According to a study by Forrester Research, the global application migration market (AMM) is perceived to be around $120 billion in 2012, and is expected to grow at a CAGR of 10.5 percent. The research firm says that the biggest driver for app migration has been cloud computing, and almost 50 percent of the AMM is driven by enterprises and SMBs abandoning archaic applications and moving them on to the cloud.
“The AMM represents one of the biggest opportunities for the systems integration channels. Apart from the revenue associated with the software, it also presents a business opportunity for selling new hardware and infrastructure,” points out Anoop Nambiar, Country Manager, (BPO), IBM India. Application migration does not necessarily mean that partners need to have software expertise. Vendors such as IBM and HP have partner-ISV alliances that focus on the AMM. Nambiar says that individual teams qualify ISVs, and along with channels identify potential customers.
Mumbai-based Paramatrix Technologies has a 70-member team for its application migration practice. Says Mukesh Thumar, MD, Paramatrix Technologies, “This is a business where you cannot afford to make a mistake. Most migration projects start at a point where the customer is unhappy with the existing system, or the system has failed, or it has become archaic. If the migration fails then there is no migration, and since it involves a lot of customization and manpower it is costly for the service provider.”
The IBM Software team has also been enabling its channels to look at the opportunity. Microgenesis, a Bengaluru-based IBM software partner, says that 20 percent of their revenue comes from customers who require support in migrating applications to newer platform. “We also offer training in products that we sell (such as IBM Websphere, Rational and DB2), and this often results in new assignments and projects,” says Manoj Tharian, MD, Microgenesis.
Explains Nitin Dang, Country General Manager, India, Micro Focus, “We are focused on application modernization. Our tools are used by partners to migrate legacy applications to the latest technologies.”
Last year Mumbai-based VDA Infosolutions aligned with Micro Focus; this resulted in a nearly Rs 5 crore application modernization order from a private bank. “Application modernization is a focus area for us. We have identified a number of potential customers, and now have a team that is focused on this market,” says Deepak Jadhav, Director, VDA.
Microsoft has been driving business application migration for many years. Says Devesh Aggarwal, CEO, Compusoft, Mumbai, “Over the years we have migrated a number of applications from legacy platforms or third-party software to Microsoft Dynamics and other software. For example, Furtado’s Music had an in-house ERP which we migrated to Microsoft Dynamics; now more than 50 users across 18 branches can seamlessly access the applications.”
Partners such as the Delhi-based Team Computers and Mumbai-based TechGyan have been focused on migrating office and messaging applications to Google Apps and Microsoft Office 365 respectively. “Customers tired of managing infrastructure see cloud-based applications as a viable alternative. Migration to SharePoint is also a business that has generated us customers,” says Suresh Ramani, CEO, TechGyan.
Migrating to open source and Linux is another opportunity that partners such as Chennai-based Futurenet Technologies are focusing on. “Many customers recognize that free software, though free, still needs support. We have the technical expertise to do it, and we have customers who have successfully migrated from legacy platforms to Linux with us,” says Ashok L, CEO. Enterprise Mobility
Global Industry Analysts estimates that the global market for enterprise mobility will exceed $173.9 billion by 2017. In India the estimates made by Zinnov puts the figure at $224 million in 2012; this is expected to grow at a CAGR of 40 percent to cross $1 billion in 2015. The figures are excluding device costs.
The Indian mobile value added service market is set to reach $6.1 billion (Rs 33,280 crore) by 2013 at an estimated growth rate of 28 percent. The market is currently at $4.8 billion (Rs 26,000 crore) and grew 32 percent from $3.6 billion (Rs 19,700 crore) in 2011 according to the Internet & Mobile Association of India.
According to a study sponsored by US-based distributor ScanSource Communications, which specializes in mobility solutions, over a period of time mobility will offer a larger opportunity than the cloud for the systems integration channels. The study says that the speed at which technology changes in enterprise mobility needs more persistent support from a solution provider compared to most pieces in cloud computing.
“We feel that enterprise mobility is one of the biggest opportunities for our channels and for us. It presents a far more complex challenge for the CIO than regular PC-based networks. Apart from a large number of devices, there are updates of mobile operating systems once every nine months or so, making support a complex affair,” explains Nandakumar KS, VP, Sales, Kaseya India.
Kaseya has already started shipping a tool for monitoring and managing Apple iOS-based devices, and has released monitoring tools for the Android, BlackBerry and Microsoft platforms too. Informs Nandakumar, “By November we should be launching a full-fledged solution which will support devices across all major platforms.”
Says Sarfaraz Dani, National Business Manager, Managed Services Organization, Value Point Systems, Bengaluru, “Over the last couple of years we have built a reasonable-size business for AMS which stands at 35,000 end-points. Presently the biggest interest of our customers is in managing mobile devices such as tablets and smartphones. In two years we can expect the number of mobile devices managed to reach or exceed the number of PC/laptop end-points.”
SIs are also rolling out new solutions. Pune-based Computer Home has integrated a financial application with Android-based mobile phones. The financial application has been integrated with the customers’ ERP at the back-end. Explains Milind Dhongade, Director, Computer Home, “We have developed mobile applications for our BFSI customers. Today we are supporting 10,000 internal users of three large customers who collectively contribute 15-20 percent of our services revenue.”
VMware is enabling partners to develop mobile applications that could be offered over the cloud. Security antivirus software vendors are building solutions for the enterprise mobility markets.
Hyderabad-based Shell Networks has started a division that focuses on enterprise mobility applications. “The team is small, but we are seeing huge opportunities. Every aspect of computing today has an element of mobility. In addition, the buzz around mobility ensures good margins,” says AL Srinath, CEO, Shell Networks.
Ahmedabad-based Innova Systems, a BlackBerry Enterprise Partner, is bundling healthcare applications (it acquires from local ISVs) with the BlackBerry platform and reselling them to customers in the vertical. The company is currently selling applications to medical representatives working for large pharma companies in Gujarat.
Says Deepak Braganza, Country Manager, LifeSize India & South Asia, “The 3G subscriber base will grow to 200 million by 2016, while the 4G subscriber base will become 67 million by 2017. Mobile-based video streaming will revolutionize today’s UC and standard video communication markets.” GRC and SIEM
Governance, risk management & compliance, or GRC, is the umbrella term covering an organization’s approach to avoiding business and technology conflicts, wasteful overlaps, and gaps.
Security information and event management (SIEM) solutions provide real-time analysis of security alerts generated by network hardware and applications by monitoring, notifying, event triggering and compiling reports.
Though GRC and SIEM are two different practices, they are often related since a GRC implementation frequently demands setting up an SIEM system, hence a number of consultancies offers services in both.
The combined size of the GRC and SIEM market is estimated at less than $5 billion globally by Gartner. However, setting up a practice in these areas often helps a channel partner to pick up business which is 5-10 times the cost of a GRC or SIEM solution.
“Consulting in GRC and SIEM often results in a partner moving up the value chain as far as the customer is concerned. The relation becomes very strategic, and can be used to leverage bigger deals,” says Vishak Raman, Senior Regional Director, India & Middle East, Fortinet.
CA, McAfee, Symantec, IBM and RSA are some of the vendors offering tools and knowledge frameworks in this space.
“For all services we leverage the Symantec Partner Program. Our Specialists and Master Specialists have access to our research, tools and even IPs; they also have the chance to work on products in their alpha and beta stages,” says Anand Naik, MD, Sales, Symantec.
According to Naik, Symantec leverages its channels to deliver the services in a co-delivery model. The Symantec Control Compliance Suite Risk Manager module offers executive-level dashboards which can illustrate high-level metrics such as risk by business unit, or risk scores for mission-critical business processes.
“Master Specialists play a big role in the services since they handle authentication, appliance, licenses or virtual applications (managed security services) to manage SIEM. The scope for partners starts with assessment through data capturing, solution architecting, and implementation and support services,” informs Naik. He says that the service pie attached is 5-6 times the cost of the tools associated with the project.
Mumbai-based Essen Vision Software has set up a services unit with professionals with consulting backgrounds, and has over the past year billed around a dozen customers for GRC and SIEM. “RBI has provided strict guidelines on GRC and SIEM for the BFSI segment, and BFSIs need to adhere to the new guidelines in the next 12 months. Even those banks which are ISO 27001-certified have to comply with the new standards prescribed,” says Ronny Ferrao, Chief Operating Officer, Essen Vision Software.
Essen recently implemented a tool which checked for compliances in the business and technology practice of an ITeS company. “In the first phase, against the customer’s expectation of meeting 60 percent of the compliance needs, our tool is helping it to meet 82 percent of the needs,” says Ferrao. He hopes that at the end of the project the billing would exceed $200,000.
Meanwhile, Mumbai-based Seclore has set up a practice for the life cycle management (LCM) of GRC and SIEM projects. “The LCM opportunity for a partner starts with identifying the GRC objective and orienting the customer by taking a consultative approach. Next, the partner helps define controls into the process. Once the process is in place, it needs continuous monitoring to figure out the challenges in these process flow controls. The cost of consulting and allied services typically ranges from Rs 8 lakh-10 lakh for an enterprise customer,” says Vishal Gupta, the Founder-CEO, Seclore Technology. Networking Services
Outside of deployment and support, IDC estimates the networking services market to be worth around $90 billion. “The traditional market size is around $30 billion, and both are converging. Apart from regular support, customers are now in need of services that go beyond break-and-fix. They want to know more about their network, they want to optimize their network usage, and with applications growing bandwidth requirements are also scaling up. All this presents an opportunity for our channels and for us,” says Amitabh Patney, VP, Services, Cisco.
This, Patney says, has led to a number of niche services that network solution vendors can start billing to their customers. Cisco wants a share of the pie, and is regularizing its services channel programs to motivate partners to address the opportunity. There are 50 million Cisco devices powering networks globally, many of them not under warranty. “Older devices need to be upgraded, or the system OS needs to be patched. There are also concerns regarding the inter-operability between older and newer devices. Customers need solution providers who can present them with specific information and chart future network growth plans,” adds Patney.
This has led to a number of new services including dashboard information services, network optimization, planning, testing and security auditing.
According to K Subrahmanya, Director, Central Data Systems, Bengaluru, “Today, post-deployment services are often more than 10 percent of the cost of the hardware. Customers are keen to cut down costs, and see services as the way to go.” Subrahmanya says that vendor certifications help a long way in convincing customers to accept value-added services.
Manpower constraints at the customer-end are also forcing customers to outsource network management. “Customers are increasingly realizing that managing networks and infrastructure by themselves is not really resulting in any gains. Last year a customer lost some people, and there was no one to manage their network, and we bagged an FMS order,” says Anatharaman Varayur, MD, Webcom Information Technology.
Webcom partnered with network testing tool vendor Fluke Networks to deliver network testing services, and sold tools worth Rs 2 crore to a defense PSU.
Other partners are exploring ways to offer network management services on an opex model. “We are in discussions with several clients who all want network optimization based on real-time data. We are presently exploring several alternatives to existing software systems. Some of the customers need their data available on a SaaS model, others are willing to have it covered under regular AMS/FMS contracts,” informs KV Jagannath, MD, Choice Solutions, Hyderabad.
Another service opportunity which is opening up is IPv4 to IPv6 migration. “The transition is a multi-year process. It’s important for enterprises to begin the IPv6 journey as soon as possible, hence it’s important for channels to be ready,” explains Prakash Krishnamoorthy, Director, HP Networking, HP India.
HP is also betting on the software defined networking (SDN) standards which it’s promoting, and says that channels will generate opportunities in services. “With open standards and open API, network administrators need not worry about support from proprietary vendors. Network solution providers can easily set up teams which can build applications and create dashboards using SDN,” Krishnamoorthy adds.
One skill-set which networking service providers may need to soon start acquiring will be around virtualization because virtualization vendors such as VMware and Citrix have started rolling out software that supports network virtualization seamlessly. Storage-as-a-service
One of the fastest-growing services market today is around storage. With the data boom across enterprises, customers are realizing the importance of reliable and secure storage. This is one of the reasons that IDC, in its Q22012 quarterly tracker, has mentioned that Storage-as-a- Service (SaaS) will witness the highest growth among all cloud computing services.
“As business organizations continue to generate vast amounts of data and seek optimum methods to store and protect them, the growth of storage capacities delivered through SaaS offerings will outpace traditional storage architectures,” forecasts Brad Nisbet, Program Manager, Storage & Data Management Services, IDC. “With SaaS capacity growing over 65 percent from 174 petabytes in 2007 to over 2.1 exabytes in 2012, the market is full of opportunity.”
SaaS is not just about the cloud. In fact few expect primary storage to move on to the cloud. “At least as far as latency exists, we do not see primary storage moving to the cloud or transforming to a services model,” says Anil Valluri, President, India & Saarc, NetApp. “However, back-up is certainly moving to the cloud, or to a vendor-managed data center (DC). Not every customer is keen to duplicate infrastructure, and customers are looking at SaaS models for back-up and even DR.”
While other cloud computing paradigms offer channels great opportunity in toplines, vendors feel that SaaS offers the biggest opportunity in services revenue. “Few customers will opt for a storage strategy that is only cloud-centric or fully hosted. Most of them will opt for a hybrid model that will enable channels to build services,” predicts Srinivas Rao, Director, Presales & Solutions, Hitachi Data Systems.
Rao feels that customers will start classifying data according to its critical importance, and that they would like a partner who could act as a broker of services as well as be a consultant to them.
SK Lau, Director, Pre-consulting, Quantum, agrees. “Customers need a primary back-up in-house and a secondary back-up outside the organization. This could be through a cloud-based service provider or an SI offering the service from its own infrastructure or DC.”
Sandeep Vahi, CEO, Compton Computers, Delhi, has been offering network back-up services since last year. “We have started offering customers back-up-as-a- service and are charging per TB of data per month. It definitely works out to be more profitable than selling storage hardware. Customers are happy that they are being billed on an opex model.”
Archival and surveillance are two of the biggest growth drivers. Email archival is a market that is expected to take off following the Supreme Court verdict in the Vedanta Aluminium vs Trimex International case which recognized corporate email as valid proof in court. Also, in the winter session of parliament this year, the cyber law bill (around the need to archive emails for up to three years) is likely to be tabled.
Tulip Data Services has launched a surveillance-as- a-service that is currently being marketed through channel partners. The DC vendor is offering not just surveillance video that can be accessed over the Internet, but also daily, weekly and monthly back-ups on a pay-as-you-go model.
“Customers need 30-45 days of back-up but do not want everything to be stored within their premises. They are willing to opt for an opex model and pay on a monthly basis,” says Anatharaman Varayur, MD, Webcom Information Technology, Bengaluru. According to Varayur, smaller customers are even willing to take storage services on an FMS model. Unified Communication
A Frost & Sullivan study in 2011 of the Indian Unified Communications (UC) market showed an increase in awareness about emerging trends in the industry such as social collaboration, virtualization, cloud communications and mobile conferencing. The overall spending on UC in India was estimated at $522.7 million in 2011 and is expected to grow to around $590 million in 2012. The market is also expected to grow at 11.8 percent CAGR till 2017.
According to Parminder Saini, Industry Manager, Information & Communication Technologies Practice, South Asia & Middle East, Frost & Sullivan, “Most enterprises have transitioned from legacy to pure IP-based communication systems. Real-time and multi-modal communications have facilitated the adoption of various on-premise applications, and we now see movement in the adoption of cloud-based UC solutions.” According to the research firm, sectors such as IT/ITeS, telecom, BFSI, manufacturing, government and healthcare will be the biggest investors in UC this year.
“Changing business models due to travel costs and time constraints are spurring organizations to adopt UC solutions that enable live communication sessions,” explains Uday Birje, Country Manager, Network Consulting & Services, HP India. Birje has been wooing HP channels to help it deliver UC services through a co-delivery model.
“At HP we are banking on our channels for deployment and support in several projects,” says Birje. “We are constantly looking out for SIs with skill-sets around supporting UC whether it’s Cisco, Microsoft or Avaya. Our division is vendor-agnostic, and offers some of the biggest opportunities for channel partners to be involved in some of the largest projects.”
Mobility and bring-your-own-device (BYOD) are two key trends that will in many ways drive the consumerization of UC. “Mobility and BYOD will be a big driver for UC. However, one aspect that CIOs are not ready to compromise on is security, and a lot of enterprises are reassessing their security posture and framework in relation to the new devices,” observes Kshitij Mishra, Head, UC & Collaboration, India Region, Huawei Enterprise.
What should interest channels is the emergence of the services model around UC. According to a Forrester Research study of deployment models, till 2013 the demand for managed services will grow significantly, outpacing the traditional deployment model of buying and then managing UC and collaboration technology on-premise.
Ahmedabad-based solution provider SAI Infosystem has set up a JV with BSNL to roll out different communication services across the country. “We have already started video telephony services over broadband in 10 states across west and north India. Our goal is to achieve a pan-India coverage offering multiple services within UC over the next two years,” says Sunil Kakkad, CMD, SAI.
Vapi-based Enjay IT Solutions has launched a hosted solution with an IPBX-based Asterix, a custom CRM called Enjay CRM based on free open source software Sugar CRM, and a mobile connectivity application called Panaroma. “We are offering our solutions with both onsite and hosted models, with flexible payments on a monthly, quarterly and half-yearly basis,” says Limesh Parekh, CEO, Enjay.
Vidyo, a video communications provider, has a strategy to sell video communications as a service. “We develop the technology and sell it through service providers such as Sify or regional SIs like the Chennai-based Fourth Dimension Technologies, Delhi-based Houston Technologies, and Hyderabad-based Orego Solutions. Sify is our sole service provider in India; it provides Vidyo solutions to its enterprise customers through our technology that is hosted at its DCs,” says Ruchir Godura, VP, India & South Asia, Vidyo.