WHITEPAPER

Are you looking for speed & agility

in operations and accelerating
your organization's growth
Consider IT Infrastructure Outsourcing

Business growth comes from a relentless focus on customers and business innovation –
and IT must do its part. When it comes to the IT infrastructure that makes the business run,
that means three things: shift spending from operations to innovation, enable
agility/flexibility, and manage risk.

The goals of IT cost reduction include freeing up resources to focus on core competencies:
enhancing solution/service competitiveness, generating revenue from new business
development, and streamlining existing business processes. As enterprises return to
expansion, they will prioritize revenue growth over cost cutting by focusing on maintaining
competitive advantage, retaining and growing customers, attracting and retaining talent, and
improving efficiency to intrinsically reduce costs.

To accomplish these goals, businesses are seeking ways to optimize their infrastructure by
trying to avoid two extremes: wasted capacity, which results in excess spend; and insufficient
capacity, which directly impacts their ability to respond to market demands. Enterprises now
require a spectrum of IT strategies atop an adaptive infrastructure to do more with less, and
transform the forced austerity of the last few years into competitive advantage.

IT Outsourcing can be a very effective alternative to using internal information technology

and resources, but a full understanding of the objectives and options are required to make
that decision. The key to a successful outsourcing decision is the cost-benefit analysis, a
mixture of the hard dollar costs and the less tangible soft costs, qualitative measures of
needs, risks, and benefits.

The decision of when, how and what to outsource is also an essential part of the equation.
Organizations evaluating their options for moving complex applications or functions, selective
pieces of their IT environment, or their entire IT infrastructure to an external service provider –
should consider how each option delivers on strategic business goals.
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The Paradox for Organizations/CIO’s Today: How To Do More

With Less
IT Efficiency is the key to achieving business objectives. And successful chief information
officers (CIOs) know they must focus on IT efficiency to enable rapid response to changing
business requirements. How do you reach that goal? With approaches like IT virtualization,
consolidation and IT outsourcing, which help CIOs achieve IT efficiency. IT efficiency can help
CIOs improve their resource utilization and reduce costs while streamlining their IT operations.

CIOs are constantly faced with challenging decisions, as to whether to:

 Upgrade existing computing infrastructure with more powerful servers and software or

lease infrastructure from hosting providers? 
 Build a new datacenter, lease space in one or more co-location centers or move to


the cloud? 
 Opt for Self-Managed or Service Provider Managed? And so on 

Challenges facing organizations today

 Some of the “pain points” that your company may be experiencing in managing its
own computing infrastructure could be driving your need to outsource your systems

to an external service provider. Typically, these pain points can include: 
 Providing a scalable, secure, and highly available computing infrastructure that
Maximum availability, utilization, and minimizes costs while ensuring service quality 

efficiencies in the face of economic  Controlling network and systems complexity and obsolescence while managing

and business pressures create a 

an increasingly expanding infrastructure 
 Ensuring bandwidth capacity and traffic loads at predictable costs to support
burden on both facilities and IT

mission-critical application environments 
managers to continuously optimize.
 Competing in an environment where faster time to market and expanded geographic
This requires each organization to fully reach are critical to success 

understand its combined operational  Enabling an agile, flexible work environment that supports a rapid response to
objectives to achieve goals. 
changing market demands 
 Managing a multitude of best-in-breed service providers and product vendors needed


to support the highest degree of service delivery 
 Difficulty in hiring and retaining skilled IT staff 

The decision to outsource your IT Infrastructure

More and more, enterprises are seeing that business success in any economy lies in
aggressively seeking and seizing opportunities to move forward. And they are using
outsourcing as a means of getting there. Why? Because they see an urgent need for rapid,
strategic change, and outsourcing can provide a fast-path to such change by enabling them
to tap into new business-enabling technologies, expand their internal skills, and acquire and
deliver new services quickly.

Dynamic enterprises are moving decisively to connect with companies that can help them
achieve what they cannot achieve alone. By shifting some of the IT burden and assimilating
new skill sets and services from external partners – in everything from datacenter operations
to application development to desktop management – CIOs and other IT leaders are meeting
their companies’ most pressing needs while laying the groundwork for future growth.

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Figure 1 – Selective outsourcing drivers and typical

High

Convert Fixed Cost

to Variable Cost Free Up Resources

PRIORITY OF DRIVER
Access New Skills
Improve Service Meet Business
Timetables
Avoid Investment
Eliminate
Headaches
Improve Focus
of Business Share Risk

Restructure
Low Company

Low-Mixed RELATIVE LEVEL Consistently High

Results OF SUCCESS

Source: Forrester's report on Strategic Outsourcing

Identifying business needs and goals

The first steps towards a positive outsourcing decision are to set those organizational goals
and determine the desired success criteria for the outsourcing decision. The decision
whether to use internal or external IT services must be based on:
 A sound understanding of the needs and limitations of the organization 

 Identifying and prioritizing the goals of the sourcing engagement 

 Developing appropriate measures for internal and external operations 

 Conducting a cost-benefit analysis of the internal and external options 

Figure 2 – Goals for IT Infrastructure Outsourcing

Tactical Outsourcing Goals Strategic Outsourcing Goals

COST REDUCTION IMPROVE BUSINESS FOCUS

Take advantage of provider’s lower cost Focus on core business while operational details
structure and operational efficiencies to are expertly managed by skilled specialists.
free funds for other projects.
COST AVOIDANCE ACCESS TO WORLD-CLASS CAPABILITIES
Eliminate big upfront investment and Gain extensive resources and access to leading
reduce the need to invest capital funds in technology, knowledge, tools, and processes.
non-core business functions.
SHIFT FROM CAPEX TO OPEX ACCELERATE RE-ENGINEERING
Pay as you go model eliminates the need Benefit from having an organization that is
to carry debt liability and the hardware and already re-engineered to world-class standards -
software assets on the balance sheet. take over systems and processes.

ACCESS TO TECHNOLOGY AND INCREASED AGILITY AND SPEED

SKILLED RESOURCES Outsourcing allows organizations to can be
An effective and practical alternative to more flexible, dynamic, and adaptable to
building new capability from the ground up. market opportunities.
REDUCING COMPLEXITY AND RISK REFOCUS RESOURCES
Gain the expertise to handle complex Shift internal IT staff from non-core activities
applications and functions that are a to activities with higher business value.
challenge to manage.

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Key Drivers for IT Infrastructure Outsourcing

Every organization has a different set of requirements and expectations when outsourcing all or
parts of their IT/IS infrastructure and functions. Some CIOs take a tactical approach for
infrastructure outsourcing to achieve more effective global operations or speed time to market.
Others decide on a complete Infrastructure Outsourcing (ITO) option as an opportunity to
transform and re-engineer their technology and processes for greater effectiveness and agility.

Driving High Performance

“Business agility is not an option, but a
While cutting costs is usually near the top of every ITO wish list, there are a myriad of
necessity in today’s global markets.
other benefits to be gained by partnering with an outsourcing provider.
Because of this, buyers of outsourcing will
be more demanding of their providers to Flexibility to Focus
deliver IT value and quality, which will mean Outsourcing providers can manage the day-to-day IT tasks, and “free up” corporate IT
greater participation of the business user in professionals who need to focus on higher value responsibilities. The ultimate benefit for
sourcing decisions. These users will likely many CIOs is the ability to focus their own internal IT resources on key strategic initiatives
push for consideration of alternative
that positively impact the future of the business.

services, to deliver the speed and agility

Agility to Compete
that competitiveness
Companies often need “speed to market” and the ability to respond quickly to opportunities.
demands.” Outsourcing providers offer fast provisioning and IT support and agility to implement or
Gartner upgrade applications quickly and securely, or to launch a product, especially when a
separation is required between internal and external IT functions.

Figure 3 – Key Drivers for Outsourcing: Stabilization & Performance

Improve business focus

Adopt best practices

Manage complexity and

stabilize environment

Transform and re-engineer

Driving High Performance Leverage technology advances
in Business Enterprises more quickly
Enhanced services and
better systems
Improve scalability and
business agility

Strengthen control and compliance

High Availability

Scale Cost and Capabilities

The peaks and valleys of business activity can add some uncertainty and inconsistency
to operations. Outsourcing providers can reduce risk by offering scalable resources and
reliable performance for business continuity.

Adapt and Protect

Businesses adapting to the changing global business environment often have need for
time-sensitive IT separation, integration, consolidation and transformation. A reliable
outsourcing provider will know how to handle the IT challenges during mergers,
acquisitions, and divestitures to maximize value and minimize risk.

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One such point in case is CarWale which Future Proof

is one of the India's fastest growing Outsourcing helps in future-proofing your infrastructure by transforming your IT for
automotive portal that offers car buyers instant delivery. By letting you focus on your core business area, outsourcing your IT
and sellers information to make intelligent infrastructure helps in creating new business and market opportunities.
automobile buying and selling decisions.
Within a year of launch, the portal was Accountability
among the most popular and visited sites A business can leverage provider Service Level Agreements (SLA) to ensure that
for information on automobiles and the IT infrastructure and application availability, performance, and support sync with
business objectives.
traffic on the portal significantly
increased. As CarWale needed the portal
Improved reliability
to be up and running 24x7x365 for its
Availability is everything. Business users depend upon their applications, and the enterprise
visitors, they wanted an IT infrastructure
depends on round-the-clock operational integrity of all infrastructure components: servers,
that was highly scalable and could
network, and security. Outsourcing IT Infrastructure with a trusted provider can guarantee as
ensure 99.99% uptime.
high as “five 9s” availability (99.999% uptime), with robust redundancy and fail-safe disaster
recovery capabilities that minimize mean time to recovery (MTTR), as well.
With more than half a million transactions
in less than eight months of its launch,
Cost Management
security of online transactions as well as
Strategic outsourcing can deliver savings and a reduced total cost of ownership (TCO) for
maintaining and managing the growing
the organization in a number of ways.
customer database was also crucial.
 Capital expenditures can be reduced and costs can be lowered. Outsourcing providers
CarWale soon realized that they needed make capital investments in hardware and equipment and share those cost across
a robust, secure and a dedicated hosting multiple customers. This translates into a lower cost based on significant economies of
solution that could ensure uninterrupted scale and allows their clients to reallocate those dollars to core business needs. 

availability of the portal for their visitors  Outsourcing allows the costs associated with IT to shift from the capital expenditure
with minimum downtime and latency. (CapEx) budget to the operational expense (OpEx) budget, financially positioning IT
Hence, they started looking for a

as an essential cost of doing business alongside other core costs of sales. 
managed IT hosting service provider that  Outsourced partners offer a way to reduce daily operational costs. The best providers
could fulfill their requirements and the allow companies to scale IT operations, so they can control how much is spent in high
company opted for Netmagic. 
or low times. 
 Businesses can “pay as they go” with outsourcing providers. Such flexibility
“CarWale's subscriber base was growing allows companies to move from fixed to variable costs. 
at an exponential rate, and Netmagic was
able to provide us with a dedicated hosting Figure 4 – Hosting options vis-à-vis IT investments
service that has blazing performance and
highest level of reliability. Netmagic offered Reduced
Capex &
us a robust dedicated hosting solution, with Opex
seamless scalability, redundant and
burstable bandwidth, Network and server
security services, 24x7 support and Public Cloud
monitoring services etc.,” revealed Tufail
Khan, Co
Founder and VP Classifieds, Automotive Hosted Private Cloud
Exchange Pvt. Ltd (www.CarWale.com).

CarWale's case proves that IT outsourcing In-house Private Cloud

has the ability to scale IT infrastructure as
needed and on a continuing basis.
Businesses can be rest assured that their
Managed Hosting
systems will never run over capacity
always ensuring smooth operations.
Thus, the CIOs no longer have to worry
Colocation
about upgrading existing computing
infrastructure with more powerful servers,
software or build a new datacenter etc. Standardization & Automation

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Figure 5 – Key drivers for Outsourcing: Cost Management

“Cloud-enabled services are becoming
increasingly viable. The attraction is
Gain economies of scale
scalability, pay-as-you-go and freedom
from infrastructure build-out. The cloud is
likely to accelerate the transfer of Increase productivity
ownership for other assets as well, from
servers to whole datacenters.” And the
fact that capacity will be accessed just in Cost Management Avoid Capital investment
time basis has enormous ramifications for
budgeting. When outsourcing to the
cloud, companies can cut costs without Predictable cost structure
cutting capabilities because of such
things as instant modernization, portfolio
Variable cost models
rationalization, vendor consolidation,
standardization, and the adoption of a
service-oriented architecture (SOA).”
Gartner Access to Skills & Technology
Access to the technology and skills needed to support business objectives is often a
critical factor in the decision to outsource. CIOs can tap the IT expertise and knowledge
of their outsourcing partners.
 Providers have senior enterprise and solution architects, as well as senior project and
technical experts who can help design solutions and guide IT projects and operations.

They also can solve technical and end-user issues through 24-7 help desk and support. 
 Instead of struggling to find, train and retain specialized IT talent, businesses can
By outsourcing its IT infrastructure to
tap a broad pool of highly skilled IT specialists who can allocate their knowledge
Netmagic, India Infoline was able to

and skills to support the businesses, as needed. 
bring down its physical server footprint to
 Outsourcing providers will assign well-qualified individuals to manage client accounts
a mere 30% by effectively scaling and with a single point of contact and multiple service teams made up of highly skilled
streamlining the company's existing IT technical individuals. 

infrastructure leading to a reduction in  Outsourcing providers come with investments already in place. The best providers
overall hardware costs (CapEx). already have the latest technologies, processes and tools. Their clients' benefit from a

continuous investment and improvement model and focus on innovation. 
 IT outsourcing can lay a foundation to help organizations move away from complex
and inefficient IT environments and create IT capabilities that are scalable, agile,
secure and responsive to business needs. 

Figure 6 – Key drivers for outsourcing: Access to world-class technology and resources

Access to specialized skills

Facilitate technology change

Access to Technology & Resources Management expertise

Attrition management

Reduce risk

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After a huge successful IPO in 2005 and in Benefits are as important as Costs
the face of growing business load of reliably The benefits of IT application and infrastructure outsourcing can be significant. Financial and
servicing over a thousand branch offices human resource limitations, the growing complexity of technology, and cost and risk of
nationwide and nearly a million clients, India deploying new technology can present challenges to an organization's internal IT operations.
Infoline (IIFL), one of the leading players in
the Indian financial services space felt the By outsourcing selective pieces of the IT environment, CIO's can leverage a service providers
need to streamline its IT infrastructure. IIFL expertise, economies of scale, high performance, and enhanced IT service delivery to address
also wanted to redirect the focus of precious some of their most pressing issues – and remove barriers to innovation and value creation.
human capital towards its core business,
instead of the running, maintenance and Figure 7 – Benefits: Outsourcing IT Infrastructure vs In-House
upgrading of its IT operations. Thus, the
company decided to avail the services of a
In House Challenges Outsource Hosting Outsource Hosting &
Cloud Solutions
managed IT hosting service provider who
UNEXPECTED EXPENSES PREDICTABLE COSTS
could provide it with a robust, scalable, and
- Thousands of out-of-pocket expenses - Save thousands on development
a highly available IT infrastructure and - Unpredictable ongoing costs of management - Ongoing costs predefined, easy to budget
manage it for them 24x7. India Infoline and upgrades - Cost savings from economies of scale
evaluated its options and finally chose STAFF/TRAINING BUDGET NO IT STAFF/REFOCUS IT STAFF
Netmagic Solutions as their managed IT - Costly new hiring and training of dedicated - Lower cost of management and operations
hosting service provider. personnel - 24x7 service desk and support

HIGH MAINTENANCE World Class Service

- Additional features such as security, capacity
Netmagic streamlined India IIFL's existing management, and device management are hard - Solutions available right away
IT infra resources and provided a turnkey to deploy with lack of technical expertise and - Competitive pricing
budgets - Extensive breadth and depth of services
solution for automated centralization of all
IIFL's key client applications including AGEING SYSTEMS UNPARALLELED SUPPORT
- Productivity suffers dramatically if older - Best equipment, software and support available
database management, network
versions of technology and applications are still – refreshed to stay current
management, server management, security running in-house - Continuous investment & improvement
management, trading application
RETENTION & TRAINING EXPERTS ON HAND
management, project and vendor - In-house staff may not have the specialized - Technological Know-how
management. training and experience - Access to technical and IT engineering experts
- Experienced staff may have high turnover rates
“Outsourcing our IT infrastructure helped
YOU OWN THE HARDWARE & SOFTWARE YOU DO NOT OWN THE HARDWARE
us focus valuable human capital on core - (Apply Depreciation) - No capital expense
business processes, application
development and innovation. All our key The greatest benefit of outsourcing is that it can enable IT to address growing corporate
client application environments are now expectations for strategic change and value creation as shown in the figure below.
virtualized and centrally hosted at
Netmagic's datacenter leading to efficient Figure 8 - Outsourcing can help companies redirect the bulk of the IT budget
from operations to strategic business solutions and change – Source Gartner
management,” said Sankarson Banerjee,
CIO, India Infoline. Today Target
100%

Thus, by outsourcing to a specialist IT New Solutions Liberated funding

for direct savings or
service provider the CIO can immediately transformational
gain access to array of skilled, qualified investment
Strategic
and dedicated resources allowing them to
Application Change Capacity
focus on their core business.
Enhancements
Spending

New Solutions
IT

Application
Operations Support Cost of Operations
Enhancements
Operations Support
Operations Maintenance
Operations Maintenance

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Outsourcing can be a transformative tool for business

Today the business agenda is broader, and outsourcing must provide a route to strategic
effectiveness as well as cost efficiency. By using outsourcing to sharpen their focus on the
business, CIOs can realize the greatest gains. The key is in placing the company's
transformational goals on the agenda at the beginning of the outsourcing engagement.
Transformational outsourcing arrangements put CIOs in a better position to use IT to
optimize business processes and acquire new capabilities – when they need to.

Such arrangements thrive on close collaboration between service provider and client,
facilitating improved understanding and enabling outsourcing's risks and the rewards to be
shared. Perhaps more important, they enable CIOs to capitalize on the changing business
environment, helping the organization accommodate an increasingly complex compliance
agenda, for example, and integrate new governance, security and regulatory requirements
into existing practices.

Companies that seize the opportunity to act boldly and employ outsourcing to launch
new strategies can effect rapid, differentiating change (Figure 9).

Figure 8 - Outsourcing can help companies redirect the bulk of the IT budget
from operations to strategic business solutions and change – Source Gartner

Business Challenge Outsourcing Solution Outsourcing Benefit Achieved

Poor application Network application ROI achieved in one month

performance due to optimization with up to 10-fold increase in
insufficient network link capacity
capacity

Excessive data/IT Virtualization of storage Reduction in servers up to

information storage and hardware 80% (plus total cost savings
support costs of up to 43% over three
years)

Real estate space Datacenter server Dramatic reduction in

constraints optimization and complexity, total cost of
virtualization; SOA integration ownership and the number of
servers

High energy consumption Consolidation; virtualization; Greener IT environment, with

and waste green datacenters a 25% reduction in energy
consumption and CO2
emissions

Shortage of skills needed Business application Reduction in the

to address a complex modernization development cycle time by
application landscape up to 50%, resulting in faster
time to market

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Outsourcing leads to innovative Business Model change

One of the advantages of outsourcing is that the cost savings and technical precision that
successful partnerships set in motion can bring in radical, innovative changes in the way
companies function, meet corporate social responsibility requirements, deliver products and
services, and respond to shifting consumer demands. These new ways of doing business can
change companies' entire value proposition by enabling them to leverage new delivery
channels, expand their service and product and service portfolio, and enter into new markets.

Outsourcing providers' objectivity and experience, access to wider resources and

geographic coverage, as well as their links to cutting-edge research and technology
development, can be especially valuable in assessing enterprises' needs and devising
groundbreaking business solutions. By establishing a relationship with a capable and
experienced outsourcing provider, enterprises are better equipped to mobilize the
expertise and computing resources needed to implement business model changes.

Need for a strategic partner

There are a number of factors that need to be considered when looking at outsourcing your
IT Infrastructure and management. The major worry that most businesses have is the loss
of control over their IT assets. This is a valid concern but can be overcome with a pre-
determined strategy for outsourcing. This issue can be taken care by diligently selecting the
right partner with the necessary skills and track record of helping other companies. Also, in
any outsourcing contract it is crucial that the service provider and the customer should have
the same set of expectations from the outsourcing contract. It is important to ensure that
the outsourcing partner is reliable and trustworthy. Choose a partner that respects the need
for transparency, and who take the time to understand your IT needs.

Also, organizations look for innovation. As the market for customers gets increasingly global
and diverse, technology product customers will expect third-party services vendors to move
up the value chain and provide domain specific innovation that will enable them to reduce
costs of getting their products to market and assist with market feedback to enable
successful creation, launch, and sustenance activities for their products.

Netmagic's infrastructure outsourcing services/solutions help the organization to achieve all

this. Netmagic is a strategic and reliable partner that brings expertise, automation and
flexible pricing strategies to drive down costs. The company provides flexible, adaptive
technology and multiple sourcing options to help you respond to changing business
demands. It enables compliance, security and business continuity to reduce risk. And when
the organization needs to move quickly on new initiatives, Netmagic backs it up with their
team of experts and technology partners.

This is evident in the way the relationship between India Infoline and Netmagic has progressed.
When India Infoline needed to upgrade its trading software and move its broadcast servers to
cloud, which runs at its peak during trading hours, and ran on 70 odd servers, it turned to
Netmagic for support. India Infoline took ten days to migrate around 54 broadcast servers to the
cloud with help from Netmagic Solutions, as against the almost six weeks timeframe required to
provision a server in-house. Since it was not economically feasible for India Infoline to buy 70
additional servers, they decided on using Netmagic's cloud computing service.

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Figure 10 – Netmagic's Comprehensive Service Portfolio

Web Control 
SAP 
CNAM 
E-commerce 
Infra Monitor- Electronic Data
VAPT enabling IT Back up:  Core banking 

SimpliCloud - Hosted
Appsecure infrastructure PetaVault 
CRM 
Public Cloud Colocation Exchange
Email Security DR 
Mobile VAS 
monitoring
Private Cloud Dedicated Linux Email Professional  ODIN 
Infra Manage - HybriCloud - Hosting Advanced Anti- Services -
enabling IT
Hybrid Cloud Spam Consulting
infrastructure Bandwidth
DR
management, Backup &
Implementation
inc. OS, DB & Storage
Work Area
App Mgmt Load Balancing
Recovery
Firewall Services DR
Management &
Maintenance

Managed Application
Security Hosting

Infrastructure Disaster Recovery

Management & Availability
Cloud Messaging &
Computing IDC & Managed Collaboration
Hosting

Conclusion
High performing businesses need to respond quickly to market changes, improve operational
efficiency and excellence, and accelerate growth. To do that, they are increasingly looking at
outsourcing partners to deliver cost efficient, flexible and scalable IT outsourcing models.

Therefore, CIOs and CFOs are rethinking their IT strategies to improve business processes,
cut costs and make sure their organizations are future-ready. Outsourcing all or part of an
organization's IT infrastructure, operations and applications is just one option in the CIOs tool
kit for moving to the next generation of IT - and bringing IT in closer alignment with these
business objectives.

www.netmagicsolutions.com

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