Infrastructure management is new focus

Enterprises have always focussed on RDBMS, NOS, and Web/Proxy/Mail servers. But now other areas like infrastructure management are getting more attention. by Brian Pereira

Enterprise Packaged Software (EPS) is the foundation for various IT systems within the enterprise. It forms the foundation for enterprise wide applications; both are crucial for enabling business processes.

For instance, connectivity is now essential for communications, online transactions and data exchange. But without a Network Operating System, RDBMS and Mail server, these functions would not be possible. In fact, these are the three key areas in packaged software for those who invested in EPS.

To align IT more closely with business processes, enterprises are consolidating infrastructure and going in for centralization. Standardization of IT infrastructure becomes crucial in this scenario. IT standardization is one of the top three priorities for 41 percent of the respondents. Enterprises also want to keep their infrastructure updated—in fact upgrades and replacement of existing IT infrastructure is a priority for 37 percent of the respondents.

The compelling need for IT standardization and upgrades has made Enterprise Package Software (EPS) a key focus area; the past investment in EPS is proof of this. Among the companies who invested in packaged software, on average, almost a third (29 percent) of the IT budget was spent on EPS. In the next one year these enterprises are likely to allocate a quarter of the IT budget (25 percent) for EPS.

Overall, in the past, 74 percent of the respondents invested in EPS and most of the companies investing in package software were from the Auto/Auto components and Chemical/Pharma verticals.

In 2003-2004, exactly half the respondents invested in Enterprise packaged software. And in the next one year (2004-2005), 46 percent plan to do so.

Investment in key areas to halve

Within EPS, the three main areas of investment are Network Operating System (NOS), RDBMS, and Web/proxy/mail server; this trend is consistent across all industry verticals. In comparison with investments made during 2003-2004, spending will be halved for the three major segments in the next one year.

Networking and communications is taken for granted in medium and large enterprises, and even small businesses have LANs. Therefore most of organizations already have a sizable installed base of NOS, RDBMS and Web/proxy/mail server. The investment in the EWA space is primarily driven by enterprises which are buying additional licenses or upgrading existing application platforms.

At present, 71 percent of the respondents have invested in NOS and 30 percent plan to do so in the next one year.

RDBMS is regarded as the pedestal for hosting and supporting enterprise-wide business applications like ERP, SCM and CRM. With consolidation, standardization, and centralization of IT systems, the demand for centralized and scalable RDBMS is on the rise. The other drivers for RDBMS are data warehousing, data mining and business intelligence.

At present 72 percent of the respondents have invested in RDBMS and 36 percent plan to do so in the next one year.

While RDBMS is a key investment area for all the industry verticals, many companies in the Auto/Auto components, Govt./PSU and Manufacturing/Engineering plan to invest in RDBMS.

With increased dependence on the Internet for commerce and communications, Web/Proxy/Mail servers already have a firm grounding in the enterprise. In the next one year about 34 percent plan to invest on Web/Proxy/Mail server.

Infrastructure management scale-up

Traditionally NOS, RDBMS and Web/Proxy/mail server have been the key areas for investment within packaged software. However, two areas which have always been of low priority are Infrastructure/ Network management tools and Testing and troubleshooting applications.

Enterprise networks are getting more complex with the deployment of multi-vendor solutions on different platforms across several locations. This makes such networks complex to manage. In such a scenario Infrastructure management tools simplify the task of managing diverse, spread-out infrastructure.

As networking in enterprises proliferates the investments in Infrastructure/network management tools will also go up. At present only 44 percent companies have invested in some kind of Infrastructure management tools and about 31 percent of the respondents plan to invest in this area.

There is also the smaller niche of Testing and Troubleshooting applications—solutions that let network administrators deal with problems like failed links, network bottlenecks, bandwidth glitches, buggy software, and crashing servers. Specialized testing and troubleshooting tools can identify these technical glitches, monitor application & network performance.

The Testing and Troubleshooting applications space seems to be cannibalized by Infrastructure management applications, since these management suites are tuned to perform multiple tasks that a multitude of smaller applications can perform, and that too as efficiently. Only 25 percent have invested in Testing and Troubleshooting Applications, and just 18 percent plan to do so in the next one year.

Knowledge mismanagement

The hype around Knowledge Management (KM), seems to be just that. KM as a concept came into existence in the mid-90s but doesn't seem to have taken shape in the Indian enterprise. Currently, only 18 percent of companies have adopted KM initiatives and only 17 percent plan to invest in this area in the future.

While most Indian companies have stayed away from KM solutions; they will clearly have to be a focus area in the future.

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