Indian RIMO suppliers courting larger buyers

Indian RIMO suppliers courting larger buyers

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Bangalore: India's IT providers of Remote Infrastructure Management Outsourcing (RIMO) services are now successfully courting larger buyers, in order to sustain growth and counter the competition from MNC Infrastructure Outsourcing (IO) suppliers.

According to a recent study called, 'Remote Infrastructure Management: Impending Crisis of Genre' conducted by Everest Research Institute, Indian suppliers are being forced to deviate from the game-changing innovations they brought to IO delivery market place that propelled them to the current level.

The Infrastructure Outsourcing (IO) market continues to evolve with offshore suppliers maturing as infrastructure service providers, enabled by remote infrastructure management (RIM) technology. Offshore (mostly India-based) suppliers are essentially targeting the same buyers as multinational firms and are starting to play by rules long established by the traditional players. They are adopting the traditional rules of IO, including offering more complex pricing mechanisms, longer deal durations, more complex SLA-driven metrics, and even rebadging of employees.

"As large Indian suppliers started approaching critical mass in IO, they realized they had to target bigger deals with large buyers to sustain the 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 RIMO market grew rapidly at 66 percent CAGR until 2007, when early signs of a sagging economy marked the beginning of the market's slower growth rate of 18 percent CAGR.

"Indian RIMO players are deviating from some of the innovations they brought to the market, such as a 'penetrate and radiate' market strategy," said Shiraz Ritwik, Research Director, ITO Research, Everest Research Institute. "They need to build creative IO offerings, respecting the biases of large buyers and capitalizing on their gradual change in mindset. Indian RIMO players also need to recognize that their strength is in flexibility and openness to new approaches and avoid getting sucked into traditional rules where they are unlikely to win."

Talking about the strategy to be adopted by the offshore RIMO suppliers, Gupta added, "A strategy of continued innovations and differentiated service offerings is more likely to be the winning strategy in infrastructure outsourcing."

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