by March 4, 2009 0 comments

Most CIOs rue spending more on technology each year. That’s why with the
slowdown taking shape, enterprises are looking at ways to spend less and get
more out of the existing IT infrastructure. This has also made Managed
IT Services lucrative option for CIOs today. It gives enterprises various
advantages. For starters, enterprises always find it hard to retain their
existing IT manpower. As the enterprise grows, it deploys complex applications,
and thus faces issues like 24×7 monitoring, security, business continuity, etc.
Plus, there is an increasing need to provide quality service for internal as
well as external users. All of this can be easily achieved by outsourcing IT
infrastructure or a part of it to a service provider also referred to as a
Managed Services provider (MSP). Here, we take a look at some of the trends in
the managed services domain. We also provide insights from a few experts in this

Application management services
As enterprise reliance on IT increases, their applications are starting to
become more complex and mission critical. Application downtime, be it a web app
or any internal app, can result in loss of revenue. So enterprises are becoming
proactive and monitor their applications 24×7. An easy way to do this is to go
for Application Management Services or Managed Application Services.

Managed application services can be broken into various services such as
application maintenance, service management, application production support,
application performance monitoring, which includes 24×7 monitoring of
applications for performance, capacity as well as availability. Also, a part of
the service that is offered separately is Application Log Monitoring service.
Here, the service provider tracks system as well as user activity of
applications, servers and OS. An enterprise can save on the cost involved in
building a log monitoring and management infrastructure. This service is also
like reporting, escalation as well as log archiving. Some vendors also offer
application production support services. These include tasks like Root Cause
Analysis, Trend Analysis, Change Management, Incident Analysis and Resolution.


The future of
managed services like ours is to go virtual and into Cloud computing
mode. In the long run, it will be cost effective and ideal for
enterprises who want to concentrate on their core business and to
automate IT completely.
 Sharad Sanghi
Managing Director and CEO, Netmagic

Netmagic however has a different take on the
evolution of the managed services landscape. According to Sharad Sanghi,
Managing Director and CEO, enterprises did not initially understand the
value of outsourcing certain services. According to him, all components of
IT had to be situated and managed in-house from an old-school enterprise
mindset, due to security and efficiency concerns. Enterprises in the BFSI
space gradually started seeing value in managed services when IT processes
had to be mission critical and banks ended up investing heavily on manpower
and automated systems that ensured agility and on-demand mission
criticality. As a starting point, banking enterprises started outsourcing
their Disaster Recovery operations to third party companies, and gradually
the routine operation and only very recently, the core banking technology

Netmagic broadly classifies its customer base
into Internet customers and Enterprise customers. Internet, simply put,
consists of customers who have online applications, that are used by their
employees real time and the application is synced with the head office or a
central technology centre. The enterprise segments however outsourced their
entire branch office technology applications to Netmagic, making it more
mission critical and data intensive.

In the case of enterprises that already have
a live data centre facility, Netmagic sees its involvement in cutting
operation costs by taking a relook at the architecture, and in most cases,
suggest that the core applications be moved to Netmagic’s pay-by-use model,
while using the existing set of servers for non-critical processes like DR.
In some cases, Netmagic goes ahead and designs the data center for the
enterprise. The other options available of course, to rent a certain number
of servers exclusively for use by the specific enterprise, situated at any
of the third party’s data centres anywhere in the world, or alternatively to
use the third party’s infrastructure, as a shared exchange as and when
computing power is required by the enterprise.

During economic turmoil, Netmagic believes
that Cloud Computing can be effectively used to consolidate allocation and
usage of data centres. This could be in two ways: one, where the enterprise
can rent out an entire ‘cloud’ and link it up with the internal network
cloud of the enterprise or two, use a common shared cloud on-demand to
perform specific mission-critical tasks.

Managed Security Services
Adoption of managed security services has increased over the past one year.
Enterprises are becoming security conscious, and many of them have realized that
they need security experts for proper protection. However, one problem
enterprises face is that security experts are hard to find, and if they hire a
lesser experienced pro and spend time as well as money to train them, the
employee might leave the company, and the whole cycle need to be repeated. Also
security technologies change fast, as newer types of attacks keep on
originating. Another challenge enterprises face is related to compliance. This
includes Incident Response and Tracking, System Audit Policy, Configuration, and
Change Management. Another reason is security of data which keeps on growing at
a phenomenal rate and security threats that grow even faster. Managed security
services can be broken into various services such as Managed Firewall/IPS/IDS/VPN,
Managed UTM Services, Managed End-point Security, Managed Identity and Access


Prashant Gupta
Manager- Security Solutions, Verizon Business

1. What are the main challenges while
implementing Managed services in an organization?

The needs of each organization vary and so do solutions. We assess these
unique needs and put in place a solution that addresses them. Globally
consistent processes and policies are applied, therefore empowering
customers with regional or global businesses to benefit from service
consistency across the globe.

2.How can a company prepare its existing
IT setup to transition to a Managed Services/ SaaS model?

The more information that enterprises have to distribute and manage, and the
more places in which that information is housed, the greater the risk of
that information being accessed by people, whom you don’t want should access
that information. Data is no longer a contained entity — it flows in and out
of the enterprise, and the competitive advantage is directed by how well
organizations are able to manage the speed of that flow. After the initial
evaluation of systems and environment has been completed, the company will
need to perform a risk analysis to pinpoint specific areas of weakness;
establish the drivers for the decision to purchase, whether they be
regulatory, business, partner/channel, vendor, customer, etc; determine the
actual and potential threats to the organization; and prioritize those
threats to establish which are most critical.

3. What services would thrive in the
current scenario?

A key driver in this area is likely to be management of applications such as
VoIP, video conferencing, collaboration, because it allows enterprises to
reduce costs while optimizing their infrastructure utilization. Companies
with investments in networks and those that are currently managing them on
their own might also look to a managed services provider. They are also
likely to look to optimize and get the most out of investments they have
already made, including optimizing their network and existing infrastructure
and virtualizing other key areas. Pressures to reduce budgets have the
potential to speed up the adoption of new services. For example, companies
who are looking at reducing travel budgets might start to look at Unified
Communications and collaboration technologies.

Managed VoIP services
A managed VoIP service usually covers design, deployment as well as
maintenance of the entire VoIP solution. Some vendors also provide management of
existing telephony solutions along with the new VoIP deployment. Usually in
managed VoIP services scenario, all equipment is owned by the service provider,
as a result a customer does not have to worry about maintaining the equipment.
Further, this allows enterprises to have easy access to the latest technology as
well as an easy upgrade to new equipment.

Data center Co-Location-based services
Data centers have become an integral part of any enterprise, however, for
non-IT companies, building and operating an in-house data center means extra
costs on infrastructure for data centers, resources, IT teams, etc. Plus, it
involves critical tasks such as 24×7 monitoring, security, etc.

An easy workaround to this is to go for Data center Co-location Service. Here
an enterprise can place its entire data center on service provider’s premises.
In this model, the data center equipment is owned by the company and it has the
choice to get it managed by the service provider or not. The advantage here is
that the company can save data center space costs, plus, it doesn’t have to
worry about other parameters like physical security, temperature control, etc.


Prasanna Lahoti
Senior Vice President — IT Services and SI Service Unit, 3i Infotech Limited

1.What are the main challenges for
implementing Managed services in an organization?
Today, technology has pervaded all the business operations within most
of the organizations. It touches virtually every stake holder within an
organization and as a result forms the back bone of any organization.
Technology savvy environment is a necessary but not a sufficient condition
to gain business and score new customers. Technology has been improving by
leaps and bounds and need of business is moving faster by the day. Thus, any
managed services activity would need to be a happy amalgamation of enabling
technology change/ upgrade even while it protects the existing investment in
IT Infrastructure. Secondly, Managed Services is expected to be more or less
like a utility. The essential expectation is that it should be available on
tap. As such, availability and uptime of the complex infrastructure becomes
extremely vital.

2.How big is the Managed Services market?
What are the emerging trends in Managed Services?
According to reports from various sources as well as our understanding
of the marketplace, India’s managed IT services market is expected to reach
$2.78 billion (US) by 2010 and is growing @ 25% pa. As organizations in
India, start attaining world class status a lot of effort will go into
creation of world class data centers — hosted or otherwise, managed security
environment and storage and other related areas. With the expanding rural
economy, businesses are rapidly expanding into the hinterland. At the same
time, creation of remote help desks will commence in real earnest across
tier 2 and 3 cities in the country.

3.What are your future offerings in MSPs?
How managed services could help a company to save operational expenditure
and have better security features?
Some of the future service offerings planned are;

  • Managed Security Services
  • Software-as-a-Service
  • Managed Application Hosting
  • Managed Storage/Backup Services

We can provide a complete end to end offering
where 3i Infotech and our customers could come up with variations of capex/
opex model. The result based model that we are putting in place effectively
puts our skin in the game with customers business and provides them the
certainty of working with a partner through thick and thin. End of the day,
we aspire to be a player whom our customer can trust their IT infrastructure
environment and rely upon us for all their current and future IT services

Another benefit of this service is that if an enterprise decides to re-locate
to a new office, its data center and application running on top of it are not
interrupted at all. Also, if a company decides to expand its servers or other
infrastructure, it can simply rent more space.

But if a company doesn’t have an IT task force, it can choose its
infrastructure to be managed by the MSP. With such an arrangement a company
doesn’t have to worry about issues like business continuity, skilled workforce,
immediate problem resolution, etc. Pricing for such a model can vary according
to factors like the amount of bandwidth needed, physical space required, amount
of cooling required, physical security and quantity of power required as well as
the amount of UPS or generator support needed. Additional costs might be added
if the enterprise opts for other managed services such as patch management, data
backup, security services, etc. Similarly, you have ‘platform as a service’ (PaaS)
model where everything is owned by the service provider and the enterprise only
pays for what it uses.

services@Wipro Infotech

Wipro Infotech sees a trend
where the ideology of outsourcing key components of IT management and
infrastructure has evolved from about 10 years back, when the ‘facilities
management’ department started by calling in external help for temporary
faults in the infrastructure in a break-fix manner.

An ideal
example that shows the effectiveness of Managed IT Services is this:
imagine your employee who is working from home suddenly finds his/her
laptop not responding to queries. The Managed Services partner remotely
accesses the employee’s hardware, identifies the problem and sends an
online patch real-time helping him/her to recover data. In rare
instances, a technician is rushed on-ground. In the absence of Managed
Services, the IT head will have lengthy conversations over phone, or
worse, the laptop is abandoned till the next business day.

 Kiran Desai,
Business Head , Managed IT Services, Wipro Infotech

The next graduation was to outsource the
server and desktop management, allowing the enterprise to concentrate on the
business growth path, leaving the day-to-day maintenance and functioning of
the IT backbone in responsible external sources. According to Kiran Desai,
Business Head — Managed IT Services, companies that have blanket coverage in
B and C class cities in India found more takers due to a clear cost

During times of economic uncertainties, Wipro
Infotech admits that there is an increased demand for higher output, single
window partners and lower costs. Analysis by Wipro reveals Asset
Consolidation, Resource Consolidation, SLA re look, and more effective
delivery models as the need of the hour.

Re looking at the SLAs is the next stage
where more detailed analysis can be carried out by managed services
companies, leading to better and reduced leakage delivery models, where the
external agency’s expertise can be used to reach the desired
products/services to the desired audience in reduced time frames. More
evolved companies have already started automating even the level 2 and level
3 jobs, while other companies are trying out external help with level 1
assistance. Another important technology component where enterprises fail to
understand the leakage of resources and business is with the application
level analysis versus hardware performance level analysis of IT usage.

Pricing models
Pricing models for a managed service differ by type of service, degree of
customization and other factors such as, terms of agreement according to the SLA.
Some of the commonly followed pricing models include seat based models, Result
and SLA based, fixed in resource based , etc. For large user engagements Asset
based pricing model is preferred.

Per-user pricing model has been gaining popularity. This model is preferred
if entire IT infrastructure is outsourced to a particular MSP. Another model
which is popular with medium and small enterprises is tiered model. In this,
MSPs offer different packages of the same services, and customers can adopt the
one which suit them most. For instance, an MSP providing managed security
services might provide in its basic package just monitoring of client IT
infrastructure while in advance package, it will provide services like
vulnerability management, penetration testing, security incident response etc.

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