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IT Managed Services (ITMS) market in India, one of the most lucrative business segments within the IT services market is currently experiencing a steady growth and with holds a strong potential for the ensuing years. Post global slowdown, organizations are gradually recovering and hence majority of the CIOs are scouting for cost effective IT solutions, which in turn has shaped the growth curve for ITMS in a splendid fashion. With more and more organizations moving to cloud computing, the market will further enjoy ample growth aspects. Currently, the market is flooded with a plethora of Managed Service Providers (MSPs) and channel partners, wherein they offer a comprehensive range of services, applications/softwares. Competition in the market is stiff and the vendors are constantly revamping their market strategies in order to garner a better market position.
The report begins with an introduction section, defining the concept of IT managed services and differentiating it from the traditional outsourcing model. The section clarifies on the various categories of services generally opted by users. It also briefs about the prevailing service packaging trends and characteristics of the market.
IT managed service market overview of the report talks about the Indian market as a whole and highlights important factors driving the market, most popular services prevailing in the market, briefs about the competitive scenario and elaborates on the market size and forecasted growth figures in a graphical manner. Primarily, the market is boosted by the increasing demand for cost effective IT solutions and services amongst organizations. The market is segregated according to business segments and service type. It also provides forecasted growth figures for these individual segments. Basically, the market can be segregated according to the user’s business type and the type of services opted by users. The section features a detailed portion on these individual segments wherein it graphically represents growth figures till the year 2016. The section also features a section which has been derived after a thorough primary research, wherein vendors specializing in different types of service categories have been mentioned which will help readers to get an insight about the current service offerings. Moving on, the report talks about the SMB market space wherein it mentions the prime factors driving the market, service preferences as well as the market size and forecasted growth figures till the year 2016.
Remote managed services section elaborates on the definition, benefits, product offerings and the competitive scenario in India. It lists down the most widely used remote managed services in the market. Each of these individual services has been elaborated in details to give the readers a clear view of the service and derive their pros and cons.
2. Executive Summary
The IT Managed Services (ITMS) market in India was valued at INR xxx bn in 20‐‐ and is expected
to attain a CAGR of 24.5% to reach around INR yyy bn in 2016
Small and Medium Businesses (SMBs) contributed about INR xxx bn in 20‐‐ and is expected to
Market
shell out INR xxx bn by the end of 20 in the ITMS market
20‐‐
Primarily, Managed Service Providers (MSPs) provide services in the form of on‐premise, remote
and cloud based managed services``
The typical process framework followed by client organizations prior to adopting managed
yp p y g p p g g
Transition services can be enlisted as:
Plan Phase I – Step 1
Phase II – Step 2
Phase III – Step 3
p
Service Currently, a prominent trend in the ITMS market happens to be associated with the pricing models
Delivery of adopting the services
Model Major pricing models include: xxx, aaa, yyy, zzz, ,,,,,
Key Managed Service Providers
Competition EMC Corporation iGate Corporation
Cisco India Dell India
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 2
4. The market is here to stay in India wherein it will exhibit
steady growth and offer ample business scope to vendors
IT Managed Services Market ‐ Overview
• Post economic slowdown, enterprises and small businesses are gradually recovering from the impact and hence are
working on bottleneck IT budgets which in turn is persuading them for IT managed service adoption
• Primarily, services including monitoring and management are the most popular services opted by users
Server and network monitoring & management happens to be the two most preferred services opted in the Indian market
Effective business strategies can be developed by vendors to tap these two service segments in particular
• Competition in the market is tensed and vendors in the market are constantly revamping their strategies in order to
survive the competition and establish a better market position
s r i e the competition and establish a better market position
• Hyper active industry verticals such as BFSI, manufacturing and government happen to be the early adopters of ITMS,
whereas IT/ITeS and logistics are anticipated to be the upcoming adopters of ITMS
On the other hand, telecom happens to rely entirely on IT outsourcing method
IT Managed Services – Market Size & Growth
INR bn
a
b
c 24.5%
d
e
0
2010 2011 2012e 2013e 2014e 2015e 2016e
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 4
6. IT Managed Services – MSPs
SAMPLE
•MSPs operating in the ITMS market in India have managed to carve a niche for themselves across various
categories in the market
•This trend in the market can be tabulated as below:
Category Managed Service Provider
Category 1 MSP 1, MSP 2, MSP 3
Category 2 …
Category 3 …
Category 4 …
Category 5 …
Category 6 …
Category 7 …
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 6
7. Remote Managed Services – India Overview
SAMPLE
Remote Managed Services ‐ Introduction
• Remote Managed Services (RMS) refers to the management of information technology services from a remote
location by a third party service provider under a mutual agreement and objectives
location by a third party service provider under a mutual agreement and objectives
• Some of the benefits, that can be reaped post implementation of RMS comprise of the following:
Benefit 1
Benefit 2
Benefit 3
…
…
A 24 x 7 service coverage on complex IT situations, that would otherwise lead to significant losses and prolonged downtime
• As of now, eminent RMS vendors now offer tailor made solutions for their clients hailing across a varied industry
verticals and segments
The major vendors operating in the RMS market segment comprise of MSP 1 and MSP 2 amongst others
j p g g p g
Some Major Remote Managed Services ‐ India
Service Type 1 Service Type 2 Service Type 3
Service Type 4
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 7
8. SAMPLE
Managed Services Market Insights – Vendor Perspective
• Service delivery approach is the most crucial aspect for a vendor in order to establish
a better business and earn significant profitability
Service Delivery • In lines with service delivery, some of the important factors identified in the market
Approach are as follows:
Insight 1
Insight 2
• The preferred delivery medium in the IT managed services market happens to be xxx
• Vendors and channel partners jointly xxx so as to increase the sales by a large extent
Insight 1
Insight 1
V d
Vendors provide xxx to channel partners which are further tapped by channel partners for
id h l hi h f h db h l f
sales
• The prime challenge faced by channel partners in particular happens to be the issue
Insight 2 of xxx, wherein xxx
• The magnitude of the challenge increases when xxx
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 8
9. Transition to Managed Services from Staff augmentation –
Typical Framework SAMPLE
Client organization Client organization prior to IT managed service adoption
Phase I Phase II Phase III
ABC XYZ PQR
• Step 1 • Step 1 • Step 1
• Step 2 • Step 2 • Step 2
• Step 3 • Step 3 • Step 3
•… •… •…
•… • ... •…
•… •… •…
Third party service provider, hosts all IT infrastructure on behalf of
Third party service provider hosts all IT infrastructure on behalf of
Vendor organization
client organization and in accordance with the SLA
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 9
11. Prime reasons driving the IT managed services market can
SAMPLE
be chalked down on the basis of their priority and impact
Prime drivers propelling the IT managed services market can be illustrated as below:
Priority
High Priority, Low Impact
g y, p High Priority, High Impact
High Priority High Impact
Driver 1
Driver 2
Driver 2
Driver 3
Driver 4
Driver 6
Driver 6
Driver 8
Driver 5
Driver 7
Low Priority, Low Impact
Low Priority Low Impact Low Priority, High Impact
Low Priority High Impact Impact
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 11
12. Drivers
SAMPLE
Drivers and Challenges – IT Managed Services Market India
Challenges
• Xxxx • xxx
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 12
14. Major Public Companies ‐ Summary
Net Profit/Loss
200,000
Size of the Bubble represents Market Capitalization in INR mn
180,000
160,000
140,000 2,939,069.1
120,000
100,000
80,000
1,296,979.2
60,000
1,080,891.4
40,000
20,000
98,911.6
0 54,124.0
‐20,000
‐200,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
Total income
aaa bbb ccc ddd eee
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 14
15. Public: Domestic Company – MSP (x/x)
Company Information
SAMPLE Offices and Centres – India
Corporate Address
Tel No.
New Delhi
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Head Office
Products and Services
Products and Services
Category Products/Services
Key People
Name
N Designation
D i ti
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 15
16. Public: Domestic Company – MSP (x/x)
Financial Snapshot
i i lS h
SAMPLE Key Ratios
K i
Total Income Net Profit/Loss y‐o‐y change
Particulars 2011 2010 2009 2008
INR mn INR mn (2011‐10)
1.5 1.1 0.15 Profitability Ratios
Operating Margin 1.72 17.85% 16.12% 11.13% 12.55%
1.0
10 0.8
08 0.10
0 10 Net Margin 1.44 12.91% 11.47% 7.90% 8.73%
0.7 0.7
Profit Before Tax Margin 0.89 16.08% 15.19% 9.69% 10.58%
0.5 0.05 Return on Equity 2.25 13.09% 10.84% 6.98% 9.66%
Return on Capital Employed 2.19 15.09% 12.90% 7.29% 10.17%
0.0 0.00
Return on Working Capital ‐269.73 216.24% 485.97% 20.81% 24.23%
2008 2009 2010 2011
Return on Assets 1.22 7.61% 6.39% 4.18% 5.53%
Financial Summary Return on Fixed Assets 14.18 92.08% 77.90% 50.43% 59.37%
Cost Ratios
• The company incurred a net profit of INR 0.14 mn in FY 2011, as Operating costs (% of Sales) ‐1.41 71.23% 72.64% 77.14% 75.67%
compared to net profit of INR 0.08 mn in FY 2010 Administration costs (% of
0.79 32.38% 31.59% 32.36% 30.94%
• The company reported total income of INR 1.1 mn in FY 2011, as Sales)
compared to INR 0.8 mn in FY 2010
compared to INR 0 8 mn in FY 2010 Interest costs (% of Sales)
Interest costs (% of Sales) ‐0.20 0.85%
% 1.05%
% 1.30%
% 1.19%
%
Liquidity Ratios
• The company earned an operating margin of 17.85 per cent in FY
Current Ratio 7.00% 1.12 1.04 2.05 2.04
2011, an increase of 1.72 percentage points over FY 2010
Cash Ratio 3.45% 1.06 1.02 1.82 1.76
• The company reported debt to equity ratio of 0.72 in FY 2011, a Leverage Ratios
decrease of 3.22 per cent over FY 2010 Debt to Equity Ratio 3.22% 0.72 0.70 0.67 0.75
Debt to Capital Ratio
b i l i
Key Financial Performance Indicators 554.42% 0.08 0.01 0.16 0.18
Interest Coverage Ratio 36.32% 21.15 15.52 8.65 10.76
Indicators Value (24/04/2012) Efficiency Ratios
Market Capitalization (INR mn) Fixed Asset Turnover 4.94% 7.06 6.73 6.31 6.69
Total Enterprise Value (INR mn) Asset Turnover 5.80% 0.58 0.55 0.52 0.62
Current Asset Turnover ‐0.68% 1.73 1.74 1.33 1.39
EPS (INR)
EPS (INR) 1.16 Working Capital Turnover ‐60.50% 16.58 41.98 2.60 2.73
PE Ratio (Absolute) 23.88 Capital Employed Turnover 7.20% 1.00 0.94 0.87 1.09
Improved Decline
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 16
18. Major Private Companies ‐ Summary
Net Profit/Loss
60,000
Size of the Bubble represents Total Assets in INR mn
40,000
20,000 SAMPLE
SAMPLE
0
‐20,000
‐20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000
Total Income
aaa bbb ccc ddd eee fff ggg hhh
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 18
19. Private: Domestic Company – MSP (x/x)
Company Information
SAMPLE Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Head Office
Products and Services
Products and Services Bangalore
B l
Category Products/Services
Key People
Name
N Designation
D i ti
Note: The list of products and services is not exhaustive
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 19
20. Private: Domestic Company – MSP (x/x)
Financial Snapshot
i i lS h
SAMPLE Key Ratios
K i
y‐o‐y change
Total Income Net Profit/Loss Particulars 2011 2010 2009 2008
(2011‐10)
INR mn INR mn Profitability Ratios
Operating Margin ‐2.06 9.29% 11.34% 4.37% 2.02%
6000 400
5021.8
5021 8 Net Margin ‐2.22 6.29% 8.51% 9.85% 5.09%
3599.6
300 Profit Before Tax Margin ‐1.79 10.25% 12.04% 13.72% 8.02%
4000 Return on Equity ‐2.88 16.78% 19.66% 20.24% 9.30%
2574.5 200 Return on Capital Employed 56.29 160.17% 103.88% 30.00% 14.87%
1824.1 Return on Working Capital 2.69 50.11% 47.42% 58.43% 29.82%
2000
100 Return on Assets ‐2.83 16.72% 19.56% 20.11% 9.17%
Return on Fixed Assets ‐11.54 33.97% 45.50% 44.12% 19.88%
0 0 Cost Ratios
2008 2009 2010 2011 Operating costs (% of Sales) 2.05 90.62% 88.58% 95.18% 97.85%
Administration costs (% of
N.A. 0.00% 0.00% 0.00% 0.00%
Sales)
Financial Summary Interest costs (% of Sales)
Interest costs (% of Sales) N.A. 0.00%
% 0.00%
% 0.00%
% 0.00%
%
• The company incurred a net profit of INR 315.83 mn in FY Liquidity Ratios
2011, as compared to net profit of INR 306.46 mn in FY 2010 Current Ratio ‐10.06% 1.39 1.55 1.49 1.41
Cash Ratio ‐41.24% 0.80 1.36 0.84 0.59
• The company reported total income of INR 5021.79 mn in FY Leverage Ratios
2011, as compared to INR 3599.62 mn in FY 2010 Debt to Equity Ratio ‐34.00% 0.00 0.01 0.01 0.01
• The company earned an operating margin of 9.29 per cent in Debt to Capital Ratio
b i l i ‐33.89% 0.00 0.01 0.01 0.01
FY 2011 a decrease of 2.06 percentage points over FY 2010 Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.
Efficiency Ratios
Fixed Asset Turnover 0.78% 5.35 5.31 4.06 3.67
Asset Turnover 15.45% 2.63 2.28 1.85 1.69
Current Asset Turnover 13.69% 2.23 1.96 1.77 1.59
Working Capital Turnover 42.66% 7.89 5.53 5.38 5.50
Capital Employed Turnover 15.24% 2.64 2.29 1.86 1.72
Source: Annual Reports; Databases; Netscribes Analysis Improved Decline
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 20
22. Channel partners in the ITMS play a pivotal role in the
success of a business SAMPLE
•Maintaining a proper business alliance with channel partners has become the most prominent business
model for IT managed service vendors in India
•The business model is tried and tested and proves to be the substantially lucrative amongst other
business strategies
b i t t i
•Owing to the importance of channel partners, selection of these partners has become a very vital
aspect for vendors and hence setting up of a fixed criteria is currently in vogue
An ideal channel partner can judged on the basis of the following attributes
xxx xxx xxx xxx
xxx xxx xxx xxx
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 22
23. Channel Partner Selection Process
SAMPLE
The overall channel partner selection process can be segregated into 6 phases, which can be
illustrated as below;
Partnership initiates
6. xxxx
6 xxxx
4. xxxx 5. xxxx
3. xxxx
2. xxxx
1. xxxx
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 23
24. Benefits – Channel Partners
Access to
SAMPLE
Vendor Community
Brand Image Enhancement
• xxxx
Better Profit Margin
• yyyy
• zzzz
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 24
26. Major Channel Partners (1/x)
ABC
SAMPLE XYZ
Headquarters Headquarters
Offices Offices
Website: Website:
Phone No. Phone No.
Fax Fax
E‐mail E‐mail
Business Highlights
Business Highlights Business Highlights
Business Highlights
• xxx • xxx
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 26
27. Case Study x
Client Organization
SAMPLE Industry IT Vendor
xxx xxx xxx
Case: Network Management
Requirements Solution Benefit
• xxx • xxx • xxx
Technology Used
xxx
IT MANAGED SERVICES MARKET ‐ INDIA.PPT 27
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IT MANAGED SERVICES MARKET ‐ INDIA.PPT 29