India's IT managed services on its boom

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">According
to
a latest report by href="http://www.dqweek.com/Indian-IT-market-to-grow-at-15.5-percent-Springboard-Research-">Springboard
Research, the IT managed services
market in India is expected to reach $3.8 billion in 2013 from $1.6
billion in 2009. This rise is at a CAGR of 22.8 percent, which is
higher than the growth rate of the overall IT services market.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">Springboard
also
noted that although managed infrastructure services dominate the
market in 2010, the highest growth will be recorded by managed
application services with a href="http://www.dqweek.com/Indias-IT-services-market-to-reach-$128-billion-by-2013">CAGR
of 26.3 percent from 2009 to 2013.

“Managed IT services in India have
existed in varied forms for more than 20 years. In this time, the
market has matured and transformed from body shopping contracts or
facility management services to a process-oriented delivery model,”
said Sudip Saha, Senior Analyst-IT Services, Springboard Research.
“After the initial delivery of on site managed services, the market
started to transform to a hybrid of off site services delivery either
through Remote Infrastructure Management (RIM) or a style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">combination
of
RIM services and on site delivery,” added Saha.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">The
Springboard
report noted that while the large enterprises in India
were the early adopters of managed services, SMBs have also started
adopting due to the similar competitive pressures and operational
concerns they face. Large corporate entities often have skilled
internal IT teams to support day-to-day operations, hence SMBs prefer
to adopt the managed services model in a phased manner.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">In
terms
of adoption among verticals like BFSI, organizations remain the
largest contributors to the managed IT services market with a share
of 28.2 percent, followed by the manufacturing and government
verticals.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">According
to
Springboard, the key reason for managed services market growth in
India is not just cost savings, but the use of managed services as a
business optimization and growth driver. Managed services provide
opportunities for enterprises to focus on their core business
competencies while leaving day-to-day IT operations to a third-party
service provider. Flexibility is yet another key outcome that managed
services provide to enterprises. It gives enterprises the option to
convert capex to opex and allows enterprises to convert traditionally
unpredictable, reactive and costly IT services to a single tangible
cost. Furthermore, enterprises gain access to high-quality, expert
support and best-of-breed management tools with a minimum investment.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">Springboard
observed
that the current managed services pricing model in India is
service level agreement (SLA) based, but as the market evolves, more
granular pricing models such as pay-per-user and pay-per-seat are
expected to emerge.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">“The
managed
services providers need to focus on service excellence and
offer productized services to retain customers. They must expand
their local delivery capabilities by having knowledgeable,
customer-facing partners and distributors,” suggested Phil Hassey,
VP-IT Services, Springboard Research. “Whereas the users need to
gauge compatibility of managed services with their internal business
processes and maintain a balance between onsite and offsite
services,” added Hassey.

style="background: transparent none repeat scroll 0% 0%; -moz-background-clip: border; -moz-background-origin: padding; -moz-background-inline-policy: continuous;">The
Springboard
report has also analyzed and ranked vendors on the basis
of user satisfaction and marketshare. href="http://www.dqweek.com/HCL-launches-the-new-%27Beanstalk%27-range">HCL
Infosystems leads in the
user satisfaction survey whereas Wipro Infotech is the leader in
terms of marketshare.