NOCs: the Multiplier Effect

Santa Clara based Ketera Technologies, a provider of on-demand eProcurement

solutions, has just set up a development centre in India. Ketera outsourced its

design work and is currently in discussions with vendors to manage its network.

Agenda: onsite/offshore project management, certifications and security.

"Looking at the track record of the management team and its integrity to

maintain the right level of security is important. I would see if there are

checks and balances in the vendor company-if the key is in the hand of one

person, it could be dangerous," Raj Shah, a vice-president with the

company, says.

He airs a view widely circulated in foreign shores. Many American and

European firms know the potential of network outsourcing services in offshore

locations, but have apprehensions that go beyond security and loss of control: a

reason why Indian companies have few international clients in this space-traditionally

the forte of IBM, NCR, Compaq and HP. But the potential and the value

proposition, even in the domestic sphere, looks huge with more and more banks,

large hotel chains, the manufacturing industry and large software companies

looking to outsource their network management.

Many small to medium level companies, which include local systems

integrators, hosting providers, and facilities management firms, have reported

30-40 % growth rates in business in the past year. And since the base is still

small, companies with $1-4 mn of infrastructure management business today will

grow even faster.

The volume chase



This brings us to the important question of having more international

clients.

On the technologies to be put in place for remote infrastructure management,

an area of analyst concern is 'country risk'; if you have the Network

Operation Centre (NOC) in Bangalore as opposed to distributing operations all

over the world, what happens when Bangalore suffers a downtime? Vendors

obviously can't say they didn't provision for it or talk about disaster

recovery in some other country that would take another 48 hours or more to set

up. A foreign client's general uptime demand is 99.9%.

"Take the recent case. Last month, networks all over the country went

down after one land and one sea cable were cut simultaneously the same day. All

offshore centres were affected. This kind of a problem for application

development is not a big issue. The uploads configured could be done later. But

in remote infrastructure management, if a server is down, you won't even

know," notes GK Prasanna, vice-president of Technology Infrastructure

Services with Wipro.

Wipro has, therefore, invested in two NOCs outside India-the US and the UK.

If one goes down, the other takes over. Secondly, the company's solution is a

three-tier architecture; a portion of the solutions that reside on the customer's

IT infrastructure. If a customer is cut off from the world, Wipro still doesn't

lose a single client alert.

For start-ups, having multiple NOCs is a rare possibility. But MphasiS, which

is working towards getting into the remote network management business by

2005-06, has invested over $1 mn in its new Global Network Operation Center (GNOC).

"NOCs can give you a physical level of comfort. I tend to be much more

business driven. A lot of the comfort factor with clients comes from the level

of relationship that you have with them. They need to understand who you are,

your company and your background in the area," says Aditya Menon, MphasiS

group CIO.

The value network



Some medium-level players have also started thinking in terms of multiple

NOCs. Network Solutions, for example, has also invested in a GMC but had started

off with a disaster recovery center in Bangalore and is now looking at having a

second one, either in Mumbai, Hyderabad or Singapore. They are also looking at a

lot of value additions to get that international edge.

"Most of our competitors are using third party tools. All the tools we

use are developed in-house. It has its advantages: it becomes easy to control a

product since you need to customise something or the other for customers,"

Sudhir D Sarma, managing director of Network Solutions says.

NOCs are, therefore, turning into value centers where transparency of

information is given prime importance. "When a customer calls up citing

poor response, you have to figure out if it is a LAN or a WAN issue, a systems

or a database problem. Arriving at that conclusion takes a lot of time. If you

have intelligent tools, you can provide a lot of co-relation and narrow down on

the problem," Sarma informs.

A feeling of security



Security still is a concern for international companies, but no longer an

overriding one. But, most vendors need to engage a third party to do an audit of

their information security objectives, say experts.

"When you say you are BS7799 certified, it means you follow certain

systems and processes which are acceptable to foreign clients. The guarantee is,

I am not going to mix your environments with that of someone else. Assume there

is one NOC from where I manage multiple customers. I should be able to partition

all these so that security is not really a concern," says Sarma.

"You cannot do an audit yourself or indulge in self-certification. Hire

a third party who is certified to do so. They will come up with suggestions,

recommendations and architecture plans to fill existing security gaps. This will

go a long way in building confidence in foreign clients," opines Hari

Venkatacharya, president and CEO of network security firm Cyrca.

While the top 5 outsourcing companies have good security imperatives in place

for client servicing, about 500 Tier 2 IT services companies in India are still

playing catch-up. There are customers at different maturity levels in an

off-shoring programme-after the vendor proves his capabilities and

credentials, he is allowed to take work offshore.

But for Indian services giants, there are considerations apart from customer

comfort zones. It's a decision taken on merit. "There are customers who

have done enormous amount of off-shoring, for whom we run some processes totally

onshore. It is a question of stability. Secondly, even in a steady relationship

with a company, we configure the onsite/offshore model. We design the solution

in line with the responsibility we are taking," Prasanna says.

And, off-shoring has ceased to be a moneysaving game. India is no longer a

very low-cost center, going by what some companies say-retaining talent, for

one, is a cash-intensive game. The feeling is that the cost game can't keep

you in business for long. With competition and more services firms entering the

picture, the end rate to customers is obviously going to go down. Only value

will survive.

Goutam Das

The Challenge

(For medium-sized Indian companies)

• Need to expand beyond a single NOC.
• Need for a disaster recovery plan.
• Finding and retaining good people.
• Providing market differentiators.
• Threat from existing service providers.
• Train security professionals in CISSP and CISA certifications.