can be

cal language skills to support

their end users, most companies will want to avoid any potential cultural or language

om transferring

Nevertheless, Forrester does not foresee European companies rushing into large offshore

infrastructure engagements with Indian vendors, but expects them to apply a more

cautious step-by-step approach. As a result, many European clients will be:

Testing the water via on-site infrastructure consult

Many European companies will start using Indian

consulting projects related to their existing infrastructure operations. These engagements

will, for example, provide assessments of the client’s existing infrastructure management

processes and contrast them with a best practices view based on the operational service

management expertise that Indian vendors can provide.

Initially outsourc

Clients will initially look to outsource confined m

vendors. As part of their selective outsourcing strategies, most clients will thereby

separate the remote management from the physical maintenance of the devices, which is

likely to remain with local providers.

Showing caution around outsourcing help desk operations.

While theoretically well suited for offshore delivery, European clients will be extremely

cautious about ou

convinced that the vendor in question offers very good lo

issues.

Not transferring staff to Indian vendors.

Although some Indian providers have successfully taken over limited numbers of staff

from their European clients in the past, most companies will refrain fr

employees to Indian vendors. The perceived cultural integration issues will present too

much of an obstacle.

26

9.1 Global Delivery Infrastructure Management Evaluation

OVERVIEW

To assess the state of the global delivery infrastructure management market for Europe

trengths and

disaster recovery capabilities, as

anagement.

Furthermore, we looked at delivery capabilities from both the operational and support

vision to assess how well

each vendor is positioned for future success, a focus on the vendors’ underlying

n remote infrastructure revenues and underlying revenue growth, the number and

nearshore resources, and the

number of desktops, servers, mainframes and network devices managed in Europe from

and see how the Indian service providers stack up against each other, the s

weaknesses of top Indian vendors are evaluated.

Current offering.

As a framework for the evaluation we looked at various service elements —

the underlying breadth of service offerings, security and

well as offerings pertaining to consolidation, virtualization, and service m

perspective of the global delivery model, as well as network bandwidth and redundance.

Finally, with regard to languages, on-site and nearshore support, as well as compliance

with the European data protection directive are assessed.

Strategy.

Comparing the RIM service strategies of each company with a

infrastructure vision and productivity investments, their commitment to adaptive sourcing

and partnerships, as well as their asset and staff transfer strategies is done.

Market presence.

Europea

typical profile of accounts across Europe that use offshore or

an offshore or nearshore location are compared.

27

9.3 INDIAN VENDORS REPRESENT A VIABLE OPTION

HCL, TCS, Wipro, and Infosys lead the pack.

HCL differentiates based on its deep infrastructure management expertise and innovative

anagement portfolio,

with significant resources dedicated to Europe. Wipro has the strongest European market

has already started to push beyond pure remote outsourcing.

anks to its

sophisticated business-centric delivery approach.

r broader infrastructure and

deals, but needs to grow its European market footprint.

services strategy, while TCS maintains the broadest infrastructure m

presence today and

Meanwhile, Infosys is building up some strong growth momentum th

Genpact, Satyam, and Patni offer competitive options.

Genpact is a strong performer with high-quality delivery processes and a sizable

European presence. Satyam benefits from its holistic services approach across

infrastructure, applications, and business processes, although the company still lacks a

European presence. Finally, Patni positions itself fo

application

28

VENDOR PROFILES

Leaders

9.3.1 TCS. TCS offers the broadest portfolio of infrastructure-related services across the plan-

buildrun value chain, with telecom infrastructure management tagged on as an added

bonus. The company maintains strong technical domain knowledge and a good ability to

support diverse technical domains. European clients will benefit from TCS’ strong local

presence, with various nearshore and onsite support centers providing multilingual

he Group's 28 publicly listed enterprises have a combined market capitalization that is

the highest among Indian business houses in the private sector, and a shareholder base of

over 2 million. The Tata Group has operations in more than 54 countries across six

continents, and its companies export products and services to 120 nations.

The Tata Group comprises 96 operating companies in seven business sectors

Information systems & communications

Engineering

Materials

Services

Energy

Chemicals

Consumer Products

support as well as local disaster recovery.

About:

One of India's largest and most respected business conglomerates, Tata Consultancy

Services in 2005-06 had groups revenues of $21.9 billion (Rs. 967,229 million),

equivalent of about 2.8 per cent of the country's GDP, and a market capitalization of

$51.3 billion. The Tatas together employ some 202,712 people.

T

29

s and BPO organisation

uch as BFSI,

top 10

corporations in the Fortune 500 list of the largest corporations in the United States are

among TC

Service O IT services: T ervices over the entire IT application lifecycle, including

migration and reengineering, e-commerce and internet services, testing services,

architecture and technology consulting, systems integration, as well as packaged software

implementation across multiple industry and technology domains.

Tata Consultancy Services (TCS) is IT consulting, service

offering services to clients across 55 countries, with a vision is to be a Global top 10 IT

services company by 2010. TCS has offices in 33 countries, over 35,000 consultants from

30 nationalities and more than 100,000 man years of experience, TCS offers a

comprehensive range of IT services to clients in diverse industries, s

manufacturing, telecommunications, retail, and transportation. Six of the

S' clients.

fferings:

CS offers ADM s

Group financial performance and sector-wise operations

7%

9%

23%

5%

4%

20%

32%

Services

Material

Engineering

Energy

Consumer Products

Chemicals

Communications &Information System

30

IT infrastructure: The company offers services that include complete outsourcing of IT

etworks, consulting and integration, hardware support and installation, and

infrastructure management.

lients in specific industries and has licensed several software intellectual property rights.

also develops and markets a variety of products across diverse industries.

ngineering & Industrial services: TCS offers a range of engineering services, embedded

oftware and R&D services to diverse clients, assisting in new product development and

anagement through services

Consulting: One of the first companies to set up an independent consulting division, TCS

day includes consulting as an integrated part of any assignment to its customers in

ifferent industry segments.

PO: TCS offers a variety of transaction-based IT-enabled services. These include

n

Asset-based solutions: It utilizes its proprietary software assets to deliver solutions to

c

It

E

s

product lifecycle m

to

d

B

7000 83500Employees

50

60

70

40

30

0

10

20

1996 2006(3Q)

inbound call centers, back office support, engineering services and database services

Human Resource:

31

ITIL Framework

Six Sigma

Tools

Alliances

TMM

Remedy Managed Services

Centers of

Excellence

SLA Base

d Soluti

on

Shared

Service

Model

Infrastructu

Cent

re Solution

ers

TCS IT Infrastructure Services

IT Infrastructure Services

Infrastructure Offerings:

Technical Help Desk Services

Desktop Services

Data Center Services

Enterprise System Management (ESM)

Network Management Services

Managed Storage Services

Database Services

ITIL Process Consulting

32

SWOT Analysis: Strengths:

TCS is capable in performing infrastructure management work that is commonly

bundled with application management like production systems support, database

management, an

TCS has six offshore infrastructure delivery centers located in Hyderabad, Chennai,

Mumbai, Delhi, Calcutta, and Bangalore.

o a AS e, W

Weaknesses:

• TCS has one ITIL certified staff

• TCS does not have any DRII- or BCI-c d consultants on staff.

one re i re delivery center located in Budapest,

Hungary.

• TCS has weak asset transfer strategy

• Weak presence in Global delivery management

ter Tata Group also allows it to leverage existing European

group resources to offer further depth and greater presence across Europe.

res that European clients get the local flavor of services

they might require.

nagement.

• TCS have strong mainframe capabilities

•

d server monitoring.

•

• TCS has br ad technical cap bilities across

ertifie

400, mainfram intel, and Unix

devices.

• TCS has only nearsho nfrastructu

• Weak help desk threatens to invite new clients

Opportunities:

• Affiliation with the grea

• On-demand service and subscription-based services.

• Local resource network ensu

• Telecom infrastructure ma

33

• Mainframe management capabilities will give opportunity to TCS to go for large

cture deals and hosting biz

he security and disaster recovery offerings

9.3.2 Wipro.

s the strongest European client base for

offshore infrastructure services today. The company is actively pushing beyond pure

nst traditional on-site outsourcers for larger end-to-end infrastructure

eals.

incipal business segments.

Care

oducts

consulting services division of Indian

ipro Limited. It is leading provider of integrated business, process, and

mentation,

networking, systems integration, and technology consulting services. It also provides

es. With operations in about 35

ooking to reduce costs through outsourcing various business

functions. The global technology services division constitutes the majority of Wipro's

its revenue and almost 90% of its operating

income.

infrastru

Threats: Paucity of certified staff to support t

may become threat in long term for its expansion program in Europe to support mission-

critical work.

Of all the Indian vendors, Wipro maintain

remote infrastructure management and has recently begun to successfully compete head

to head agai

outsourcing d

The company operates through five pr

• Global IT Services and Products

• Lighting and Health Science

• Consumer

• India and Asia-Pac IT Services and Pr

• IT Enabled Services

Wipro Technologies is the global technology and

conglomerate W

technology services. A leading global independent R&D services provider, the firm

offers such services as application development, enterprise systems imple

with offshore business process outsourcing (BPO) servic

countries, Wipro Technologies has been growing rapidly due to number of companies,

particularly in the US, l

business, accounting for about 75% of

34

Service offerings:

Application Development &

BPM

band

Business Intelligence

se Security e-procurement & B2B

Home Gateway

Infrastructure Solutions

Maintenance Application Performance

Management & Support B2E

Broad BPO

Business Consulting CRM Data Warehousing e-Business Enterprise Application

Services Enterpri

ERP

IEEE 1394

Learning Solutions

PLM Product Support Process Consulting Space Communications SCM

System Design Voice Networks

ices Wireless Networks Wireless LAN

Legacy Migration Multimedia Package Implementation

System Integration Technology Consulting Network Management Testing Services Optical Networks Quality Consulting

Web Serv

Industrial Automation

Wipro’s Global IT Revenue pie

Custom App Dev & Maintenance, 23%

Consulting , 1%

Infrastructure Outsourcing, 9%

ITES & BPO, 9%

R&D services, 37%

Package Implementation+Te

sting + System Integration, 21%

35

Messaging services

Desktop Management

Telecom Network

Data Centers

SecurityServices

Servers & Mainframe services

Netwo

DB

ervices

Infr uct

Syst In

Con

SWOT Analysis

Strengths

Strong European client base for offshore infrastructure services.

Strong Acquisition strategy

Strong Delivery capabilities through its offshore centers in India and Europe.

Strong R&D services and infrastructure management.

Provides Multi lingual Support

Wipro services can be unbundled or provided as point offerings

• Control over Attrition rate

• Competing with existing outsourcing competitors at the recompete stage of the deal.

IT Infrastructure S

astr ure Management

ems tegration

rks

A Services

sulting

• A broad portfolio of infrastructure related offerings

• Strong European support functions

•

•

•

•

•

•

36

Weaknesses

• Wipro does not have any help desk agents located in nearshore geographies.W

infrastructure offerings will negatively impact Wipro’s ability to differentia

long term.

ide

te in the

It has to increasingly develop its nearshore centers, especially for help desk

management in Europe.

Relentlessly focus on costs and process rather than value

pportunities

Developing transition methodologies to ease this process from a customer perspective

and is also exposing the cost savings associated with taking a high proportion of work

to an offshore location.

Looking at asset transfer in EU this will take Wipro into big league

• Needs to evaluate options for nonlinear growth, such as an IP-based solution

e the key areas where Wipro will be foraying into

of spreading itself across too many different services

to compete in the

infrastructure market vis-a-vis the incumbent providers.

• Wipro lacks the experience in taking over assets and needs to show savings from

•

•

O

•

•

framework.

• Hand held devices will b

• Address SMB markets: Companies interested in adaptive provisioning and pricing

models.

Threats

• The company is in danger

domains simultaneously.

• Wipro has to develop a strategy beyond labor arbitrage if it is

performing this work.

37

9.3.3 Infosys Technologies

Although a late entrant into this market, Infosys is building up some strong momentum

implementation, Infosys has since invested

rovides consulting and IT services to clients globally - as

n business transformation

mployees worldwide, we use a low-risk Global Delivery

Model (GDM) to accelerate schedules with a high degree of time and cost predictability.

ogy, delivered by best-in-class people." &

"To achieve our objectives in an environment of fairness, honesty, and courtesy towards

t & Management:

gineering,

mance & Management

Scorecard, Corporate Strategic Planning, CPM Technology Implementation,

on Framework, Technology Architecture & Design.

ent, Performance Testing,

est Automation, Testing Center of Excellence.

Infrastructure Services

thanks to its use of innovative business service management methodologies coupled with

modular, business-centric delivery processes. While faced with an initial struggle in

finding the right skills locally for fast

strategically in on-site and nearshore delivery options for Europe.

Infosys Technologies Ltd. p

partners to conceptualize and realize technology drive

initiatives. With over 69,000 e

Its Vision and Mission is to "To be a globally respected corporation that provides best-of-

breed business solutions, leveraging technol

our clients, employees, vendors and society at large."

Service Offerings:

Application Developmen

Application Development, Application Maintenance, Application Re-en

Application Portfolio Management, Platform Services.

Corporate Perfor

Balanced

Data Architecture, Discovery and Solution Design, Integrated Management Processes

and Methods, Strategy Executi

Enterprise Quality Services

Defect Prevention, Metrics Based Performance Managem

Process Assessment, Process Training, QA Process Consultancy, Software Process

Capability Improvement, T

38

Application Management, Datacenter Services, Desktop Services, Infrastructure & ITIL

onsulting, Mainframe Operations, Network Services, Service Desk.

System Integration

Enhancement (PE2).

C

Packaged Application Services

CRM, Enterprise Application Integration (EAI), ERP, HCM, SCM.

Product Engineering Services

Additional Product Services, Offshore Product Development Center, Product Consulting

and Professional Services, Product Design & Development, Product Lifecycle

Management, Product Sustenance, Testing & Automation, Systems Integration.

Architecture Services, Business Intelligence and Data Warehousing, Enterprise Content

Management, Enterprise Information Portal, Enterprise Mobility, Enterprise Security,

Identity Management Migration and Re-hosting, Performance Engineering &

0.0%

5.0%

25.0%

10.0%

15.0%

20.0%

30.0%

35.0%

Revenue by Services

31-Dec-06 20.1% 29.8% 2.1% 17.9% 3.3% 7.0% 1.5% 4.9% 9.1% 4.3%

30-Sep-06 21.4% 29.2% 2.3% 17.0% 3.6% 6.8% 1.6% 4.5% 9.9% 3.7%

30-Jun-06 21.3% 29.9% 2.6% 16.5% 3.0% 6.2% 1.8% 4.2% 10.8% 3.7%

31-Mar-06 20.1% 30.8% 4.3% 17.1% 3.2% 5.6% 1.9% 4.0% 9.8% 3.2%

Re- Package Engineer Businesroducts

Development

Maintenance engineer

ingImplementation

Consulting Testing ing

Servicess

Process

Other Services P

39

Infrastructure Services:

SWOT Analysis

trengths

• Highly adaptable to clients demands by virtue of its size

• Its overall offshore infrastructure management capabilities stand out for their high

process maturity

• R&D is strong focus area. 82 invention disclosures and 20 patents applications in 2006.

• Strong strategies for investment

• Strong capabilities in Wintel, Unix, and network management and monitoring gives cost

benefits.

S

40

Weaknesses

• Lacking focus to align ISM with core business

lacks the nearshore capabilities to provide clients with multi-country infrastructure

opportunities to network with Fortune 500 business leaders.

• Strategies like MD and Chairman on the boards of other companies helps Infosys to

oors at a senior level with both clients and prospects.

issue

• Weak market presence

•

management support.

• Attrition rate, though low as per industry, but is going up

• Cannot get HR for infrastructure management

• High training cost

• Weak onsite support

Opportunities

• Vendors are eager to partner with Infosys.

• Will find opportunity in bundling application and infrastructure management

• Focusing on European market.

• Presence in World Economic Forum and the Bill Clinton Foundation work out as a

open d

Threats

• Weak security and disaster recovery capabilities and no certification will raise

in European countries

• No major experience in staff transfers

41

9.3.4 HCL Technologies.

HCL has strong infrastructure management background and innovative services strategy. The

and managing infrastructure transformation to help clients better

HCL is one of the leading global Technology and IT enterprises with annual revenues of US$

nies, HCL Technologies and HCL

founded in 1976, is one of India's original IT garage start ups. Its

range of offerings span R&D and Technology Services, Enterprise and Applications Consulting,

cture Management, BPO services, IT Hardware, Systems Integration and

n India. The HCL team comprises 43,000

professionals of diverse nationalities, operating across 17 countries including 360 points of

ajors.

company has grown from being a pure-play IT operations supplier to an end-to-end service

provider capable of initiating

align with their business needs.

3.90 billion. The HCL Enterprise comprises two compa

Infosystems.

The 30 year old enterprise,

Remote Infrastru

Distribution of Technology and Telecom products i

presence in India. HCL has global partnerships with several leading Fortune 1000 firms,

including several IT and Technology m

Its Business Model and Service Offerings:

42

Infrastructure Services:

RIM Service Offerings – By Indian Vendors.

Service

Provider

System

Monitoring

Network

Monitoring

Security Desktop

Support

E-mail

Support

ERP

Operations

Support

Database

Administration.

Mainframe

Support

Wintel

Support

Unix

Support

Help

Desk

Wipro

TCS

HCL

Infosys

High Provided to 10 or more customers

Medium Available and provided to 1 to 10 customers

Low Under development or not a stand-alone service option

Services

Services Desk Incident Problem Change Configuration Release

Checkpoint

ISS

Cisco

EMC

Sun

IBM

IIS

I Planet

Apache

Oracle

SQL Server

Windows

UNIX

Windows

MAC

Sun

Cisco

Nortel

Enterasys

Avaya

M

Symantec

Trend Micro

HP

Hitachi

Web logic

Web sphere

Sybase

DB2

Linux

Midrange

Mainframes

Linux

S Exchange

Lotus Notes

Custom Apps

ERP/CRM

Net Forensics Dell

End User Computin

g

Data Centre

Security ApplicOperat

ation ions

Process & Tool Consultancy

Network

43

9.4 Latest figures disclosed during Jan-Apr 2007

US$ Mn 2004 2005 2006-07 2006-07 2006-07 Q1 Q2 Q3 Wipro 92 200 51 60 85.6 TCS 78.2 136.8 61.21 58.52 60.39 HCL 64.4 115.2 46.434 40 Infosys 59.8 100.8 Discl at Yeoses ar end Satyam 50 3.2 16.74 20.6 4 18.3 #Others 115 172.8

3

5

7

9

11

13

17

19

AM

J 05

to JA

S

JAS

05 to

ON

D 0

5

J

JFM

AM

J

AM

J 06

to JA

S06

15

05

ON

D 0

506

06

to 06

FM

TCS Infosys HCL Wipro Satyam Cognizant

% QOQ

AMJ 05 to JAS

JAS 05 to OND

JFM 06 OND 05 to AMJ

05 05 JFM 06 06 AMJ 06 to JAS 06 TCS 7.08 6.82 9.13 7.65 8.21

Infosys 10.08 6.68 6.08 11.30 13.03 HCL 3.24 5.88 7.69 7.94 10.29

Wipro 8.31 11.4 10.67 0 7.52 3.69 Satyam 8.54 5.24 6.76 7.33 9.32

Cognizant 11.24 9.09 11.13 17.97

44

10. Methodology

Sampl haracteristics Considered Within Each SWOT Category (Repre ntative of Types o tions) STRE THS WEAKNESSES OPPORTUNITIES THREAT

e Cse f Considera

NG S Adprop

vanta s of osit

Capabili s, resources,

ts, ple

pet e ntages

Organizational core competencies USPs Resourc etpeo Organiza tr Cost efficienc s and cost stru Experience, knowd Financial reserves, likely returns Cash flow, long-term contracts Brand and reputation Marketing reach, distribution, Awareness Innovation Location and geographical

Accre Com strength Cost structure Disadvantages of proposition Distractions from core a

abi Kn ues anvul Loss of key staff Ma ent covsuccession Morale, commitment, leadership Obsolete technology Organizational culture Poor product and marketing mix Processes and systems and so on

Bu and product d D hic shifts Gap in the m itespace Geographical, export, import Glo ces Ind stytrends Information and rese Market developments and t New markets, vertical, horiz New source of labor New USPs Niche target markets Non traditional partners Partnerships, agencies, distribution, channels

cal effects

Economy me, a E viro l effe Fiscal policy Insurmountableweaknesses

en

lative effects

et demand

entrants

New technologies, services, ideas Obstacles faced Seasonality, weather effects Substitute products and services Sustainable financial backing

geion

tieasse peo Com itivadva

es, assple

s,

tional s ucture

iectures

ledge, ata

ditations

petitive

ctivity Gaps in cap lities

own iss d nerabilities

nagem er,

sinessevelopment

emograp

arket/wh

bal influen

ustry or life le IT developm

arch

rends

ontal

Politi

(hobroad)

n nmenta cts

ts

Legis Mark New

45

11 References

ls of the research project which includes:

o con e c o at HCL nologies a

is firm C, B

rviews pub shed in CIO Today, business week, Data Quest etc.

Book la NASSCOM

Various references are taken at different leve

• ng t TalkiTech

cerned peopld Wipro Technologies and TCS.

e in th orporate communicati ns departmentn

• Articles publ

Everest etc.hed by consulting s like Gartner, ID utler, Forrester,

• Inte li

• Black unched by M

Websites like: www.hcltech.com www.hclisd.com www.wipro.com www.satyam.com www.tcs.com

sys.com

ww.infow

ww.gartner.comw www.globalsourcing.com www.outsourcingdatabase.com