Every company is looking to optimize expenses more than ever before

He is considered a pioneer of the Internet infrastructure industry. A
technologist, entrepreneur, and visionary, BV Jagadeesh, chairman, Netmagic
Solutions wears many hats. With his company firmly entrenched in the managed
services space, he speaks to Dataquest about the recession, the industry, the
value, and the criticality of managed services and its potential in India.
Excerpts

Are the adverse market conditions opening up new opportunities?

Absolutely. We are seeing a change in customer behavior. There are three
areas customers are focusing on: cost efficiency model, adoption of outsourcing,
and exploring new technologies to bring in efficiency. If you look at these
focus areas from a cost efficiency point, over the last year and a half
surviving the recession has been a top priority for every company. Organizations
are opting for various avenues to tackle the recession which has only increased
the worries of a CIO, for whom spending more on technology each year is a
concern.

Meanwhile, on the outsourcing front, enterprises are facing issues such as
manpower retention, deployment of complex applications causing issues like 24x7
monitoring, security, business continuity, etc, along with the growing need to
provide quality services both to customers and employees. Hence, outsourcing IT
infrastructure is becoming a key driver for survival. Finally, one needs to
explore new technologies to bring efficiency and with the slowdown becoming more
prominent, enterprises are looking at ways to get more out of the existing IT
infrastructure and that is why offerings like cloud computing are gaining a
foothold among all companies, big and small.

In the changed environment, what strategies did you adopt specifically to
sustain/improve profitability?

Our tag line reads when its mission critical and that has been our
strategy well before the recession, when we ventured into the business of
managed services. As a company we are constantly striving to gauge the pulse of
the market and come up with offerings that satisfy the mission critical needs of
the market. This approach has enabled us to gain the first mover advantage in
most of our offerings. For example, earlier this year, we became the first
Indian managed services provider to launch its cloud computing services.
Recently, the company became the first player in the space to get into
electronic data vaulting services as well.

What do you think are the key learnings from this recession?

The biggest reality of the recession was that every company is looking to
optimize their expenses more than ever before. The recession showed companies
that while incurring certain expenses is inevitable, they could cut down costs
in other areas too.

Managed services in India has had a chequered past with some CIOs having
reservations and concerns on security. What is your assessment of this
perception?

In the past, there may have been concerns when it comes to outsourcing to
third party data centers. As you rightly mentioned, round the clock security at
different levels is a parameter that companies need to keep in mind while
outsourcing. They also need to ensure that the chosen service provider has
automated fire detection and alarm systems in place. Reservations about security
are changing with companies staying committed in ensuring that it adheres to
well recognized industry standards and offer optimum security monitoring to
detect any breaches. Netmagic offers security services, wherein it can detect
and fix any such incidents.

Customers are comfortable to outsource to hosting service providers given
that they can offer complete SLAs to customers right from physical
infrastructure to platform availability. We provide both options to customers,
wherein they can avail management for their owned equipment or take managed
servers, network devices. Secondly, Netmagic offers remote infrastructure
service to customers that is not hosted at the data center

Can you elaborate on your managed services strategy and the market
opportunity in India?

An IDC India study on the data center market opportunity covering six
citiesDelhi, Mumbai, Chennai, Kolkata, Pune, and Bengaluru pointed out that
while the captive market will grow only at a CAGR of 16%, third party data
center market will grow at a CAGR of 35% in the next two years. The study also
revealed that an increasing number of companies in these cities will opt for
third party data centers owing to benefits such as cost in terms of power,
skills, real estate, availability of power, and skill and maintenance of
industry standards and accreditations. Thus today, as companies grow,
outsourcing to data centers is more attractive because it allows owners to focus
on their core business. Of the total Indian data center services market in 2007,
third party data centers constituted nearly 20% in terms of built-up space and
this ratio was expected to increase to 27% by end of 2009.

In your experience what are some of the challenges CIOs face in India when
it comes to outsourcing to a third party data center?

Some of the biggest challenges for a CIO when it comes to outsourcing a data
center are managing functions like round the clock security at different levels,
high-speed redundant connections that make data center carrier-neutral and
highly reliable with five nines availability, optimal DC environment including
power, temperature and humidity of the data center and level of support and
skill on 24x7 basis. We excel on all these parameters.

Are lesser TCO and greater RoI the key deliverables that enterprises look
at in terms of managed services?

We provide managed services in the form of infrastructure management and
managed hosting. As part of the infrastructure we manage network, OS, DB, and
select applications for owned infrastructure. Customer benefits from our
economies of scales and shared resources model. The shared NOC model is
cost-effective, especially on 24x7 support requirement. Managed hosting services
provide for hosted hardware with management services. This provides customers
end-to-end SLA right from hardware to platform.

What opportunities do you see with the advent of cloud computing?

Every company, irrespective of its size, can benefit from cloud computing.
This technology makes sense for large enterprises, mid-sized Internet service
companies, and SMBs as well as traditional enterprises in any vertical. Based on
the nature of their operations and size, companies will have different cloud
computing requirements. We recently became the first managed IT services company
in India to launch cloud computing services. Netmagic cloud computing services
are vertical agnostic and can be deployed for varied applications and OS
platforms, giving us an opportunity to reach a wide variety of companies. We
have seen an encouraging response to our services. We also see opportunities
that can be developed in areas of desktop virtualization and provide integration
services for enterprises private cloud setup.

Shrikanth G

shrikanthg@cybermedia.co.in