IT managed services market in India to hit $US3.8 billion in 2013

The IT managed services market in India is growing at a compound annual growth rate (CAGR) of 22.8 per cent, according to IT market research specialist Springboard Research's newly released report 'Indian Managed IT Services Market'."

The market is expected to reach $US3.8 billion in 2013 from $US1.6 billion in 2009, and this growth is higher than the growth rate of the overall IT services market. The report says Wipro Infotech has the highest market share, and HCL Infosystems leads in user satisfaction.

Change in traditional model

This year will see the dominance of managed infrastructure services but things will change in the future. By 2013, the highest growth will be recorded by managed application services that are predicted to grow at a CAGR of 26.2 per cent.

About 66 per cent of CIOs surveyed by Springboard said they intend to adopt and engage with a managed services model rather than strategic outsourcing. These professionals think it will be more convenient to use managed services and perceive that by doing so, they will have access to the best of breed services without losing control of IT.

Sudip Saha, senior analyst, IT services, at Springboard Research, said Indians have used managed IT services in varied forms for more than 20 years. A lot has changed during this time and the market has gradually transformed from body shopping contracts or facility management services to a process-oriented delivery model.

"After the initial delivery of onsite managed services, the market started to transform to a hybrid of offsite services delivery either through Remote Infrastructure Management (RIM) or a combination of RIM services and onsite delivery," said Saha.

High rate of adoption

Initially, managed services were mostly adopted by large enterprises but now more small and medium businesses (SMBs) are using them because of competitive pressures and operational concerns.

Corporate giants have skilled internal IT teams that can support day-to-day operations but the SMBs don't have this luxury and they prefer to adopt the managed services model in a phased manner.

Today, SMBs are very keen on using managed network services, workplace management services and managed server services, according to the report. Banking, financial services and insurance (BFSI) organisations are the largest contributors to the managed IT services market and they are followed by the manufacturing and government verticals.

"The managed services providers need to focus on service excellence and offer 'productised' services to retain customers. They must expand their local delivery capabilities by having knowledgeable, customer-facing partners and distributors," advised Phil Hassey, vice president, IT services, at Springboard. "The users, however, need to gauge the compatibility of managed services with their internal business processes and maintain a balance between onsite and offsite services."

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