BFSI Fastest Growing User Vertical Of Managed IT Services

Managed IT services provider Netmagic Solutions has announced its Rs 100 crore expansion plan, with Rs 80 crore in private equity led by Indian arm of Fidelity International and Nexus India Capital and Rs 20 crore being pumped in from the company’s internal accruals.

The company sees huge growth potential for managed IT services in the BFSI sector. Talking to Biztech2.0 , Sharad Sanghi, CEO and founder, Netmagic Solutions confirmed, “BFSI is the fastest growing user vertical of managed IT services. Demands for services like hosting, connectivity, security and services at operating system level are on a massive growth path in this sector.”

Data security and scaling up are the two main challenges before the BFSI sector. For instance, while data security is the primary challenge for banks, for stock markets the question is how to plan and scale up to the voluminous growth that they have seen in recent years in terms of traffic, transaction growing ten-fold, people, bandwidth etc. Managed IT service addresses these challenges by providing 24/7 expertise and adequate services like load balancing, dynamic storage solutions etc.

More from Biztech

Future Group - Reliance Retail Deal approved by CCI RBI ban on cryptocurrencies takes effect; prohibition could force investors to tap the black market

Skill requirement to manage data centre challenges such as rapidly changing technologies, power consumption etc are also making this sector heavily depend on such services. Sanghi added, “With technology changing rapidly, the finance sector faces the challenge of evaluating different technologies, adapting its skill sets to these changes, and evaluating multiple vendors. Instead of having them do these jobs we as managed IT services providers offer them a complete end to end solution by testing new technologies in the market, evaluating the best match for suiting their needs and providing multiple skills catering to each area of IT infrastructure challenge faced by them. This spares them lot of time to focus on their core competencies.”

Further, though most of the players in this space have standard product offerings, what seems to be the main differentiator for a managed IT services provider is customisation of solutions. As Sanghi mentioned, “Our customised services differentiate us from the rest in the industry. For instance, we have standard product offering for data back up services. Now if a finance customer comes with a specific need of doing data back up in a specific way, we do it.” Sanghi informs that about 15 - 20% of Netmagic’s revenue comes from BFSI sector.

Other potential target sectors include online media, manufacturing, ITES, hospitality, travel and tourism, education, telecom and government institutions.

On being asked about the convictions behind investing in this sector, Raj Duggar Senior MD - Fidelity said, “Demand drivers for managed IT services business are very strong. Some of the drivers for this are massive growth in Internet traffic, SaaS, network centric computing etc. In India, the two main revenue drivers for managed IT services would be Internet and enterprises’ need for value added services like managing uptime, security and so forth.”