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Updated: October 29, 2010 13:14 IST

RIM, the next wave of growth for Indian IT

D. Murali
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Rajiv Kaul. Photo: Special Arrangement
Rajiv Kaul. Photo: Special Arrangement

What the acronym RIM evokes in Rajiv Kaul is not ‘Research in Motion’ but ‘Remote Infrastructure Management.’ Because, as the Executive Vice Chairman and CEO of Mumbai-based CMS Info Systems Pvt Ltd (http://bit.ly/F4TRajivCMS), Rajiv is excited about the potential that RIM holds for the IT (information technology) industry.

“As per the NASSCOM-McKinsey report on RIM services, India has the ability to capture $13-15 billion out of the total addressable $96-104 billion global RIM opportunity by 2013,” he begins, during a recent interaction with Business Line. “The domestic market is also promising with a higher addressability factor, given the presence of local field force with the Indian RIM services providers. India has an immense potential and also appetite for offshore and domestic RIM services.”

And investments in building the right skilled workforce would lead to the next wave of growth for the Indian IT, hopes Rajiv, therefore. Our conversation continues over the email.

Excerpts from the interview.

RIM or ‘cloud’ services, which do you see as the most suitable to the Indian enterprise environment?

RIM and cloud are two different concepts and not mutually exclusive. RIM is a business model for delivering the monitoring and management services for a client’s IT environment through an offsite shared service delivery model.

Cloud computing is an upcoming diverse and disruptive business model. It is about automating internal IT capacity and IT services by offloading it to third-party service providers for rapid application deployment. It ensures as-needed system and storage scale by leveraging virtualisation and multi-tenant technologies. There is also scope for the creation of substantial new businesses and revenue streams.

While the cloud approach to services abstracts the underlying capacity and technologies, there is still a need for provisioning, controlling and monitoring capabilities which must be aligned to existing requirements. This flexibility also creates new complexity and drives the need to manage these components at both the customer and the service provider level.

What do you think will make RIM service providers successful?

The last decade saw a shift from an on-site resourcing model to an off-site delivery and SLA-driven one, which leverages technology. Though labour cost arbitrage still remains a key differentiator, there is a definite movement towards alignment of IT with the customer’s business requirements.

Hence, I believe RIM is moving more towards an outcome- or a transaction-based revenue model, where the availability of the infrastructure directly affects the customer’s business, especially in the services sector, including banking, insurance, government, retail, hospitality and utilities.

This is where the convergence with cloud services is starting to transition the entire IT infrastructure to a public or a private cloud, as a natural extension to IaaS (Infrastructure-as-a-Service). The revenue model is based on usage, availability or transactions; and the vendor is responsible for the infrastructure and its management.

In order to succeed the vendors would need to:

• Invest in integrated tools, security and transition methodologies.

• Implement processes to address real-time response and mission-critical nature of RIM services.

• Apply automation and lean techniques to optimise delivery and costs while offering flexible contracts and pricing.

Can you describe a RIM value chain -- as a trajectory that players should aspire to traverse, moving from low to high-end?

I believe that the RIM value chain moves on multidimensional axes influenced by customer requirements, delivery model, technology requirements, and business engagement model. The model can start from a resource-based hybrid one and evolve to a pure play utility-based model.

RIM vendors can engage with customers at 3 levels:

• Current delivery model, where the customer owns the infrastructure and RIM vendors provide services based on SLAs. The revenue stream is based on a combination of assets and infrastructure availability.

• Opex-based model, where the dedicated infrastructure is located in a third-party or vendor data centre and customer pays a lease rent charge. The software licences may be owned by the customer or can be a part of the opex model.

• Utility-based or cloud-based model, where the service provider services the customer through investments in the cloud or as a managed service provider to the cloud services vendor.

What are the IT skills relevant to RIM?

The IT skills required for RIM are significantly different from the traditional software application development and maintenance (ADM) skills that the Indian IT exports industry is currently focused on.

Typical skills required for RIM are:

• Strong understanding of the fundamentals of IT infrastructure including data centre infrastructure, networking, end-user computing devices, along with middleware, enterprise and infrastructure software.

• Expertise in monitoring, performance tuning and troubleshooting hardware and software remotely using IMS tools.

• Understanding of standards and service delivery frameworks such as ITIL, ISO/IEC 20000 etc.

• Key soft skills including the ability to communicate well along with being proactive and service-oriented.

What are the factors that have propelled the adoption of RIM services in India?

Organisations are seeking scale to their businesses without increasing the cost base, which is when they look at RIM as a suitable option. Several businesses, especially those in the consumer finance and banking space are looking at expanding their presence in tier 2 and 3 cities. Here, it becomes very challenging for them to build capable teams and manage them year round. Hence, to benefit from efficiency of scale and pool of skilled resources, these organisations are looking to adopt RIM services.

Both on-site and off-site managed services are required; the former for positioning skilled personnel at the customer’s data centre and the latter being RIM. With such managed services, customers can focus on their core business activities.

Your views on the role of SMEs in the growing RIM adoption in India.

Until recently, SMEs in India were not keen adopters of IT infrastructure. However, with increasing cost pressure of managing processes manually, many SMEs are now in the process of setting up an IT infrastructure. At this point, adoption of RIM will benefit them as it will eliminate cost of building and managing teams and infrastructure while ensuring guaranteed service levels and turnaround time.

Currently there are 3.5 million SMEs in India. Each of these SMEs will be a prospect for RIM services at some stage of the lifecycle. Given the size of the segment, we can expect a lot of business to come from this space and expect a lot of innovation in RIM services to happen over the next couple of years.

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