Web Exchange Market Education Series
Remote Infrastructure Management
Ensure Value, Reduce Risk
Presented by:
Paul Schmidt Mike Slavin
June 29, 2006 [Link]
Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Session Agenda
Introductions and Stage Setting Fundamentals of Remote Infrastructure Management Market Overview Service Provider Landscape Making the Essential Decisions Key Take Aways and Wrap-Up
7/5/2006
Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Introductions and Stage Setting
7/5/2006
Copyright 2006 All Rights Reserved Technology Partners International, Inc.
TPI: Thought Leadership, Broad Experience
Our impact is amplified by our history in helping the largest, most accomplished companies in the world to face and overcome their greatest sourcing challenges.
Credentials
Expertise
Favorable Outcomes: Clients find the sourcing mix best optimized to their business as a result of our objectivity, informed analysis, practical insights and flexible approach Full Life-cycle Services: We have unmatched skill and experience in strategy design, implementation and sourcing management Real-world Expertise: A deep roster of skilled advisors (350+) gives TPI the human capital necessary to put the right team on every project Speed-to-Results: Having successfully advised many of the worlds most complex organizations our solutions are robust, viable and deployable Sustainable Value: Sourcing solutions must return value to shareholders over a continuum; we help our clients evaluate their efficacy over the short, medium and long term
Sourcing Management & Governance
Sourcing Strategy & Assessment Internal & External Sourcing Solutions
Contract Initialization & Transitions
Contract Development & Negotiations
Service Provider Assessments / Due Diligence
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Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Meet The Experts
Paul Schmidt
TPI Partner and Practice Leader, Global Service Delivery
Extensive
background in BPO, ITO, business strategy development and IT advisory services and technology offshore advisory experience in M&A activities, partnership and joint venture business structures, profitability and revenue growth
Deep
Expertise
Previously, as Founder and CEO of Offshore Development Group:
Assisted
clients to leverage global resources in strategic and emerging markets clients develop markets through acquisition and partnerships for offshore IT, BPO services and strategic business development activities.
Helped
Previous clients include United Airlines, International Paper, ING, BP Education:
MBA B.S.
7/5/2006
- Wright State University
- Computer Science; U.S. Air Force Academy
Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Meet The Experts
Mike Slavin
TPI Partner and Practice Leader, Global Information Technology
Experienced
in the management of all aspects of IT sourcing and operations career includes senior roles in advisory, service provider and client organizations knowledge to advise clients, lead assessments and support full outsourcing transactions
Extensive
Applies
Before joining TPI, Mike as a CIO
Managed
implementation of new systems and technologies e-business solutions
Implemented
Held key leadership and consulting positions at EDS, Price Waterhouse and other firms TPI clients have included: Siemens, Capital One, PSEG, BellSouth, CIBC, Credit-Suisse, Agilent, Cendant, Wachovia, CA, Mercer HR, and Celestica
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Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Todays Discussion Roadmap
When evaluating remote infrastructure management, corporations need a clear understanding of the way the market is headed, the range of options available, and some of the potential risks to overcome.
Remote Infrastructure Management 101 Market Overview Service Provider Landscape Essential Decisions and Risks
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Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Fundamentals of Remote Infrastructure Management
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Copyright 2006 All Rights Reserved Technology Partners International, Inc.
What is Remote Infrastructure Management?
Service delivery from distant locations with the goal of reducing costs, improving processes and enhancing service levels. Day-to-day management of IT infrastructure from a remote location Any IT function that can be successfully executed off-site is a candidate for remote infrastructure management Per IDC estimates, 85% of data center support functions can be performed remotely Offerings differ from one service provider to another, based on expertise, skill sets and client requirements Services include the following:
Monitoring services Help-desk services Server management Data-center management Storage management E-mail management Network management Asset management Selected IT-security services
7/5/2006
Copyright 2006 All Rights Reserved Technology Partners International, Inc.
Alternative Business Models
Each remote infrastructure management solution is unique to the companys needs. There are a variety of ways in which an optimal solution may be tailored. Internally-delivered (captive) remote infrastructure management Joint ventures / hybrid models Outsourced provision of remote infrastructure management Infrastructure management outsourcing is divided into two types: total outsourcing and out-tasking Total outsourcing typically involves outsourcing of all major service towers along with management responsibility and risk.
May also include asset takeover
Out-tasking involves outsourcing of targeted, limited services
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Remote Infrastructure Management Market Overview
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Whats New?
Remote infrastructure management has become possible through the convergence of enabling capabilities. Low-cost countries and robust services infrastructure High-speed telecommunications interconnectivity Security technologies Applications / Systems Management Business Continuity services Drivers accelerating the market: Increased competitive pressure on service providers to further reduce cost of service Increasing awareness of the remote infrastructure management market Need to support global footprints of multinational clients Increased infrastructure and labor resiliency reduction of risk
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Past versus Present
Greater automation and use of offshore resources provides significant cost benefits for managing infrastructure systems and assets. Service provider business drivers differ between multinationals (MNCs) and India pure-plays: MNCs require offshore delivery of services to remain competitive for a large influx of re-competes and fully outsourced solutions. They also:
Develop internal remote infrastructure management capabilities to drive down internal costs; now deliver those capabilities to clients Interest in increasing net margins Bundle remote infrastructure management into overall infrastructure deals with often little transparency Prefer to remain mostly under the radar
India-based pure-plays are naturally extending their original software customer base and adding new markets to fuel continued growth. They also:
Make a strong play with existing customers as a service extension Target carve-out (out-tasking) opportunities rather than total outsourcing Take advantage of clients re-competing/renewing infrastructure deals and trend towards multi-sourcing Market aggressively to develop the market and their competitive positioning
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Market Trends in Infrastructure Services Delivery
Remote Infrastructure Management is becoming an important technology sourcing component. India-based service providers are aggressively investing to compete with MNCs For infrastructure management, India is the offshore location-of-choice Clients seek 24x7 follow the sun coverage and global footprint Service provider focus is shifting from technology to business optimization
Supporting client transformational objectives
Variable pricing, SLA provisions, and more flexible contract models are prevalent
Well established with MNCs, while Indian pure-plays are more risk averse and accustomed to FTE pricing; however, this is changing Competition and changing technology landscape will benefit customers with flexible pricing and operating platforms
Small players offering remote services for niche markets
Scale and investment issues Very fragmented market longer-term viability issues
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Copyright 2006 All Rights Reserved Technology Partners International, Inc.
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Global Demand for Remote Infrastructure Services is Rising
Company adoption of global service delivery increases both in depth and breadth Desk Top Company adoption of global service delivery increases both in depth and breadth 32% 75% 41% Support after the three-year inflection point. 88% ADM the three-year inflection point. (Total) after
Analysis Design Coding Testing Deployment Infrastructure (Total) Help Desk Remote Server Remote Network 0% 34% 47% 33% Current41% Current 25% 50% 75% 37% 53% 56% 68% 47% 60% 39% 53% 44% 63% 66% 85% 60% 81% DB Admin Remote Mainframe Security Monitoring Electronic SW Application Maint R&D BPO CRM BPO - HR BPO - F&A BPO Other Others 31% 42% 24% 29% 23% 33% 22% 30% 49% 14% 19% 13% 18% 12% 16% 11% 18% 10% 15% 4% 4% 67%
Emerging
3+ years experience experience Current 3+ years > 75% 100% 0% 25% 50%500 people
100% Initially 3+ Years
Source: TPI State of Global Service Delivery, 2005
Source: TPI State of Global Service Delivery Study - 2005
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Outsourcing Satisfaction is Relative
Satisfaction with global sourcing has room for improvement. However, the level of satisfaction equals that of in-house staff and traditional IT consultants.
Satisfaction
Offshore resources Onsite Internal staff 3.5 3.6 3.4
Offshore resources
Onshore Consultants 0.0 1.0 2.0 3.0
3.4
4.0
5.0
Source: TPI State of Global Service Delivery Study - 2005
No significant difference in satisfaction between any of the alternatives.
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IT Services Offshore Market Maturity
Mature
Desktop Mgt Perf. Mgt MainFrame Admin HW Maint. Prod Control ERP Admin Change Mgt NW Monitor NW Mgt E-Mail Mgt Help Desk Server Admin DB Admin
Offshore Market Maturity
Offshore Leveragability
90%+ of Delivery Effort 60%+ of Delivery Effort < 60% of Delivery Effort
Emerging
Asset Mgt SW. Mgt Voice Mgt
Storage Admin Security Admin
Capacity Mgt
Future
Asset Procure
Data Ctr Mgt
ChargeBack Admin
Offshore services are primarily remote
Limited
Moderate
Extensive
Offshore Resource Depth
7/5/2006 Source: TPI Research
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Who Is Using Remote Infrastructure Management?
Global leaders in a variety of industries set the pace for service acquisition. Hitachi
Network mgmt., server admin., storage mgmt., DB admin.
Microsoft
Help desk, server admin, DB admin., DR, backup admin.
Shell
Help desk, server admin., security admin., messaging, problem coordination
Financial services major
Server admin., network mgmt., desktop, DB admin.
Unum Provident and a major energy corporation also signed contracts with significant global service delivery components for remote infrastructure management. Many of the major deals are not transparent. Remote Infrastructure Management is being performed as part of a larger outsourcing deal with MNCs in low-cost subsidiaries.
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Service Provider Landscape
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Global Portfolio Emergence
Service providers are establishing capabilities in an average of 4.2 countries.
Service Providers' Offshore Capabilities
South America Asia Pac (non-India)
Location
Eastern Europe Ireland Mexico China Canada India
0%
20%
40% Percent
60%
80%
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