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starting line MUST
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Commscope’s Wired for Wireless mantra Commscope is training its leading partners in its Wired for Wireless portfolio in order to expand the opportunities they can target. The company is introducing this portfolio—which it got through its acquisition of Andrew in 2008—to its structured cabling partners in India for the first time. “Wired for Wireless solutions bring incremental revenue for our cabling partners. It also makes them a one-stop source for the entire building communication solution for their customers,” said Natarajan Viswanathan, MD, India & Saarc, Commscope. “Our portfolio is carrier-neutral, and provides a structured infrastructure which enables mobile communications inside buildings, eliminates dead zones and spotty coverage, and provides seamless communication throughout large facilities.” The training is underway for close to 20 partners, and the company plans to include more partners in the next phase. “These partners will be trained by June 2011. While most of the training will be done in-house, n viswanathan the trainees will also spend time at our executive briefing center in Bengaluru for live demos, integration techniques and sales training,” Viswanathan said. In addition, the company plans to hold events for partners where they can meet architects and property consultants to talk about how end-to-end cabling solutions with wireless components can be incorporated at the planning stage of the building. The company is also working with a set of partners for equipping them to provide intelligent cabling systems. “We have started training our Elite partners and will later enable other partners as well,” Viswanathan informed. He said that Commscope will enroll 20 new solutions providers in tier-2 cities and enable them to become partners. “We have identified the cities where we see opportunities for business. We will enroll VARs, train them, and take them on board as partners. We will also help them with closing and executing their first few projects.” n — Sonal Desai
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Microsoft’s rupee billing n sonal desai
M
icrosoft has introduced rupee billing for its distributors from May 1, 2011 to ensure consistency in pricing. The rupee billing would be applicable to all volume licenses, EA subscriptions, open value subscriptions and full packaged products. Even the backend rebate paid to partners will now be in rupees. The company is also thinking of bringing its OEM licenses and hardware portfolio under rupee billing; however, there is no timeline set for it, informed Ramkumar Pichai, GM, Customer & Partner Experience, Microsoft. The company had so far been billing its products to its six Indian distributors and large account resellers (LARs) in US dollars through its regional office in Singapore. Due to this, tier-1 partners were forced to locally bill products at prices fixed by the spot price of the dollar, which resulted in volatile pricing. “Rupee billing will provide our partners with predictability in doing business. While earlier prices changed almost everyday, we are now ensuring that prices will be stable for a month. We will issue a fixed rate card suggesting the estimated retail price of our products every month,” said Pichai. “In the earlier regime, price volatility hurt partner business. By the time you closed a deal prices could have decreased or increased. Also, different distributors had different forex strategies. This meant that their markup on the spot prices varied, and this led to different prices at which different distributors billed partners,” said Devesh Aggarwal, CEO, Compusoft. Commented Paresh Shah, Partner, PH Tecknow, “We would have been happier if the prices were fixed for three months and not just for a month. In many deals the sales cycles could take
“In the dollar billing regime, price volatility hurt partners. By the time you closed a deal, prices could have decreased or increased” Devesh Aggarwal CEO, Compusoft
more than a month from the time you quote a price till the time you close the deal. Prices could change over this period, and create a rift between the partner and the customer.” Another big painpoint is the increase in the list price of software products following the move to rupee billing; this, many partners believe, would have a negative impact on demand. Remarked Shah, “The new price list issued by Microsoft is 8-9 percent dearer compared to the previous month’s. We will have to pass on the increased rate to the end-customer. We are hoping that the impact will be short-term till there is more clarity and Microsoft streamlines the process and reviews the price list.” Pichai informed that Microsoft has provided LARs and distributors the necessary training to move to the new model. He said, “Over the next two months we expect to completely transition to the new process. There have been a few issues which have been brought to us by partners and we have tried resolving them. One was about existing customers who are tied in under the dollar-pricing model. For these customers we will continue to respect the contract and only move them to the new model when their annual subscription comes up for renewal.” n
contents
May 01, 2011 l Volume 5 Issue 01
HIGH GROWTH MANY CHALLENGES
Cover Story Enterprise VARs are optimistic about high growth in the current fiscal, but also aware of the many challenges that could hamper it
18 NEWS Analyses
Channel Chief
Microsoft’s rupee billing
4
Commscope’s Wired for Wireless mantra
4
AMD plans stronger presence
8
astTECS turns to EPABX resellers
8
New specializations for Cisco partners
10
CA Technologies to focus on services
10
Editorial 12 Opinion
14
Feedback
14
Shadow Ram
38
Get Personal
38
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16 Market Focus Trends in Mobile Computing The next 12 months will redefine the mobile computing market in both form and functionality
25 Role Model Vinay Dugar, CEO, Supreme Technologies, talks about his company’s evolution to one of the leading regional distributors in the country
27
READ More
6
Vishak Raman, Regional Director, India & Saarc, Fortinet, responds to some tough questions about the company’s performance and policies
Tech Focus Office 365 Microsoft’s new online productivity suite is a radical shift in both technology and delivery
29
starting line MUST
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astTECS turns to EPABX resellers IP telephony and open source PBX vendor astTECS India has started roping in traditional EPABX resellers to sell its products. The vendor has also announced a channel program and a framework that assures partners double-digit margins. After trying to sell through local IT channels, the vendor has turned its attention to traditional EPABX resellers, and has launched a seminar series educating them about the opportunities IP telephony offers. “Traditional EPABX resellers are facing tough direct competition from service providers (SPs) who are bundling or leasing an EPABX free of cost to any enterprise that commits to a minimum monthly billing or usage. The boxes leased for free are plain vanilla EPABX. We are trying to offer partners an alternative at an attractive price-point which would help them upsell to their customer base,” said Devasia Kurian, MD, astTECS India. Based on Asterisk, a popular, feature-rich, IP telephony solution, astTECS is manufacturing PBX appliances using standard x86 Devasia Kurian hardware. “Commodity hardware and open source help us to build appliances which perform as well as those from an established vendor,” Kurian explained. The PBX appliance that astTECS offers includes support for automatic call distribution, VoIP, voicemail, IVR, conferencing and video calls. According to Kurian, over a period of time, IP telephony is more cost-effective than regular telephony. “With a platform like Asterisk you can set several rules in your PBX system so that, depending on the plan you subscribe to, you can see a reduction in your bill by up to 40 percent if you’re an average customer.” astTECS is hoping to rope in around 100 partners across the country, and will start offering free training in sales and basic support. “The pricepoints we offer ensure that partners make higher double-digit margins and also earn extra money from services,” Kurian said. n — Ramdas S
8
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AMD plans stronger presence n RAMDAS S
A
fter the initial success of its channel programs, AMD is readying for the next phase of its channel strategy which involves increasing its direct presence and expanding market coverage. It is also betting big on APU platform Brazos to help it garner more market share. “Over the past two quarters AMD has increased its direct presence to 35 cities, and over the next two quarters we will have dedicated channel sales managers in about 50 cities. We have identified cities that have an overall market potential to sell 1,000 processors a month,” said Raghuraman P, Director, Transaction Business, AMD India. Unlike rival Intel, which spends millions in branding and promotion, AMD has a limited ad budget and is hence focusing on having direct contact with the white-box channel by having more feet on the ground. “For the stage which we’re at, there’s quicker and more visible ROI from having face-to-face connect than spending huge amounts on advertising,” Raghuraman explained. AMD has also floated a program called Happy Hour to ensure stronger and more direct engagement of its sales team with partners. “Everyone in the India team, including myself, has to spend at least two hours at the front desk of the assembler shop or retail store selling AMD-based PCs,” said Raghuraman. The chip-maker is betting big on Brazos, which combines the CPU and GPU on a single die. “Since its global launch in January, we have provided 1,000 APU and motherboard samples to a few hundred partners for them to build white-box systems and test them,” informed Raghuraman. “The response has been good, so this quarter we begin shipping the product in big numbers. We
“Over the next two quarters we will have dedicated channel sales managers in 50 cities, each having a market of 1,000 units a month” Raghuraman P
Director, Transaction Business, AMD India
estimate that more than 1,200 white-box builders will sell PCs with APUs.” Raghuraman declared that Brazos doesn’t compete with Intel’s Atom processor. “There’s a misconception that Brazos is pitted against Atom because the combination of CPU and GPU on one chip allows for a form-factor similar to what Atom supports. Let me make it clear that Brazos is a full-fledged mobile PC platform with all the latest features including HDMI, USB 3.0 and 8 GB RAM expandability—and yet it consumes less power than the competition.” AMD is planning aggressive pricing for Brazos. Currently, Brazos APUs bundled with their respective motherboards are available at an MOP of `5,5007,500. The entry-level pricing of the Brazos PC will be `17,000 onward. According to IDC India, AMD registered an overall market share of 17 percent during Q42010. “The plan is to gain 50 percent share in the assembler segment,” revealed Raghuraman. AMD has also re-activated the white-box server initiative with Asus and exclusive distribution through Rashi. According to Raghuraman, “Rashi has appointed a dedicated sub-distributor in all major cities to supply the server range.” n
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4/7/2011 12:01:46 AM
starting line New specializations for Cisco partners n sonal desai
C
isco recently announced new partner specializations for its borderless network, collaboration and data center architectures. The company is working on actively evolving its Learning Partner channel program to deliver architecture-based skills and training. “The new architecture specializations present a clear link between Cisco solutions and customer business needs, and improve the opportunity for partners to attach high-value professional services,” said Samir Mishra, Regional Manager, Advanced Technology Channels, Cisco India & Saarc. According to Mishra, the new specializations will be required for a partner to become Gold or Silver certified, and will also become mandatory for resale certifications beginning August 2012. The Data Center Architecture
“For a new Gold certification, the cost has been reduced by $50,000, and the total training hours have been reduced by up to 25 percent” Samir Mishra
Regional Manager, Advanced Technology Channels, Cisco
Specialization will be divided into two parts: Unified Server Certification and Unified Fabric Certification. This will help tier-2 partners to choose a certification based on their business strategy and customers’ needs. “For a new Gold certification, the cost has been reduced by approximately $50,000, and the total training hours have been reduced by up to 25 percent as
against the existing norms of up to 150 hours of training required. We will also offer up to $5,000 in Cisco Learning Credits for each of the first 500 partners to complete the recertification process. Presently, we have 10 Gold Certified Partners and eight Silver Certified Partners. Besides, Cisco is evolving its Learning Partner program to enhance the architectural training for partners and customers through its global network of more than 450 Learning Partners,” Mishra said. The company will also customize training for specific job roles. “For example, we have sales training that is tailored for account managers, and technical training focused on Cisco product deployment aimed at field engineers. These roles are used only as a way of creating relevant training and to help the partner understand the type of individual he should send for the training. Once all role requirements are met, the company can submit itself for certification,” he explained. n
CA Technologies to focus on services n Sonal Desai
C
A Technologies will focus on enabling partners to sell services in the current year. The company has launched in India its services arm — CA Services, which will have significant partner participation. The company announced offerings around its service assurance, security, virtualization and automation practices. “These services are based on our global best practices and include offerings in the areas of design, building, implementation, management and postimplementation reviews and health checks,” said Darren Reid, Vice President, Service, World Markets, CA. CA is keen to sell its premier management software products like Spectrum, e-Health, NetQoS and Wily to the mid-market, which is estimated
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“CA is revamping its channel strategy. There will be a lot of focus on tiering our partners and running specific partner programs, incentives and rebates for each category” Darren Reid
Vice President, CA Technologies
to be worth $100 million. This is the potential size of the opportunity for tier-2 partners, Reid informed. According to Reid, CA’s tier-2 partners are already carving a niche and providing services to their customers. “Often these customers do not require the services available from a GSI, and they rely on their supplier of the products to also provide services. This is the opportunity
we would encourage tier-2 partners to tap,” Reid said. He added that although in the initial deployments the tier-2 partners would shadow CA Services staff, they would have to operate on their own at a later stage. The company will announce new training and certification programs for its partners in the next few months. “CA is revamping its channel strategy this year. There will be a lot of focus on tiering our partners and running specific partner programs, incentives and rebates for each category. A lot of emphasis will be given this year toward enablement of the channel,” Reid said. He added that the focus this year would be on CA-accredited partners. “We would be making a fair amount of investment toward recruitment of new tier-2 partners.” n
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edit opinion Volume 5, Issue 01
Conservative outlook for FY2011-12 dhaval valia
I
am a risk-averse person. I have a conservative outlook for the current fiscal. And I have reasons not to be optimistic. As an individual consumer, my cost of living has risen significantly over the past two years. My utility bills have increased, grocery bills have climbed, and commute bills have bloated. My house-maids too have compelled me to increase their salaries citing the increased cost of living. To add to that, I recently bought a non-staggering apartment (in a suburban area like Kandivli in Mumbai) at a staggering price of Rs 10,000 per sq ft. One could argue that I could have waited for the prices to come down. Trust me, I waited for two years for the prices to drop—and two years back the apartment would have cost me half of what I finally paid for it. Now for this piece of real estate I have had to take a huge home loan at a 10.5 percent rate of interest. In all, my monthly outgo has increased by almost 50 percent while my income increased by a much smaller percent. This simply means that I am saving less, that my disposable income has shrunk, and that I am stressed about the future. If you consider me a typical consumer, then you know where car sales, consumer durable sales, and computer sales are headed going forward. So if you are a retailer selling to a consumer like me, be prepared for a slowdown in sales. In case you are an enterprise VAR, you know what will happen to your customers who may include car manufacturers and FMCG companies. During the recent slowdown, when the private sector wasn’t spending much, we had the government doing its bit through fund allocations for e-governance projects and infrastructure projects, and by raising the salaries of its employees. But with corruption becoming the norm of our current affairs, my sense is that government projects will be intermittently delayed. Already in Mumbai (following many real estate scams) the babus are wary of clearing new projects. Meanwhile, the central government is embroiled in one corruption scandal after the other. It is constantly in a firefighting mode, and decisions regarding policy matters have taken a back seat for some time now. Does this mean we are facing another slowdown? I honestly don’t know. But I am cautious about the future. n E-mail CRN Executive Editor Dhaval Valia at dhaval.valia@ubm.com 12
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Managing Director Printer & Publisher Director Group Commercial Director Executive Editor Contributing Editor Assistant Editor Principal Correspondent
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edit opinion Hacked, with no one to call Robert Faletra
T
he trouble with the cloud is there’s no one to call when you have an issue, and that’s a sales opportunity for the channel. Two weeks ago, my personal e-mail was hacked. For several days I experienced the reality of what it could be like if I were a small business trying to deal with a cloud supplier with whom I have very little clout. My e-mail was with AOL’s AIM division. It all started when I got a call from a neighbor who had just received an e-mail from me that I had been mugged in London at both knifepoint and gunpoint and needed $1,950 to get out of the jam. A few minutes later I got a call from a California-based business contact asking if I was alright. I realized that the scammer had used my e-mail to hack into my LinkedIn and Facebook accounts, which had the same passwords—yes I know that was stupid. Before long, thousands of personal and business contacts were getting e-mails asking for cash. The scammer was using several free e-mail providers to set up accounts in my name and use my contact list to try to scam them. By the way, as far as I know, no one took the bait. In any case, the interesting thing was that there was no one I could call to stop this. It took me two days to regain control of my e-mail. I called AOL and repeatedly got a “sorry, we can’t help” reply. I finally made my way to the fraud division of AOL and talked to a fraud investigator who gave me an e-mail address to report this to at AOL. Facebook and LinkedIn were no better, and also don’t provide any support numbers. I sent both of them e-mails that my accounts had been hacked and got no meaningful response. Now, granted, I don’t pay for any of these services so to some degree you might ask, ‘what should I expect?’ At the very least, when someone has a system that has access to personal information and it’s been compromised, there needs to be some ability to get to someone who can do something. So what’s the lesson here? As we move more toward computing as a utility, the channel is going to take on a role similar to that of the independent insurance agent who, because he writes millions of dollars in policies for the companies he represents, has leverage, and the customer has someone to call. It’s a role solution providers have always played, and to me it’s a pitch that needs to be refined, especially when selling to small businesses. As for me, I’ve now regained control over my e-mail and Facebook and LinkedIn, and have now got more passwords than I can remember and no two are the same. n Email Robert Faletra at robert.faletra@ec.ubm.com 14
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Complaint against Western Digital
with Varun and address the matter.
I am a retailer in Ludhiana, Punjab. Of late we have been facing serious warranty issues with Western Digital hard drives. Problems exist from creating the RMA number to processing the request for warranty service. Even after following the unfriendly and lengthy procedure, the replacement is taking 45-60 days. I believe that CRN being a channel magazine should take up this matter and question Western Digital about the lapses in its warranty process.
Sushil Bandi Country Manager, Western Digital
Varun Gupta Ludhiana Thanks CRN for bringing this to our notice. I will ask my Regional Manager to get in touch
Arbitrary hike by Microsoft While the move by Microsoft to introduce rupee billing is good, its impact on the pricing needs to be closely monitored. The rupee billing has led to an increase of 8-10 percent in open license prices, and sales are bound to suffer due to this arbitrary increase. I am hoping that Microsoft reviews its decision on the price hike and advises its distributors to roll back the prices in the next few weeks. Rajan Gupta Akshay Computers, New Delhi
Send your feedback at editor@ubmindia.com or post your views on www.crn.in
Advertiser Index Company name
Page No Web site
Sales Contact
Microsoft
2 www.microsoft.com/india/visualstudio
Alcatel Lucent
3
Wipro
5 www.MyRightPC.com
wipro-ccp@denave.com
Compuage
7 www.compuageindia.com
info@compuageindia.com
Dell
9 www.dell.co.in
dell_enquiries@dell.com
Comtech Asia
11
www.comtechasia.in
Trend Micro
13
www.trendmicro.co.in
Supertron Electronics
15
www.supertronindia.com
HCL
33 www.hclsmb.in/partners
hclpartners@hcl.com
Mach Data
34
www.machsdata.com
raj@machsdata.com
Quick Heal
35
www.quickheal.com
marketing@quickheal.com
Unistal
36 www.unistal.com
marketing@unistal.com
Biz Secure
36
www.indiaantivirus.com
sales@indiaantivirus.com
BSY Network
36
www.bsynetwork.com
srinu.i@bsynetwork.com
Zyxel
37 www.zyxel.in
IBM
39 www.ibm.com
McAfee
40 www.mcafeepartner.com
www.neoteric.co.in
smbsolutions@neoteric.co.in
info.supercomp@supertronindia.com
info@zyxel.in
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channel chief “If partners feel there’s a bias; they can contact me” Sonal Desai met Vishak Raman, Regional Director, India & Saarc, Fortinet and posed some tough questions about the company’s performance and policies Fortinet is increasingly losing market and mind share. In Q32010 Cyberoam came from behind and took the top spot. What do you reckon has been the reason for Fortinet’s decline? Q32010 was just a blip. Fortinet continues to be a market leader in the UTM appliance space, and that too by a substantial margin. Cyberoam did do well in Q32010, and they were smart in communicating the fact—probably because they had only three months to take advantage of it. They knew their market leadership would be short-lived. That’s exactly what happened. In Q42010 we bounced back both in factory revenue and value terms. As per IDC India, we closed the year with a market leadership share of more than 20 percent. Being a public company we are conservative with our communication. We also need to be more accurate about the information we share with third parties such as IDC and the media. We are confident that Fortinet provides better value—from a technology, product offering and support perspective—to its customers and channel partners.
It isn’t just about market share. As is evident from the latest CRN Channel Champions Survey, partners are unhappy with your channel management as well. There are allegations that Fortinet is biased toward certain partners in aspects such as deal registration, lead generation and pre-sales support. We have strong partner management policies, and we continuously strive to make our partners grow and be profitable. However, we work with select partners who have invested significantly in building Fortinet business in terms of people, certification, business development, etc. It is therefore likely that many VARs who are not authorized, but sell Fortinet may feel that we are biased in passing leads or registering deals or providing pre-sales support to select partners. We want to work with partners who not only sell
“Cyberoam did well in Q32010, and they were smart in communicating the fact— probably because they knew their market leadership would last only a quarter” 16
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products but also have the expertise to provide an entire solution which requires designing, deployment and support. Not all channel partners have these capabilities, hence it is by choice that we work with a limited number of partners. As a result, our ability to serve customers is also better. Imagine a scenario in which six or seven partners bid for a Fortigate DB that sells for Rs 60,000 to Rs 70,000. What would be the margin each of them would earn? Some of them would lose interest and opt out of the business. That’s what’s happening to other vendors. Our partners value and trust our engagement model, and that is the reason why companies such as ACPL, Kinfotech, Orient, 22x7 and Secure Solutions, which earlier worked with the competition, are now dedicated Fortinet partners. Having said that, I acknowledge the complaints regarding delays in payment of backend rebates. Those were procedural issues which have now been addressed, and I can assure partners that the lead time will improve. In case partners still feel a bias, I invite them to talk to our regional managers or channel managers. They can even contact me.
You continue to pursue a single-distributor model which has disappointed many because they believe that for a fast-moving category like UTM appliances a second distributor is essential. Ingram Micro has been with us since we first launched our offerings in India almost a decade ago. They have played an important role in our market leadership. They have been providing immense value by enabling partners and driving business. Fortinet doesn’t believe in box-pushing, hence we only want to engage with partners who have the capability to provide holistic network security solutions. Unlike other UTM brands which have adopted a tier-3 stock-and-sell model, we continue to follow a back-toback model. With this distribution strategy we do not feel the need for a second distributor at this point.
Does this mean you will focus on select partners and not expand as other UTM brands are doing? At present we have a strong network of 30 tier-2 partners giving us a strong presence in class A cities. However, we also realize that we need to address the new opportunities that are coming from class B cities.
channel chief Some of our competitors are doing well in these places, and we need to establish ourselves there as well. For geo-expansion, we are investing in people and training. We have strengthened our regional teams and have also appointed a local training partner who will train and enable partners in the emerging cities.
“VARs who are not authorized but sell Fortinet may feel we are biased in passing leads. But our policy is to work with partners who have strong skills”
Another allegation is that Fortinet favors tier-1 systems integrators over tier-2 partners. It was highlighted in this year’s as well as last year’s CRN Channel Champions survey.
earning higher margins.
I don’t agree with that at all. Typically, as I see it, there is little or no conflict between the business done by tier-1 and tier-2 partners. Tier-2 partners normally target opportunities in the range of $5,000 or manage customers with less than 500 nodes. This is not to say that they don’t sell to large enterprises or execute large projects. In fact, we actively involve them in providing certain components of large projects. Many of our tier-2 partners have played an integral role in executing large projects such as for Delhi International Airport, SWAN, and state data centers. Some of our tier-2 partners such as Kinfotech, 22x7 Solutions and Mikroz Infotech are managing large accounts like the UB Group, Biocon and the Times of India. The average size of such deals these partners execute is Rs 20 lakh to 25 lakh. These partners have positioned themselves as solutions providers, and are
What are your new strategic initiatives for 2011? The UTM market is recognized as the fastest-growing segment in the network security market. In order to maintain market leadership, it is critical for us to focus on our technology value proposition and innovation. We also need to affirm our commitment to the Indian market by increasing our sales and support resources to guarantee customer satisfaction and sustain growth. The top priorities for India and Saarc are to accelerate high-end market penetration by focusing on the telco and government verticals which represent a strong business opportunity. We have added two senior industry specialists to our India team: Digvijaysinh Chudasama and Saurabh Chopra. Digvijaysinh, as Sales Director in charge of the government and defense verticals, will lead our market outreach exercises into these security-sensitive verticals. Saurabh will focus on growing opportunities in telecom. n
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cover story
A
s the IT channel said goodbye to a reasonably good FY2010-11 and entered the new fiscal, optimism about growth is high among enterprise VARs as they set out to plan and strategize for FY2011-12, as is evident from the CRN Channel Confidence Survey. According to 130 enterprise VARs who took the biannual survey, though growth opportunities are enormous, challenges need to be countered on the way. FY2010-11 saw these enterprise VARs achieve a mean average revenue growth rate of close to 24 percent, with as many as 15 percent saying that they grew by more than 50 percent over the previous fiscal, while 35 percent grew in the range of 20-40 percent—much above the industry rate. For Mumbai-based VDA Infosolutions, FY2010-11 saw above-expectation growth with the company crossing the `35 crore mark as opposed to the projection of `28 crore. “We began last year with low expectations. However, we saw big money come our way from large virtualization projects,” says Deepak Jadhav, CEO, VDA. “Having postponed their IT investments for two years during the slowdown, FY2010-11 saw customers upgrading their infrastructure in a big way. While doing so many customers opted for consolidation and virtualization of their server and storage solutions.” Adds Rahul Meher, CEO, Leon Computers, Pune, “The focus in FY2010-11 for customers was to upgrade infrastructure, and while doing so to invest in technologies that led to cost savings and delivered ROI. Customers have become very conscious about ROI after the slowdown.” For Leon, a large chunk of business was delivered by customers who migrated to new Microsoft
platforms which also required server and client upgradation. “The theme last year was to upgrade and migrate our leading customers on the software front. We conducted six such migrations last year, and moved them all to a virtual platform and bundled our managed services,” Meher says. For many partners, FY2010-11 was also the year to review their focus areas and move into new solutions and services. “As customers came out of a slowdown, their priorities and outlook have undergone a major shift. They want solutions that provide clear benefits to business, they want managed services along with products and solutions, and many are also asking for an opex model for investment in IT,” says Harshad Kulkarni, CEO of Concept Technologies, Pune. As a result, many partners chose to build capabilities in areas such as managed services, data center solutions, virtualization, disaster recovery (DR) and management, as well as emerging areas like physical security and surveillance, mobility solutions and unified communications.
Growth projections Having come out of a good year after two terrible years, the channel is optimistic about a better future. Nearly 31 percent of the respondents have projected a growth of more than 50 percent next year; 41 percent expect to grow between 30-50 percent, while 17 percent are confident of growing at 20-30 percent. Most partners are counting on the Big 5 verticals to bring in growth—IT & ITeS, BFSI, government, manufacturing and education. These respondents believe that new concepts like public cloud computing will increase the affordability of IT for the Indian SMB segment and open up opportunities across the IT solutions and
HIGH GROWTH MANY CHALLENGES Enterprise VARs are optimistic about high growth in the current fiscal, but also aware of the many challenges that could hamper it n crn network 18
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cover story performance in fy2010-11 Much below expectations
4%
revenue growth in fy2010-11 Less than 10 percent
Above expectations
22%
30% Slightly below expectations
44%
30-40 percent
31%
17%
40%
30-50 percent
31%
22%
> 50 percent
Base: 130 enterprise VARs
12%
20-30 percent
10-20 percent
13% 15%
As per expectations
10-20 percent
Negative growth
3% 4% 12%
40-50 percent
revenue growth expected in fy2011-12
Grow more than 50 percent
20-30 percent
Base: 130 enterprise VARs
services spectrum. Optimistic about the future, enterprise VARs are now preparing the ground for geographical expansion—a few of them internationally—by adding new products and brands to their portfolio, and building services offerings which they believe will be key to future sustenance.
Base: 130 enterprise VARs
solutions and services THAT BOOSTED GROWTH IN FY2010-11 Services
55%
Servers
49%
Networking
44%
Storage solutions
Priorities and focus areas Virtualization continues to be the biggest growth theme for the current fiscal. Nearly 44 percent of the enterprise VARs said that virtualization is where they will build their capabilities and drive growth. “Over the past two years we have seen a move toward consolidation of core infrastructure among mid-market and large enterprises. We ourselves have done several consolidation projects around IBM Power 7. These customers will look at virtualization this year, and we are seeing a strong pipeline in this area. The other element driving consolidation and virtualization is the private cloud. Today, honestly speaking, the concept of a private cloud is nothing but a virtualized infrastructure,” says Jadhav. Agrees Edward Jeevan, Director, Binary Systems, “In the past 12-18 months we have done several consolidation projects. These customers are now moving toward virtualization because that’s the logical step.” Adds Ashok L, CEO, Futurenet Technologies, Chennai, “Server consolidation using virtualization has been at the top of the mind for all our enterprise customers for some time now. But now we are also seeing desktop virtualization picking up. Customers are becoming smarter, and are seeing the long-term benefits of VDI.” Government-led R&D institutions are also investing in virtualization. “In 2010 a lot of government tenders came our way, and we did cluster implementation and virtualization projects which fetched us 25 percent of our revenue. We also got good business from the manufacturing segment for virtualization,” informs Kulkarni. Building advanced services capabilities and offerings
41%
Desktops
31%
Notebooks
30%
Software licensing
30%
IT Security
28%
Virtualization
23%
UPS and power solutions
22%
Imaging & printing
21%
Business application software
14%
Physical security and surveillance
12%
Base: 130 enterprise VARs
INDUSTRY VERTICALS THAT BOOSTED GROWTH IN fy2010-11 IT & ITeS
58%
Manufacturing
56%
Education
41%
Government
39%
Banking and financial services Telecom
19%
Public sector units (PSUs) Retail
33%
19% 18%
Infrastructure and real estate
As customers came out of a slowdown, their priorities and outlook have undergone a major shift. They want solutions that provide clear benefits to business
17%
FMCG and consumer durables
15%
Media and entertainment
14%
Hospitality
14%
Base: 130 enterprise VARs
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cover story Solutions that boosted growth in FY2010-11 Data center solutions
39%
Remote infrastructure services
31%
Software-as-a-Service / Cloud computing services
31%
Virtualization
31%
Connectivity and voice solutions
30%
Desktop conferencing/video conferencing
30%
Security surveillance solutions
28%
Managed security services
27%
Green IT Business continuity and disaster recovery solutions
24%
23%
Managed print services Software applications like ERP, CRM
17% 17%
Document management services
15%
Unified communications
15%
WAN optimization solutions
14%
Business Intelligence and analytics
Base: 130 enterprise VARs
14%
business ACTIVITIES THAT BOOSTED GROWTH IN FY2010-11 Added new solutions and services
71%
Deep selling to existing customer base
62%
Focus on new technology areas
51%
Enhancing efficiency of your company
42%
Tie-up with new IT technology companies Focus on new industry verticals
39%
35%
Geographical expansion in India and internationally Cost cutting
24%
21%
Inorganic growth
5%
Base: 130 enterprise VARs
ITeS companies last year for these services. With newer and more portable form factors evolving in the access client space, many VARs also see provision of mobility solutions as an opportunity. Software solution providers are also seeing increasing interest in business intelligence (BI) and analytics. “Those customers who have deployed ERP and CRM are increasingly investing in BI because it provides granular and actionable intelligence about improving various parameters of business. The slowdown has been a catalyst in this mindset change,” believes Harinder Salwan, CEO, Tricom Multimedia. According to many network integrators, unified communications and video conferencing (VC) too are picking up. “In the past six months we have seen a sudden interest among customers for unified communications. We have closed two large projects: at Vodafone we integrated the UC platform with the building management systems of the company, and at ONGC we integrated their entire mail and messaging infrastructure. In addition, we are running three pilots which are in an advanced stage,” says AL Srinath, CEO, Shell Networks, Hyderabad. VC is also seeing traction since bandwidth costs have come down, and customers are looking at using the technology to cut travel costs. In the next 12 months many network integrators are expecting several projects. “We are seeing schools and hotels in Rajasthan deploying VC,” informs Vinod Jasuja, CEO, BD Computronics, Jaipur. The government too is emphasizing on VC. “In Maharashtra, VC is being deployed in all government departments so that block officers do not have to come to the HQ for meetings. This is being done to improve governance and collaboration between various departments,” notes Yogesh Godbole, CEO, Ace Brain Systems, Pune. With physical security assuming great importance in both the private and government segments, VARs are building their capabilities in targeting this opportunity. While a few VARs who have been in this field for some time now are looking at developing skills in advanced technologies such as video analytics and biometrics, the others are looking at basic IP-camera and networking opportunities.
Growth verticals is another big focus area, and nearly half of the enterprise VARs who took the survey identified it as a key priority. “Most of the customers today are not happy with the traditional AMC or facility management services,” says Pinkesh Kotecha, CEO, Ishaan Infotech, Rajkot. “They are demanding SLA-driven managed services along with the products and solutions they buy from us. Managed services is becoming a big differentiator even among SMBs as it promises better utilization and ROI.” Many VARs are building their capabilities in remote infrastructure management, managed security services and DR management. “Managed security services linked with business continuity and DR solutions is a big addressable opportunity,” says Meher, who signed up two
20
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The IT-ITeS segment which was heavily impacted due to the slowdown has emerged as the top-spending vertical. Most partners are banking on this vertical to drive growth in FY2011-12 as well. The segment has started hiring on a large scale, and this has meant incremental business for infrastructure capacity addition. There are several greenfield projects
Customers are not happy with the traditional facility management services. They are demanding SLA-driven managed services as it promises better utilization and ROI
cover story coming up in this segment, according to enterprise VARs who took the survey. “The recession had impacted the demand from this segment in the past two years,” points out Jadhav. “Now it is back to its spending ways. IT and ITeS companies have always been the first to invest in new concepts and technologies, and we are seeing significant adoption of cloud integration for their internal use. Many of them are gearing up to offer their cloud services in the market. Consolidation and upgradation is another driver.” Meher adds: “The segment is investing in unified architecture, cloud and unified storage. VDI is one thing they are adopting now.” For the first time in the past three years, VARs are seeing the IT segment investing in greenfield projects. For software VARs, the opportunity in the segment last year came from software upgradation, primarily Office 2010, Exchange Server 2010 and Windows 7. Most expect this to continue in the current fiscal as well. Comments Kshitij Kotak, CEO, Greycell, Mumbai, “With the outlook improving, the IT-ITeS segment is upgrading its entire infrastructure, primarily software. This will continue to drive demand from this segment. With hiring back on track, there is likely to be expansion and the opening up of new development centers.” Manufacturing is another segment that a majority of VARs are banking on to drive demand. While many growing units are investing in ERP, the ones that have already invested in the software are consolidating and virtualizing. Smaller manufacturing companies are preferring cloud computing services. Education and government, along with BFSI, continue to be among the top five growth verticals. “The BFSI segment has to keep pace with technology because of the competition in the segment. Server virtualization, green IT and unified communications are some of technologies they are investing in. In addition, following RBI guidelines, there is significant investment being made in DR solutions. While the larger banks were the first to comply, the co-operative banks are starting to comply,” informs Meher. Compliance and GRC solutions are another growth area in this segment. In smaller regions, rural and co-operative banks are investing in computerization, document management and high-speed scanning solutions. Enterprise VARs catering to the education segment expect it to emerge as one of the fastest growing verticals over the next five years. According to respondents, PCs, peripherals, connectivity, thin clients, remote infrastructure services, school ERP and digital classrooms are increasingly gaining acceptance. “We have set up a separate division to cater to this
FACTORS THAT will drive GROWTH IN FY2011-12 SMBs will drive IT demand
67%
Companies will upgrade as they have not done so in past few years
53%
Cloud computing and Infrastructure-as-a-service will drive growth
46%
Enterprises will invest in consolidation and virtualization
44%
Government policies and investments
31%
KEY CHALLENGES LIKELY TO HAMPER GROWTH IN FY2011-12 Customers are bargaining too hard resulting in margin pressures
64%
Payment delays by customers
63%
Changes in vendors' channel strategies
47%
Customer sentiments have turned negative due to inflation and global events
31%
Lack of right skill-sets
28%
Non-availability of proper customer financing
27%
Cloud computing will negatively impact hardware and software business
26%
Non-availability of proper channel financing
23%
Competition from non-traditional channels like telecom
15%
Base: 130 enterprise VARs
CHANGES IN CUSTOMER BEHAVIOR Customers are investing only in solutions that guarantee ROI
68%
Customers are preferring IT consolidation rather than IT expansion
64%
Customers are demanding managed services along with products and solutions
54%
Customers are moving from IT Capex to Opex
31%
Customers are moving towards cloud computing
28%
Base: 130 enterprise VARs
key BUSINESS PRIORITies IN fy2011-12 Focus on new technology areas
65%
Deep selling to existing customer base
63%
Enhancing efficiency of your company
63%
Add new solutions and services
61%
Focus on new industry verticals
51%
Tie-up with new IT companies
Customers are not sure about the cloud, but they don’t want to be left behind. They want to deploy projects on EMI, so if it doesn’t deliver ROI they can terminate it
Base: 130 enterprise VARs
43%
Geographical expansion in India and internationally Cost cutting
30%
28%
Inorganic growth through acquisitions and/or fund raising
7%
Base: 130 enterprise VARs
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cover story Areas THAT WILL drive GROWTH IN FY2011-12 Services
45%
Servers
43%
Networking
41%
Storage
39%
Virtualization
Challenges and issues
38%
Software licensing
32%
UPS and power solutions
30%
Thin clients
26%
Business application software
24%
Physical security and surveillance
23%
Imaging & printing
Desktops
vendors are offering special prices on software licenses for educational institutions,” informs Salwan.
41%
IT Security
Notebooks
22% 19% 18%
Base: 130 enterprise VARs
solution categories VARs will invest in during fy2011-12 Virtualization
44%
Remote infrastructure management services
40%
Cloud computing
39%
Data center integration
35%
Private cloud solutions
34%
Business continuity and disaster recovery
34%
Mobility solutions
34%
Unified communications
30%
Security surveillance
29%
Business Intelligence and analytics
28%
Video conferencing
27%
Software applications like ERP, CRM
29%
Base: 130 enterprise VARs
segment,” says Ganesh Mahabala, Senior Vice President, Value Point, Bengaluru. “Apart from e-learning systems, leading schools and colleges are investing in modern Web 2.0 applications and taking to social networking tools to connect with parents, students and teachers. In addition, there’s huge opportunity for networking, connectivity and access clients.” Further, the notification by the All India Council of Technical Education to stop using pirated software has resulted in software licensing opportunities from engineering colleges and polytechnics. “These days we are seeing low levels of piracy in educational institutions. All
22
Computer Reseller News
The events of the past months—rising inflation, unrest in the Middle East, and disasters in Japan—have made customers cautious and adopt a wait-and-watch policy
01/05/2011 www.crn.in
Despite the high expectations from the current fiscal, enterprise VARs are aware of the various challenges that could put a spanner in their growth plans. Their primary concerns? Customers driving hard bargains, increasing sales and payment cycles, and growing caution among customers toward investments due to recent events globally and in India. To add to that, changes in vendors’ GTM strategies and channel policies are also creating complexities for enterprise VARs. Remarks Meher, “The events of the past six months—rising inflation, political unrest in the Middle East, the natural disasters in Japan, and the inability of some European companies to come out of their financial crises—are making customers cautious across segments. As a result, they have been postponing their investment decisions, sales cycles have lengthened, and payment cycles have gone up. In segments like manufacturing, we have seen a wait-and-watch approach for the past six months.” Jadhav agrees. “There has been a growing sense of caution among customers in the past few months. This is due to a number of reasons, including the flurry of new technologies and concepts in the market. Customers are confused about where to put their money. For instance, many customers are not sure about the cloud, but they don’t want to be left behind either, so they want us to deploy the project on an EMI model. The thought process is that if the new deployment doesn’t deliver on the promised ROI they can terminate the contract.” It continues to be a buyer’s market, and driving hard bargains continues to be the norm. Says Jeevan, “Customers have learned the art of bargaining during the recession and they continue to use it. In many deals we were shocked at the amount of discounting customers expected and hence we decided to sit out. The unfortunate part however is that there is always some vendor or VAR willing to sell at such low prices.” All these factors have resulted in customers resorting to dictating payment terms. According to partners who took the survey, payment terms which had normalized in the past six quarters have deteriorated in the last
The current GTM of cloud computing companies relegate VARs to the role of commission agents. There’s the fear of use and throw away
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cover story Customers who were earlier paying within 15 days are now taking 40-45 days. Certain large companies are even dictating payment terms of 90 days
INDUSTRY VERTICALS THAT WILL drive GROWTH IN FY2011-12 IT & ITeS
71%
Manufacturing
62%
Education
three months. “Customers who were earlier paying within 15 days are now taking 40-45 days, and those who were paying within 30-45 days are now taking 5065 days,” says Jeevan. Certain large companies are even asking for payment cycles of 90 days, and VARs taking the survey say that if this continues it would negatively impact their working capital as well as their ability to do business. To make things worse, many VARs believe that recent changes in the GTM of several vendors as well as changes in their partner engagement models could also hamper growth prospects. Says Kotak, “With new clients like tablets emerging, and the concept of cloud computing gaining ground, VARs will surely face more competition from non-traditional channels.” Ajit Mittal, CEO, Acme Digitek, Lucknow, agrees. “Changes in channel programs are causing distress. The biggest challenge for us is to grow independent of vendors’ influence and policies.” Since a large number of VARs are aware of the negative impact cloud computing will have on their hardware and software sales (despite the merits of it for their customers), many aren’t willing to align with the current channel strategies of cloud companies. “The current partner models of cloud computing companies relegate VARs to the role of commission agents. There’s the fear of use and throw away. Once a customer gets comfortable with cloud computing services, there’s nothing to stop the vendor from bypassing the partner,” opines Kotak.
Expectations from vendors Ensuring better profit margins continues to be the one thing that enterprise VARs want from vendors. Most VARs believe that ensuring healthy profits across channels is important for the overall growth of the channels, and that the onus of doing so lies with the vendors. “While vendors keep talking at their partner meets about how they want partners to sell value, they are the ones who are numbers-driven,” states Jeevan. “Without them walking the talk, partner profitability will always be an issue. One of the key things they need to do is ensure some price parity in the market. Giving one price to one partner and another to a second partner gives the customer a reason to bargain harder.”
Attrition is back with the IT sector upping its hiring. With new technologies, there’s shortage of new specializations. VARs want vendors to make certification cost effective 24
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58%
Government
51%
Banking and financial services
45%
Public sector units (PSUs)
36%
Infrastructure and real estate
33%
Healthcare
32%
Hospitality
32%
Media and entertainment
31%
Telecom
30%
Retail
30%
Pharma
27%
Base: 130 enterprise VARs
SUPPORT REQUIRED FROM VENDORS in FY2011-12 Ensure better profit margins
71%
Improve lead generation and pass on more qualified leads
50%
Maintain Market Operating Price (MOP)
42%
Offer qualitative incentives, rather than quantity-based
40%
Provide cost-effective training and certification programs
39%
Have clear customer management policies
32%
Offer better pre-sales support
32%
Help us move to a solution-centric path
27%
Provide clear guidance on areas to focus on for future growth
27%
Offer customer financing / project financing
23%
Provide more MDF support for customer development activities Base: 130 enterprise VARs 19%
Passing on quality leads is another support that VARs expect. “All partners have limitations in terms of the number of sales and pre-sales leads. There has to be a proper engine that identifies quality leads,” says Jadhav. The issue of attrition is also back with IT and ITeS organizations upping their hiring. In addition, with new technologies emerging, there’s an overall shortage of new specializations and skills. As a result, VARs want vendors to make training and certification cost effective. Says Kulkarni, “With so many new technologies, it’s difficult for the partner to invest in all certifications even if he wants to. If vendors want to popularize a particular technology, they should keep the cost low for new certifications.” n
market focus
d n s e in r T The next 12 months will redefine the mobile computing market both in form and functionality
le
T
in
mo
bi
g
n abhijeet mukherjee & RAMDAS S
comp
hat’s what’s indicated by the trends of the past six months. While PC commoditization continues to change the market dynamics in the consumer space, buying behavior is the biggest influence in the market. Here are the main trends.
New processor platforms Intel and AMD have been trying to create new benchmarks and have been quick to announce the next generation of processors. In April 2011, almost all manufacturers announced models on Huron River, the mobile version of the Sandy Bridge platform launched for the desktop market earlier this year. Overall, the PC market, which saw a slump in Q42010 and Q12011, is expected to get a boost with the launch of the new generation of processors from Intel. “We believe that demand will increase with the on-
t u
set of summer, and the graphic capabilities of the Huron River platform should tempt a number of customers to upgrade,” says Rajesh Thadani, Director, Consumer Business Unit, HSB Lenovo India. Similarly, AMD launched Brazos, part of its Fusion range of accelerated processor units (APUs) which combine the CPU and GPU functions inside a single
“Demand will increase with the onset of summer, and the graphic capabilities of Huron River should tempt a number of customers to upgrade” Rajesh Thadani
Director, Consumer Business, HSB Lenovo
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market focus “Seeing the demand from consumers, we have introduced new features such as the Dolby sound system and an HD recording facility in notebooks”
“Netbooks were launched with low entry price-points as their USP, but they did not see increasing demand because of their limited functionality”
Saji Kumar
Ashwini Agarwal
Head, Product Management, Acer India
die. This has also been taken seriously by some of the OEMs. For example, Acer India, recognizing that the product line requires special attention, has signed on Neoteric as an exclusive distributor. Acer has also launched notebooks with Web cams for HD recording. “Seeing the demand from consumers we have introduced new features such as the Dolby sound system and an HD recording facility in notebooks,” says Saji Kumar, Head, Product Management, Acer India. Adds N Shivakumar, General Manager, Toshiba India, “We are seeing yet another wave in computing platforms with a focus on visual computing. Consumers are demanding features such as HDMI because they would like to watch movies and play 3D games on their laptops.” Over the past two months the first models on the Nvidia Tegra platform have appeared with Toshiba launching a netbook model sporting a 1 GHz processor and 1 GB of flash storage.
Tablet market The Indian PC market is converging with the handheld device market. In the next few years many of the functions now available only on a PC will also become available on mobile handset devices. Recognizing this, PC vendors have begun protecting their turf by introducing smartphone devices. Vendors such as Acer, Asus, Dell, HP and Lenovo are offering handheld devices as a flanking strategy to ward off competition from Qualcomm, Nokia and Samsung. While Dell, Samsung and Acer have already launched their offerings, Lenovo and HP are expected to have high-profile launches of their products later this month. Analysts predict that tablets could spell doom for netbooks. “Most of the growth in consumer tablet PCs will come in the home segment at the expense of mininotebooks and ultraportable PCs. Though the iPad has not yet been officially introduced in the Indian market,
“With the innovations that AMD has brought in, the day is not far when your notebook can stay charged over a 12-hour transcontinental flight” Ravi Swaminathan MD & VP, AMD India
26
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President, MAIT
it has done a lot to inspire consumers to own a tablet,” says Vishal Tripathi, Principal Analyst, Gartner India. However, the present price-points of tablets are in excess of `21,000, with those from Dell and Acer being priced at more than `35,000. “Netbooks were launched with low entry-level price-points as their USP, but they did not see increasing demand because of their limited functionality,” says Ashwini Agarwal, President, MAIT. “I believe tablets will create a market of their own, built largely because of a superior fashion quotient and greater portability.”
SSD demand While the market size is still very small, manufacturers such as Dell, Lenovo and HP have announced ultra portable high-end laptops with in-built SSDs. These notebooks now cost `90,000 or more, but vendors are expecting prices to drop once SSD acceptance grows. “SSD prices have been dropping by almost 300 percent year-on-year. By the end of the year, the price difference between SSDs and normal drives should be $100 or so. This would make them affordable enough to be included in mainstream notebooks,” says Gopal Swaminathan, Director, Sales & Marketing, Intel India.
Broadband-ready notebooks With 3G services being rolled out by service providers, you can expect more models which are broadband-ready. “In our Thinkpad range we have models which are mobile broadband-ready, so all the user needs to do is insert a 3Gready SIM card,” says Rajesh Dixit, Director, KAB, Think Classic Product Group and Channels, Lenovo India. While these products are currently priced high, mobile broadband is expected to be a feature that will be standard by the end of the year.
Longer battery life “We believe that the biggest battle in the notebook market will be about how long the battery can stay charged. With the innovations that AMD has brought in, the day is not far when your notebook can stay charged over a 12-hour transcontinental flight,” says Ravi Swaminathan, MD & VP, AMD India. Using low-power components and design innovations, notebook vendors have today managed to create products that have a battery life of over eight hours. With the next generation of notebooks being powered by SSDs and low-power processors, it’s likely that we’ll see a 10-hour battery life in the near future. n
Role model
Living up to its name Vinay Dugar, CEO, Supreme Technologies, made several changes to his business model before he zeroed in on regional distribution. Today he has taken the company to new heights as one of the leading distributors in the region n abhijeet mukherjee
K
olkata-based Vinay Dugar, CEO of Supreme Technologies, is among the largest regional distributors in West Bengal. Born in a business family, Dugar could have easily remained in the established family business of supplying lubricants to government departments. Instead, he chose to take the path less traveled. In his own words, “In 1991, following my graduation from St Xavier’s College, I joined the family business. My role was to meet babus to ensure that state governments bought products from us. However, within a few months, I realized that it wasn’t my cup of tea. I couldn’t see much personal growth in it either. Besides, there was not much value addition from my side to the business, so I decided to carve my own niche.” Dugar’s mother financed the new venture by providing capital of `15,000. “The PC market was in a nascent stage, but I could sense big opportunity. Since I did not have much seed money to invest I thought of starting by selling consumables such as diskettes and cartridges,” he recalls. The same year he partnered with a friend to launch a company named Compumatix. Dugar’s government contacts now came in handy, and helped the company to earn revenue of `8 lakh in the first year of operations. Dugar began expanding his reselling portfolio and ventured into providing solutions. The company soon bagged a computerization and networking project from Vishwa Bharati University, Shantiniketan. In 1994, Compumatix recorded an annual turnover of `4 crore. Along came Dugar’s first test as an entrepreneur. In 1994 Dugar’s partner decided to opt out on unamicable terms. “That sucked out a lot of money from the company, money which I was planning to invest for growth,” says Dugar. “In fact, I even decided to get out of the IT business and rejoin the family business. However, my father asked me not to lose heart. He gave me the courage and motivation to persist.” With support from his family Dugar restarted his business in 1995, but it wasn’t until 2000 that he zeroed in on his dream venture—Supreme Technologies. “After
“Vendors wanted sub-distributors who gave them more volumes by using any means, not companies like us who believed in providing value addition”
selling to corporates for over a decade I felt the need to do something new. The home market was booming, but there was no good IT retail store in Kolkata where consumers could touch and feel products before they bought them. I therefore set up a 1,000 sq ft retail showroom in Chittaranjan Avenue, and started a retail business selling all types of PCs, peripherals and components. My decision was right—today that area has become the IT hub of Kolkata with at least 80 retail stores.” Called the IT Mall, Dugar’s retail store has become a landmark in Kolkata. After gaining a foothold in the retail market, Dugar started getting proposals from vendors to enter the subdistribution business. He accepted. “In 2003 we got into sub-distribution and soon signed up with 25-30 brands. What lured us was the backend incentives plus the huge demand-supply gap.” Later, as the market expanded and competition increased, Dugar felt that there was no longer any differentiation in being a sub-distributor. “Every vendor
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role model 1991
Started Compumatix in partnership with a friend
1994
MILESTONES
Recorded an annual turnover of `4 crore
2000 1994
began appointing multiple subdistributors. We realized that there was very little we could do to add value, and that the business had become more about rotating money. The more and faster you sold, the more money you made from backends and inventory rotation. Vendors wanted sub-distributors who gave them more volumes by using any means, not subdistributors like us who believed in providing value addition.” In 2007 the company decided to pursue a business model which allowed it to do value addition. Continuing with its retail business, it moved into regional distribution and is today a regional distributor for Intel, Dell, Sony and LG for the entire state of West Bengal.
Partner moved out of Compumatix Ventured into retail and launched Supreme
and enterprise segments. “We will have a separate team to handle this business for which we plan to recruit in the next quarter.” But Supreme isn’t looking at expanding beyond West Bengal. “We are deeply rooted in this region. We understand the mindset of the people and see a vast opportunity that still needs to be explored,” Dugar explains.
Focus on best practices
2011 2007 2003
According to Dugar, what differentiates Supreme from its peers is its focus on inculcating Began sub-distribution and best practices. The company has signed up with 30 brands invested in automating its processes and systems by deploying Oracle Moved into regional ERP. “We have automated our distribution entire credit management, supplies, inventory, logistics and finance Posted a turnover of using this process. It has made Current business `140 crore us more efficient, improved our In FY2010-11, Supreme posted a inventory cycles, and improved turnover of `140 crore, a 25 percent our lead-time to the market. The automated credit growth over the previous fiscal. Of this, 30 percent came management system has helped us to improve the from the retail business while 70 percent came from utilization of capital by distributing credit among regional distribution. partners based on their worthiness.” Dell has been a revenue spinner for the company, Training is another element that is core to Supreme. contributing nearly 40 percent of its distribution The company has partnered with NIIT to provide sales revenue; Intel contributed 25 percent, Sony 15 percent management training to its employees. “Our business and LG 20 percent. While the distribution business grew model has changed over the past two years, so now our by 20 percent, the retail business grew by 35 percent sales people need to focus on partners and how to sell during the last fiscal. products rather than just push boxes,” says Dugar. “We The company has a channel network of 350 active also provide them internal training in finance and supply resellers across 19 districts of the state. chain management.” With the increasing penetration of the Internet in In addition, it provides training in human behavior upcountry markets, Dugar sees good opportunity there. to its sales force. “This helps our sales people to “While in metro cities there’s only 15-20 percent growth understand what is going on in the mind of the reseller in IT, in upcountry markets it’s 40 percent.” and change tack accordingly,” explains Dugar.
Future plans
With a projected turnover of `175 crore for FY2011-12, Dugar plans to expand both his retail and distribution business. He will add more showrooms, both in Kolkata and in upcountry regions. Dugar also wants to increase his 1,000 sq feet Kolkata store to 4,000 sq feet this year. On the distribution front Supreme plans to expand its portfolio by adding new digital convergence products and improving its market coverage in class D and E cities. In addition, Dugar has plans to focus on the SMB
“We provide training in human behavior to our sales force to help them understand what is going on in the mind of the reseller and change tack accordingly” 28
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On a personal note Dugar takes time off for reading whenever he is not working. He loves to read management books. “Reading de-stresses me. I recently read Rethinking The Future, which provides insights into new marketing and leadership principles for the changing world.” Dugar loves his cars and enjoys long drives. “Driving provides me recreation and relaxation. I own a Skoda Laura and a Honda City, but my dream car is a Ferrari.” The man is inspired by the two people he considers his mentors—Alok Garodia, MD, Jupiter International, and Vishnu Bhandari, CMD, Supertron Electronics. “Their success stories are really inspiring. Garodia runs a diversified business that is into IT and solar energy, while Bhandari has taken Supertron to unimaginable heights. They have taught me to be clear in the mind about what I want to do in life, and never to leave the ethical road to success, come what may.” n
tech focus
will shake up it Microsoft’s new online productivity suite is such a radical shift in both technology and delivery that there will scarcely be any segment of the IT industry that won’t be impacted in a big way n Edward Moltzen
A
one-week examination of Office 365’s beta by the CRN Test Center finds much more than just a simple, online suite of productivity tools. Microsoft has turned the heart and soul of day-to-day computing over to the cloud in a manner that every enterprise, business or government entity can access in a meaningful way. And it’s done so in a way that should embarrass Google, one of Microsoft’s primary rivals. Office 365, frankly, is to Google Apps as XBOX 360 Live is to Pong. It’s in a different league entirely, and represents a leap into the next generation of computing. To be clear: Office 365 doesn’t do it all, all by itself. For extended functionality, including single signon, the solution still requires a working knowledge of Active Directory. Several tasks like integration of existing, premise-based mailboxes with Office 365 are not automatic either. When Microsoft executives briefed reviewers on Office 365 earlier this month, they were clear that the software giant still considered the solution provider channel to be its strategic go-tomarket plan–and with good reason. But Office 365 is so radically different from other approaches we’ve seen from Microsoft in the
For $6 per month per user, Office 365 bundles Exchange, Outlook, SharePoint and Lync into a turnkey solution for up to 25 people in an enterprise
productivity and collaboration spaces that it will have a major impact all through the pipeline.
What it does For $6 per month per user, Office 365 bundles Exchange, Outlook, SharePoint and Lync (formerly known as OCS) into a turnkey solution for up to 25 people in an enterprise. It integrates this technology with mobile platforms including iPhone and Windows Phone 7. It integrates both with Office 2010 and some earlier platforms, as well as Office Live, its free, Web-based extension of its productivity suite. It works almost seamlessly with Mac OS X. It’s fast. We noticed almost no latency in working in Office 365 even in a 3G Internet connection as slow as 1.11 Mbps. It takes about five minutes to set up an SMB enterprise productivity and collaboration infrastructure on Office 365, and about a minute to add users and tailor their permissions and access. In a week of testing, we ran into no downtime. While this remains a concern for any productionquality business solution in the cloud, and will remain an area to watch as the Office 365 installed base grows, for now it appears to be on a reliable network.
How it works Once an account is opened up, a designated administrator finds a straightforward, easy-to-access management console. This console provides for license
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tech focus management, adding users, defining their security levels, creating security groups and creating levels of functionality throughout. Administrative privileges also allow for porting an organization’s domain name to Office 365. This is not difficult; Microsoft provides a three-step wizard for domain addition to Office 365 through Microsoft Online Services. Users are provided with 25 GB of storage and security features (such as litigation hold on e-mail deletion), and can be controlled by enabling or disabling them via check boxes. In short: it’s largely enterprise-capable administration.
Microsoft Exchange There is no need to deploy a stand-alone Exchange server or even integrate a separate cloud-based exchange of which the CRN Test Center has reviewed several in recent years. Because it is part of the overall Office 365 package, it’s ready to go once the account is set up. As with Exchange, Office 365 provides an administrator with the ability to set user-by-user functions and features. From choosing whether to issue storage capacity warnings at 24.5 GB or 24.75 GB or 25 GB, to setting an organization’s e-mail archiving preferences, to enabling or disabling Active Sync and Unified Messaging, and even whether to provide a ‘Mail Tip’ to users, Microsoft allows for drop-down-box-like control over what a user gets or doesn’t get. If someone doesn’t have training in Exchange administration, it’s fairly easy through Office 365 to get started. SharePoint comes ready to use with built-in Team Site functionality. As with Exchange in Office 365, there is no separate server that needs installation. It’s included in the Office 365 package. Collaboration features are familiar to those versed in the Exchange and SharePoint worlds. Team Site can be populated with individual site pages–for special projects or work groups, for example–and users can set their own controls about who can access their pages. It also integrates with the calendar and task features in Office 365, and provides a wiki-like Team Discussion creation tool that permits for separate discussion threads on separate topics. Document sharing is provided, and with access control. Throughout, Microsoft has built a familiar ribbon at the top of the Team Site page that guides customization of each page or discussion thread, and there appears to be no feature loss between the online version and the
As with Exchange, Office 365 provides an administrator with the ability to set user-byuser functions and features. Administrative privileges allow porting of domain names 30
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on-premise version of SharePoint.
Microsoft Lync Lync is the current product name for Microsoft Office Communication Services (OCS), so get used to the new branding if you have not yet. Deploying this part of Office 365 allows for userby-user management of file transfers, audio and video, domain federation and public IM connectivity. This is done through a page of check boxes.
Customization To a degree, Office 365 is not just a ‘take it or leave it,’ or ‘one size fits all’ offering. It does allow for creation of custom plans for an enterprise: either a deployment or pilot rollout; inclusion of Exchange, SharePoint, Lync and Microsoft Office Professional Plus server capabilities; and feature-by-feature rollout on an individual schedule—with a very granular console.
Pricing model For $6 per month per user, Microsoft is working to simplify not just the deployment of IT but the monthly cost model as well. While some VARs may see this as a move that undercuts their own pricing or their own relationships with customers, others may very well be highly competitive with their own deployments of either on-premise or cloud-based versions of these products. Still other solution providers may view Microsoft’s cloud-based bundling of SharePoint, Exchange and Lync services, with Microsoft Office tools, as a plus that will allow them to focus on other areas of a customer’s IT and business needs–including broader security, mobility, virtualization and data center architecture and management. In any event, Microsoft is now putting a price to its productivity, messaging and communications in the cloud: $6 per month per user. That may diminish a VAR’s pricing flexibility or create the need for additional conversations with a customer. Microsoft will undoubtedly have to work with its channel partners to make sure conflict is kept to a minimum.
In the cloud Microsoft has made no bones about the fact that it is aiming to put every single piece of its product line on the cloud. It’s already done so, successfully, with apps like Word, Excel and PowerPoint via Office Live, as well as with its gaming platform, XBOX 360 Live. While this has been trickier for Microsoft than, say, rival Google because Google never had to change a business model from selling boxed software, Office 365 represents Microsoft’s boldest move to date into the cloud. It very well could be Microsoft’s most successful product for IT since Windows XP. But it is a near certainty that it will change the rules for deploying enterprise software, and, in the process, force its competitors to adapt as well. n
channel buzz
n Andre Suzan, HR Director, Logitech EMEA, presents the
Partner in Excellence in India Trophy to Kapal Pansari (left), Director, and Puneet Dhandharia, Business Manager, Rashi Peripherals
Rashi concludes meet for its sales champions n SAP manager demonstrating SMB software solutions at the Run Better Solutions Roadshow
SAP launches Run Better Solutions campaign SAP has launched a multi-city marketing campaign named ‘Run Better Solutions’ to provide SMBs an insight into SAP solutions and services. The road show will be conducted across Indore, Hyderabad, Ahmedabad, Pune, Ludhiana, Coimbatore and Aurangabad. SAP aims to reach out to more than 600 SMB organizations, partners and influencers over the next six months. The campaign will engage with end-users through specific break-out sessions containing live demonstrations of industry-relevant SAP solutions, customer implementations and testimonials, including partner discussions. n
Rashi Peripherals recently concluded a two-day meet for its all-India sales team in Mumbai. The first day involved product training and updates for all brands distributed by Rashi. The distributor also conducted a theme-based product ramp show which had product managers dressed up as south superstar Rajnikanth. On the second day, Rashi employees were involved in outdoor activities at Water Kingdom for team building, and developing planning and leadership skills. The event culminated in an awards ceremony where more well-performing employees were given awards that included a 22-inch Toshiba LCD TV and Asus Eee PC. A lucky draw was also conducted whereby 100 lucky employees won different prizes including Asus Eee PCs, 22-inch Toshiba LCD TVs, ViewSonic digital photo frames, and SanDisk products. Several vendors including Asus, Adata, Microsoft and SanDisk were present at the event. n
HP wins the TAIT T20 IT Cup
n The victorious HP team
Team HP won the T20 IT Cup 2011 organized by TAIT last month. Teams from HP and Allied Digital played the finals. Allied Digital won the toss, and after electing to bat scored 145 runs. HP made the required runs by the 15th over. HP’s Sunny Singh was adjudged the Man of the Match for his all-round performance. TAIT President Girish Rathod and Directors Rushabh Shah and Prakash Shah presented the trophy to the winning team. The T20 IT Cup was played over six weeks and saw the participation of teams from HP, Allied Digital, Asus and TAIT. TAIT has been organizing the IT Cup since 2005, and this year it converted it to the 20-over format. Next year’s tournament is scheduled to start in January 2012 with eight teams. n
To feature your company’s events in CRN, send write-ups with photographs to editor@ubmindia.com
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New Products Digisol wireless access point
D
igisol has introduced a new wireless access point, DG-WA3000N. The device is backward compatible with the 802.11b/g standard. It has an internal radius server for authenticating wireless clients; this provides an additional level of network security and allows user access control in LAN. In addition to the point-topoint and point-to-multipoint bridge function of the access point, it features a wireless distributed system which allows the product to act as a WLAN access point and repeater at the same time. The feature can be used to set up a wireless network in large spaces such as airports and hotels. It is priced at `2,900 and comes with a lifetime warranty. The product is available with Digisol’s regional distributors.
XFX Radeon HD 6790 graphics card
X
FX has launched a new graphics card targeted at gamers and movie buffs. It also has graphics support for Dolby TrueHD and 3D HDTV. The XFX Radeon HD 6790 uses AMD Eyefinity technology, and has a dual fan system. The XFX AMD Radeon HD 6790 comes for an estimated street price of `9,000 with a 3-year warranty, and is available through Rashi Peripherals.
Altec Lansing speaker system
A
ltec Lansing has launched a new range of speakers— the BXR 1321, a 3-piece home speaker system for desktops and notebooks. Designed in a compact satellite form factor, it comes with two 50mm full-range drivers and one 100mm sub-woofer. Each driver has 2 Watts per channel while the sub-woofer has 4 Watts. The product is available at a price of `1,750 through Rashi Peripherals, and comes with a 1-year warranty.
SMC 3G router
S
Su-Kam Torque home UPS
S
u-Kam has launched the Torque range of home UPS with 650 VA, 850 VA and 1500 VA models. It is said to charge batteries 40 percent faster than competing products, and has an automatic overload sensing feature which alerts the user in case of overload with repeated beep alarms. It also comes with a fuzzy logic technology that senses the requirement of the battery and controls the charging process accordingly. Torque is suited to run appliances such as printers, televisions, tube lights, fans, refrigerators, scanners, computers and fax machines. The 1500 VA model is priced at `4,700 with a 2-year warranty, and is available through Sawan Aircom.
MC Networks has introduced ATM routers that connect to 3G networks by using existing USB wireless modems. The router features 10/100 MB/s LAN and WAN ports, a high-speed wireless-N access point, and NAT firewall with SPI. The new ATM router supports the latest WPA and WPA2 wireless encryption to prevent unauthorized access. It also provides high speed xDSL connectivity. The router is priced at `4,990, and comes with a 3-year warranty. It is distributed by Sapphire Micro Systems.
The products featured here have not undergone any benchmarking or testing. The trailers contain information provided by vendors and distributors. To feature your company’s products in CRN, send write-ups with photos to editor@ubmindia.com
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Dell back on top? P
C market numbers for the first quarter of 2011 are on their way, but there is little doubt that Dell is back on top. Many HP partners admit that the numbers for HP haven’t been great during Q12011, and it’s very likely that Dell will reclaim the market leadership which it lost during Q42010. According to a senior executive with an HP distribution partner, “Because of higher inventory spillover from the previous quarter, there was limited fresh billing during the first two months of the quarter. What we have been hearing from the market in most cities is that Dell has done exceedingly well.” Also, the announcement about Sunil Dutt’s exit has created doubts among the channel about whether the zonal distribution model will remain intact. According to an HP retailer, six out of the 12 zonal distributors (ZDs) are expected to exit HP’s consumer PC distribution. All these six ZDs are the telecom distributors that Dutt had appointed. “Three of them are opting out of HP distribution as they are finding it difficult to cope with the PC business, while the other three are being asked to leave by HP because they have miserably failed to meet their numbers ever since they came onboard,” said an HP World partner. Ingram and Redington are likely to take over the distribution for the zones being vacated by the six zonal distributors. One of the key challenges with the existing zonal distribution model has been the lack of flexibility to move around stocks. If multiple zones are handled by a single distributor, they can manage, monitor and forecast inventory with more precision, and move stock between zones in case their forecasts go wrong. Many HP retail partners have also expressed dissatisfaction with the low-key marketing and advertising strategy of HP. “While the distribution model and policy put in place by Sunil Dutt is good, where HP has failed is in aggressive advertising. In my estimate, Dell has been spending 4-5 times more than HP on mainstream advertising, and that’s what is getting them more consumers,” opined another HP World partner. With too much confusion and uncertainty surrounding HP’s PC business, it’s likely that Dell will sustain its PC leadership for at least a couple of quarters. In the meantime, HP partners—commercial and retail—can only hope that the company finds a leader who can steady the ship. n
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Personal
“I’d have liked to meet Hitler” Mohit Puri, Country Manager, Watchguard India & Saarc, joined the company in 2006. Earlier, he worked at PortWise as pre-sales consultant for close to two years. Puri has also worked as Infosecurity Consultant at National Security Solutions.
mohit Puri
If not in the IT industry: I would have joined the Indian Air Force. Biggest passion: Success.
Behind the wheels: I have just booked a Toyota Etios. Gadgets I can’t do without: My laptop and BlackBerry. Weekend activities: Watching movies and playing golf. Favorite holiday destination: I like Goa, and Cebu in the Philippines. Hate the most: Liars and back-stabbers. Favorite movie: Sholay in Hindi cinema, and the Indiana Jones series. Favorite stars: The great Amitabh Bachchan, Harrison Ford and Sachin Tendulkar. Role Model: Ratan Tata. Ultimate ambition: To be a successful businessman. Then everything else would be incidental. Wildest thing I have ever done: River rafting. Thing I most want to do in life: Sky diving. If I became the Prime Minister: I would put all corrupt people behind bars. Celebrity I’d like to spend a day with: Sachin Tendulkar. I like his conviction and his dedication to cricket. One person I would like to meet and why: Adolf Hitler. He was very strategic and tactical. Your deepest and darkest fear: Reptiles of any kind. n
— CRN Network
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RNI NO. MAH ENG/1999/635 Postal Reg. No. MH/MR/NORTH EAST/193/2010-2012 License to post without prepayment MR/TECH/WPP-23/NE/2010-12 Posted at Patrika Channel Sorting Office, Mumbai Due Date 2nd, 3rd & 16th, 17th Of Every Fortnight