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The new star of the Indian IT Industry!
Vineet Nayar, former Chairman, NASSCOM RIM Forum, and former Vice Chairman & Joint Managing Director, HCL Technologies

An Industry analyst once commented on the criticality of IT Infrastructure to an organization’s success, saying, “While perhaps not as flashy as iPods, nanotechnology, or service-oriented architecture, IT infrastructure is the plumbing that consumes massive amounts of capital and supports critical commercial activity in the modern world and when it fails, everyone pays attention.”

Vineet Nayar, Chairman, NASSCOM RIM Forum & CEO, HCL TechnologiesRemote Infrastructure Management - The message is loud and clear, that IT Infrastructure is at the heart of an enterprise and no CIO in his/her worst nightmare would wish for it to ever fail! With the intent of avoiding such occurrence, the IT Infrastructure Management Industry came into being and its players have continued to evolve in their service models, ever since. Consistent performance of this industry has evidently raised its appeal globally, and it stands today with a market opportunity of around USD 500 billion. Its volume is perhaps an apt reflection of the significant place it enjoys in a CIO’s life.

The history of the global IMS Industry is rather long, but I will cut straight to about 5 years back when this Industry took a revolutionary turn for our country. This was the time when many global organizations started looking for low-cost, high-quality alternatives, and they sought global delivery models to achieve these goals. The last one decade saw Application Development and Maintenance (ADM) and Business Process Offshoring (BPO) leading the IT infrastructure industry growth, but the last few years have paved way for a new segment that concentrates on remote management of Infrastructure services or Remote Infrastructure Management Service (RIMS).

Industry on the whole has witnessed a high growth in the adoption of remote infrastructure management service among the global enterprises. Many factors have contributed to this elevated growth, including the fragmentation of the infrastructure value chain leading to the sliver-isation of services; technological and architectural changes; transforming customer behaviors and focus; and altering offshore vendor supply environments. Requiring sophisticated tools to manage core IT systems of an enterprise,  remote management of infrastructure services is mission critical and reflects high customer confidence and relationship. This alternative model of managing IT Infrastructure using remote low cost locations like India has not just caught the eye of CIOs but is gaining their confidence day by day. Indeed, good news and a substantial opportunity for India to have a leading edge in the global IT outsourcing landscape, and for Indian service providers to be positioned higher in the value chain.

So what started as a smart and alternate sourcing model has today become a strategy of choice for CIOs across the globe. RIM’s attractiveness is evident from the huge market potential this Industry has come to have. As per a recent Report by NASSCOM-McKinsey titled ‘Remote Infrastructure Management Services: Igniting India’s leadership (2008)’, globally, the RIM industry is expected to achieve a penetration of 25 to 27 per cent by 2013, a US$20 billion to US$21 billion increase over the revenues of about USD 6 billion to USD 7 billion today. The Report goes on to state that with global CIOs’ continued comfort with India as the “primary” offshore destination, the country will capture greater than 50 per cent of the world market i.e., USD13 billion to USD15 billion in revenue by 2013, which would create 325,000 to 375,000 jobs.

These numbers validate the exponential growth in demand for remote infrastructure management services. Recent surveys of over 140 CIOs by McKinsey & Company suggest that, as customer environments mature and they have more control over processes, they are more likely to adopt remote infrastructure management. While 18 per cent of CIOs surveyed have offshored some part of infrastructure management, an additional 7 per cent plan to offshore in the next three years while a further 15 per cent plan to offshore, though without a specific timeline. Another witness to this interest is the steep rise in solicited infrastructure RFPs to offshore vendors, which has grown by 440% since 2000 from 52 in 2000 to 229 in 2007.

The reason for this surge is simple – a compelling benefit story. Customers have begun to enjoy several benefits from RIM. The most significant is a reduction in their overall infrastructure costs. Some customers are seeing a reduction of almost 25 per cent in their IT infrastructure budget. They are also getting better service, quality and transformational value from their Indian remote infrastructure management partners.

With such an attractive environment and benefit kitty, India’s RIM industry is on the threshold of a surge that could have historic global impact, comparable to that created by the ADM and BPO industries. An increasing number of global CIOs are likely to put global delivery of remote infrastructure management at the core if their IT Infrastructure strategies in the next 3 years. While a whole lot of others will sit up and start their explorations of this hot new offering from India.

But for India to sustain its leadership and realize the full potential of the RIM opportunity, several challenges must be addressed. NASSCOM, the industry, and central and state governments need to work together to address the issues of talent supply and quality. The Government also needs to address concerns stemming from the inadequate supply of physical infrastructure, regulatory issues that direct lower productivity and reiterate its commitment to enforcing security and cyber laws. On the supply, the Indian service provider community needs to support the adoption of ISO 20000 as the standard to enhance  RIM process sophistication and maturity, enhance operational excellence to match global peers (by investing in integrated tools, security and transition methodologies, plan for scale to develop efficient ‘service factories’, applying productization, automation, and lean techniques to optimize delivery) and enhance sales and marketing capabilities. In fact, going forward all stakeholders will need to act in unison upon the challenges and implications arising from the RIM opportunity to ensure that India can once again establish and sustain a leadership position as the IT global delivery hub of the world.


  • Real-time response, mission-critical nature of activities/processes in RIM compared to predominantly project-based in ADM  
    Device-based or SLA-based model in RIM compared to the largely FTE-based service model in ADM and BPO
  • High need for process standardization in RIM
  • High security requirements in RIM compared to ADM and most BPO processes
  • Increased leverage of tools for RIM and contractual governance
  • High dependency on other vendors and IT assets required for effective execution (i.e. closure of tickets) in RIM as against independent execution in ADM and BPO
  • Talent requirement: RIM requires high technology skills. The service is mission critical in nature with zero tolerance for error.
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