market research report : it managed services market in india 2012
DESCRIPTION
For the complete report, get in touch with us at : [email protected] 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.TRANSCRIPT
IT Managed Services Market IndiaIT Managed Services Market – India
April 2012
Executive Summary
Market
The IT Managed Services (ITMS) market in India was valued at INR xxx bn in 20‐‐ and is expectedto 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 toshell out INR xxx bn by the end of 20 in the ITMS market
The typical process framework followed by client organizations prior to adopting managed
shell out INR xxx bn by the end of 20‐‐ in the ITMS market
Primarily, Managed Service Providers (MSPs) provide services in the form of on‐premise, remoteand cloud based managed services``
Transition Plan
yp p y g p p g gservices can be enlisted as:
Phase I – Step 1
Phase II – Step 2
Phase III – Step 3
Service Delivery Model
p
Currently, a prominent trend in the ITMS market happens to be associated with the pricing models of adopting the servicesMajor pricing models include: xxx, aaa, yyy, zzz, ,,,,,
Competition
Key Managed Service Providers
EMC Corporation iGate Corporation
2IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Cisco India Dell India
•Introduction•Market Overview•Remote Managed Services•Remote Managed Services•Staff Augmentation vs. IT Managed Services•Transition Plan •Cost Component•Service Pricing ModelService Pricing Model•Market Influencers•Major IT Managed Service VendorsCh l P L d•Channel Partner Landscape•Case Studies•Strategic Recommendation
3IT MANAGED SERVICES MARKET ‐ INDIA.PPT
g•Appendix
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 s r i e the competition and establish a better market positionsurvive 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
INR bn
a
IT Managed Services – Market Size & Growth
b
c
d
e
24.5%
4IT MANAGED SERVICES MARKET ‐ INDIA.PPT
02016e2015e2014e2013e2012e20112010
SAMPLE Market Segmentation – Various Categories
Market Split – Business Segments (20‐‐)
19%ca
Market Split – Service Type (20‐‐)
4% a19%
45%
b
38%
58%
c
b
36%
INR bn
a
b
321
INR bn
a
b
321
b
c
d
e
0
xyzb
c
d
e
xyz
5IT MANAGED SERVICES MARKET ‐ INDIA.PPT
02016e2015e2014e2013e2012e
02016e2015e2014e2013e2012e
SAMPLE IT Managed Services – MSPs
•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 …
6IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Category 7 …
SAMPLE Remote Managed Services – India Overview
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 objectiveslocation 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 othersj p g g p g
Some Major Remote Managed Services ‐ India
Service Type 1
Service Type 4
Service Type 3Service Type 2
7IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Managed Services Market Insights – Vendor Perspective
Service Delivery Approach
• Service delivery approach is the most crucial aspect for a vendor in order to establish a better business and earn significant profitability
• In lines with service delivery, some of the important factors identified in the market are as follows: Approach Insight 1 Insight 2
Insight 1
• 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 extentV d id h l hi h f h d b h l f
Insight 1 Vendors provide xxx to channel partners which are further tapped by channel partners for
sales
Insight 2
•The prime challenge faced by channel partners in particular happens to be the issue of xxx, wherein xxx
•The magnitude of the challenge increases when xxx
8IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Transition to Managed Services from Staff augmentation –Typical Framework
Client organization Client organization prior to IT managed service adoption
Phase IABC
Phase IIXYZ
Phase IIIPQR
• Step 1• Step 2
• Step 1• Step 2
• Step 1• Step 2
• Step 3•…•…•…
•Step 3•…• ...•…
•Step 3•…•…•…
Third party service provider hosts all IT infrastructure on behalf of
9IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Vendor organizationThird party service provider, hosts all IT infrastructure on behalf of
client organization and in accordance with the SLA
Phase X – xyz Identification
xyz
Phase X SAMPLE Step 1 Step 2 Step 3.a Step 4
Step 3 Step 5
Step 3.b Step 6
10IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Prime reasons driving the IT managed services market can be chalked down on the basis of their priority and impact
Priority
Prime drivers propelling the IT managed services market can be illustrated as below:
High Priority, Low Impact High Priority High Impact
Driver 1
g y, p High Priority, High Impact
Driver 2Driver 2
Driver 3
Driver 4Driver 6
Driver 5
Driver 6
Driver 7
Driver 8
ImpactLow Priority Low Impact Low Priority High Impact
11IT MANAGED SERVICES MARKET ‐ INDIA.PPT
ImpactLow Priority, Low Impact Low Priority, High Impact
SAMPLE Drivers and Challenges – IT Managed Services Market India
Drivers Challenges
• Xxxx • xxx
12IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE IT Managed Services ‐ Snapshot
Vendors
•Player 1
•Player 2
•…
Channel Partners
•CP 1
•CP 2
…
•…Users
•User 1•User 2
•…
•…
User 2•…•…
13IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Major Public Companies ‐ Summary
180,000
200,000
Net Profit/Loss
Size of the Bubble represents Market Capitalization in INR mn
120,000
140,000
160,000
2,939,069.1
1,296,979.2
1,080,891.460,000
80,000
100,000
54,124.098,911.6
0
20,000
40,000
‐20,000
‐200,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
Total income
eeeaaa bbb ccc ddd
14IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Public: Domestic Company – MSP (x/x)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
New Delhi
Products and Services
Ticker Symbol
Stock ExchangeHead Office
Key People
Products and Services
Category Products/Services
N D i tiName Designation
15IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Public: Domestic Company – MSP (x/x)
i i l S h K iFinancial Snapshot Key Ratios
Particulars y‐o‐y change (2011‐10)
2011 2010 2009 2008
Profitability RatiosOperating Margin 1.72 17.85% 16.12% 11.13% 12.55%
Net Profit/LossTotal Income
1.1
0 81 0
1.5
0 10
0.15INR mnINR mn
Net Margin 1.44 12.91% 11.47% 7.90% 8.73%
Profit Before Tax Margin 0.89 16.08% 15.19% 9.69% 10.58%
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%
Return on Working Capital ‐269.73 216.24% 485.97% 20.81% 24.23%
Return on Assets 1.22 7.61% 6.39% 4.18% 5.53%
0.70.8
0.7
0.0
0.5
1.0
0.00
0.05
0.10
2011201020092008
Financial Summary
• The company incurred a net profit of INR 0.14 mn in FY 2011, as compared to net profit of INR 0.08 mn in FY 2010
• The company reported total income of INR 1.1 mn in FY 2011, as compared to INR 0 8 mn in FY 2010
Return on Fixed Assets 14.18 92.08% 77.90% 50.43% 59.37%
Cost RatiosOperating costs (% of Sales) ‐1.41 71.23% 72.64% 77.14% 75.67%
Administration costs (% of Sales)
0.79 32.38% 31.59% 32.36% 30.94%
Interest costs (% of Sales) ‐0.20 0.85% 1.05% 1.30% 1.19%compared to INR 0.8 mn in FY 2010
• The company earned an operating margin of 17.85 per cent in FY 2011, an increase of 1.72 percentage points over FY 2010
• The company reported debt to equity ratio of 0.72 in FY 2011, a decrease of 3.22 per cent over FY 2010
Interest costs (% of Sales) % % % %
Liquidity RatiosCurrent Ratio 7.00% 1.12 1.04 2.05 2.04
Cash Ratio 3.45% 1.06 1.02 1.82 1.76
Leverage RatiosDebt to Equity Ratio 3.22% 0.72 0.70 0.67 0.75
b i l iKey Financial Performance Indicators
Indicators Value (24/04/2012)Market Capitalization (INR mn)
Total Enterprise Value (INR mn)
EPS (INR)
Debt to Capital Ratio 554.42% 0.08 0.01 0.16 0.18
Interest Coverage Ratio 36.32% 21.15 15.52 8.65 10.76
Efficiency RatiosFixed Asset Turnover 4.94% 7.06 6.73 6.31 6.69
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
16IT MANAGED SERVICES MARKET ‐ INDIA.PPT
EPS (INR) 1.16PE Ratio (Absolute) 23.88
Working Capital Turnover ‐60.50% 16.58 41.98 2.60 2.73
Capital Employed Turnover 7.20% 1.00 0.94 0.87 1.09
Improved Decline
SAMPLE Public: Domestic Company – MSP (x/x)
Key Business Segments Key Geographic Segments
100%1,061,703758,960650,942723,138 100%
4%4%4%4%4%4%5%5%
0%
50%
100%
19%
74%
17%
75%
14%
76%
13%
78%
31% 29% 28%
6%6%5%5%
31%50%
100%
13%
53%
12%
54%
11%
53%
11%
54%
0%201120102009
%
2008
13%
dddbbbcccaaa
6%6%5%5%0%
2011201020092008
dddbbbcccaaa
Key Recent Developments
Description News
xxx
xxx
xxx
17IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Major Private Companies ‐ Summary
60,000
Net Profit/Loss
Size of the Bubble represents Total Assets in INR mn
40,000
SAMPLE20,000 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
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18IT MANAGED SERVICES MARKET ‐ INDIA.PPT
ggg
SAMPLE Private: Domestic Company – MSP (x/x)
Company Information Offices and Centres – India
Corporate Address
Tel No.
Fax No.
Products and Services
Website
Year of Incorporation
B l
Head Office
Key People
Products and Services
Category Products/Services
N D i ti
Bangalore
Name Designation
19IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Note: The list of products and services is not exhaustive
SAMPLE Private: Domestic Company – MSP (x/x)
i i l S h K iFinancial Snapshot Key Ratios
Particulars y‐o‐y change (2011‐10)
2011 2010 2009 2008
Profitability RatiosOperating Margin ‐2.06 9.29% 11.34% 4.37% 2.02%
Net Profit/LossTotal Income
5021 86000 400
INR mnINR mn
Net Margin ‐2.22 6.29% 8.51% 9.85% 5.09%
Profit Before Tax Margin ‐1.79 10.25% 12.04% 13.72% 8.02%
Return on Equity ‐2.88 16.78% 19.66% 20.24% 9.30%
Return on Capital Employed 56.29 160.17% 103.88% 30.00% 14.87%
Return on Working Capital 2.69 50.11% 47.42% 58.43% 29.82%
Return on Assets ‐2.83 16.72% 19.56% 20.11% 9.17%
5021.83599.6
1824.12000
4000
6000
100
200
300
400
2574.5
Financial Summary
Return on Fixed Assets ‐11.54 33.97% 45.50% 44.12% 19.88%
Cost RatiosOperating costs (% of Sales) 2.05 90.62% 88.58% 95.18% 97.85%
Administration costs (% of Sales)
N.A. 0.00% 0.00% 0.00% 0.00%
Interest costs (% of Sales) N.A. 0.00% 0.00% 0.00% 0.00%
0 02011201020092008
• The company incurred a net profit of INR 315.83 mn in FY 2011, as compared to net profit of INR 306.46 mn in FY 2010
• The company reported total income of INR 5021.79 mn in FY 2011, as compared to INR 3599.62 mn in FY 2010
Interest costs (% of Sales) % % % %
Liquidity RatiosCurrent Ratio ‐10.06% 1.39 1.55 1.49 1.41
Cash Ratio ‐41.24% 0.80 1.36 0.84 0.59
Leverage RatiosDebt to Equity Ratio ‐34.00% 0.00 0.01 0.01 0.01
b i l i• The company earned an operating margin of 9.29 per cent in FY 2011 a decrease of 2.06 percentage points over FY 2010
Debt to Capital Ratio ‐33.89% 0.00 0.01 0.01 0.01
Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.
Efficiency RatiosFixed 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
20IT MANAGED SERVICES MARKET ‐ INDIA.PPT
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
Improved DeclineSource: Annual Reports; Databases; Netscribes Analysis
SAMPLE Private: Domestic Company – MSP (x/x)
Key Recent Developments
Description News
Overview
Solutions
21IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Source: Company Websites
SAMPLE Channel partners in the ITMS play a pivotal role in the success of a business
•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 b i t t ibusiness strategies
•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
22IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Channel Partner Selection Process
6 xxxx
The overall channel partner selection process can be segregated into 6 phases, which can be illustrated as below;
Partnership initiates6. xxxx
4. xxxx 5. xxxx
2. xxxx3. xxxx
23IT MANAGED SERVICES MARKET ‐ INDIA.PPT
1. xxxx
SAMPLE Benefits – Channel Partners
Access to Vendor Community
• xxxx
Brand Image Enhancement
• xxxx
Better Profit Margin
• yyyy
• zzzz
24IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Benefits – Channel Partners
Trend 1
Trend 3 Trend 2
25IT MANAGED SERVICES MARKET ‐ INDIA.PPT
SAMPLE Major Channel Partners (1/x)
ABC
Headquarters
XYZ
HeadquartersHeadquarters
Offices
Website:
Phone No.
Headquarters
Offices
Website:
Phone No.
Fax
E‐mail
Business Highlights
Fax
E‐mail
Business HighlightsBusiness Highlights Business Highlights
• xxx • xxx
26IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Case Study x SAMPLE Client Organization IT Vendor
xxx xxx
Industry
xxx
Case: Network Management
SolutionRequirements Benefit
• xxx • xxx• xxx
Technology Used
27IT MANAGED SERVICES MARKET ‐ INDIA.PPT
xxx
SAMPLE Strategic Recommendations (1/x)
xxx
xxx xxx
• xxx • xxx
28IT MANAGED SERVICES MARKET ‐ INDIA.PPT
Thank you for the attentionThe IT Managed Services Market in India report is a part of Netscribes’ Information Technology Series. For more detailed information or customized research requirements please contact:
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29IT MANAGED SERVICES MARKET ‐ INDIA.PPT
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