A Report on Managed Services Industry in India

A Study on Managed Services

Industry in India based on secondary data

Report

By

Srikiran C. Rai (Roll No. 10048)

Work carried out at Feedback Business Consulting Services Pvt. Ltd.

Submitted in partial fulfillment of the requirement of

Summer Internship Programme

Under the Supervision

of Mr. Jayanta K. Das

Manager, Feedback Business Consulting Services Pvt. Ltd.

Bangalore

Feedback Business Consulting Services Page 2

SDM Institute for Management Development Mysore, India

June 2011

List of abbreviations

Abbrevation Expansion

MS Managed Service MSP Managed Service Provider UC Unified communication

MNO Managed network operations CN Carrier network IPT IP telephony VC Video conferencing

HSUC Hosted services for unified communication CCS Contact centers solutions IMS Infrastructure management services DCS Data center switches NMA Network management and automation

TP Telepresence V2N Virtualization (Cloud Services) UCSS Unified communication security solutions TMDS Threat migration and data security

Bn Billion

Mn Million


List of Figures

Figure 1: Screenshot of competitor analysis excel ............................................................................... 16

Figure 2: Managed Services Industry-breakup by services ................................................................... 17

Figure 3: Indian Managed Services Industry size and growth trend ...................................................... 18

Figure 4: Growth of India's share in APAC MSP market........................................................................ 19

Figure 5: IT industry break-up ............................................................................................................ 22

Figure 6: Education industry breakup ................................................................................................. 23

Figure 7: BFSI industry break-up by services ....................................................................................... 24

Figure 8: Banking Sector overview ..................................................................................................... 25

Figure 9: Banking sector statistics ...................................................................................................... 25

Figure 10: NBFCs breakup by type...................................................................................................... 26

Figure 11: Financial Services in India and major stats .......................................................................... 26

Figure 12: Insurance sector statistics and data.................................................................................... 27

Figure 13: Insurance sector growth and size ....................................................................................... 27

Figure 14: Banking Sector growth drivers ........................................................................................... 28

Figure 15: Healthcare sector breakup ................................................................................................ 29

Figure 16: Pharma industry structure ................................................................................................. 30

Figure 17: Bulk and formulation goods breakup.................................................................................. 30

Figure 18: Pharma production centers in India ................................................................................... 31

Figure 19: Logistics industry breakup by service.................................................................................. 32

Figure 20: Overview of Manufacturing sector ..................................................................................... 34

Figure 21: Activities outsourced in BPO .............................................................................................. 35

Figure 22: Headquarters of major MSPs ............................................................................................. 36


Table of Contents

List of abbreviations............................................................................................................................2

List of Figures .....................................................................................................................................3

Table of Contents ...............................................................................................................................4

Acknowledgement..............................................................................................................................6

CERTIFICATE BY THE ORGANIZATIONAL GUIDE ......................................................................7

CERTIFICATE BY THE FACULTY GUIDE, SDM INSTITUTE FOR MANAGEMENT

DEVELOPEMNT, MYSORE .............................................................................................................8

Executive Summary ............................................................................................................................9

Brief on Managed Services ................................................................................................................ 10

Problem Definition ........................................................................................................................... 11

Approach to the secondary research .............................................................................................. 11

Research Design ............................................................................................................................... 12

Information needs ........................................................................................................................ 12

Research Objectives ...................................................................................................................... 13

Data Collection from secondary sources ............................................................................................ 14

Market overview........................................................................................................................... 14

Market estimates.......................................................................................................................... 18

Global Managed Services Scenario ................................................................................................. 19

Unified Communications (UC) – an emerging field in Managed Services ........................................... 20

Key Customer Segments being looked at in India ............................................................................ 21

IT Sector Profile ............................................................................................................................ 21

Overview .................................................................................................................................. 21

Industry Structure ..................................................................................................................... 22

Education Industry profile ............................................................................................................. 23

Overview .................................................................................................................................. 23


Industry structure...................................................................................................................... 23

BFSI Industry Profile ...................................................................................................................... 24

Overview .................................................................................................................................. 24


Growth Drivers.......................................................................................................................... 28

Future Outlook.......................................................................................................................... 28

Healthcare Industry ...................................................................................................................... 28

Overview .................................................................................................................................. 28

Infrastructure............................................................................................................................ 28

Growth Drivers.......................................................................................................................... 29

Pharma sector .............................................................................................................................. 29

Overview .................................................................................................................................. 29


Geographical distribution of the production centers – Pharma..................................................... 31

Logistics industry .......................................................................................................................... 32

Industry Structure ..................................................................................................................... 32

Manufacturing Sector ................................................................................................................... 33

Overview .................................................................................................................................. 33

BPO Sector ................................................................................................................................... 34

Overview .................................................................................................................................. 34

Activities outsourced ................................................................................................................. 35

Geographical spread of the major Managed Service Providers in India ............................................. 36

Growth Drivers of the Managed Services industry........................................................................... 37

Future outlook for the Managed Services industry .......................................................................... 38

Inferences from the secondary research ............................................................................................ 38

Limitations ....................................................................................................................................... 38

Conclusion ....................................................................................................................................... 39

References ....................................................................................................................................... 40


Acknowledgement

I take this opportunity to express my profound gratitude and deep regards to my guide Prof. Govinda

Sharma for his exemplary guidance, monitoring and constant encouragement throughout the course of

this project. The blessing, help and guidance given by them time to time shall carry me a long way in my

journey of life.

Sincere appreciation is extended to Mrs. I.V. Rajashree and Mr. Jayanta K. Das, Feedback Busniess

Consulting Services Pvt. Ltd. for their immense help during the course of this work. In those moments,

when things used to turn dark, their presence had a soothing effect.

I am grateful to the SDMIMD Library staff for providing me with the timely help in search of the

references for this thesis.

My several well-wishers helped me directly or indirectly; I virtually fall short of words to express my

gratefulness to them. Therefore I am leaving this acknowledgement incomplete in their reminiscence.

Srikiran C. Rai


SDM-IMD SIP 2011

CERTIFICATE BY THE ORGANIZATIONAL GUIDE

This is to certify that Mr. Srikiran C. Rai, currently pursuing Post Graduate Diploma in

Management at SDM Institute for Management Development, Mysore has satisfactorily

completed Summer Internship project titled

A Study

“A Study on Managed Services Industry in India” between 1st April to 31st May, 2011

Signature: Date:

Name: Place:

Designation:

Name of the Organisation and Address:

Feedback Business Consulting Services Pvt. Ltd.


5th Floor,

Oxford Towers,

139 Old Airport Road,

Bangalore – 560008

Tel: +91 80-25201399

Tel: +91 80-40623800

Organisational Stamp

CERTIFICATE BY THE FACULTY GUIDE, SDM INSTITUTE FOR

MANAGEMENT DEVELOPEMNT, MYSORE

This is to certify that Roll No. 10048, Mr. Srikiran C. Rai of PGDM Batch 2010-12 has satisfactorily completed Summer Internship Project Titled

“A study on Managed Services in India based on secondary data”

at Feedback Business Consulting Services Pvt. Ltd. Located at Bangalore from 1 April 2011 to 31 May 2011

to partially fulfill the requirements of the PGDM program under my guidance.

Signature: Date:

Name: Prof. N. R. Govinda Sharma

Designation: Professor

SDM Institute for Management Development, Mysore


Executive Summary

Dissertation Title: A study on Managed Services Industry in India based on secondary data.

Supervisor: Mr. Jayanta K. Das

Designation: Team Manager

Email: [email protected]

Name of student: Srikiran C. Rai

Roll No: 10048

This project report gives an account of the Managed Services Industry in India, with an intention to

gauge the end-user perception of managed services to be used by a major MNC and a leading player in

the voice based services to expand its operations.

From the secondary research carried out it is evident that the Managed Services sector is fragmented

and there a lot of players providing different services. The industry can be termed as high growth given

its 22.8% growth rate and the market large considering it is already a $2.78 billion industry.

The major industry sectors that were needed by the client and profiled in this report are :

IT

Education

BFSI

Hospital

Pharma

Logistics

Manufacturing

BPO

Hospitality


As I was working as a Management Trainee and was fully involved in all the confidential research work carried out by my team, I am unable to present any primary research findings on the above research. Signature of Student Signature of the supervisor Srikiran C. Rai Mr. Jayanta K. Das,

Manager, Feedback Business Consulting Services Pvt. Ltd.

Date:08/05/2000 Bangalore

Brief on Managed Services

Managed Services is the practice of transferring day-to-day related management responsibility as a

strategic method for improved, effective and efficient operations. This is when all aspects of your

network or storage i.e. routers, firewalls, upgrades, maintenance, data centers etc are outsourced or

managed by a third party. It is actually a combination of both hardware and IT based services. A major

MNC (Company X) in the telecom services arena, due to their strong presence there, is looking to enter

the voice and data based Managed Services market in India.

A managed service provider (MSP) provides delivery and management of network-based services,

applications, and equipment to enterprises, residences, or other service providers. Managed service

providers can be hosting companies or access providers that offer service s that can include fully

outsourced network management arrangements, including advanced features like IP telephony,

messaging and call center, virtual private network (VPNs), managed firewalls, and monitoring/reporting

of network servers. Most of these services can be performed from outside a company's internal network

with a special emphasis placed on integration and certification of Internet security for applications and

content. MSPs serve as outsourcing agents for companies, especially other service providers like ISPs,

that don't have the resources to constantly upgrade or maintain faster and faster computer networks.

The key value proposition for Managed Services is to deliver 'predictable services at a predictable cost'

with continuous improvements and proactive value addition. The key benefit to customer is that it has

to pay less for the same quality of service or gets a higher quality of service for the same price over

successive years.


Problem Definition

A major international player in the telecom and voice based services sector, Company X with a strong

presence in India is contemplating expanding its services to cover both voice and data based services.

Currently the market is highly fragmented and the industry is still in its nascent stage with most

companies opening up to the concept of Managed Services only recently. The industry can be termed as

high growth given its 22.8% growth rate and the market large considering it is already a $2.78 billion

industry. So it wishes to evaluate the Managed Services (MS) market scenario in India and expand its

operations in India based on the recommendations.

Approach to the secondary research

The first task is to list out all the possible secondary sources which could give valuable information on

Managed Services and the industry segments catered to by MS. There could not have been a single

information source. In fact, the secondary data collected was a mixture data from different sources as

depicted below


Research Design The type of research design is a mixture of both exploratory research and descriptive research.

Information needs 1. Managed Services – competitor list

2. Managed Services – industry breakup and classification

3. Overview of the sector and the growth statistics

4. Names of key MSPs in India and the services they provide

5. Global and Indian headquarters of the major MSPs in India

6. Major customer segments and the analysis of each sector

The sample size chosen was XX1

The sampling technique chosen was convenience sampling.

The industry sectors in question and the respondents were from:

1 The numbers/figures are not indicated to guard client confidentiality. However, care has been taken to consider a

good enough sample size to ensure adequacy of data and the necessary confidence levels


1. BFSI (x) respondents

2. Transportation (x) respondents

3. Healthcare (x) respondents

4. Pharmaceuticals (x) respondents

5. Hospitality (x) respondents

6. Manufacturing (x) respondents

7. Logistics (x) respondents

8. BPO (x) respondents

9. IT (x) respondents

10. Education (x) respondents

The respondents were distributed over the following cities in India in order to get a pan-India picture:

1. Bangalore (x) respondents

2. Chennai (x) respondents

3. Delhi (x) respondents

4. Gurgaon (x) respondents

5. Mumbai (x) respondents

6. Ahmedabad (x) respondents

7. Hyderabad (x) respondents

Research Objectives The specific research objectives were:

1. To gauge the belief about outsourcing of companies in various sectors mentioned above

2. To know the awareness level of the market for Managed Services

3. To know their current arrangements with Managed Service providers and their usage habits

4. To know the problem areas faced by the companies with Managed Services.

5. To know their opinion about the concept of Asset Financing.

6. To gauge their perception of Managed Service providers in the country

7. To estimate the price willingness and inclination to go for a Managed Service Provider akin to

the client in the future.

8. To know the factors that will drive such an adoption of an MSP by the company.


Data Collection from secondary sources

Market overview

The very first task was to collect information about the major players in the managed services industry,

as any sector profiling begins. By doing this, you get a picture of the structure of the industry you’re

dealing with. You can get an idea about whether the industry is organized or unorganized. This

information also leads to find the market breakup by size and revenue.

The information needed in this case was major players in the Managed Services sector. The client on

behalf of whom this project was being carried out was an Indian firm so the players in question were

major Indian players or MNCs with presence in India. It was required to look at those players whose

services were more oriented towards voice and data based services like VOIP, video conferenci ng,

unified communications, etc.

From the research, the various managed service providers which emerged in various sectors were:


BFSI Transportation Healthcare Pharma Hospitality

Wipro IBM (IT Hardware) Avaya India IBM IBM (IT Hardware)

IBM (IT Hardware) Datacraft Wipro Accenture Infosys

SunGard Infosys IBM (IT Hardware) Genpact Alcatel Lucent

Datacraft HCL Technologies Infosys Avaya India Cognizant

Infosys Alcatel Lucent HCL Technologies Cisco Systems D-Link

HCL Technologies CapGemini Alcatel Lucent IBM (IT Hardware) Avaya India

CapGemini SAP India SAP India SunGard Wipro

Fiserv India NCS India EMC Corp HCL Technologies

EMC Corp Mahindra Satyam NCS India Alcatel Lucent

Cognizant Accenture Mahindra Satyam Acer India

Juniper Mphasis Cognizant NCS India

D-Link Genpact Accenture Mahindra Satyam

Mphasis Patni Computers Juniper Accenture

Genpact Nokia-Siemens D-Link Juniper

Patni Computers Emasters Net Private Ltd Mphasis

L&T Infotech Genpact

Mahindra Satyam L&T Infotech

Accenture

Avaya India

SAP India

NCS India

Manufacturing Logistics BPO Education Public

Wipro HCL Technologies Wipro Acer-India NCS India

Cisco Systems NCS India IBM (Global Processes)

NCS India Mphasis

IBM (IT Hardware) Cognizant SunGard Mahindra Satyam L&T Infotech

Datacraft Accenture Datacraft Accenture Cisco Systems

Infosys Mphasis Infosys Juniper SunGard

HCL Technologies Genpact HCL Technologies Avaya India ENPL

Alcatel Lucent Patni Computers CapGemini Cisco Systems Nokia-Siemens

CapGemini Fiserv India IBM (IT Hardware) HCL Technologies

Acer India Cognizant SunGard Alcatel Lucent

SAP India Juniper HCL Technologies Mahindra Satyam

EMC Corp Mphasis Alcatel Lucent Accenture

NCS India Genpact Datacraft

Mahindra Satyam Patni Computers CapGemini

Cognizant Mahindra Satyam EMC Corp

D-Link Accenture


Mphasis Avaya India

Genpact SAP India

Patni Computers NCS India

L&T Infotech

After a few modifications, the final list of players which I compiled was the following.

Cisco Alcatel-Lucent Wipro Avaya Microsoft NEC India IBM 3i Infotech D-Link Aspect Communications

Polycom Tieto India Bell India Amicus ITS Accenture Juniper HCL Datacraft Microland

Table 1: Major players in the Indian Managed Services universe

After that an excel sheet with various heads was prepared to give an exploratory idea about the

Managed Services industry. The excel consisted of various heads like Name of the company, primary and

secondary focus of services (data/voice), services provided, headquarters – global &India operations,

key segments that they cater to. A screenshot of that excel is shown below

Figure 1: Screenshot of competitor analysis excel

Apart from that, in the profiling job, I was asked to prepare a slide in the managed services indicating

the break-up of the industry with respect to the services. Based on my secondary research, I concluded

that the managed services industry was broken into three major parts:


1. Managed IT Services

2. Managed Print Services

3. Managed Security Services

Figure 2: Managed Services Industry-breakup by services

The services that we were focusing on were the ones on the right hand side of the flow d iagram.

Apart from that I prepared a list of services that were used in the various segments in India. The source

of the data was mostly company websites.

Auxiliary information about the above companies like their India headquarters and other offices, th e

services that they provide, the industry sectors that they cater to, etc was compiled in an excel and

submitted.


Market estimates For the purpose of profiling the sector, I needed to collect information on the industry size and growth

over the years.

The data is summarized in the following graph in the next page:

Figure 3: Indian Managed Services Industry size and growth trend

The salient features of the Indian Managed Services market have known to be these.

Managed services in India is estimated at USD 1.6 billion in 2009 and is estimated to top USD 3.8

billion in 2013.

Banking, Financial Services and Insurance (BFSI) organizations remain the largest contributors to

the managed services market with a share of 28.2%, followed by the manufacturing and

government verticals.

The total Indian Managed Services market in 2007 was estimated to be USD 1.2 billion with

Managed Network Services accounting for the biggest share of the pie followed by Managed

Desktop Services.

Managed Services market represented 20% of the total India domestic IT Services market in

2007 (USD 5 billion revenues)

In the recent past, businesses are leveraging IT managed services providers for everyday tasks

(PC and server maintenance, network maintenance, and managed application services) rather

than complete IT team outsourcing.

As per the recent Springboard report, Wipro has the highest market share in managed services

in India.

Mid-market enterprises are opting for Managed Services model for its value to customers that

MSPs add.

According to a study by Forrester Research, the addressable Managed Services market in India

will be USD 8.27 bn.


Global Managed Services Scenario

Global market for managed services was estimated USD 41 bn in 2009 and it is estimated to

deliver revenues of approximately USD 66 bn by 2012 – According to a study carried out by

Ovum Consulting Group.

IP VPN services are the largest global managed services market, with revenues totaling USD 17

bn in 2008.

Analysts say VPN services to remain the most widely deployed managed service in 2012, also

VoIP will experience the fastest growth over the next four years with a 39% CAGR.

According to International Data Corporation, the UC market in EMEA was worth USD 8 bn in

2010 and will grow to USD 16.6 bn by 2014.

A poll conducted earlier last year by CompTIA showed that nearly one-third of 322 organizations

surveyed planned to make new investments or increase spending on managed security services.

Managed services companies will become increasingly specialized as an influx of newcomers to

the market forces existing players to solidify their niches.

The same study by Ovum Consulting says North America will overtake Europe as the largest

overall market for managed services by 2010, and Asia-Pacific managed services market will see

27% CAGR, driven mostly by growth in India and China.

From the demand side, Indian companies are increasingly adopting the hybrid model (a

combination of remote or offsite and onsite delivery models) compared to past trend of seeking

a full suite of services through multiple service providers/vendors thereby increasing complexity

instead of reducing it.

Indian Managed services will grow at CAGR of 25% to 27% in the next 3 to 4 years.

Figure 4: Growth of India's share in APAC MSP market

1.17

5.3

APAC Industry Size 2007 (bn USD)

India

Rest

2.78

7.47

APAC Industry Size 2010 (bn USD)

India

Rest


Unified Communications (UC) – an emerging field in Managed Services

Unified communications (UC) is the integration of real-time communication services such as instant

messaging (chat), presence information, telephony (including IP telephony), video conferencing, data

sharing (including web connected electronic whiteboards aka IWB's or Interactive White Boards), call

control and speech recognition with non-real-time communication services such as unified messaging

(integrated voicemail, e-mail, SMS and fax). UC is not a single product, but a set of products that

provides a consistent unified user interface and user experience across multiple devices and media

types.

Currently India leads the SAARC region’s UC market in terms of total spending and overall

awareness – F&S 2010*

Datamonitor’s report on unified communications in India - financial services led the UC market

with a share of 10.7%

The maximum revenue for the UC market was generated by IP and hybrid PBX technology with a

32.3% share

Messaging, tele-collaboration, mobile convergence, call control, and switch integration are

gaining popularity as UC

Online and telephony presence is also a recent phenomenon representing the fulcrum of UC

These would also include messaging, email, voice and unified messaging, conferencing,

collaboration, mobility and a unified client.

All these elements were present earlier in isolation, and there is a scope for business process

integration rather than being used in isolation.


Key Customer Segments being looked at in India IT

Education

BFSI

Healthcare

Pharma

Logistics

Manufacturing

BPO

IT Sector Profile

Overview

The total revenue of the Indian IT industry is estimated to be USD 88.1 billion in FY 2011 and the

industry growth rate has been 27% CAGR from 2008 to 2010.

It employs nearly 2.5 million directly, while indirect job creation is estimated at 8.3 million during FY

2011.

The major companies in the sector when it comes to different segments of company size, are:

Large: TCS, Wipro, Infosys, HP, Cognizant, HCL, Cisco, Tech Mahindra, Patni Computers, etc.

Medium: Compuage Infocom, Datacraft India, Iris, Infotech Enterprise, Educomp Solutions etc.

Small: Omnotech, Progressive, Infotec, Frontier, Euronet India, etc.


Industry Structure

Figure 5: IT industry break-up

The two heads under which the IT industry can be classified are: by type of service and the type of

players. The details of each classification are given in the above diagram.


Education Industry profile

Overview

India's total education market size is about 18 billion Euros in 2010. The higher education sector, is

valued at close to 10.5 billion Euro. India is planning for more investment on education sector [Rs 520.6

billion (Euro 8.08 billion)] in this financial year. India's burgeoning education market is expected to reach

a staggering 35 billion Euro by 2015, with the CAGR at 15%. The higher education market alone would

grow to over 21 billion Euro in the next five years.

Industry structure

Figure 6: Education industry breakup

The education system is divided into two major parts when it comes regulations

Formal Education System Informal Education System

Under the purview of the Ministry of Human Resource Development.

No central governing body for K12; Ruled by state boards/ICSE/ CBSE/ International Boards.

Institutions in the formal education space must operate as not-for-profit institutes set up under a Trust/ Society.

Informal Education System is free from any regulations.

Not governed by any regulatory body.


BFSI Industry Profile

Overview

The Indian BFSI ecosystem is structured, mature, and adequately regulated to sustain structural

challenges of the growing economy.

Industry structure

Figure 7: BFSI industry break-up by services

The industry is highly competitive and resurgent. Given below are a few important facts about the

sector under various heads.


Figure 8: Banking Sector overview

The size and growth of the Indian Banking Sector is given below. The recession of 2008 has resulted in

the a marginal slowdown, but there are signs of recuperation.

Figure 9: Banking sector statistics

Now we look at the individual sectors of NBFCs, Financial services and Insurance

A non-banking company carrying business of financial institution will be an NBFC.

Activities included in the definition of an NBFC are:

Financing, whether by giving loans, advances or otherwise

Acquisition of shares, stocks or securities Hire purchase

Insurance – excluded by notification

Management of chits, kuries, etc

There are a few subcategories in the NBFC sector


Figure 10: NBFCs breakup by type

Under the financial services sector, there are three major types of services as shown below. The specific

details of the sectors are given below.

Figure 11: Financial Services in India and major stats

The insurance sector is a sub section of the BFSI sector and majorly divided into two major parts – Life

Insurance and General Insurance


Figure 12: Insurance sector statistics and data

The growth and size statistics for the Indian insurance sector are

Figure 13: Insurance sector growth and size


Growth Drivers

Figure 14: Banking Sector growth drivers

Future Outlook

India is expected to be the 3rd largest financial services hub in the world by 2040

The BFSI sector will focus on deployment of IT solutions for rural connectivity to increase its

presence in rural and semi-urban areas.

The BFSI IT Services market in India is expected to grow from $1.6 billion i n 2009 to $2.7 billion

in 2013, growing at a CAGR of 14.2 percent, according to Springboard Research report

Healthcare Industry

Overview

Hospital market in India is currently estimated at USD 35.8 billion. Hospital industry in India is extremely

fragmented due to the large number of nursing homes and small - to mid-sized hospitals. Industry is

dominated by the private sector with 78% market share.

Infrastructure

18,000+ hospitals

9,976 are government hospitals with 500,000+ beds

757,377 Registered doctors, 78,000+ Dental doctors, 720,000+ AYUSH doctors with 1,370,000+

General nurses

Innovation

Appeal &

needTechnology

Enablers of

Solutions

Reach

The India

challenge

Banks

Capital

Protection

Financial

Services

Higher credit

playInsurance

Long term

lending


289 medical colleges

Figure 15: Healthcare sector breakup

Growth Drivers

The healthcare delivery market in India is at a nascent stage with high demand and growth

potential, driven by a surge in the number of treatments and the rise in cost per treatment.

Tax holiday for next five years for setting up new hospitals in Tier II and Tier III cities .

Pharma sector

Overview

Indian Pharmaceutical Industry is valued at approximately USD 21 bn in FY 10, third largest in world in

terms of volume and ranks 13th in terms of value. India accounts for 9.7% of the Asia-Pacific

pharmaceuticals market in value terms. It is one of the key employing segments with about 4.2 million

employment opportunities from more than 20,000 registered units.


Industry structure

Figure 16: Pharma industry structure

Revenue growth has been solid over the years as shown in this graph

Figure 17: Bulk and formulation goods breakup


Geographical distribution of the production centers – Pharma

Figure 18: Pharma production centers in India


Logistics industry

Industry Structure

Figure 19: Logistics industry breakup by service

The break-up of subsectors were given below

The third party logistics sector was subdivided as

The warehouses are divided as


The transportation sector is divided into

Manufacturing Sector

Overview

India’s GDP of USD1.43 trillion makes it the 11th largest economy in the world and 4th largest in

terms of purchasing power parity

One of the fastest growing economies in the world – growing at over 8 % p.a. for last 3 years

Industrial sector makes 18% to the total GDP

India is ranked 2nd in terms of manufacturing competence

Manufacturing Sector contributes to

43% of FDI Investment

17% of India GDP

53% of Indian Exports

India is the world’s 2nd largest small car market. India is one of the only three countries that make its

own Supercomputers, one of the six countries that launch its own satellites. India is the world’s largest

producer of milk, 2nd largest producer of food including fruits & Vegetables. 100 of the Fortune 500

have R & D facilities in India. India is the second largest group of software developers after the U.S.


Figure 20: Overview of Manufacturing sector

BPO Sector

Overview

Indian BPO Industry currently generates USD 14.1 billion revenue.

Indian BPO industry employs approx 700,000 professionals across 25 countries.

BPO revenues contributes about 1% to the India’s GDP and 4% to India’s exports.

India is the world's largest offshore outsourcing center.

Accounts for 40% of the overall BPO offshore market.

The industry has a lot of potential. The Indian BPO has the potential to generate USD 50 billion revenue

by 2012. It provides employment opportunities for approx 2 million professionals in India alone . The

BPOs can contribute up to 2.5% to the country’s global GDP by 2012.


Activities outsourced

Figure 21: Activities outsourced in BPO


Geographical spread of the major Managed Service Providers in India

Figure 22: Headquarters of major MSPs


Growth Drivers of the Managed Services industry

Intense competition as a result of globalization

o UC has been growing steadily due to the fact that workforce has become immensely

globalized and organizations are fighting inter-continental operational efficiency battles.

This creates a need for employee collaboration, productivity and customer service. The

need for staying connected across locations, time zones and integrating various

mediums of communications like voice, data, Telepresence, IM, email, video, etc. will

help UC to have a rapid growth.

The lack of in-house skilled IT personnel

Management of application becoming increasingly complex as well as mission critical for success

Increasing network and infrastructure complexity

o With the expansion of operations and the subsequent expansion of the network of

employees, communication and collaboration becomes a necessity

Shrinking IT budgets

o New cost cutting services which facilitate collaboration like UC are the need of the hour.

Need of optimum usage of existing network and infrastructure

New operators are trying to establish their networks in the near future

Operators are trying to maintain pan-India networks with optimal quality, bandwidth, capacity,

and availability

Operators are opting for transformations of their networks, making their networks future-ready

The need to innovate and find competitive differentiators

Availability of specialists with technology and domain expertise in managed services space

Managed services provides great flexibility to manage the cyclicality of businesses

New opportunities in business created by technology advancement

o Over the long term, opportunities exist to design entirely news business and approaches

using mobility, such as virtual manufacturing, virtual meetings, virtual logistics, or new

modes of operations such as office-less business.


Future outlook for the Managed Services industry

By 2014, the UC market in India will approximately be USD 840 mn

In India, connecting from a PSTN network to that of an IP network is not been implemented yet.

This could be one of the initiatives towards improving the scope of UC in India.

Spectrum allocation of 3.5G or 4G will also see many more deployments of UC across

organizations

Inferences from the secondary research Managed Services Industry seems to be a burgeoning sector in the Indian economy. With robust growth

figures and a positive future outlook, it will probably alter the future of functional strategy of

organizations.

Limitations Due to confidentiality of data accumulated and the sensitivity of the information, I am unable to present

neither the names of the companies involved in the study, nor the results which can be considered vital

to the plans of the client. Moreover, the data and names which have been presented or mentioned in

the report are changed due to confidentiality requirements.


Conclusion During the internship, the focus was on understanding how to conduct a market research in a

professional way. The area that I worked on during my stint at Feedback Business Consulting Services

Pvt. Ltd. was Managed Services along with carrying out secondary research in numerous other areas.

The secondary research showed that Managed Services is still a nascent industry in India but it sure has

great growth prospects. The primary research indicated that the services are quite pervasive and

companies are just beginning to realize the profits and cost savings that they bring along with them.

Even the industry sectors which have been considered for the secondary research were burgeoning

sectors and were indeed prospective clients for company X.

The subsequent primary research information has not been published in this report due to

confidentiality reasons.


References

Market Research: An Applied Orientation, 6th Edition by Naresh Malhotra

State of the art Marketing Research 2nd edition by Blankenship, Breen and Dutka

Marketing Research – A South Asian Perspective by Churchill, Iacobucci & Israel

Voice & Data Magazine

Communications Today

International Data Corporation (IDC) – Research Report on Managed Print Services

Forrester Research Reports

Feedback BOK

Netscribes Market research reports

CRISIL

Assocham India Research Papers

IBEF website

RBI website

National Skill Development Corporation(NSDC) knowledge bank

IRDA website

Cygnus research report

Ernst & Young Research Reports

iMaCS Analysis

NASSCOM website

www.hcl.in

www.cisco.com

http://en.wikipedia.org/wiki/Managed_services

http://en.wikipedia.org/wiki/Unified_communications

http://www.hcl.in/

http://www.cisco.com/

http://en.wikipedia.org/wiki/Managed_services

http://en.wikipedia.org/wiki/Unified_communications

Documents

A Report on Managed Services Industry in India