India’s telecom infrastructure is scaling up to new heights and is now ready for remote infrastructure work. Since the government monopoly in the telecom sector was lifted in 1998, Indian government has taken several initiativess to spur investment in the telecom sector. And while there is always a race between demand and supply, vendors have aggressively built world-class network capacity.

According to Nasscom, India has 66% of the $18 billion outsourcing pie. While the addressable market is $163 billion. Globally, the IMS market is projected to be at $100 billion while India’s current size is estimated at $500 million. According to Gartner, in 2006 infrastructure services delivered in a global delivery model from India to US companies has surpassed $1 billion.

As India’s reign in the outsourcing market continues, I would like to talk about a concept which germinated almost a year back. This is what we call, “Mananged from India.” One evening during casual discussions with Pari Natarajan, CEO of Zinnov, I talked about India being a leader in application maintenance and sustenance and thus coined the word “Maintained from India.” Pari immediately reframed and called it “Managed from India”. Although we did not ponder much about it after that, the recent activities in IMS has made me rethink this.

Akio Morito’s dream of “Made in Japan” -- a phrase embodying leading-edge technology, quality, and high customer satisfaction -- is a household phrase around the world.

The question we need to ask ourselves and industry leaders is, by 2012 will enterprises around the world talk about “Managed from India”?

HCL Technologies recently introduced a service under which it will remotely upgrade business computers to Windows Vista from its offshore facilities. The “Zero Touch” desktop deployment, as HCL calls it, is completely automated and will allow businesses to cut Vista installation costs by 40%.

Today, IT service providers of all stripes are ramping up their low-cost, remote infrastructure delivery capabilities. Almost all of the top Indian vendors with a presence in India have forayed into the red ocean. MNC vendors such as HP, EDS and CSC are using the global delivery model to perform elements of remote infrastructure management work from offshore and nearshore locations.

If we think vendors alone are riding on the wave of infrastructure management services (IMS), then the meal is half complete. Many MNC captives have already made decisions of sourcing IMS from India and many more would follow. Recent news about Google investing at least $1 billion in a million-square-foot data center comes as a great bolster to the industry. Not to mention, Nokia, Yahoo, Akamai and many other companies have already started managing NOCs from India.

It is not uncommon to find companies unsatisfied with their relationship with IT and BPO vendors. Most companies end with a trial and error method, losing significant money and time in the process. What is important for them is to analyze the problems in detail and to figure out the key reasons for those problems, in order to avoid repeating those mistakes in the future.

Some of the key problems companies usually are confronted with include:

• High attrition
• Issues with quality of talent
• Lack of flexibility on the part of the vendor to accommodate changes in requirements and priorities
• Higher cost than envisaged
• Delays in project completion

It is important to address the key reasons of the failure of the relationship, such as:

• Lack of strategic and functional alignment with the vendor
• Low client focus
• Lack of enough due diligence on the vendor and detailed operations review
• Higher than competitive rates from the vendor, due to lack of market understanding and right negotiation
• Lack of robust SLAs
• Lack of win-win terms and conditions in place to address business requirements in the contract with the vendor
• Lack of a governance framework

IT outsourcing buyers should start looking beyond just cost savings and looking at ways their offshoring/outsourcing service providers can add value. Looking at offshoring initiatives as only a cost savings effort will significantly impact these organizations’ ability to initiate improvements in their business process and react quickly to business changes. When cost savings are the only focus, offshoring vendors will only look at optimizing the solutions they are working on without understanding or worrying about how the solution fits into the customer’s IT strategy.

IT offshoring buyers should start treating the offshore providers as partners and take time to explain their business model, customers and IT, R&D and business process requirements of the company and also the management team of partner organizations to take key decisions. This would empower the service providers to be able to add more value to their offerings and be fast and flexible to changing needs of their customers.

There is a telecom revolution sweeping India, and unlike many countries it is through the “Unwired” or “Wireless” route. The penetration of telephone when we just had landline phones (wired) in our country was lower than 2%. Having a phone was considered a privilege of sorts. While today triggered by the viral growth of mobile telephony, the telephone penetration (teledensity) has crossed the 13% mark. It is expected that by 2010 India will have a teledensity of 35% or more. It's hard to believe we could do so much in such a short time, but if we had followed the path that developed countries followed (traditional landline networks) we would have taken 10-15 additional years to achieve the kind of penetration we have today. And this will be more and more evident when we re-look at the numbers 7-8 years down the line.

These hard-to-believe numbers are corroborated by equally enticing anecdotes. I was traveling in a train from Bangalore to the northern part of India. During most of the journey I could easily receive and make phone calls. Also, noteworthy is that not only the voice but the data connectivity has also taken great strides in India. While the train was cruising through the uninhabited terrains (mountains, forests, barren lands and others) I could still surf the Internet through my Reliance Data card cum telephone connection. Three years back when I had made a similar journey, these things were not at all possible. No wonder India witnessed the world’s highest number of new mobile subscriber additions in the month of August 2006 (5.9 million new mobile users) leaving China (5.19 million) behind.

Zinnov expects that India will cross the 200 million mobile subscribers mark at the latest by the end of December 2007. On the data front Zinnov expects that the first 3G launch will happen between November 2007 and February 2008 in India. Zinnov also expects that India will sustain the growth it is witnessing now for the next 4-5 years mainly driven by:

• Falling tariffs & affordability
• Infrastructure sharing by the service providers
• Increased penetration in small towns, villages
• Urban penetration, which is expected to grow even further

In a country of more than a billion, if everybody gets connected and is linked to the country’s economic, social and business system, it would not result in anything less than fast growth. “Hail” mobile telephony.