The Indian Managed IT Services market is expected to grow at a CAGR of 24.9 percent and become a $ 2.78 billion industry by 2010, making it one of the fastest growing markets in the Asia/Pacific region. The total India Managed IT Services market in 2007 was estimated to be $ 1.17 billion with Managed Network Services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 percent of the total India domestic IT Services market, which crossed $ 5 billion revenues in 2007.
"The traditional IS outsourcing model is under siege and "Risk and Reward" deals are now becoming popular. Today, service providers are launching low-cost, highly flexible service delivery platforms that leverage ‘commoditized technology’ to provide more ‘productized services’ to customers,” said Seepij Gupta, Assistant Manager, Software and Services Research, IDC India.
The notion of Managed Services is no more just hype or an industry buzzword. Initially the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure. Today, even mid-market enterprises are opting for this model as they realize the need to concentrate on the core objective of delivering value to their customers, rather than deploy valuable management resources in running and maintaining IT infrastructure.
As enterprises of all sizes, across verticals reap the benefits of outsourcing their IT infrastructure, the main driver for Managed Services can be summed up in one sentence – it is all about "do it for me" versus the burden of "do it yourself". Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at compounded annual growth rates (CAGRs) of 31 percent and 28 percent respectively, over the next three years (2008 to 2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’.
"While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone," added Praveen Sengar, Senior Manager, Software and Services Research, IDC India.
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