Services

The network is the service

The services sector is a promising market for cabling vendors with the majority planning to invest on fibre and Gigabit Ethernet. By Chirasrota Jena

The tertiary sector that is popularly known as the services sector has been attracting the attention of the IT industry. IT plays a prime role in information processing, storage and access with a view to providing improved services to the consumers.

The services sector covers a vast range of occupations involving comparatively little capital investment leading to gainful employment and has a good potential for export revenues. The sector calls for continued induction and infusion of knowledge-based technologies with cutting edge applications of information technology.

Logistics companies and hotels are part of this sector. Companies in the logistics sector use IT extensively to track goods. Similarly, hospitality chains are looking at tapping e-commerce opportunities by wooing global jet-setters. The top business priority for companies in this segment is the geographical expansion of business. IT transformation is a key factor in achieving high performance for retailers. The volumes of data are huge in these companies as apart from product details they also need to maintain a large customer database.

According to the survey, 79 percent of 34 respondents from the service industry are planning to invest in fiber and 74 percent are planning to invest in Gigabit Ethernet. Though last year most respondents from the service sector has invested primarily on desktops, servers, connectivity and printers but this year they are planning to invest in PCs and Notebooks and on different connectivity technologies. This sector uses IT extensively to ensure timely delivery and tracking of goods. Hence, connectivity is a high priority area and firms in this segment allocate the biggest portion of their IT budget to bandwidth.

Top of the list

As per the survey, fibre leads the list of top 15 IT infrastructure areas where service vertical is planning to invest this year. Some large enterprises are outsourcing their connectivity requirements from third-parties. With the growing demand for higher bandwidth and security of networking assets now organisations are also managing their own connectivity. This higher off-take of fibre optic cable will depend on the success of broadband services. Several broadband service operators, in fact, have already laid out kilometers of fibre anticipating huge demand.

As far as fibre to the desktop is concerned, it definitely offers advantages in terms of high bandwidth throughput but its adoption has been slow in the recent past primarily owing to the high costs as compared to the structured cabling options (copper). Gigabit Ethernet remains the favourite option for respondents in this vertical. As the service industry is dependant today on availability of IT equipment, in such a scenario while there is no doubt that improved networking will enhance performance, the service industry is constantly seeking out better avenues to increase productivity and better its network. Cisco is considering the services sector as an emerging vertical, which will definitely help the company to expand its reach amongst large enterprises.

Hotels are now deploying wireless Internet services for their customers. As per the survey report, out of 34 respondents from the services sector nearly 82 percent have existing copper cabling infrastructure while 71 percent have fibre cabling. Fibre is gaining momentum in the service sectors.

Cabling systems are becoming intelligent especially the ones deployed in the enterprise space. These systems support real-time management of the physical layer, which enables immediate troubleshooting of problems, if any, besides optimum utilisation and efficiency. Intelligent structured cabling is able to track IP-based devices so that the network manager can access, control and manage them from a central location. This is critical considering the distributed computing environments that we have today and the acute need to troubleshoot them remotely. There is a scarcity of network management staff and therefore remote access and management of devices is logical. For this, the use of an intelligent structured cabling system is a must.

Besides this, there is a growing trend towards interoperability and providing higher security to the user as well. Says Subash Chawla, Consultant, IT Group, Jindal Photo Ltd, “Though some of our connectivity requirements are outsourced from a third party like Bharti and Sify, we are planning to deploy the technologies at our end. High-bandwidth and high-speed demands are pushing the limits of data transmission in LAN networks. The demands of advanced applications such as Fast and Gigabit Ethernet are pushing cabling solutions to reliably transfer voice, video and data.” 

PCs and notebooks

As these sectors are technology driven and looking for durability, portability and products that are sleek in design, vendors are offering them high-quality products accompanied with state-of-the-art technology. As per the survey, 71 percent of the services sector is planning to invest in PCs while 62 percent of respondents are planning to invest in notebooks. Bundled with high-end applications and flexible in usage, the penetration of notebooks is expected to be highest in services like healthcare, logistics, hospitality and advertising agencies. The operating system on these laptops is Windows XP and broadband connectivity is preferred. Non-IT companies are giving notebooks to their executives in a bid to boost productivity. The spurt in laptop usage can be attributed to the increasing usage of IT, and the automation of the sales force in sectors like pharmaceuticals and fast moving consumer goods. Rural India has always been a major growth driver and with the penetration of the services sector into the hinterland it continues to be so. With the growth of the mobile workforce in India the demand for notebooks bound to increase in the coming days.

Elaborates Sanjeev Saxena, IT Head, Krishna Maruti Ltd., “As most of our executives are mobile we have to procure more laptops for our company. Some of the executives are using their own notebooks while the company provides notebooks to some executives. Nowadays laptops are considered an essential element for the smooth running of a business. It is considered as a business enabler. We are also planning to deploy some networked laser MFDs in our offices.”

Lasers and MFDs

Laser printers are gaining momentum with large enterprises. Most large enterprises are going for laser MFDs for their lower maintenance cost and the speed of operation and also security features. Of the 34 respondents from the services sector, 94 percent have already deployed laser printers. Large enterprises are looking to create a better work environment along with enhanced productivity while going for printers. Rapid technological changes, reduced costs (both of printers and consumables), high usage of Internet, increasing functions and features in printers and multi functional devices (MFDs) have contributed to the growth of imaging and printing devices. Another 62 percent of the services sector respondents are planning to invest in laser printers.

EWA: still standing

53 percent of respondents from the services vertical are planning to invest in CRM. Presently, most big hotel chains are investing in comprehensive systems that store complete profiles of their clients. The moment a guest walks in and if he is a regular client, the hotel knows his preferences immediately and serves him accordingly.

The logistic companies are also the front runners in deploying enterprise wide applications. While tracking goods across the supply chain is a necessity, companies are also realising the need for deploying enterprise wide applications. This is because logistics companies are realising that they have to move beyond just shipment tracking to monitoring and tracking shipments proactively.

Fine-tuning strategies

The software vendors are honing their strategies to tap these segments. Simultaneously, they are conducting road-shows about their products, identifying code-less technologies to perform any customised extensions to the existing solutions, and adding BI front-end tools on top of the ERP/CRM/SCM solutions to provide an easy and useful interface for the top management of client companies.

Take the case of GATI Limited. 300 employees are working in the Eastern region for GATI Limited. The company is investing on its IT infrastructure. It is also an early adopter of various applications. Informs Apurba Kumar Karmakar, Head, Automation, Eastern Region, Gati Limited, “We have deployed Lotus Workflow from IBM. But we prefer to deploy the solutions developed in-house. For a logistics service provider, the most crucial thing is how fast we can get a shipment delivered to a client. We are also using the CRM for establishing a better relationship with customers.”

Storage software: already done

With 83 percent of 23 respondents already having e-mail archival and 65 percent having deployed database archival software, it’s perhaps natural that the number of companies planning to make further investments on this category is on the lower side. 47 percent of 34 respondents are interested in deploying e-mail archiving solutions and 44 percent in database archiving.

Logistics companies, hotels, retail outlets and other industries are making extensive use of e-mail communications, which is why most services companies already have these solutions or are planning to get them. Informs Saxena, “The archiving solutions available from different vendors are costly. But with the need to maintain compliance standard and for better corporate governance we are now thinking over these storage software deployments. We are using e-mail extensively for our business. We always prefer to take backups of all e-mail by the close of the day so that no e-mail messages are lost. It also helps in tracking all e-mail communications with our customers.”

Archiving databases

Many players in the services sector have been able to improve performance and availability. It has been realised that streamlining databases is critical to improving application performance, enhancing decision support and managing costs. Ongoing database archiving keeps databases operating at peak performance, providing a cost-effective, long-term solution to the problem of accelerating database growth, while maintaining optimal database size. In addition, routine maintenance, backup and re-organisation processing take less time because there is less data in the production database to process.

While the business benefits of utilising an e-mail system as the communications hub have been far-reaching, the costs and risks for achieving these benefits have become a major challenge for the large enterprises. The IT departments they rely upon for immediate as well as long-term support and management of the e-mail system. Without some kind of retention, management, and protection strategy, the cost of storing and accessing all this information in a timely manner becomes prohibitive, mail stores become bloated or possibly corrupted, backups and restores take longer, and the business is impacted. Compliance is emerging as a key driver compelling organizations across verticals to spend in e-mail archival and file archival solutions.

The issue of regulatory compliance has significant potential to emerge as a critical concern area for CIOs and CEOs in the near future. This is governed by multiple factors including the increasing globalization and the growing prominence of India on the global economic landscape. A host of international and Indian regulations have come into play, which mandate specific policies and systems to be followed while engaging with multiple stakeholders.

Other areas of IT spending

There has been growth in the data centre market in India. Every data centre deployment and expansion project will need power conditioning solutions and therefore the market for these solutions is also increasing. There is increased dependence on IT by businesses. As more business processes become automated the strategic importance of data centres has grown. Over the years, IT has changed and become modular (mainframes to servers) while the infrastructure that supports IT in the data centre has remained static from the mainframe era. It is therefore critical to get the right technology in place. It is important that one adopts the right architecture for the data centre one which enables businesses to be agile and supports it as it grows and yet scalable enough to adopt technological and environmental changes in the future. Today more than power, cooling can be a challenge especially for high-density applications.

Factors driving IT investments

Business drivers today are return on investment and doing more with less. The two key IT trends that emerge are centralised IT environments or consolidation and compaction. A big concern faced by customers with respect to Information Technology today is asset utilisation (in terms of reducing the need for floor space) and operating costs. The same is evident in the increase of SOA and technological trends of server virtualisation that are all a response to do more with less and these kinds of trends are going towards server consolidation by the customer. As per the survey, 56 percent respondents are planning to deploy UPS and 47 percent are planning to deploy gensets.

Connectivity options in terms of leased line, VSAT and RF links are preferred by the service industry. According to the survey, out of 32 respondents from the service sectors 84 percent have existing leased line infrastructure. 56 percent of 34 respondents are planning to invest in leased lines in the coming year. Large enterprises are now also investing on VOIP and video conferencing technologies. Chawla opines, “We are using the combinations of VPN and leased line for our Internet usage. As we have to coordinate with our office in France we are using video conferencing tools. Now for our data centres we are planning to invest in the power conditioning technologies.”