Layer 5 Switches Gain Popularity

As networks kept getting increasingly complex, a shortage of qualified IT staff prompted Indian businesses to actively outsource their network upkeep needs to network management service providers. For most Indian businesses, almost 40% of the overall networking costs go into administering and maintaining the network.

Coming at a time when the industry was reeling under the effects of the slowdown, the demand for NMS provided a much-needed market opportunity for a number of Indian network integrators who branched out into this lucrative business space. The total network management services market last year was pegged at Rs 171 crore.

Visible trends
The NMS market in year 2002–03 was dominated by the likes of Datacraft and HCL Comnet. Other leading market players were Wipro Infotech, Satyam Infoway, GTL, Microland, Comsat Max, CMS, and Bangalore Labs. In addition, NCR and Euro Networks built their reputation by managing hosts of ATM networks of different banks.

While cost was definitely a strong motivation for Indian businesses to outsource their network management needs, organizations without qualified staff and resources to manage their networks increasingly found outsourcing an attractive option. Also, outsourcing provided a significant competitive advantage for most companies who looked at rapidly expanding their networks across the country.

There was an exponential demand for managing enterprise network services such as LAN, WAN, VPNs, VoIP, intranets and extranets for deploying various applications. Some NMS vendors like HCL Comnet and GTL even offered value-added services like disaster management as part of their service bouquets.

The promise of the sector was such that even traditional VSAT players like Comsat Max and Gujarat Narmada Fertilizer Corporation (GNFC) joined the NMS bandwagon. With years of experience in the VSAT space, Comsat Max was in a position to provide customers a complete end managed digital network for data, voice and video transmission.

The Indian corporates increasingly took to wiring up their branch offices, mostly due to the growing dependence of businesses on networks. Banking was a major sector pushing for networking its branches. While SBI increased its branches by 900, Punjab National Bank and Syndicate Bank ramped up their networked branches by 400 and 85 respectively. More significantly, their purchase orders mentioned that the networks would have to be managed end-to-end by the service providers.

The lack of will on the part of corporates to continuously upgrade their technology infrastructure was another key factor driving the NMS space last year. In direct contrast, most of the serious NMS vendors kept on investing substantially in technology and in constantly upgrading their skill sets to address emerging issues in network management. This made them an ideal choice when it came to outsourcing network management needs.

The NMS space in India is expected to accelerate faster than other markets in Asia-Pacific. Pure-play players like Microland and Bangalore Labs are looking aggressively at tapping new emerging verticals. The Indian market potential is considered quite high in the BFSI, call center, and service provider segments, as also in the courier services and FMCG companies.

Vendor infrastructure & clients
It is difficult to make a clear estimate of the market share of various NMS players since many of them are still clubbing their revenues with their integration business. However, among companies who are already providing NMS revenues under a separate head, Datacraft emerged on top with nearly Rs 56 crore worth of business followed by HCL Comnet, which did business worth Rs 32 crore.

Others like Wipro Infotech, Bangalore Labs, Ramco, Comsat Max, and Sify were in the Rs 12–14-crore bracket. In terms of infrastructure, all major players invested substantially in establishing their NOCs. For example, the NOC at HCL Comnet provides end-to-end WAN management services. One of HCL Comnet’s largest projects worth Rs 3.14 crore in 2002-03 was for Punjab National Bank. It also had Fabmart, TVS–Suzuki and Indiatimes among its customers.

Datacraft also set up its NOC in Bangalore through which it offered its STARtrac management services. A large chunk of its Rs 88 crore integration project for SBI was contributed by the NMS sector. Datacraft even launched its own iBOSS integrated network management system (iNMS) tool. Sify came up with ‘Beacon’, a product for network management. "The Hindu" newspaper group became the first buyer of Beacon, while other clients included British Council India Library, New India Assurance, ABN Amro Bank, Amul, and ISRO.

Wipro Infotech’s NMS service also offers special emphasis on security, as its NOC in Bangalore has the capacity to continuously manage and monitor 1,000 firewalls. Some of Wipro’s clients include Apnaloan.com, Essar Group, Indal, Kotak Securities, ICICI, LG Soft, i-Flex, HDFC, KPMG, Canara Bank, Haldia Petrochem-icals and Seagram Manufacturing. Microland used Wipro’s NOC to service clients like Blue Dart, IDBI Bank, and Procter & Gamble.

GTL’s NOC in its Mahape facility is used for remotely managing the networks of about 10 of its blue chip clients. These include centre operations and network security on a 24x7 basis that involves trouble ticketing for leased lines.

Bangalore Labs too invested substantially in setting up its International Management and Resource Center (IMaRC), a vendor-plural NOC facility. Some of its primary customers are Pidilite, Shoppers Stop, Hathway, and IIM Lucknow.

Comsat Max, through its 24x7 NOC in Delhi, services clients like Hero Honda, Thomas Cook and Exide, while Ramco has clients like Bombay Stock Exchange, Indian Oil, Amara Raja Batteries, Ericsson, Coca-Cola, AirFreight, Hughes Escort, ONGC and Tata Institute of Fundamental Research. Even banking service providers like NCR and EuroNetworks have joined the NMS bandwagon. While NCR manages the entire ATM network for SBI and HDFC among others, EuroNetworks manages the shared ATM network for IDBI Bank, Standard Chartered, Citibank and UTI Bank.

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