IT services companies out of India engaged in remote infrastructure management outsourcing RIMO, are signing deals with larger buyers to ward off the growing competition from the traditional MNC infrastructure outsourcing IO players, according to a study. Everest Research Institute in its recent study on Remote Infrastructure Management: Impending crisis of genresays that with rising pressure to sustain growth and counter the competition from MNC infrastructure outsourcing suppliers, India’s providers of RIMO services are successfully targeting and signing deals with larger buyers.
Remote infrastructure outsourcing is a subset of the overall tech infrastructure offshore market. The study found that Indian suppliers are being forced to deviate from the game-changing innovations they brought to the infrastructure outsourcing delivery market and the ones that had lifted them to current levels.
As large Indian suppliers started approaching critical mass in technology infrastructure outsourcing, they realised they had to target bigger deals with large buyers to sustain growth. Their target profiles and deal characteristics started rapidly approaching those of the large multinational legacy suppliers,said Gaurav Gupta, country head and principal, Everest Group.
The offshore mostly India-based suppliers are targeting the same buyers as the multinational firms and playing by rules long established by the bigger players. They are adopting the traditional rules of infrastructure offshoring, including offering more complex pricing mechanisms, longer deal durations, more complex SLAdriven metrics, and even re-badging of employees.
Despite the slowdown, RIMO remains the fastest-growing IO delivery model and offshore suppliers have grown and held their market share. With most MNC players setting up offshore delivery centres, offshorebased suppliers are being compelled to move to other value levers and adopt convergence strategy which positions them between RIMO and the traditional models.
The RIMO market grew rapidly at 66% CAGR until 2007, when early signs of a sagging economy marked the beginning of the market’s slower growth rate of 18% CAGR.
On the strategy to be adopted by the offshore infrastructure suppliers to retain share and grow, Gupta said: They need to come up with innovative approaches to infrastructure service delivery, while balancing the offerings to compete with MNC suppliers in the large deals market segment. The industry recognises the innovations that offshore suppliers brought to the market and expects such companies to continue on the path of innovation.
Everest Research Institute in its recent study says that with rising pressure to sustain growth and counter the competition, India’s RIMO providers are targeting larger buyers. The study found that Indian suppliers are being forced to deviate from the game-changing innovations and the ones that had lifted them to current levels.