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August 29, 2012

India Remote Managed IT Services Market to Increase by 28 Percent: Study

More small and medium businesses (SMB) are adopting remotely managed information technology services (RMITS) in India, forming a new growth engine for IT services, according to new industry research.

India-based businesses are gradually moving up the technology ladder in an effort to improve business process efficiency and emulate their larger counterparts in terms of technology adoption, according to AMI Partners’ report, “2012 India Managed Service Study,” which defines an SMB as having up to 999 full-time employees.

Technology management is a significant challenge for India SMBs, with only one in four of India small businesses (SBs, companies with up to 99 on staff) employing a full-time, internal, IT professional dedicated to managing their technology infrastructure. For medium business segment (MBs, companies with 100 to 999 employees), more than eight in 10 MBs have dedicated internal IT employees.

Their main focus, however, is on routine maintenance issues, rather than strategic IT management.

Overall, RMITS market share is predicted to increase in 2012 by 28 percent year-over-year, according to the study. The increase is more than double the growth rate shown by on-premise IT services within the same period, indicating that future growth opportunities for IT service providers lie within this market, according to Dev Chakravarty, manager of research at AMI.

“A key driver for the growth of RMITS is the fact that it provides India SMBs with hassle-free IT services from an expert IT service provider, reducing their dependence on in-house IT staff,” Chakravarty said. “Our discussions with these SMBs revealed that they prefer this mode due to its speed and efficiency.”

Greater adoption of RMITS is being driven by the ecosystem developing with several players entering the market to take advantage of the opportunity in this space. Players in the space include traditional value-added resellers, system/network integrators, hosting service providers with a datacenter infrastructure, telecom players, ISPs et al.

But a majority of service providers also prefer to operate with a combination of on-premises and remote modes. In fact, over one-third of India SMBs prefer to receive a combined module of services, according to AMI research.

“Another interesting factor enhancing the usage of RMITS is the changing mindset of newer-generation SMBs – especially startups, where decision makers are much younger and highly Internet dependent mainly due to relations with global firms,” Chakravarty added.  “Twenty-four/seven connectivity is a necessity rather than a luxury for them. Consequently, they try their utmost to avoid downtime and stoppage of operations due to ICT infrastructure failure and delay in the arrival of engineers from IT service providers. This is the primary reason that they favor RMITS, since such challenges are easily alleviated through remote monitoring and resolution.”

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Edited by Braden Becker

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