Digital technologies such as platforms, cloud-based applications, big data analytics, mobile systems, social media, and cybersecurity need to be integrated with the legacy core technologies. This provides significant opportunities to Indian technology and business services providers who can understand these new technologies and deliver optimum value to their partners on these technologies.
Service in today’s digital world is marked by customer centricity, wherein focus on enabling the customer is causing waves of digital transformations. Instead of buying just technology, clients are looking at end-to-end IT solution that has a similar business impact. Cloud computing technologies are providing companies with a way of connecting traditional information systems to IoT-enabled devices. This capability will allow enterprises to build sense and respond systems quickly and economically. Cloud computing has given major fillip to development of applications and API (application Program Interface), critical to integration of devices and platforms. N.Ravichandar, Sr. Vice President- Emerging Technologies, HCL Infosystems Ltd says, “With the advent of IaaS and PaaS delivery models, application development cycles and cost have critically shortened providing major boost to IOT related initiatives.” According to Gartner reports, the public cloud services market in India is projected to grow 30.4 percent in 2016 to total $1.26 billion. The highest growth is expected to come from Infrastructure as a Service (IaaS), followed by Platform as a Service (PaaS). Driven by the demand for speed, flexibility, scalability and access on-the-go, organizations today are fast embracing a cloud-enabled solutions.
It is said that by 2020 companies will be competing primarily on service basis. As the service industry is playing its major role in the economy, it brings both opportunities and threats to companies that manufacture and sell technology products. Most of the companies those are making automobiles parts, industrial products, scientific instruments and computing devices are noticing downfall in margins due to which they are expanding more on services part.
Jayant Gundewar, Director- Enterprise Services, Dimension Data India shares his views. He said, “Tech as a Service is a driven by business outcomes demanded by various functions in an organization like business development, HR , Internal IT , Supply chain etc. Faster availability & agility is spurring the demand from business users who need speed for launching their products & services to their clients. Convenience of scaling up /down basis business needs makes it a compelling proposition.”
Latest trends of Technology as a Service business
The growing dominance of services, its automation and the disruptive innovations are the megatrends that are shaping all businesses. To continue their success, companies need transformations which require new approaches in how technology is developed, delivered, commercialized and consumed. This approach of Technology as a service is the rising future for technology sectors.
Cloud computing has made IT the real enabler of business. Now the CIO / CTO are not the only decision makers in Technology but every user is the evaluator, assessor and decision maker in the path of absorption of technology. Cloud computing is not a new playground but the cloud services market just seems to scale up year after year. According to analyst firm Gartner, it is supposed to reach $1.9 billion in 2019. Not only that, the likes of Digital India initiative and benefits of cloud like agility and cost effectiveness has led to many organizations leaving no stone unturned to hop on to the plane. As Cloud becomes mainstream with the business environment, organizations across the world are appreciating the potential benefits of Cloud, while seeking mechanism to overcome challenges of adopting these highly disruptive technologies. There is a huge Cloud opportunity to be leveraged, with an accelerated adoption of Infrastructure on Cloud and ISV led solutions, due to clear advantages such as speed, adaptability etc. Many small businesses are benefitting immensely by adopting cloud computing as an integral organization’s business model. There is immense market for Cloud solutions since it is the backbone of many fast emerging trends such as BYOD, mobile working, Business Intelligence and Analytics increasingly rely on Cloud. Increased use of smart phones, and easy access to the Internet will see greater adoption of technology by small businesses and start-ups.
Cloud computing provides a serious alternative to traditional IT consumption models. It’s a paradigm shift in the way service delivery is done. Being skilled at cloud infrastructure and application migration, Hitachi Systems Micro Clinic deliver value to customers by offering proactive monitoring, automation, and management to their customer’s environment. Soumay Seth, Vice President- VAS, Hitachi Systems Micro Clinic excerpts, ” The growing dominance of services in the industry and the disruptive innovations of software are the two latest trends those are shaping the technology trends. We ensure that our clients will be able to take complete advantage of the cloud in a way that leverages AWS best practices, innovative services, and transforms their IT infrastructure into a true profit – centre for their business.”
These days many companies are investigating the applicability of end-to-end business process management (BPM) for their organizations, by revamping the existing manual process it helps in delivering the strong strategical and tactical value. Similarly, IT companies need a new operating model comprising of automated tools, relevant talent acquisition and management strategies and refined thinking around operating discipline, This new model will not only help IT deliver tailored services to a new generation of users, but it will also unlock the vast potential of emerging digital business opportunities made possible by the quickly maturing SMAC Stack.
According to Ashwani Singh , Managing Director at Clockwork Business Solutions, “Data Analysis as services will be the way forward wherein customer will be billed per report or by size of Data. Secondly SaaS will be big opportunity with Start-up companies or Payroll Service, HR services rather than purchase expensive software, remain idle at any given time, customer can pay for the use of software on demand.
In 2017 Artificial intelligence, machine learning, and smart things promise an intelligent future. In the next three years, enterprises will make a fundamental shift from building IT to consuming IT. Enterprises are planning to transition IT workloads at a significant rate and pace to a hybrid cloud infrastructure, with off-premise environments seeing the greatest growth in adoption. While cost is often perceived to be the main driver of this shift, research shows that benefits in time to market and quality are driving cloud acceptance, while security and compliance remain key concerns for adoption, particularly for large enterprises.
Key success factors for services business
The critical success factors for a product business are well known, starting with selling every unit with some gross margin and continuous product improvement. But in case somebody’s forte is a service, it’s harder to find guidance on what will get you funded, and how you can scale your business. With services, scaling the business often implies cloning yourself, since services offered by you are the intellectual property and the competitive advantage. In this case, there are some success factors that are common to both environments. For example, both need to provide exemplary customer service, build customer loyalty and provide real value for a competitive price. Here are the additional success factors that are significant key for a business with a services offering:
- Create service portfolio which address business problem with attractive business case, is repeatable and has scope of innovation for further growth
- Identify Services capabilities which your team has or partial competence. Focus initially on services portfolio with existing skill-set\credentials for easier break-through in the segment
- Never sell services as commodity, highlight how your service is more innovative and of higher value to your clients. Low cost and low margin can be strategy to acquire services business credential but is not sustainable model.
- Invest in your team to acquire skill-set such as client communication, business understanding, ability to translate service solution to deliverable on ground-level.
- Automation is a key differentiator in evolving services models. It needs large investments upfront & ongoing to continuously improve the platform capabilities
Innovation and automation in service oriented business model.
Traditional partners have done a lot of OEM driven Innovation and Automation but the shift in focus for the customer has left a wide gap to be filled by partners who offer not only what is “Off the Shelf” but also help customers engineer the right custom fit solution with their help. Piyus Kanti, CEO, Cloudstrats Technologies opines, “We feel lot of blue ocean exists in fulfilling the requirements of customers in the Cloud and TaaS era. Customers are on the lookout for partners who are not OEM focussed alone but understand customers so much that they are part of the user segment and can then drive solutions and innovation which actually help the end user of technology – the business user. Though there is a steep learning curve but given the resources at their disposal partners can help drive this positive change.” Proprietary technology empowered by software and provided as services is the new mantra. Unlike the traditional generation of labour-based services, the services of TaaS are moving to highly software-enabled, on-demand, customizable to business contexts, and often virtually delivered by a system of hardware, software and people. Unlike in traditional product model, TaaS is using technology tools to deliver dynamic functions and solve business problems in close collaboration with customers. It is increasing functional versatility, and leverages ecosystem to expand the scale of value created for the customer.
Services is a long haul business – there are no shortcuts to glory. One needs to build resources to continuously invest in creating service offerings. Its important to build differentiators based on technology rather than just people skills.
By Satinder kaur