starting line MUST
Read
Toshiba strengthens distribution Toshiba India has revamped its distribution model in the country as part of its strategy to grow 100 percent year-on-year in 2011. The vendor has opted for a hybrid model, continuing to operate through national distributors (NDs) for matured markets while appointing regional distributors (RDs) for several upcountry regions. In addition, Toshiba is putting in place a strong sub-distribution channel. Informed N Sivakumar, General Manager, Toshiba India, “We have appointed RDs in emerging markets such as Goa, Bihar, Jharkhand, Chhattisgarh, Uttarakhand, Jammu & Kashmir, Orissa and the north-east. We will continue to address the rest of the market through NDs such as Ingram Micro, Redington and Compuage.” Patna-based Caltron Info Trade will be in charge of Bihar and Jharkhand, while SA Infoways has been appointed for Orissa. Goa is handled by Jamson Computers, while Uttarakhand and J&K are handled by VSM Technologies and Digital Systems N Sivakumar respectively. The entire north-east will be managed by Datamation Services, while the Chhattisgarh distributor will be Raipur-based Mahesh & Co. Toshiba will bill RDs directly and will not allow NDs to operate in these territories. “Thus far our business was largely concentrated in the top 30 cities, while the states where we have appointed new RDs did not account for much. We feel that a dedicated RD can focus more on building a channel than an ND,” explained Sivakumar. Nevertheless, Toshiba is betting on NDs playing a bigger role in other markets, where to support the NDs the vendor has started appointing a strong sub-distribution channel. Said Sivakumar, “We have appointed close to 25 Premier partners who will stock-and-sell through smaller resellers. They will buy from NDs.” Sivakumar also informed that Toshiba will increase the number of its service centers to 100 by year-end as new territories are covered. n — Ramdas S
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EMC reconfigures Affiliate program n RAMDAS S
E
MC India has reconfigured its Affiliate partner program under its Velocity channel partner program to promote select models of its newly announced VNXe range of unified storage products. The program will not be directly managed by EMC India, but by its distributors Ingram Micro and Redington. “We have just announced the VNXe series of products which combines the best features of our award-winning Clarion range of SAN storage products and the Celerra range of NAS products to form best-of-breed unified storage offerings,” said Manoj Chugh, President, EMC India & Saarc. According to Chugh, the changing dynamics of the storage market have made it tougher for smaller partners to qualify and invest in the existing Velocity partner program options. He explained: “The Affiliate partner program has been introduced looking at the smaller channel partner who would like to make an entry into the world of enterprise storage selling but is not yet willing to make the commitments. All you need to do is take up a 5-hour online training session which will help you sell a couple of faster-moving models under VNXe—and then you are on. This is a no-entry-levelbarrier program. We are not asking partners for any commitments; they just need to enroll for the basic online training.” Chugh said that EMC has no specific target in mind in terms of the number of partners who would be enrolled in the program. “We have left the numbers to our distributors to chase.” The Affiliate program would allow a partner to sell only two of the VNXe models; to qualify to sell any of the other products, including entry-level Celerra or
“This is a noentry-barrier program. We aren’t asking partners for any commitments. They just need to enroll for basic online training” Manoj Chugh
President EMC India & Saarc
Clarion boxes, partners need to opt for any of the other Velocity Channel programs such as Signature, Premium or Affiliate Elite, and then pass through the certifications. “The VNXe product line starts at `5,60,000. These are storage arrays built specifically for the SMB segment which does not have the luxury of in-house storage experts,” Chugh said. While IBM and HP have introduced the Minimum Order Quantity-based run-rate business for their fast-moving products, EMC has not yet planned such a program. “We don’t have pressure either from our customers or partners; both are comfortable with our lead times. However, if there’s such a demand then we will take a call.” Chugh informed that with SMBs accepting the Iomega range of entry-level NAS products, EMC has started to get a stronger footing in the segment. “As the storage needs of SMBs become critical, we see many Iomega customers migrating their critical storage environment to VNXe.” EMC India recently announced the availability of nearly 40 new products. Apart from the VNXe series, the vendor also announced new models under the Data Domain range of backup and archival solutions. n
contents
May 15, 2011 l Volume 5 Issue 02
Cover Story No business is as big as government business, yet most partners lose out because they can’t meet the qualification norms. Not to worry: CRN unearths 10 opportunities within their reach
18 NEWS Analyses
Channel Chief
EMC reconfigures Affiliate program 4 Toshiba strengthens distribution
4
HP PSG returns to IT distributors
8
Epicor to set up India office
8
MIEL targets non-linear growth
10
Array expands partner network
10
Editorial 12 Opinion
14
Feedback
14
Channel Buzz
36
Shadow Ram
46
Get Personal
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16 Market Focus Restructuring at Cisco The company has vowed to save $1 billion in expenses over the next 12 months as it embarks on a major organizational restructuring
20 Role Model Rakesh Agarwal, CEO, Pioneer Computers, shares his journey to becoming a leading sub-distributor in the country
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READ More
6
Sunil Grewal, Sales Head, Gigabyte India, talks about the Indian motherboard market and the company’s plans for the year ahead
Tech Focus Burning questions The potential Microsoft-Skype pairing has raised as many new questions as answers
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starting line HP PSG returns to IT distributors n Ramdas S
H
P India’s Personal Systems Group (PSG) has begun dismantling telecom distributors and is returning back to proven IT distributors. The company recently appointed Compuage to manage the Gujarat zone which was earlier managed by a telecom distributor. According to highly placed sources within HP, seven out of nine telecom distributors will be replaced over the next couple of months, and HP PSG’s existing distributors— Ingram Micro, Redington, Savex and Rashi—will take their place. Atul Mehta, MD, Compuage, confirmed his company’s appointment as a zonal distributor for Gujarat. “We have signed up for Gujarat. But I wouldn’t like to comment on the distribution strategy of HP’s PC business.” An HP’s zonal distributor from the telecom side confirmed that it is moving out of HP PC distribution.
“We have signed up for Gujarat. I wouldn’t like to comment on the distribution strategy of HP’s PC business” Atul Mehta
Managing Director Compuage
“The PC business is very different from the mobile handset business, and we couldn’t find a comfort level in it, hence we decided to exit. We are currently sitting on some inventory but once we liquidate it we will move out,” said the zonal distributor. The distributor refused to be named as it felt that the news could impact its ability to liquidate its HP inventory.
Despite several efforts by CRN to get a response to specific queries, HP provided us with a standard statement that said, “There is no change in our consumer strategy and the current developments are in line with our objective to drive profitable growth, both for HP and its partners. Our strategy is consistent with our existing policy of regional exclusivity to partners, and partner exclusivity to HP.” When asked to specify the “current developments” the HP spokesperson didn’t respond. “If HP is moving back to IT distributors at this stage it may not be a bad idea. They have worked with these distributors before. However, distribution is the least of HP’s problem today in the retail segment,” said Vishal Tripathi, Principal Analyst, Gartner India. “What is more critical for HP is to rebuild consumer demand for its products. Dell has not only been eating into its market share but also its mind share.” n
Epicor to set up India office n sonal desai
E
RP vendor Epicor is setting up an India office, in Mumbai, the process for which was already started last year. The company is hopeful that it will have all the approvals in the next month to start operations. It will launch its flagship product, Epicor 9, which is aimed at the mid-market. Globally, 40 percent of its business comes from the manufacturing segment, while the rest comes from the distribution, retail and services segments. “Epicor 9 is a remarkable product and is based on service oriented architecture with CRM, BI and SCM integrated with the software. Available on-premise and in a hosted environment, the product comes with enterprise search functionality and is priced almost 30-40 percent lower than SAP B1,” said Rishikesh Trivedi, Channel Director, MEA, Turkey &
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“We have already signed nine partners and plan to have not more than 12 solution providers with a strong vertical and geographic presence” Rishikesh Trivedi
Channel Director MEA, Turkey & India, Epicor
India, Epicor. “We have started engaging with prospects in the mid-market segment (150-200 employees), and solution providers in India,” Trivedi informed. “We have already signed nine partners and plan to have not more than 12 solution providers with a strong vertical and geographic presence. We
want to establish 5-7 strong referral customers in the first year, and then scale-up.” Partners would be given access to the Epicor University which provides online and offline training in sales, pre-sales and implementation. They can achieve certifications in financials, distribution, technicals and manufacturing. “A senior director also addresses partner concerns, and updates them during a 45-60 minute Webinar every fortnight. We will spend about 4 percent of our revenue on marketing and brand development,” Trivedi said. Till the time the company gets all the statutory clearances for billing from India, its Dubai office would be billing customers and partners. “Although the billing would happen from Dubai, it will be in rupees, and all the partner incentives will also be paid in the same currency,” Trivedi said. n
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starting line MIEL targets non-linear growth n Sonal Desai
M
IEL e-Security wants to be a `450 crore company by the end of FY2013-14 compared to its last fiscal top-line of `55 crore, and has charted a well-defined strategy to achieve it. The company has already bagged 20 customers for MEDS—MIEL Endpoint Diagnostic Service—since its launch in January 2011. Two of the largest deployments for MEDS are in automobile sector for 15,000 and 13,000 endpoints respectively. MEDS, priced at `35 per PC scan, can check 200 security parameters on desktops and servers for compliance standards such as ISO 27001, PCI/ DSS, SOX and HIPAA in addition to regular security compliance tests. Two more such IP-based services are on the cards: Sentinel, a tool to aid confidentiality, integrity and availability of data, and Risk Matrix, a risk management software. “Both
“We have 35 partners globally but only one in India. In the next two quarters we will focus on building a partner network in India” MN Kutty nair
Chairman & Managing Director MIEL e-Security
these IPs are being tested, and will be launched in H22011,” said MN Kutty Nair, Chairman and Managing Director, MIEL. “And more IPs around the education segment are being created.” The company also expects its training arm to contribute to non-linear growth. “We have a strong training practice for security standards.
We have already trained 14,000 people from 1200-odd organizations. We have training centers in Mumbai and Pune, and have opened new ones in Delhi, south India and the Middle East. We want to invest in areas that are high growth and guarantee strong margins,” said Nair. MIEL is in talks with strategic investors to fund future growth plans. “We are in discussions with strategic investors who are impressed with our 360-degree approach to information security. They understand that we have made investments in training and certifications in newer technologies, and services and solutions such as compliance, mobility, virtualization and the cloud,” Nair said. MIEL will leverage the channel to sell its services. “Today, we have 35 partners across the globe but only one—Choice Solutions—in India. In the next couple of quarters we will focus on building a strong partner network in the country,” he said. n
Array expands partner network n sonal desai
W
ith the aim of increasing its footprint and revenue in the Indian market, Array Networks is strengthening its partner relationships. The company, which already has iValue Solutions and Redington as distributors, recently signed on Inspira as the third distributor. Henceforth Redington will mostly work with volume partners, iValue with tier-2 solution providers, and Inspira with tier-1 partners for large projects. Array has also announced a number of programs to upgrade its partners to solution provisioning, the latest being the Total Value Partner Program (TVPP). The company has shortlisted 55 active partners for the new program. “These partners have done business with us, and we thought that rather than chasing quantity we
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“We are adding technical resources in all regions. Going forward, we also plan to establish an R&D center in India” Shibu Paul
Country National Sales Manager Array Networks
should go after quality,” explained Shibu Paul, Country National Sales Manager, Array Networks. Some of these partners include Softcell, Meta Infotech, Essen Vision, Smartnet, Kinfotech, Vayam Tech, Mars Telecom and Precision Technologies. The chosen partners will work with customers in the BFSI, government, manufacturing and
IT-ITeS verticals. “These verticals are spending on our kind of solutions, and are willing to invest with us,” Paul said. “Encryption is increasing from 24 bits to 48, and this will be the major trigger for our solutions. Also, many government organizations are upgrading their IT infrastructure, so that is one big potential.” Once the TVPP is formalized, Array will introduce the Platinum, Gold and Silver partnership tiers. The company will work on a regional business model. “We have full-fledged marketing teams handling the north, west and south. Now we are adding technical resources to these regions. Going forward, we plan to establish an R&D center in India.” Plans are also afoot to enable TVPP partners to scale to post-sales support and services. “At present the post-sales support infrastructure is through distributors,” Paul noted. n
edit opinion Volume 5, Issue 02
Cancer of corruption dhaval valia
W
hile doing this edition’s cover story on opportunities we came across shocking stories about the level of corruption around us. Many vendors told us why they don’t participate in government projects directly—the tenders are so bloated that they can’t provision their global accounting systems for the huge cuts that have to be given to win the projects. Consider the Karnataka State Data Center Project, which has become folklore among vendors and partners. For a project that couldn’t have cost a paisa more than `12 crore, the government floated a tender for `60 crore. Now the entire transaction is believed to be under the scanner. But as we have all come to know of government affairs, I don’t think much will come out of it except a slowdown in approvals. One vendor was skeptical even about this: “The bureaucrats are not slowing down decision-making on projects because they fear investigation; they are doing it because with the current spotlight on corruption they don’t want to clear projects that can earn them big money later. They are sure that the anti-corruption sentiment will soon subside, and that they can then get back to their old ways.” Then there’s this partner from Maharashtra who told me about his first and last experience with government projects. The SI had pitched for a tender to provide computers for schools in the tribal regions of the state. For the actual project cost of `1.5 crore, the state department had floated a tender of `6.5 crore. He was called by the minister’s son and told that his company’s tender would be cleared but that he would have to first give him an advance of `1.5 crore and later `3.5 crore. Another partner who wanted to participate in a state data center project was told by a senior bureaucrat that they would revise a clause for topline requirements to make his company eligible for tendering, but that for that to happen he would need to pay `30 lakh upfront. Let me also tell you that the private sector is no less corrupt. A few partners who service large enterprises told me how greasing palms for getting empanelled on the suppliers’ list and getting more business than other suppliers is common even among large MNCs who always talk about transparency and corporate governance and business ethics. One partner told me that to be empanelled on the suppliers’ list of a large enterprise he had to buy the IT decision-maker a car (in the name of a family member). Two years later when the list was reviewed he bought the IT manager a family vacation to the Far East. n
E-mail CRN Executive Editor Dhaval Valia at dhaval.valia@ubm.com 12
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edit opinion Specializing in micro-verticals will be key Kelley Damore
Q
uestion: Do you know where you are going to be in five years and how you are going to get there? With the advent of cloud services and the power of mobile and tablet devices, technology is moving faster than any time I can remember. How we consume information and how IT will need to manage, secure and control that information is going to radically change how we conduct business and the business models of the future. I would argue that the need to specialize and integrate is more important than ever. In the future, you will need to stitch together technologies and, more importantly, have development expertise to offer custom applications for your customers. While products are part of the solution, it won’t be where the bulk of your margins come from. If you stay close to your customers and their obstacles, you will survive. This is where I believe micro-verticals come in with the ability to build practices around very specific markets and pain points. I am not talking about having a specialty in health care, for instance, but rather a specialty around a certain function within health care and targeting a certain constituency within the health care field. For example, you become an expert on EMR for clinics and physicians’ offices. You become an expert in the hospitality market around integration services or transportation and logistics. And while some of the customers’ pain points may be around hardware integration services, most will be around the applications you provide to the customer. And let’s talk about the customer. Your customer may not be the CIO or IT guy in the future. There is an internal battle with IT and line of business to control and own the technology. Line of business is winning because it is responsible for P&L, not IT, and technology can help it get there. What’s more, technology is cheap and accessible. If IT isn’t an enabler, line of business will and can go around them with the plethora of cloud services that are available to them with a swipe of the credit card. Speaking of cloud, where do you play in the future? Depending on the customer you serve, cloud could be a big opportunity or a threat that you need to understand. Many of the enterprise customers are looking to build out private clouds because they believe this is the next stage of virtualization. This trend could sync up with your current business model nicely. Or perhaps you lead with business process outsourcing and pull in the hardware and software integration. This market is still a landgrab, and how it all shakes out is still very unclear. The next five years will require a new way of thinking and investment in skills. How you fit in will be determined by the path you take today. n E-mail Kelley Damore at kelley.damore@ec.ubm.com 14
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Conservative outlook The editorial titled ‘My Conservative Outlook for FY2011-12’ in the CRN edition dated May 1, 2011 aptly captures what the common man on the street is experiencing and feeling. It surely echoes the sentiments of people like me. It is so frustrating to note that while inflation is making life difficult for commoners like us, there are new scams worth hundreds of crores happening every day. Sachin Kanchan Wysetek, Mumbai
Negative factors Your May 1 editorial made for very interesting reading. You have captured the mood of the people on the ground
and also raised questions about the feasibility of sustaining a high growth of 9 percent with inflation at such high levels and declining consumer confidence. I agree that the declining sentiments of Indian homes will impact their buying patterns negatively, and that this would affect all sectors including IT. While the impact on resellers selling to homes will be direct, on those selling to companies it will be indirect. As homes buy less, companies will make less revenue and this will bring down growth rates. IT partners will surely have to factor the points raised by you about the overall economic challenges while planning their business for the year. Satyajit Desai ABC Computers, Mumbai
Send your feedback at editor@ubmindia.com or post your views on www.crn.in
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Page No Web site
2 www.microsoft.com/india/visualstudio 3 www.ibm.com 5 www.rptechindia.com 7 www.compuageindia.com 9 www.dell.co.in 11 www.texonic.com 13 www.fujitsu-india.com 15 www.neoteric.co.in 17 www.infotrend.in 19 www.supertronindia.com 21 www.hidcorp.com 23 www.k7computing.com 27 www.molexpn.com 41 www.quickheal.com 42 www.symantec.com 42 www.meganet1.com 43 www.hclsmb.in/partners 44 www.unistal.com 44 www.indiaantivirus.com 44 www.epson.co.in 45 www.zyxel.in 47 www.riverbed.com 48 www.iomega.com/nas
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scandisk@rptechindia.com info@compuageindia.com dell_enquiries@dell.com info@texonic.com info@fujitsu-india.com sales@neoteric.co.in sales@infotrend.in info.supercomp@supertronindia.com hidindia@hidcorp.com mpnsupport@molex.com marketing@quickheal.com
hclpartners@hcl.com marketing@unistal.com sales@indiaantivirus.com info@zyxel.in marketingindia@riverbed.com indiasales@iomega.com
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channel chief “We will continue to introduce features that are not available in other brands” Sunil Grewal recently took over as the Sales Head of Gigabyte India. He spoke to Ramdas S about the Indian motherboard market and the company’s plans for the year ahead In the recent CRN Channel Champions Survey there was general opinion, especially among partners in Class B and C cities, that Gigabyte is still largely a push brand. How are you planning to change that? It’s a perception that exists among a small section of system builders, and it only exists in certain pockets of the country. Today, if you consider large cities such as Mumbai and Bengaluru, we are probably having a market share which is close to 50 percent. However, this is not the case across smaller towns, where Asus is the market leader, largely due to the good work done by Rashi over the years. One of the reasons we have not been successful in creating the necessary momentum is that we are premium-priced. Many citybased resellers understand the high quality standards that Gigabyte maintains, and are willing to get customers to pay that extra. We are looking at ways to communicate more effectively with smaller city partners, and educate them better.
In terms of market share where does Gigabyte stand in the country? We have 22 percent share in the Indian market which sold an estimated three million motherboards in 2010. Asus is the clear market leader, with Gigabyte second closely followed by Intel. We intend to grow our market share to 30 percent this year.
Partners say that you are not strong on AMD-based platforms. Why? We admit that we have a low market share in India. If you look at the statistics carefully, the major lead that Asus has on us can also be attributed to this fact. One of the reasons why Asus is strong in the AMD motherboard segment is because Rashi is a prominent AMD distributor and does a lot of pre-bundled offers. However, things are changing. AMD used to predominantly sell low-end processors before, where such bundles work. But now that they are focusing more
“We have a 22 percent share in the Indian market which sold an estimated three million motherboards in 2010. Asus is the clear market, leader, with Gigabyte second closely followed by Intel” 16
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on high-end Athlons and Phenoms, which we believe we stand a better chance of selling to customers who are looking at better-performance motherboards. We have increased our AMD portfolio significantly over the past year. Let me mention here that we were the first to launch motherboards based on the AMD 980 and 990 chipsets, globally and also in India.
What is Gigabyte India’s roadmap for 2011? We launched the Gigabyte Select series of motherboards (2011 edition) in first quarter of the year, and will follow up with more launches in the next few quarters. We will continue to innovate and introduce features that are not available in other brands. These include Japanese solid capacitors with 50,000 hours of life, 4-phase power design, and next-generation quality components including lower RDS, MOSFETs, ferrite core chokes, and 3TB HDD storage support on all other motherboards. On the distribution front, we will continue with our
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channel chief four national distributors, and add Premium partners (sub-distribution) to the 135 we currently have to increase our geographic coverage, and thus improve availability.
Partners have been recently complaining about the RMA turnaround on Gigabyte boards. How do you plan to address the issue? Today, depending on the city or town, our average turnaround time (TAT) is now around seven days, but over the next six months we plan to bring it down to just three days. Through Accel Frontline, we presently have 81 collection points in 79 cities. To augment our post-sales support we are in the process of setting up 56 collection centers through our Premier partners. While our city coverage through this activity will increase to 85 cities, what it will do is make our post-sales more accessible to resellers and customers and thus improve the overall TAT. We have also invested in setting up exclusive Gigabyte-branded service centers in Mumbai and Bengaluru. These service centers are managed by Accel, but have engineers directly trained by Gigabyte. We are adding three more such service centers in Kolkota, Chennai and Kochi over the next quarter.
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“Our average TAT is now seven days, but over the next six months we plan to bring it down to three days. For this we are setting up 56 collection centers through our Premier partners” The desktop market is shrinking. What is Gigabyte’s strategy to ensure that your numbers keep growing? It’s once again a perception issue. While growth rates are low, the desktop market is still growing, especially in the upcountry market. As in matured economies, you will see more users buying desktops for performance and for applications such as gaming. Today, the gaming motherboard market is less than 2 percent, but we see exponential growth in the segment.
Why haven’t you introduced Gigabyte server and workstation motherboards in India as yet? Gigabyte consists of five business units, and Gigabyte India reports to the unit that is in charge of desktop motherboards. All the other business units operate directly from Taiwan. n
market focus RestructuRing at Cisco The company has vowed to save $1 billion in expenses over the next 12 months as it embarks on a major organizational restructuring n Chad Berndtson
C
isco Systems plans to continue its restructuring campaign with more layoffs, cuts in underperforming business units, and a plan to remove $1 billion in expenses heading into its fiscal 2012. “We know what we have to do,” says Cisco Chairman and CEO John Chambers. “We have a clear game plan. We are a company with a track record of constant, market-shaping innovation. We’ve had to make big changes before, and each time we’ve made these changes we’ve emerged stronger.” Cisco’s third quarter results were slightly above expectations. For its fiscal third quarter the company reported sales of $10.9 billion, up 4.8 percent from the $10.4 billion it reported in the year-ago quarter, and just ahead of Wall Street estimates of $10.86 billion. Gross margins fell to 61.3 percent from 63.9 percent a year earlier. Cisco’s quarterly profit was $1.8 billion, down 17.6 percent from the yearago quarter
profit of $2.2 billion. Cisco will continue to see some weakness in its fourth quarter as its corporate restructuring continues and Cisco continues “hard work behind the scenes,” Chambers said. Specifically, Cisco expects fiscal Q4 revenue to be between flat and up 2 percent from a year ago, which would put the figure in the $10.84 billion to $11.02 billion range, below Street estimates of $11.67 billion. In his comments, Chambers struck a notably different tone from the optimistic, cheerleading persona regular Cisco observers are used to. He also backed off Cisco’s often-described annual growth targets of 12-17 percent. Cisco has gone on the defensive following several quarters of disappointing earnings reports and steady declines in businesses such as switching and consumer products. Among a number of recent Cisco headaches, the company has seen ongoing, high-profile executive departures as it changes its corporate structure. In April came a candid memo from Chambers admitting that Cisco had disappointed investors, confused employees and lost credibility in the marketplace, portending changes ahead for the networking titan. Some changes have already happened. In recent weeks, Cisco shuttered its Flip video camera business as part of a restructuring of its consumer unit, and confirmed organizational changes that included cutting down on the company’s much-maligned structure of internal boards and councils. More changes are coming, according to Cisco’s top executives. The company recently launched an early retirement program for eligible Cisco employees, similar to one Cisco provided in 2009. There will also be layoffs. “We do anticipate a workforce reduction affecting both our full-time and contractor workforce,” said Gary Moore, who was named Cisco’s chief operating officer in February, and was making his first appearance on Cisco’s quarterly earnings conference call. Cisco’s third quarter was a similar story to its fiscal second quarter: notable declines in switching, public sector and other areas where Cisco has been weakening in the past year, and
Cisco has gone on the defensive after several quarters of disappointing earnings and steady declines in switching and consumer businesses 20
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market focus gains in collaboration, data center and services. Cisco’s core switching and routing business, which together account for a little less than half of the company’s overall revenue, continue to struggle. Routing saw a 7 percent increase year-over-year, but switching declined 9 percent. Asked by analysts about weakness in switching Chambers admitted that Cisco will continue to see a number of competitors from “a lot of different directions,” including, he said, “HP and Huawei on price.” Chambers also reiterated that the switching market is in significant transition and that the price-per-port is falling, creating short-term pressure on revenue. The public sector is another area where, according to Chambers, Cisco must “adjust quickly.” This sector accounts for about 20 percent of the company’s overall business, but while the segment was on a 30 percent growth rate four quarters ago it saw a decline of 8 percent in orders year-over-year for Q3. There were many bright spots. Collaboration, which includes Cisco’s video conferencing portfolio, grew 39 percent year-over-year, and data center virtualization and cloud grew 31 percent. The company’s Unified Computing System, which has been a hit for Cisco since debuting more than two years ago, now boasts of 5,400 customers following a gain of 1,570 customers in the third quarter, and now has an annualized run-rate of $900 million, Chambers said.
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As for the changes to its structure of boards and councils, Cisco has reduced its number of councils from nine to three, and its boards from 42 to 15 Total global enterprise sales grew 12 percent yearover-year, and commercial sales, which is what Cisco calls midmarket and small business, grew 2 percent. Its services business, which accounts for 20 percent of total revenue, grew 14 percent overall. As for the changes to its structure of boards and councils—put in place by Chambers about five years ago—Cisco has reduced its number of councils from nine to three, and its boards from 42 to 15. Neither Chambers nor Moore committed that Cisco would exit the board and council structure entirely. “The headline is we’ve changed the way we’re operating,” said Moore, who said the rearranged corporate structure will drive “simplicity and agility into the organization.” Chambers called out members of his team for a job well done, and trumpeted several areas of growth for Cisco, but overall his choice was to highlight areas where Cisco needs to improve rather than where it has thrived. Said Chambers in his closing comments: “The buck stops here. It’s my responsibility. I get it.” n
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cover Story
T
he government is allocating a lot of funds to building infrastructure (such as data centers), setting up common service centers, and implementing projects such as UID. There are also a number of projects which involve automation of different departments at the center and states. Despite this massive potential, there’s limited opportunity for the vast majority of channel partners. This is mainly because the larger projects commissioned by the government have very stringent tender qualifications which automatically disqualify 99 percent of tier-2 channel partners. “It’s unfortunate, but true, that most of our partners are unable to participate in some of the large requirements posted in the government sector. Apart from large EMD (earnest money deposit) requirements, there are qualification criteria based on turnover, track record and experience in handling government projects for an organization to bid for government projects. In addition, some of the larger projects run for many months and often span a year or two before completion. The bid winner therefore needs to have strong financial muscle to manage the project,” explains Visak Raman, Regional Director, Fortinet. Despite such odds, there are several opportunities for a focused partner who’s willing to show enough patience to play a long
and waiting game. “Apart from passion, patience and perseverance, you need to know how exactly the system works. You need to spend time understanding the etiquette of doing business with the government and public sector,” remarks Ajay Maitin, CEO, Graphic Trades. While opportunities are piece-meal in certain projects, they nevertheless look bigger and better than those presented by some of the other segments such as BFSI and manufacturing. CRN presents 10 such opportunities within the government sector which a partner can pursue depending on his individual strengths.
1
Biometrics
Most of the biometric projects announced, implemented or planned are not large by government project standards. Many of these projects are de-centralized and offer scope for smaller systems integrators (SIs). A large number of biometric projects are attendance systems or employee monitoring projects which even small government departments are pursuing seriously. “Smaller departments in the Tamil Nadu government have opted for smart cards for staff, and some of the project sizes are less than `1 lakh,” says PWC Davidar, IT Secretary, Tamil Nadu. “Such projects are being implemented by mostly small local outfits.” Some of the betterknown partners have
No business is as big as the government, yet most partners lose out because they can’t meet the qualification norms. Not to worry: CRN unearths 10 opportunities within their reach n sonal desai & ramdas S 24
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cover story bagged larger projects. For example, Pune-based Ace Brain Systems is deploying a biometric application across 93,000 schools in Maharashtra, a project which is expected to be worth `102 crore for the first 33,000 schools itself. Biometrics projects are mostly smart card-driven though there are a few RFID-based projects in the pipeline. “The technology has become fairly common, and vendors like HID have enabled partners to deploy projects much more easily over the past few years,” observes Vinesh KM, AVP of Silverbyte Solutions, Mumbai.
2
Web Presence & Localization
Information dissemination is a key focus of government sector entities ever since the advent of the Right to Information Act and other similar acts. According to the Bengaluru-based Indian Center for Social Transformation (ICST), an NGO piloting e-initiatives, most departments, offices and public sector companies have earmarked budgets ranging from `20,000 to `20 lakh for setting up websites that would act as information dissemination media. An estimated 13,000 websites of organizations spread across the states, center and public sector need to be developed, designed, maintained and hosted. “Some of the larger projects are being developed by the likes of TCS. However, these also represent an opportunity for smaller ISVs or SIs,” says VP D’Souza, Project Consultant with ICST. Localization is another area where a number of smaller projects are being outsourced to smaller entities. “With just about 5 percent of the population being really comfortable with English, localization of content is very important, hence a number of government sites are being localized,” says Angiah Santhanaswamy, Head, Government Vertical, Adobe India. Since localization involves both translation and transliteration services, projects are likely to be contracted to smaller players, and this represents yet another opportunity for a partner willing to build skill sets.
3
Client Systems & Peripherals
Though a majority of the large tenders are bagged by national SIs, Indian manufacturers such as HCL, and in some cases the OEMS, normal desktop and laptop purchases are still the best way to get started with a government account. “There’s definite partner opportunity in smaller deals, and we work with several channel partners in
“The government is quite open to open source today. Things have changed a lot over the last three years, and our business has grown 300 percent in this segment” sandeep sehgal
Director, Government & ISV, Red Hat India
“Apart from passion, patience and perseverance, you need to know how the system works. You need to spend time understanding the etiquette of doing business” AJAY MAITIN
CEO, Graphic Trades
specific government and public sector accounts,” says S Rajendran, CMO, Acer India. After updates to auditing standards were set by the Comptroller and Auditor General’s office for the center and states in 2002, it has become imperative to create tenders that are unbiased and offer fair opportunity to every entity. “Most of the tenders mention that the supplier can be a registered reseller of the manufacturer or brand, and we are all keen to create a level playing field for everyone,” says MN Vidyasankar, IT & BT Secretary, Karnataka. Remarks Maitin, “We have generally been successful when it comes to small and mid-sized government tenders. There are several hundred such requirements opening up across the country every year.” The DGS&D has also played an important role in helping the partners’ cause. Over the past two years most IT vendors have made extra effort to see that their products were registered under DGS&D rate contracts. “We have been a late entrant in the country, but over the last few months we have managed to get a number of our workstations and servers registered under the DGS&D scheme. This is helping our partners win business in government accounts,” says Ramprasad Lakshminarayanan, GM, Channels & Volume Business, Fujitsu India.
4
Open Source
Open source has gained ground in the government vertical because it’s perceived as a cost-cutting option. Governments such as those of Kerala, Tamil Nadu and West Bengal have been seen as pro-open source and free software. Meanwhile, Red Hat is working with tier-2 partners such as Prithvi, Terasoft and Tulip on the mission mode projects. On other projects such as the bus ticketing system for the state transport department and the digitization of land records in Bengaluru, it is working with partners such as Vayaam and Trimax. Comments Sandeep Sehgal, Director, Government Vertical & ISV, Red Hat India, “The government is quite open to open source today. Things have changed a lot over the last three years, and Red Hat’s business has grown 300 percent in this segment.” In the last two years Red Hat has enabled close to 40 partners working in the government space. These partners provide services support to end-customers or large SI partners. “A typical deal size for such partners ranges from `20 lakh to `10 crore,” notes Sehgal. He says that the company works with tier-2 partners
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cover Story in two ways: one, with an increased deployment base, Red Hat needs partners to provide onsite support services to its customers; and two, with an increase in the application development requirement for customers such as NIC, it needs partners having skill sets in open source to work with such customers and assist in development. Emphasizing the fact that tier-2 partners are now scaling up to meet the requirements to participate in government projects, Sehgal says, “In government bids, a bidder has to pass qualification criteria such as turnover and projects. We align our partners with large SI bidders to form a win-win situation for both. The large SIs use tier-2 partner for their services/applications in such projects.” Adds Sandeep Menon, Country Head, Novell India, “Though national SIs such as Wipro have strong open source practices, there are several small partners with specific skills sets making inroads into the defense and public sector. The projects range from virtualization to data migration.”
two national SIs, and are assisting them with project implementation,” says KV Jagannath, CEO, Choice Solutions, Hyderabad. Even so, several departments are making individual decisions, and are opting for reseller partners. For example, C-DAC selected Choice to implement its data center, while Trimax was chosen to set up data centers for ITI and the Karnataka State Police. Also, in recent times, RFPs floated by PSUs have rationalized pre-qualification criteria and deposit amounts.
5
6
Data Centers
The government had earmarked around `1,200 crore for state data center projects in 2009. Most of the states have awarded the projects. “It’s true that we couldn’t directly bid for the statewide projects, but we struck an alliance with one or
“There’s a clear trend in the government for any project for popular welfare to cut down time and cost, and provide access to information” CHERIAN VARGHESE
Sr Director, Alliances & Channels, Oracle India
Digitization/Automation
The government’s initiative to introduce citizenfacing services is driving digitization and automation projects. “There’s a clear trend in the government for any project for popular welfare to cut down time and cost, and provide access to information,” says Cherian
CASE STUDY: ABM KNOWLEDGEWARE
Setting an example
M
umbai-based ABM Knowledgeware and Oracle are replicating the now-famous Kalyan-Dombivli Municipal Corporation (KDMC) e-governance model across all the 231 urban local bodies of Maharashtra. The project, to be completed by 2012, will automate more than 100 citizen services in the state, and optimize transparency and accountability across all departments of the civic bodies. The software has an information gateway which is interfaced with the PDA, MIS, online payment gateways, etc. All the current features prakash rane are connected to a kiosk 24/7, which is again connected with a multiple delivery system for online payments, followed by an SMS alert. All the applications are hosted on the KDMC server. A role model, KDMC today serves nearly 2.5 million local residents and is charting out services such as payment of taxes, applications for new water connections and birth/ death certificates, and property-related queries through citizen facilitation centers. ABM Knowledgeware developed and deployed custom-made
software, MAINet, on the Oracle database. Says Prakash Rane, MD, ABM Knowledgeware, “When we developed the software for KDMC we engineered 400 business processes.” For example, earlier, citizens had to fill up multiple forms and annexures for requests as simple as a land record or a birth/death certificate. People had to repeatedly fill in the same information in different forms leading to duplication and more paperwork—and also necessitating more storage space. What AMB did was remove the additional annexures and create an application workflow in the software. Simultaneously, it offered citizens SLAs— agreements of services and the time-frame. In the process, ABM has monetized its IP. Says Rane, “We have an agreement with KDMC that the IP would remain with them, but that we would have the exclusive right to market and implement the software. It’s a win-win situation for both since KDMC proliferates the software and earns the license fee while we get the implementation fee.” n
“We have an agreement with KDMC that the IP would remain with them, but that we would have the exclusive right to market and implement the software. It’s a win-win situation for both since KDMC earns the license fee while we get the implementation fee”
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cover Story Varghese, Senior Director, Alliances & Channels, Oracle India. We can divide the opportunities in the government segment into two categories: the central government and the state governments. The mission mode projects are from the central government, while the state governments lean more toward consolidation and automation, and connectivity between gram panchayats. Today, more state governments are seeking optimization in terms of capacity growth planning, people planning, and projects, and require data
Strategies for partners
In a nutshell Position products under DGS&D contract list—When buying products under the DGS&D contract list, the decision-maker in the government or public sector organization is not subject to intense auditing pressure. Especially for small requirements, government customers can take faster calls in preparing a tender or RFP if the product which needs to be purchased is in the DGS&D list. Form consortiums if you cannot go alone—“We understand that in many cases smaller vendors are unable to participate in a tender because of tender requirements. That is one of the reasons why we allow vendors to form consortiums and pitch,” says MN Vidyasankar, IT & BT Secretary, Karnataka. Smaller companies can get together and pitch for larger tenders. Private-public partnerships work—Many IAS officers want vendors to work more closely, and come with a proposal that can be delivered on a private-public partnership (PPP) model especially for projects where the government is working with citizens on a B2C model. The chances are that proposals based on PPP models are likely to get approved. Prepare yourself for a slow grinding game—Files don’t move fast in the government, so anyone doing business with the government needs to show a lot of patience. Successful partners say that the end-result is worth the wait. Understand the system very well—The Indian bureaucratic system is fairly complex. A thorough understanding is absolutely necessary when you pitch for business. Ensure that the right protocols are maintained. Get involved at the pre-RFP stage—While many state and central establishments have third-party consultants who advise them on what to buy and create specifications, in most cases decision-makers take help from potential solution providers. This naturally gives the solution providers an edge. Protectiveness is a paramount quality for successful tender winners. n
We understand that in many cases smaller vendors are unable to participate in a tender because of tender requirements. That is one of the reasons why we allow vendors to form consortiums and pitch
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“Most of the tenders mention that the supplier can be a registered reseller of the manufacturer or brand. We are all keen to create a level playing field for everyone” MN Vidyasankar
IT & BT Secretary, Karnataka
collection hubs for the same. The KDMC digitization (see box) has become a benchmark in Maharashtra, with the state government recently announcing the digitization of more than 200 urban local bodies on the same lines. The project was undertaken by ABM Knowledgeware along with Oracle. While large digitization projects have been bagged by large SIs, there exists a lot of scope for outsourcing of work to smaller partners. As a matter of fact, some of the projects bagged by Sify and HP in 2008 were delivered through multiple partners across the country.
7
Document Management
8
IT & Physical Security
Government agencies deal with a colossal number of documents everyday. With an ever-increasing need to improve the efficiency of operations, the central and state governments are testing waters by outsourcing or (setting up in-house) document management (DM) functionalities. For example, the zonal head-office of the State Bank of India at Hyderabad has implemented DM for managing circulars. Before the deployment, the bank received up to 600 circulars everyday from its head office, the RBI as well as other stake-holders. DM digitized the circulars; the vendor is also hosting them on a central Web server and sending periodic updates by CD to places where the Internet is not available. Elsewhere, Mumbai-based Dess Solutions has deployed a press clippings management software for the publicity department and the Chief Secretary’s office in Mantralaya, Maharashtra. The company has sold licenses for 10 users who manage up to 100 clippings everyday. Some of its other clients include Air India, the Trademark Registry and the Bombay Stock Exchange. Meanwhile, the New Delhi-based Logicsoft has customized the implementation of earlier versions of manageOffice at Power Intranet (Ministry of Power). It has enabled an office automation system including workflow, DMS and file tracking. It also provides a CD-ROM database as a ready-reckoner on the Indian power sector. And there are more opportunities. For instance, the All India Council for Technical Education has invited bids for the development and implementation of a DM system across its offices for in-house use.
According to Frost & Sullivan, the global security industry is estimated at $150 billion. The market for India is estimated at more than $500 million, and growing at about 30 percent annually. Of this, the
cover Story “Always target an individual establishment. The deal size can be small, `20 lakh-`25 lakh, but it goes by limited inquiry”
“While the smaller projects can easily be grabbed by tier-2 partners, there also exists a lot of scope for winning deals on the outsourced model”
ANANTHRAM VARAYUR
Visak RAMAN
MD, Webcom IT
Regional Director, Fortinet
electronic security market is estimated to be in the region of $227 million and growing at a CAGR of 9 percent. Recent government notifications are fuelling further growth. These include the one from RBI asking all banks to install IP-cameras at their branches and ATMs. Indian Railways has also announced the deployment of cameras at all railway stations over the next five years. And the new Terminal 3 at Delhi International Airport has implemented IndigoVision’s end-to-end IP video solution for its 3,700-camera surveillance system—the largest single installation of an IP video system in Asia. While the scope for mid-market resellers to bag these projects directly is low, many IT partners have figured out ways to create consortiums, or piggy-back on government SIs. Partners can also learn from MK Infosystems which tied up with BHEL to penetrate the government vertical. “Through referrals, we are now working with several state police departments and paramilitary agencies,” informs Manoj Bisht, CEO, MK Infosystems. He continues, “We won a contract to create an intelligent surveillance system for the Indian Parliament in 2009. The project is worth `40 crore, and we are partnering Bharat Electricals and NICE for the same. Our share of the pie is about `6 crore.” He says that the Commonwealth Games provided a major boost in demand for security surveillance. “The government put in place strong perimeter security and surveillance for all stadiums and the games’ village, and that was also a large project for us.”
9
Storage & Infrastructure
As part of the e-governance plan, a lot of government departments are opting for automation. “One example: automating and integrating municipal councils across the country is a focus area across state governments,” says Subroto Das, COO, EMC India & Saarc. Quoting a 2010 EMC-sponsored IDC study titled The Digital Universe in India, Das points out the significant growth of digital information in the country. “The study estimated that digital information would grow from 40,000 petabytes to 2.3 million petabytes over the next decade (2010 to 2020). This info explosion has created huge opportunities for information infrastructure across verticals, and the government is going to be the biggest.” With government records going digital, IT storage opportunities are growing. Even small organizations are taking the initiative to buy NAS boxes. “These are smaller requirements, and the spend on storage
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is typically less than `10 lakh,” notes DR Bhaskaran, Director, Sales, Mach Data System. In addition, most government departments have started the process of building network infrastructure. Secretariat LAN projects have started rolling out across the country. “While the smaller projects can easily be grabbed by tier-2 partners, there also exists a lot of scope for winning deals on the outsourced model, especially in rural areas,” opines Raman of Fortinet.
10
Video Conferencing
Mounting costs and shrinking budgets are forcing governments to use technology optimally. This includes video, which has changed the landscape of collaborative technologies. For instance, the Government of India has undertaken a nation-wide project to connect jails and district courts. The tele-conferencing system allows judges, legal professionals, court officials, inmates and witnesses to seamlessly communicate face-to-face in real-time. Ananthram Varayur, MD, Webcom IT, says that tier-2 partners have come a long way in video conferencing (VC) deployments in government organizations. “3-5 years back there was a lot of resistance. We had to tell a senior scientist that he should cut down on travel and that his life was very precious. That turned out to be a good pitch because the scientist also thought that he should not waste his time at the airport or in unnecessary travel—and that was how we first deployed VC in a defense establishment.” Varayur has a few words of advice for tier-2 partners who want to penetrate the government segment. “Always target an individual establishment. The deal size can be small, `20 lakh-`25 lakh, but it goes by limited inquiry. In fact we deployed a complete boardroom at DRDO last year for `55 lakh. The solution involved VC and audio, and can accommodate 25-30 people.”
Conclusion Tier-2 partners have struggled and come a long way, and there are ways to break into the circle of large SIs in the government segment. There are interesting case studies which can be learning material for partners who are willing to enter the space. Perseverance and patience are the essentials required because the time-cycle of a government project extends much longer than any private sector project, and this also impacts the credit and payment cycles. As newer areas open up, partners will also need to scale up their skill sets and learn to work jointly so as to co-exist. n
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Made in Indore He could have joined the family business. He could have worked as an engineer. Instead, he chose to set up an IT business of his own—and succeeded n abhijeet mukherjee
R
akesh Agarwal, CEO, Pioneer Computers, could have fiddled with machines and systems as an engineer. Instead, he chose to follow his heart— and set up a business of his own. Today, after more than a decade of perseverance and hard work, Pioneer is one of the few names to reckon with in the distribution space in Madhya Pradesh (MP). “I’m an engineer, and so I had the option to work as one. Besides, my family is into cloth wholesaling, and I could have joined them. But I wanted to be an entrepreneur, and that is what I am today,” says a proud Agarwal. Now 41, Agarwal founded Pioneer Computers and
started sub-distributing computer components in 1996. “After completing engineering from Indore University in 1992, I joined Dess Computers, an IT firm in Mumbai. During the years I spent there working as a sourcing and account executive, I was fascinated with IT hardware, and how it was distributed. That was when I decided to start my own business and shifted base to Indore,” he recalls. Agarwal founded Pioneer with an investment of `10 lakh which he borrowed from his father. “I did not save much from my salary at the IT firm. My elder brother and I rented a 150 sq ft office, and used most of our money to establish the company and procure stocks,” says Agarwal. Pioneer started by sub-distributing brands such as Nvidia graphics cards, Microtek monitors, Seagate hard disk drives and Mercury products. “In the first year itself Pioneer clocked `50 lakh in revenue by sub-distributing IT products to resellers,” Agarwal says. “In those days, there was not much competition in hardware subdistribution, and the profit margins were also good.” Agarwal spent 3-4 years consolidating the business; the next big leap came in 2000. “I wanted to expand. Since I had established my footing in the subdistribution space in Indore, I wanted to include more brands and reach out to more consumers. We therefore started reselling software licenses, especially for Microsoft OS. Simultaneously, we opened a new office in a larger 2,500 sq ft place in Indore.” In 2005 he decided to move from sub-distribution to regional distribution, and purchased a 7,000 sq ft space which doubled as a warehouse and an office. With aggressive marketing and a TAT of 24 working hours, Pioneer began acquiring a reputation for its prompt services in the Indore market. The same year, it became an authorized distributor for Intel. The company entered the retail segment in 2007-08 by setting up a 3,000 sq ft showroom in Indore called E-Mall.
“Systems automation has given us stronger visibility about our channel partners’ business. By using CRM we regularly plot the buying and payment patterns of each reseller we deal with” 32
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Role model
2011 2010
2007 2005
2000
1996
closely with them to bring new and “Our entry into retail proved to MILESTONES high-end products to the market,” be the key thrust for growth in informs Agarwal. 2007 as it added 10 percent to He also believes in keeping his our turnover. We also expanded Launched Pioneer Computers employees abreast of the latest our sub-distribution portfolio by know-how, and provides them adding Sony notebooks, among other products. We undertook a Expanded his business, added vendor-certified training. Recently, he organized a training program major channel expansion program brands like Microsoft by HP and IBM for 10 Pioneer by adding nearly 700 new resellers employees. across smaller cities in MP. The Ventured into regional Pioneer has also added brands gamble paid off as Pioneer clocked distribution with Intel such as Dell, Canon and Compaq `46 crore in revenue—a 19 percent increase in top-line over the `37 Set up a 3,000 sq ft showroom to its portfolio. “Though I think at present we have almost all major crore we earned in 2006-07,” in Indore called E-Mall brands in our sub-distribution Agarwal discloses. portfolio, we are definitely open Pioneer also experimented with Honored by MPTCDA for to more brands if need be,” adds opportunities in the BPO segment outstanding services Agarwal. in 2009-10, but soon realized that it 50 percent of Pioneer’s revenue was not its forte. “We were looking Pioneer revenue crossed in the last fiscal came from the at the potential of call center `60 crore mark peripherals segment, while 37 services, but the idea with which percent came from re-distributing we started the new service did PC components. not fructify. We then decided that outsourcing was the best option, and that it was better to concentrate on our primary business of sub-distribution,” says Agarwal. Future business Pioneer aims to cross the `75 crore mark in 2011-12. Its roadmap for the next three years includes reaching a Current business turnover of `100 crore as well as expanding outside MP. In FY2010-11 Pioneer achieved a turnover of `60 crore. “After VAT becomes uniform across the country, we plan Its retail business contributed 10 percent of the revenue to expand to other cities in MP and even outside. I think while sub-distribution and distribution contributed the for us the future lies in the notebook category which lion’s share. The company has been growing at a CAGR gives us a substantial YoY growth of 50 percent. We have of 35 percent for the past three years. Today, Pioneer also received praise from HP for selling a substantial has 25 employees, out of whom 10 are service engineers volume of notebooks this year. I think this will continue while the rest are sales and accounts executives. to be a driving factor for us,” says Agarwal. He believes “On the sub-distribution front we intend to include that such momentum in the notebook category will help more lifestyle products because that’s where the growth the segment to stay ahead of tablets despite all the hype will come from. The focus on high-end products will tablets have created. continue, and we will keep building on our solutions Five years down the line Pioneer expects to cross and services capabilities,” says Agarwal. `150 crore in turnover. “Product-wise I do not see much The company has set up a managed contact center scope for expansion, but technology-wise we would for the Madhya Pradesh Electricity Board, and provided include more tech products as that is the order of the connectivity solutions to the state’s Indore & Madhya day,” Agarwal states. Pradesh (IMP) grain market connecting all its 100 offices at the taluka level though WAN optimization. With an inventory management and CRM system in Personal life place, Pioneer is now focused on enhancing profitability. During his leisure hours Agarwal spends time thinking “The systems automation has given us greater about strategies to increase his business, otherwise he productivity as well as stronger visibility about our loves to travel and spend quality time with his family. channel partners’ business. By using CRM we regularly “My favorite destination is Switzerland because of its plot the buying and payment patterns of each reseller we exotic locales. I have been there twice, and will continue deal with. We have also identified a set of partners who to visit the place time and again. Mahabaleshwar is are always keen to push high-tech products, and work another place where I like to go and spend time with my family.” He has also received accolades, once in 2000 and again in 2010, from the Madhya Pradesh Telecom and “After VAT becomes uniform across the Computers Dealers Association for his outstanding services. country we plan to expand to other cities As for role models, Agarwal admires Kalpana Chawla in MP and even outside. I think for us the and Rajiv Gandhi. “I respect Gandhi for the vision he future lies in the notebook category” had for India and what he did for IT in the country.” n
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tech focus Microsoft’s Skype Acquisition
Burning Questions N
ow that Microsoft’s pulled the trigger on an $8.5 billion acquisition of Skype, the potential Microsoft-Skype pairing has raised at least as many new questions as answers. Microsoft, it seems, has a lot to make clear about how it plans to integrate Skype, how it plans to make Skypeled opportunities available to the channel, and why it made such a dramatic statement—it’s Microsoft’s largest acquisition ever—right now. Here’s a look at the issues that are emerging.
Did Microsoft overpay for Skype? As soon as the $8.5 billion number was confirmed, the chorus of Twitters hit a steady crescendo: did Microsoft overpay? It’s a hefty sum for Skype, which, as many Microsoft investors noted, is a company that not only lost money last year but is also a service many users enjoy for free or close to free. Microsoft has a history of overpaying for acquisitions; its widely referenced 2007 buy of aQuantive, an online ad firm, cost $6 billion and is perceived as a flop. Many analysts cannot fathom how Skype got a valuation of $8.5 billion. They opine that there could have been a silent bidding war and Microsoft bought it to stop someone else from getting it.
rivals, particularly Cisco and its WebEx offering. However, the challenge for Microsoft on the enterprise front is that Skype, despite its usage by businesses the world over, isn’t an enterprise-grade product. While having some nice communications features, it is still regarded as a consumer-grade solution. Microsoft, it’s easy to forget, is a part-owner of Facebook, and thus will have some pull in the baking of Skype features into Facebook. Facebook with voice and video would be more powerful, and it will be interesting to see if the Microsoft-Skype duo becomes a trio with Facebook.
Is it all just to spite Google?
How much will Microsoft limit Skype?
Microsoft and Google are both arch-nemeses. Google was said to be interested in acquiring Skype, just like Facebook, and at one point, Cisco and others were said to be too. Google has been gaining traction, albeit slowly, with Google Voice, its IP communications service and Skype competitor. Skype is undoubtedly a major brand and hugely popular with consumers. Microsoft on the other hand was badly in need of another consumer foothold, and a communications foothold. Buying Skype solves both those problems, and puts a Microsoft product on any phone—Windows, Apple, Android or otherwise—that uses Skype mobile. Signed, sealed and delivered as a big fat middle finger to Google? But Microsoft will never admit that.
Microsoft CEO Steve Ballmer said during the press conference to announce the acquisition that Microsoft will continue to support and invest in Skype clients on nonMicrosoft platforms. Skype has relationships with a large number of unified communications and video entities. The question is if Microsoft will allow its partners to included Skype in an implementation where the rest of the UC sale is of Microsoft’s UC competitors, like an Avaya or Cisco or Polycom. That’s key to getting Microsoft into competitors’ sales through the back door, but many solution providers are wondering just how far that support will carry.
Where and how will Microsoft embed Skype? Microsoft can now potentially embed Skype audio and video calling into as many Microsoft products as it sees fit, including Bing, Outlook and Web mail, and Office 365, Microsoft’s well-reviewed suite of cloud-based office apps. Windows LiveMeeting, Microsoft’s conferencing platform, is another obvious choice. The potential integration there is enough to make Microsoft a more direct competitor to conferencing platforms from its UC
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How will Microsoft keep carriers happy? Skype has long had a tricky relationship with major telecom carriers, who see the placement of Skype VoIP services, especially on mobile devices, as a low-cost threat to the business that keeps them afloat. Microsoft will have a tricky line to walk now, especially since it partners with a number of carriers behind its Windows Phone platform and the devices that use it. During the press conference, Microsoft CEO Steve Ballmer simply said that Microsoft’s partnerships with carriers for its Windows Phone platform will remain fundamental. n
tech focus When cloud turns to vapor The cloud is not infallible. Even the biggest of the big sites go down every now and then n crn NETWORK
C
loud computing has changed the face of IT. But every once in a while the cloud goes down. It shuts off. It vanishes. Amazon’s recent cloud outage has brought to light the impact cloud outages can have. Users expect their cloud apps, platforms and infrastructure to just work. And when they don’t, it’s a jarring realization. Here we take a look at recent cloud outages and what caused them.
Amazon Web Services On April 21, 2011, Amazon’s Elastic Compute Cloud and Relational Database Service suffered sweeping outages and service interruptions for customers using Amazon’s North Virginia data center, aka Availability Zone. Initially, the Amazon outage took down several popular Web sites like Foursquare, HootSuite, Reddit and Quora, plus a bunch of others. Service hiccups from Amazon’s cloud outage persisted for several days, angering users. Amazon’s lack of communication around the cloud outage prompted calls for transparency. While Amazon is still investigating the root cause of the cloud outage, the company said that the issue stemmed from data getting “stuck” within its Elastic Block Storage service. Amazon has not said how many users were affected or how affected users will be compensated for the downtime.
Yahoo Mail Yahoo Mail, the search company’s cloud-based e-mail service, went down May 5, 2011. Yahoo could not say how many users were impacted when its popular e-mail service was down for several hours. Yahoo acknowledged the outage on its Twitter feed. “Yahoo Mail is currently inaccessible to some users. We are working to correct the issue and restore all functionality immediately,” Yahoo said. At the time of this writing, Yahoo had not said what caused the mail outage.
Google Gmail Google’s widely popular cloud e-mail service Gmail suffered a massive outage in late February 2011 that wiped out thousands of Gmail inboxes. Gmail users woke to find that messages in their Gmail inbox, folders and other data had vanished. At its peak, the outage affected roughly 150,000 Gmail users.
In the days that followed, Google apologized for the outage, calling it a “scare.” Google said a software bug that was introduced by a storage update had caused the downtime. Google Gmail was back to full service within a few days.
Microsoft Windows Live Hotmail Microsoft’s Windows Live Hotmail cloud-based e-mail service rang in the new year with an outage that temporarily deleted inboxes of more than 17,000 users, an outage that persisted for more than four days. The Windows Live Hotmail outage started on December 30, 2010 and continued into January 2011. Users said they logged into their accounts and noticed that e-mail, folders and other data had vanished and could not be recovered. Microsoft said it had fixed the problem by January 2, but users reported issues for two more days. Microsoft blamed the Hotmail outage on a load balancing issue between Hotmail servers.
Skype Popular Internet voice and video calling service Skype was knocked offline for several hours in late December 2010. The Skype outage affected millions of users of Skype’s Web-based phone and video calling service. The outage lasted about three hours before Skype services slowly returned to normal. Skype blamed the outage on a lack of “supernodes,” computers that act as phone directories on Skype’s network. A number of supernodes failed because of a software issue, Skype said.
Twitter Known for sporadic outages, usually for minutes at a time, Twitter suffered several outages throughout much of June 2010, spates of downtime that continued through July. At the time, the cloudbased micro-blogging monster blamed the outages on major world events such as the FIFA World Cup 2010, saying that global interest boosted activity to unsustainable levels. The trouble started on June 11 when Twitter suffered poor site performance and a host of errors due to high capacity. Issues persisted on June 14 with several hours of ups and downs. Twitter said that periodic outages could continue through the beginning of July, but that it was making internal network adjustments to avoid future problems. n
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gold standard of Channel satisfaction
The annual CRN Channel Champions 2010 Awards for 25 different product categories were presented at an exclusive ceremony held on April 28, 2011 in Mumbai
Leading channel partners and channel chiefs following the proceedings of the CRN Channel Champions 2010 Awards presentation ceremony 36
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B Raghavendran, VP and Head, Partner Organization, Cisco, receiving the Channel Champions trophy for Enterprise Networking from Kedar Shah, CEO, Nirmal Datacom
Dhaval Valia, Associate Publisher and Executive Editor, CRN, sharing the Methodology and Process for the Channel Champions 2010 survey
Gary Yang, MD, D-Link, receiving the Channel Champions trophy for SMB Networking from Harinder Salwan, MD, Tricom Multimedia, and Secretary, ISODA
Sunil Dutt, VP, PSG, HP, receiving the Channel Champions trophy for Commercial PC segment from Krishnan Jaishankar, MD, Ingram Micro
Neeraj Sharma, President, IPG, HP, receiving the Channel Champions trophy for Workgroup Printer from Vinod Mulchandani, CEO, Aarvee Computers
Dhaval Valia, Associate Publisher and Executive Editor, CRN, presenting the Channel Champions trophy for Structured Cabling to KR Naik, Chairman and MD, Smartlink Network Systems Anoop Nambiar, Country Manager, Business Partner Organization, IBM, receiving the Channel Champions trophy for Server from Cherian Thomas, Director, Wysetek Systems Technologists
Deepak Jadhav, CEO, VDA Info Solutions, presenting the Channel Champions trophy for Network Storage to Alok Tandon, Director, Partner and Alliances, EMC
Anand Naik, Director, Technology Sales, Symantec, receiving the Channel Champions trophy for Client Security from Paresh Shah, CEO, PH Teknow and Treasurer, ISODA
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Kailash Shirodkar, Publisher and Director, UBM India, presenting the Channel Champions trophy for Network Security to Bhaskar Bhakthavatsalu, Regional Director, Check Point
Gaurav Burman, Director, Transactional Business, APC, receiving the Channel Champions trophy for Commercial UPS from Suresh Ramani, CEO, Techgyan
Sunil Dutt, VP, PSG, HP, receiving the Channel Champions trophy for Thin Client from Devarshi Buch, Director, Omnitech Infosolutions
Siddharth Jatania, National Sales Manager, Transactional Business, Acer, receiving the Channel Champions trophy for Consumer Desktop from Ketan Patel, CEO, Creative Peripherals
Kailash Shirodkar, Publisher and Director, UBM India, presenting the Channel Champions trophy for Virtualization to T Srinivasan, MD, VMware India
Ram Prakash Lakshminarayan, President, Tally, receiving the CRN Channel Champions trophy for Software Application from Vikram Seth, CEO, Software@Work Sunil Dutt, VP, PSG, HP, receiving the Channel Champions trophy for Consumer Mobile PC from Anil Jagaria, Director, Savex Computers
Nand Kumar, VP, Sales, Kaseya, receiving the Channel Champions trophy for Infrastructure Management Software from Ajay Sawant, MD, Orient Technologies
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Neeraj Sharma, President, IPG, HP, receiving the Channel Champions trophy for Consumer Printer from Pravin Dhoka, CEO, Ortek Computers, and Board of Directors, TAIT
Rohan Kadam, Manager, Corporate Marketing and PR, Asus, receiving the Channel Champions trophy for Motherborad from Girish Rathod, CEO, Compex Systems
Conrad Serrao, Regional Head, West, IT Business, Samsung, receiving the Channel Champions trophy for Flat Panel Display from Anand Karapurkar, Director, Infobahn Technical Solutions
Rajesh Khurana, Country Manager, Seagate India, receiving the Channel Champions trophy for Hard Disk Drive from Dushyant Mehta, Chairman and MD, Mediaman Infotech
Gary Yang, MD, D-Link receiving the Channel Champions trophy for Home Networking from Rajesh Kothari, CEO, Blue Chip Computers and Chairman, ISODA
Kailash Katkar, MD and CEO, Quick Heal, and Abhijit Jorvekar, VP, Sales and Marketing, Quick Heal, receiving the Channel Champions trophy for Antivirus from Rushabh Shah, CEO, Graham Information Systems, and Vice President, TAIT
Vishal Parekh, MD, Kingston, receiving the Channel Champions trophy for Memory Module from Salil Warior, Group Commercial Director, UBM India Kailash Shirodkar, Publisher and Director, UBM India, presenting the Channel Champions trophy for PC UPS to Gaurav Burman, Director, Transactional Business, APC
B Suryanarayanan, Director, Sales and Marketing, Intel, receiving the Channel Champions trophy for Microprocessor from Champakraj Gurjar, CEO, Maxtone, and Board of Director, TAIT
Salil Warior, Group Commercial Director, UBM India, giving the vote of thanks at the conclusion of the Awards presentation ceremony
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New Products Transcend Portable HD
T
ranscend has launched its USB 3.0-powered StoreJet 25H3P in India. StoreJet 25H3P boasts of 1TB of storage capacity, and comes bundled with Transcend Elite data management software which allows users to keep their digital content organized, protected and up-todate. It is encompassed in a shockproof case, has a durable antishock silicon cover to protect against accidental drops, and also has an anti-slip rubber enclosure. The company says that the new hard drives have undergone the US military drop tests. Priced at an MRP of `9,900, the drive comes with a 3-year warranty, and is available through Transcend’s authorized distributors.
Seagate 1TB HDD
S
eagate has launched the world’s first 3.5-inch hard drive featuring 1TB of storage capacity per disk platter for both the home and office segment. Seagate’s GoFlex Desk delivers storage capacities of 1TB, 1.5TB, 2TB and 3TB, and an area density of 625 Gigabits per square inch. The 3.5 inch Barracuda desktop hard drives would be available for distribution by mid-2011. Each drive includes an NTFS driver for Mac, which allows the drive to store and access files from both Windows and Mac OS X computers without reformatting. The products come with a 1-year warranty. They are priced at `9,000 for 2TB and 15,500 for 3TB, and are available through authorized distributors.
Genius Wireless Mouse
I
nspan Infotech has launched the Genius Traveler 6000, a wireless mouse. The mouse offers a 1,200 dpi optical engine. It is designed with one AAA battery and a power switch for extended battery life. It also has a lift-up storage space and three buttons with a scroll. The mouse is compatible with Windows 7, Vista, XP and Mac OSX. Available in three popular colors, Diamond Black, Royal Blue and Ruby Rose, it is priced at an MRP of `990 and comes with 3-year warranty.
Simmtronics HDDs
S
immtronics has launched its new hard disk drives globally. The drives are available with storage capacities of 80GB, 120GB, 160GB, 250GB, 320GB, 400GB, 500GB, 750GB, 1TB, 1.5TB, 2TB and 3TB. They are available in both SATA and PATA formats. The 3.5inch hard disk is based on the capacity, performance and power (CPP) concept, and is meant for desktops. The product comes with 3-year warranty, and is available across India through its 18 offices and authorized channel partners. The price of the 500GB and 1TB hard disks are `1,900 and `3,000 respectively.
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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Key Intel execs quit
Personal
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here seems to be a mass exodus of senior executives from Intel India. CRN has learnt from highly placed sources that six senior executives have either left or are serving their notice period. While the reason for their exit is yet to be ascertained, the news that half-a-dozen senior executives are quitting has started intense speculation among Intel channels since last week. Vinay Chopra, who was General Manager in charge of OEM business, is believed to have already left the company. Another Intel veteran, Rajesh Gupta, who was Director, Sales & Marketing, for the north and east, and held the same position for the western Rajesh Gupta region before that, is said to be serving his notice period. Gupta has spent over a decade at Intel India, and was earlier in charge of technical support. Also serving his notice period is Gopal Swaminathan, Director, Sales & Marketing, in charge of south India and Sri Lanka. Swaminathan has been with Intel since December 2002, and was in charge of the OEM business before taking over his present role. The most surprising name doing the rounds is that of Ashok Nair, South Asia Channel Business Manager, who is also known to be serving his notice period. Nair has been heading Intel’s channels since 2006, and has been with the company since 2004. n
MRP woes continue
M
RP sticker woes continue unabated for partners. With select models of HP printers going into shortage again, many partners are being forced to buy and therefore sell at prices above MRP. There’s little that HP is able to do about it. Recently, one of the smaller partners in Bengaluru unwittingly supplied printers to a public sector organizations at above-MRP prices. No one seemed to have noticed the fact that it was billed above MRP. Then an auditor at the PSU spotted it, following which the person in charge of procurement and approval of the transaction was suspended. The partner who supplied the printers has been disqualified from the supplier list of the company. CRN has raised this issue time and again. A year and half back some partners were fined because MRP stickers missing from Dell notebooks, in Tamil Nadu. Prior to that, many Kerala- and Delhi-based partners were raided for carrying stock without MRP stickers. n
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“Good friends are precious” Indrajit Sabharwal, Managing Director, Simmtronics Semiconductors, started the company in 1992. Earlier, Sabharwal worked as Senior Consultant with IDC in 1988. The major clients that he served included Modi Xerox, HP and Digital.
Indrajit Sabharwal
If not in the IT industry: I would have opened a hospital or a restaurant/ hotel.
Biggest passion: Food. I want to taste every kind of chocolate existing in this world. Behind the wheels: My BMW. Gadgets I can’t do without: My cell phone and laptop. Weekend activities: Relaxation. I like to spend time working out at a gym, or with a glass of chilled beer. Favorite holiday destination: Goa and New York for their exotic locales. Hate the most: Liars, and people who don’t meet commitments. Favorite movie: I like watching all types of English and Hindi movies. Role model: God. He motivates me to handle all situations. Ultimate ambition: Work hard and to be known as the best in whatever I do. Wildest thing I have ever done: Raced bikes at amazingly high speeds. Thing I most want to do in life: I would love to race bikes and cars. If I became the Prime Minister: I would ensure food for everyone everyday, and also try to recover all the black money. Celebrity I would like to spend a day with: George Bush. One person I want to meet: Sachin Tendulkar, because I love cricket. Your deepest and darkest fear: Losing good friends. They are precious and cannot be bought with money. n
— CRN Network
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