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With the likes of Accenture, EDS and IBM offering "offshore" data center management services, some Indian IT players are eyeing this market closely. However, the same kind of growth as the Indian BPOs saw in IT applications offshoring, is not likely to happen soon.
Why Outsource Data Centers?
Before considering the case for offshoring, we need to understand what drives corporations to outsource their data centers at all, particularly given their fears about data security, reliability and intellectual property. Clients look to data center outsourcing when they are faced with one or more of the several issues below:
- Cost pressure
- Increasing management time
- High investments in technology and infrastructure
The key attraction here is that the costs of continuously upgrading infrastructure, particularly hardware and software; can be passed on to the vendor. Apart from cost saving, data center outsourcing is also driven by a need to increase organizational efficiency and reduce downtime. Lower business risks coupled with higher productivity levels in the organization are key benefits of outsourcing data centers .
Vendor Landscape
IBM and EDS dominate the global data centers business, but several Indian IT companies have entered this market. However, while global giants like EDS and IBM can offer end-to-end services, Indian vendors are trying to carve out a place for themselves in infrastructure management services. Some of the services offered by India-based vendors are: - Network management
- Systems administration
- Database administration
- Real-time application support/technical helpdesk
- Enterprise resource planning (ERP) support
- Remote network monitoring
- Remote hardware monitoring
- Support in Database administration
Going Forward…
Given that data centers are unlikely to move easily across locations, Indian players are adopting diverse strategies. Large Indian IT companies like Infosys, Wipro or HCL are looking to build models similar to those of IBM and EDS; with a near-shore physical center and offshore management. They also believe that they can leverage their expertise and reputation in IT, to get bundled contracts that also encompass remote infrastructure monitoring. However, compared to the likes of IBM, contracts bagged by Indian vendors are relatively small in size.
Given the finance and infrastructure needs, only the larger Indian companies are likely to make significant headway. Interestingly, it was IBM and not Wipro or TCS that bagged one of the largest IT infrastructure outsourcing deals in the Indian domestic market.
While remote infrastructure maintenance is growing very rapidly in India, there are next to zero physical moves of data centers to India or to India based firms. Whether data center deals will continue to be dominated by firms like IBM and EDS or will Indian IT firms make a mark in this segment remains to be seen.
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