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March - 2006 - issue > On The Cover
Sify Opening New Frontiers
Priya Pradeep
Tuesday, March 21, 2006
Walking briskly down the aisles of the state-of-the-art Global Command Center at Chennai, India, R Ramaraj, CEO, Sify looks over the shoulders of his engineers peering intently at the PCs in front of them. As he watches them at work, he feels a sense of satisfaction. At how smoothly processes and solutions are being systematically generated for the Parsippany, NJ based Sun Chemical Corporation. “Remote management of infrasructure is our core competence, you could say its in our DNA. Our vast experience in infrastructure management in India enables us to add real value to our customers in the U.S. We are specialists in this area,” says Ramaraj with quiet confidence.

Even as you read these lines, Sify’s engineers are busy solving problem tickets for Sun Chemical, a large U.S. based manufacturer of printing inks and pigments. They remotely monitor Sun Chemical’s IT infrastructure across the U.S. and Europe on a 24x7 basis out of India. They carry out all routine administrative tasks, fix any problems that arise, and report on the health of the IT infrastructure in real time.

Today, Sun Chemical’s IT managers can rest easy, confident that Sify’s support team would have fixed any problem before it can impact end users or disrupt business operations. Sify remotely manages 525 servers housed in four data centers across the U.S. and U.K. for Sun Chemical. These enable critical business processes across Sun’s manufacturing, distribution and customer relationship management functions. This remote management service relies on Sify’s redundant network connectivity over four undersea cable systems to ensure services are ‘Always On.’

Sify’s 18-month relationship with Sun Chemical started bearing fruit within a few months of engagement. Scott Carcillo, CIO, of the $4 billion Sun Chemical is happy. “When I stepped in to Sun Chemical two and a half years back, we had different vendor service agreements and different processes to manage our distributed infrastructure. Across Sun's 312 locations, there was no consistent model and we faced several perfomance issues. Few months after the Sify engagement began; I got a unified view of my entire infrastructure across Sun's multiple locations sitting at my desk. It was a great relief and I felt we were more secure,” quips Carcillo.

“The complexity of Sun Chemical’s IT infrastructure enabled value added off-shoring. We drew on our deep knowledge and experience of infrastructure management to streamline processes at Sun Chemical, and delivered cost savings by off-shoring our services,” points out V M Kumar, Vice President – Infrastructure Management Services at Sify.

Why Remotely Manage Infrastructure?
Cost savings are an important reason to take the management of IT services off-shore. CIOs are constantly under pressure to do more than just off-shoring of software development. With multiple undersea cables with large capacities of bandwidth now coming into India, reliable connectivity is no longer a challenge. CIOs and CTOs are taking advantage of this to achieve additional savings by sending infrastructure management work offshore–something that was not considered possible a few years ago.

However, there is more to off-shoring IT infrastructure management than just cost savings. Take the technical talent crunch, for example. Many U.S. corporations downsized their IT staff to the absolute minimum during the tech downturn in 2001-03. With companies returning to healthy business growth, there is an acute shortage of talent that corporations now face, especially senior resources capable of supporting strategic IT initiatives that the business demands. Off-shoring IT infrastructure management relieves such senior resources from the demands of 24x7 production support. As a senior IT resource at one of Sify’s new customers put it, “ I get the chance to sleep in tomorrow for the first time since I started here a year ago. I can’t stress enough how fantastic that will be. Thank you Sify!”

Remote management of IT infrastructure is all about access to deep, diverse and scalable expertise. With technology becoming ever more complex, the number of platforms, technologies and proprietary products that a CTO is faced with managing is truly mind-boggling. Windows, Unix, Linux, Cisco, Nortel, Extreme, Oracle, SQL Server, Netscreen, PIX, WebLogic, Websphere, Exchange, Domino… the list keeps growing. With talent available in plenty in India, companies like Sify are indeed well placed to ride the next wave in off-shoring– Remote Infrastructure Management Services.

Another good reason to outsource is access to process skills that would be difficult and expensive to develop and maintain in-house. ITIL (Information Technology Infrastructure Library), a set of best practices for IT Service Management, have been adopted by the best companies, with engineers trained and certified in the ITIL framework. Sify, for example, has nearly 150 ITIL certified engineers, who combine their technical and process skills to provide superior value to their clients. One of Sify’s key value adds to its customers is its systematic approach to eliminating root causes of problems in the customers’ production environments.

With this approach, the customers’ IT infrastructure settles down over time with very few incidents that require corrective action, something that customers are willing to pay for. For example, Sify proactively monitors over 300 high-end Cisco routers and switches for Viacom, a global entertainment media giant. Besides, notifying incidents for corrective action even before the business is impacted, Sify has been able to offer new insights on capacity bottlenecks and redundancies in its network to Viacom, helping rationalize some of their network related capital expenditure. This is made possible by Sify’s ITIL compliant process framework that enables full visibility into the health of the IT infrastructure, in real time, to its clients.

“They were the only offshore vendor who had their own I.P. (Intellectual property) and did not have to use anyone else’s software solution to manage our network. That made their total pricing dramatically different from other offshore vendors,” says Joe Simon, Group CIO, Viacom.

The Battleground
According to Gartner, several deals, ranging from $1million to $6 million, for global remote infrastructure services were signed in the second quarter of 2005. The global opportunity for infrastructure management has been valued at $111 billion (Source: Forrester Research) but off shoring to India is just beginning. Nasscom estimates that revenues from offshore infrastructure management in India will reach $1 billion in three years. Indian firms are approaching this space in the same way that they approached the software services market. Sify, Wipro, Infosys and HCL, amongst others, are now competing with established vendors such as IBM and EDS. In fact, the successes of IBM, EDS and CSC in bringing infrastructure management work offshore will only serve to accelerate the growth of this space. “We have invested substantially in infrastructure, people, processes and technology over the last 8 years to build a position of strength in the Indian market with remote management of infrastructure. Off-shoring of IT infrastructure management is in its early stages and the opportunity is huge. We believe we are well positioned to gain a share of this growing market,” says Ramaraj.

No single company has a dominant share at present, but the scene is heating up with most of the Indian IT majors offering infrastructure management services to their existing clients in a bid to extract more from their current relationships. However, Sify, as a specialist in infrastructure management, is the company to watch out for. A survey of over 300 CIOs by IDC, indicated that over 64 percent of CIOs are comfortable with the concept of selective outsourcing of various infrastructure needs. “Offshore Infrastructure Management demands a fundamentally different approach when compared to offshore software development. There is no room for error, and you need to have a 24x7 service culture that spans people, processes and support systems,” says Rahul Swarup, President–Enterprise Solutions, Sify. He should know, as Sify’s Enterprise Solutions Division has a leadership position in services such as IPVPNs, data center services and managed services in India with over 1200 corporate clients, 400 of them being multinational firms such as Whirlpool, Gilette and GE.

No wonder a large national broadband provider in the U.S. chose Sify as its partner for outsourced network operations support.
Sify’s experience in scaling its customer engagements dramatically over the last 18 months, and its recent customer wins against serious competition from Indian IT majors, has given it the confidence in emerging as a highly respected player in the global IMS market. “Sify’s sales strategy is two pronged.

In addition to our direct selling efforts, we also work through business partners and strategic alliances to increase our reach,” says Kumar. “Our strategy is also to partner with local companies in the U.S. in the IMS space. Not only can we add tremendous value to their customers, we can help them become profitable.”

Advantage Sify
Sify’s Q3 2005-06 revenues have hit $26.7 million and the company currently has a cash balance of $63.2 million. The company is the largest private Internet and networks services provider in India with over 40 percent market share in IP VPN services. It was the first ISO 9001–certified service provider for Data Center and Network operations in India back in 2003.

Sify’s domestic infrastructure management services contributed 57 percent of its revenues in the last quarter. In consumer services, Sify’s 3100 plus cyber cafes with more than 25,000 PCs, used by 1.2 million subscribers across 160 cities in the country, are managed remotely from one location. Sify manages a humungous 60,000 device equivalents at any given point of time. Reliability, scalability and security are the cornerstones of this gigabyte data network.

Sify’s current service delivery team of 800 caters both to engagements in India and internationally. Rustom Irani, CTO, Sify, says, “We have continuously developed our capabilities over the years to become IT infrastructure management specialists. We manage one of India’s most sophisticated and extensive networks over which we provision both our enterprise services and consumer services. We do this with tools, applications and software that we have developed for network management, customer support, a sophisticated trouble ticketing system and a live reporting portal that CIOs can log on to. All tools and processes have been developed in a customer centric manner, as we believe the role of technology is to ensure delivery of services to result in customer delight.”
Sify’s progress in the U.S. market over the last year and a half has made analysts sit up and take notice.

Forrester, who accorded recognition of Sify’s growing international presence by including it in its recent Forrester Wave on Infrastructure Management, has this to say about Sify: “It is the largest managed network services provider to corporate India, supporting more then 1000 corporations and is a leading data center services provider with 2 level–three data centers. Fueling its credentials for managing infrastructure remotely is the fact that Sify is the largest ISP in India. Sify is best suited for remote offshore infrastructure management. Sify is a good fit for buyers that want to offshore discrete processes to an infrastructure specialist and are looking to partner with an offshore vendor. Large conglomerates use Sify for discrete activities like server management and monitoring. Global companies that have sophisticated selective sourcing capabilities can introduce Sify to perform discrete processes or activities, while retaining service levels with the end customer.”

Business Model
Ever since Sify set out to acquire global customers, it has recognized the need to adopt innovative business models that provide superior value to customers. Sify has attempted to steer away from the conventional time and material model that most IT majors still use. Several of Sify’s engagements are priced on a ‘per device per month’ basis tied to service level agreements (SLAs), and are serviced by a shared pool of engineers supporting multiple customers. As Sify eliminates root causes of problems in customers’ infrastructure, and applies process improvements, resources become more productive, the benefits of which can be passed back to customers.

Another innovation Sify brings to the table is its rapid transition methodology, which allows the benefits of off-shoring to start flowing very early in the engagement. The traditional approach to transitioning infrastructure management has been to look at the entire IT infrastructure as one piece. Therefore the lead-time to start moving work offshore from the beginning of the engagement used to be at least 8-12 weeks. Sify’s rapid transition approach takes a process centric view of transition, and is therefore able to identify and transition suitable processes sequentially, in quick succession. Customers can now experience the benefit of off-shoring as early as two weeks from the start of engagement, depending on the readiness of its processes.

Risks and Solutions
Security and business continuity are the top concerns for customers and service providers alike the world over. Sify follows globally accepted best practices in both these areas.

The layers of physical security are obvious on a visit to any of Sify’s command centers, and that is indeed reassuring to visiting customers. Not so obvious, but equally important are Sify’s practices in ensuring network and information security, which are borne out by BS7799 certification of its operations. Sify is also in the process of obtaining SAS 70 Type II certification.

Sify’s service infrastructure offers complete redundancy at every level to assure its customers of business continuity. The company’s multiple command centers give it the ability to resume operations from an alternate center in a matter of hours, in the event the primary center is affected. Sify’s global connectivity is designed to be fully redundant through multiple STM-1 connections that are leased from all the submarine cable systems that land in India. Sify’s business continuity plan for specific engagements includes resource continuity, which is achieved by distributing engineers to work from multiple locations, and maintaining shadow resources who can quickly step in should the need arise.

Last Word
With all the aces it has managed to stack up its sleeve its no surprise that Sify has earned recognition in the Forrester Wave Report in a remarkably short time frame that, “Sify is best suited for discrete offshore remote management.” This is a shot in the arm for the company given the competition its up against. Sify’s experience in running its own network and data centers, with considerable experience in remote management of infrastructure for Indian clients, gives it the edge in this fiercely competitive market. For Sify is playing on its strength as an infrastructure specialist. And customers are found to trust specialists with increasingly mission critical infrastructure.
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