The NPA Drill / 50
Digital Business / 64
Leisure / 86
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Vol XXX No 5
I
March 15, 2012
The Business of Infotech
DQ-CMR Customer Satisfaction Audit
CSA Storage ..................................................................IBM Servers....................................................................IBM IT Servcies........................................... HCL Infosystems Enterprise Software................................................ SAP Laser Printers & MFDs..............................................HP Notebooks.............................................................. Dell Desktops...................................................................HP Security..........................................................Symantec
l e ad e r s
S e g m e nt s
2012 S u r v e y o f 4 0 1 l a r g e e nt e r p r i s e C I O s 92 pages including cover
Special Subscription offer on page 74
Contents March 15, 2012
COVER STORY DQ-CMR Customer Satisfaction Audit
14
2012
Walking the Talk
Vendors of all hues aggressively worked on multi-pronged customer satisfaction strategies. In the end those who walked the extra mile emerged as winners
Segments
Leaders
Storage ........................................................................ IBM Servers.......................................................................... IBM IT Services................................................ HCL Infosystems Laser Printers & MFDs.....................................................HP Enterprise Software...................................................... SAP Notebooks...................................................................... Dell Desktops............................................................HP-Compaq Security............................................................... Symantec
40 Tilt in the Market Dynamics
| March 15, 2012
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56| STeP-IN Forum: Strengthening the Community
44 CIO of the Month Change: Call of the Day Defined Structural Alignment Required for Cloud Samrat Ashim Das — CIO, Tata AIG
The combination of key note speakers and brainstorming sessions on innovation, new technology, etc, made SteP-IN Forum a great success 60| ISA Vision Summit 2012: Collaborating with the Government
Be Open to Change —Dr Neena Pahuja CIO, Max Healthcare
It’s All About Mindset Change Ritu Madbhavi — SVP, information technology, Draft FCB Ulka Group
Not only did the conference witness just government participation, but also some key announcements from both union and state governments
50| Non-performing Assets: Collections as ‘Customer Care’
The companies need to develop and execute strategic plans that leverage the contact center, enterprises, etc, to meet the demands of the consumers
62| Business Strategy: Through the Looking Glass
52| IT in Financial Inclusion: An All-round Strategy
Low-cost technology strategies for banks to implement and improve the effectiveness of their financial inclusion initiatives, going beyond token enrolment
The camera business is turning out as a major thrust area for Canon even in India
Leisure 86| DQ Snippets: Learning Business Ethics 87| Roundup: Celebrities Steal the Show at NASSCOM ILF 2012
While it was business as usual, the sentiment was neither too upbeat nor gloomy as in 2009 88| Art: India’s Affair with Art
digital business
With big and renowned names descending on the Indian Art Fair, to showcase their artworks, art is being consumed both visually and materially by one and all. Class distinctions, as prominent earlier, have been shown the door
64| E-commerce: India E-shining?
India is all set to reach new horizons in ecommerce are the industry players ready too? 68| Entrepreneur Story: Hungry for More
The author reflects on his entrepreneurial journey and risk-oriented ideas that quenched his appetite for success 70| Kaleidoscope: Top Social Media Influencers
REGULARS
It’s the time to spot people and brands in different categories who ruled the social media...
Edit..........................................................................8
72| E-commerce: Will the Boom Sustain?
Inbox.....................................................................10
E-commerce is a very exciting space for today’s online community, and India’s young start-up economy is going along for the ride
Online Content.......................................................6
Ganesha................................................................12 News............................................................... 76-85 Afterthought.........................................................90
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March 15, 2012 |
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A Giant Step?
F Ibrahim Ahmad
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or me one of the biggest and the most heart warming news was Akhilesh Yadav’s (son of Mulayam Singh Yadav, Samajwadi Party chief) assembly election manifesto, which talks about promoting English in schools and colleges, giving tablet computers to students, and building infrastructure. Frankly speaking, this is what Uttar Pradesh (which also happens to be my state and is said to influence political leadership and fortunes for the entire country), needs and wants. I am not promoting any specific politician or political party, because by the time this edition of Dataquest would have reached readers, new state governments would have been formed. But I am sure that information technology, education, and infrastructure would have moved several notches up in their overall game plan. It was not long ago when Mulayam Singh’s diatribe against the English language and computers had shocked the Indian IT fraternity. Frankly, this is a big development. If you look at most of the pre-election analysis in the media, change for development is what citizens want. And this is what is apparently deciding their votes. While some other states like Karnataka and Tamil Nadu have offered election sops around infotech for several years, it is nice to see such mindset shifts happening in Uttar Pradesh. The UP politicians are thankfully realizing the changing aspirations of Indians. And gearing up accordingly. Once again, if I take Akhilesh Yadav as an example, it is very interesting and heartening to see that his advisers for this round of elections include very young IT savvy professionals who have experienced the world beyond the villages and towns of Uttar Pradesh. They know about the opportunities that are coming out of globalization, and understand the aspirations of common people. These people are convincing Akhilesh, in real time, about the power of IT and English education as a tool to touch people’s heart. The IT industry also has a role it can play in helping this new generation of political leaders. These young and aspiring politicians, with a sincere desire to bring positive change (I believe) will not be able to deliver many of their promises if the industry does not support them in terms of making technology affordable and accessible to many of the people in these states. And this is where innovative business models have to be thought of. Also, investments need to flow into these places. Delhi, Bangalore, and Mumbai are already cluttered. If Uttar Pradesh can change, I think there is hope for everybody. Besides the country as a whole, this should be big news for the IT industry too. It might be a single step, but it could be the giant step.
Vol XXX No 5
March 15, 2012
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FEBRUARY 29, 2012
inbox
Internet Momma in China vs India vs US
This is with reference to your article ‘Internet Momma in China vs India vs US’ (Dataquest, February 29, 2012). This article has rightly focused on the concept of ‘censorship’, which has been deliberately imposed by the gov-
ernment and similar institutions on all types of media. The entire methodology of controlling and suffocating the real concerns of a society is undemocratic and restrains constitutional rights such as ‘freedom to speech and expression’. Similarly, targeting social media websites such as Facebook, Twitter, etc, should be seen along similar lines. I agree that absolute freedom is an impossible task to achieve, but constant surveillance and filtering methods as adopted by China can surely kill the real issues. Therefore we need to make a crystal clear distinction between indispensable need for surveillance and undemocratic measures of controlling. Deepshikha, New Delhi
Solving the Desktop Quandary This is with reference to the ‘Solving the Desktop Quandary’ (Dataquest,
February 29, 2012). The adoption of virtual desktop virtualization has made employee location immaterial. As rightly mentioned in your article, virtualization will heighten enterprises’ revenue and lessen the cost incurred. Hence desk virtualization has proven to be a win-win situation. As an employee, I feel virtualization, especially in desktop, will surely solve a lot of our issues also. Sanjukta, Mumbai
Illegal Recycling: Another danger in India’s E-waste Story I recently read you article on Dataquest website titled ‘Illegal Recycling: Another danger in India’s E-waste Story’ (Dataquest, February 15, 2011). I decided to write in because I found the article very well researched and insightful. I am currently working in the same industry,
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and as such could see that you have done a thorough research and got the views from a wide variety of industry players—NGOs, recyclers and OEMs. One point which stood out for me was the fact that unorganized players are able to offer better financial incentives to consumers, and as such are the first choice for the majority of the people who are not very climate conscious. We at PriceShred, a reCommerce platform, are tackling this problem by taking a very different approach, by focusing on the reuse aspect of the e-waste management problem.
We allow people to sell their used mobile phones (we will move into other consumer electronics soon) to us for cash, these phones are then repaired and refurbished by us, and given a new life. We then sell these phones. We have been live for 2 months, and have done close to 50 transactions. And based on my interaction with our customers, we see that (cash in our case) people with some financial incentives provided are more than willing to be responsible towards the e-waste. We educate our customers about our processes and how we responsibly take care of all the phones, such as by reusing phones which have life left and recycling phones which are at the end of their life with certified recyclers. Do let me know your thoughts on PriceShred’s approach to this problem. Your feedback and suggestions will be much appreciated.
Abhinav Sarangi, co-founder, PriceShred.
Freedom is Not Free
com via Email
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February 15, 2012). Exploding a matter to an unimaginable extent has always existed in the world. Most of the petitions are targeted to gather attention from media and people. Undoubtedly, social networking websites have redefined our lives. To some extent, misuse of such websites also exist, but the challenge of the day is to filter serious concerns from cheap stunts and come out with structural changes. We should also not allow entertainment of undemocratic steps in the name of secularism and tolerance. We have seen artists being targeted by providing convoluted arguments laced with manipulations and designs. Therefore we need to create a platform to hear each and all to create judicious decisions, which will be effective in the long run. Sourav, Bhopal via Email
En Passe
This is with reference to your article ‘En Passe’ (Dataquest, February 15, 2012). It is very true that mobility devices have overtaken the personal computers. The market share of desktops have fallen drastically. It is because laptops are more affordable. As a consumer, even I would prefer a laptop over a desktop. Assembled PCs are surely losing their hold. This article had many facts. Thanks for the information. Vidushi Sharma, New Delhi
Raising the Bar
skills through ICT-enabled courses. Only then we can see the resurgence of real India! Amit, New Delhi
Advertisement Index Adv.
Pg. No.
Exide www.exide4u.com
23
Galgotia galgotiacollege.edu
29
Google www.google.co.in
03
IBM www.ibm.com
09
In House TR www.emtechindia.in
49
Matrix www.MatrixComSec.com
13
Microsoft www.microsoft.com
IFC
Oracle www.oracle.com
IBC
QuantumLink Communications www.qlc.in
17
R P Infotech www.rpchirag.com
39
Safenet (Non bleed adv) www.safenet-inc.com
57
Schneider Electric www.schneider-electric. co.in
07
Toshiba e-studio www.estudio.com
35
Tulip www.tulip.net
BC
This is with reference to your article ‘Raising the Bar’ (Dataquest, February 29, 2012). This was an eyeopener and a well-written article. ICT has already become an integral part of many private educational institutions, this change has decreased manual work and has inculcated new energy among all. But the real challenge is to bring ICT to the government institutions. We need to target the common masses by empowering and enhancing their visit www.dqindia.com
March 15, 2012 | 11
ganesha
Technology Transforming Music! The days of melodious and honest music are over, what we have now is a combination of lesser talented artists minting money by covering up their lacunae through innovations in technology DR GANESH NATARAJAN The author is vice chairman & CEO of Zensar and co-chair of the National Knowledge Council of CII. He can be reached at maildqindia@cybermedia.co.in
S
ometimes the idea for an unconventional thinking on IT verticals comes from the most unexpected sources. Chatting with Shubha Mudgul, a veteran folk singer, and her partner Aneesh Pradhan in Pune late last year, the idea of a technology conclave celebrating the role of IT in music came up and was designed and delivered brilliantly by the dynamic duo this week. The digital music revolution today is epitomized by Apple; and the iMac and iTunes have made the 99% song download a possibility and placed Digital Rights Management at the very center of a new industry ecosystem. Already Verizon and AT&T are designing Long Term Evolution (LTE) networks that will provide speeds of up to 50 Mbps, a step up from touted WiMax speeds of 10 MB. Comcast’s new Project Infinity promises all catalogs on demand and with over a 100 mn US television sets expected to be internet connected by 2014 compared to the 5 mn odd today, the consumption of music would certainly make today’s CD players totally irrelevant. Innovation is certainly the key and as my cerebral friend from California, Nat Mani pointed out to me in a recent email, the days of legends like Lata Mangeshkar and Whitney Houston may soon be over because their strength was the ability to belt out perfect songs in a single take, thereby optimizing the cost and time of the hundred piece orchestra, which was the central cost element in the old days. The digital era makes line-by-line recording both possible and optimal and will enable even inconsistent singers to turn out hit singles! Innovation is also expected to take the industry to new frontiers in this decade. Sites like Spotify and SHAZAM have made music access and distribution extraordinarily simple. One mind-boggling prediction is 12 | March 15, 2012
The days of legends like Lata Mangeshkar and Whitney Houston may soon be over because their strength was the ability to belt out perfect songs in a single take, whereas the digital era makes line by line recording both possible and optimal and will enable even inconsistent singers to turn out hit singles for ear rings embedded with chips that would serve as the iPads of the future, directly stimulating the auditory nerves in the ear to give us the joy of listening to music without any need for external devices. Will some of us still long for the joys of listening to our old long playing records? While many old emotions were stirred and myriad new ideas were discussed at the conclave and the outstanding ‘Baaja Gaaja’ musical event that accompanied it, one thought shared by poet and writer Javed Akhtar remains imprinted in my mind. Speaking about the joy of reaching out to new cultures, Javed provided the metaphor of a tree whose branches spread over time and the leaves are able to reach out to newer and newer horizons. However none of this would be possible if the roots of the tree were not deep and strong. Food for thought for our increasingly global industry? Maybe we should start a country-wide debate on the social and cultural impact of many of these innovations!
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Cover Story
DQ-CMR Customer Satisfaction Audit 2012
Highlights n In the last 5 years, most categories have seen different top performers in customer satisfaction n The most consistent performances have been of HP in printers (winner all years), HCL Infosystems in IT services and Dell in notebooks (winner in the last 4 years) n IBM is the storage topper for the first time since we included the category n SAP is back on top after 5 years in enterprise software 14 | March 15, 2012
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CSA 2012
Walking the Talk Vendors of all hues aggressively worked on multi-pronged customer satisfaction strategies. In the end those who walked the extra mile emerged as winners Shrikanth G with inputs from onkar sharma, shilpa shanbhag, stuti das and rukhsar saleem shrikanthg@cybermedia.co.in
“Your most unhappy customers are your greatest source of learning.”
I
n the end it all boils down to the end users—if they are not satisfied, you are not doing things right. The 10th Dataquest-CMR survey on enterprise customer satisfaction has its usual store of surprises and upsets. Some vendors have grown their satisfaction scores while others slipped. Before we look at the segment-wise performance and take a macro perspective on how the enterprises reacted to the industry offerings across segments, it reveals the buying trends oriented towards acquiring new technologies and concepts during 2011. CIOs of large to mid-size enterprises seriously explored deploying analytics and inked a cloud strategy—this was one instance. As we look at some of the major CIO surveys over the last year it also reveals the same. For instance last year’s IBM Global CIO Survey mentioned that with the economy recovering, CIOs are looking more to driving transformation in their companies, their role is evolving to become more and more associated with extracting value from technology and gaining insights from complex systems. The study also pointed out that the new technologies CIOs would be exploring in the days ahead would be ones like analytics, cloud, and other hot areas. DATAQUEST | A CyberMedia Publication
—Bill Gates, Microsoft
Clearly as we look at 2011, one can say that it was the year that signaled further maturity of the IT infrastructure in many enterprises as CIOs seriously explored numerous ways to take their IT organizations to meet the post-recession challenges and opportunities. Interestingly, during 2011 one also saw numerous conversations on the CEO-CFO-CIO relationships and the extent of final decision-making powers CIOs have on new purchases and the quantum of IT budgets allocated to them. Off late there is a growing consensus that many progressive enterprise CXOs are taking a keen interest in IT purchase decisions from a technology point of view as well. Earlier the top management thinking was more toward—more bang for the buck—CXOs now closely look at even aspects like aligning the latest technologies to create an enterprisewide change.
Broadly Speaking
With these changing dynamics in buyers and the CIO’s roles getting much more challenging over the year, the IT decision making process increasingly involved multiple stakeholders within the company. While this is not exactly new, it is getting more prevalent. As we look at the Customer Satisfaction scores visit www.dqindia.com
in this backdrop, clearly the industry winners delivered more satisfaction using a multi-pronged approach. One, they invested heavily on pre-sales and created an effective post-sales ecosystem ensuring that whatever promised or told in the pre-sales is continued over a period of time through the product or the service life cycle. As we look at the systems segment—desktops, notebooks and servers, the significant change on the desktop side was that HP-Compaq overtook Dell and took the first position. In line with the trend, the assembled segment satisfaction scores continued to dip as the branded vendors significantly upped their ante across the desktop category. In the Desktop category the parameters like overall-price, commercial, delivery and installation determined the winner. On the notebook side of things, the ranks remained more or less unchanged. Dell retained its #1 spot and what made it the ultimate winner were parameters like pre-sales and marketing. Overall customer satisfaction scores have come down in Notebooks with the exception of Lenovo, which saw a marginal growth as compared to the last year. On the server side, IBM’s domination continues, but both March 15, 2012 | 15
Cover Story y Methodolog The tenth Dataquest-CMR survey on the Enterprises-Customer Satisfaction with IT products and suppliers is compiled on the basis of methodology jointly decided by CMR India and Dataquest. The CMR team was led by Suman Dutta and assisted by Ritesh Mathur and Poonam. CMR India conducted the survey among 401 CIOs/IT Managers of large enterprises (from ET 500, BW 500 or BS 1000 lists) this year, with the same objectives as that of DQ-CMR CSA 2011-12 which were: To develop brand scores of customer satisfaction for different product and service categories and to identify functional and service attributes that drive customer satisfaction. The survey covered large enterprises across various verticals like Manufacturing, Government, BFSI, IT/ITeS, Education etc. The survey was spread across 10 cities—Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad, Pune, Ahmedabad, Coimbatore, and Chandigarh. The survey covered Desktops, Notebooks, Servers, Enterprise Software, IT services (integrated and outsourced services), Security products, Laser Printers & MFDs and Enterprise Hardware Storage (SAN, NAS). In each category, a minimum sample size for each major brands were identified using the understanding of the market and from the study done last year. CIOs were asked to rate the level of satisfaction on each of the parameters and sub-parameters on a 5-point scale for the top two brands owned for each product category in terms of their share in the organization and depending on the usage of the product or service. CMR India derived the importance of each of the parameters from the satisfaction scores, which were used as weights for each of the sub-parameters. To arrive at the overall satisfaction scores of different products and services, CMR India measured satisfaction against each of these ‘importance’ parameters and arrived at weighted scores of satisfaction, on a maximum possible total of 100, which makes all the parameters and brands comparable within their scope.
IBM and HP locked horns. It was a very tightly fought battle. What put IBM in the favorite’s spot was innovation and huge investments on the Systems and Technology Group (STG); and its aggressive focus on pre and post sales. Server vendors meanwhile aggressively evangelized on energy efficiency and strategically positioned blade servers in the bargain selling on the optimal management of floor space and higher compute density. In storage, the biggest surprise was HP, which relinquished the top spot that it was holding for the last 2 years to IBM. IBM banked on innovation and its labs’ expertise to win the honors. The company also aggressively worked on effective product creation as well as product positioning best suited for Indian requirements. It invested heavily on pre-sales and other customer connect initiatives. EMC and Dell held on to their respective positions. Looking at the IT Services and Enterprise Software segments, HCL Infosystems retained its top 16 | March 15, 2012
spot. What worked well for HCL was its service engagement approach through which it widened its services to include the maximum possible consumer and client base availing of different services. On the Enterprise Software side, SAP edged out Microsoft and, clearly, the wide ranging customer connect initiatives it took over the last year helped it reap higher satisfaction scores. CSAT scores of all vendors in this segment saw good growth when compared to the previous year. On the Laser Printer and MFD front, while HP remained the undisputable #1 position, the biggest climb was for Samsung to the 3rd spot. Epson went down the charts. Canon retained its #2 spot. HP’s end-to-end approach and pioneering concepts like Total Print Management (TPM) and Balanced Deployment ensured its top place year after year. HP also took to the enterprises some innovative concepts like ‘Smart Install’ that liberated the need for having a separate driver CD as by virtue of smart visit www.dqindia.com
install—the driver is embedded in the printer itself. In security, Symantec continues to dominate the satisfaction charts across parameters. The big upset was Trend Micro going down. Both McAfee and Cisco bettered their ranks as compared to last year. Security is the one space where customers will get more demanding as the threat landscape keeps changing. Given that vendors who are able to offer an ecosystem based solution and a proactive partner/ channel base with hands on technology knowledge will garner more satisfaction. This was the case with Symantec, which through innovative programs like channel specialization, was able to effectively communicate its product strengths to the enterprise customer. The key takeaway from CSA 2012: Customers’ expectations are growing by the day and vendors need to constantly engage with them on multiple platforms to sustain/increase their overall satisfaction scores.
DATAQUEST | A CyberMedia Publication
Cover Story / Enterprise Storage
On an Up Drive
In an extremely competitive market, with every vendor having their traditional strengths, IBM has made an impressive climb to the top
N
othing stays the same and retaining the top spot is more difficult than reaching there. Some of these sayings hold good for the enterprise storage space which, over the years, has seen the humble DAS to NAS to SAN and ILM and now all that unstructured/structured digital assets are converging in what they call—The Big Data. Enterprise storage is the market in which each vendor fights it out, literally. in terms of revenues, market share, and customer satisfaction. Looking at the customer satisfaction scores, there were quite a bit of upsets. HP’s domination in this segment over the last couple of years came to an end with IBM overtaking HP with a good margin. At the time of DQ Top20, as we took the audit of the storage industry for FY11, it revealed that after a relatively slow growth in FY10, owing to global recessionary conditions, FY11 saw the storage market going back to normalcy; especially in H2. The overall market grew by 20%. This is not the complete picture though, the good news is that as per industry reports, India was the 3rd biggest market in the APJ region. In FY10, budget cuts followed by no approv-
Enterprise Storage: Top Vendors Vendor IBM HP EMC Dell NetApps Oracle/Sun
Score 88.1 86.5 86.4 85.3 85 83.3
Rank ‘11 2 1 3 4
Rank ‘12 1 2 3 4 5 6
Change 1 -1 0 0 new -1
5 sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction It’s a tough battle in which each one is leader in their own right. But finally when the question of who is #1, the verdict was in favor of IBM
als despite storage requirements translated into enterprises analyzing their storage capacity. Big-ticket projects no longer were the norm, instead enterprises focused on completing smaller and more significant projects. Having long chased the #1 position, IBM reinforced its position finally by toppling HP. Also, IBM was one of the fastest growing top 5 external disk storage vendors in India driven by past acquisitions (like XIV) and R&D (Storwize V7000 SONAS). With those assets, it made big
Enterprise Storage: What Satisfies Customers Industry 87.4 85.5
Dell 90.0 90.0
EMC 86.5 85.1
HP 88.0 90.0
IBM 96.0 90.0
NetApp 86.2 85.5
Oracle/Sun 84.0 80.0
Convenience in operation & adoption of the product Overall - Product
87.9 87.0
85.6 88.3
87.4 86.5
86.8 88.1
90.0 91.9
88.0 86.7
86.0 83.6
Responsiveness of the vendor to your specific requirement Vendors understanding/Domain knowledge of your business Overall - Pre Sales & Marketing Value for Money Clarity of pricing contract Credit facility received Total cost of ownership Overall - Price & Commercial Timely delivery/total time to intiate the project Demonstration/training/handholding initiative by the vendor Overall - Delivery & Installation Responsive - Always available for technical queries Expertise of the vendor to resolve problem Availability of spare parts Interaction with service team Overall - Post Sales Service Overall Satisfaction
85.0 85.0 85.0 86.9 81.7 80.4 86.1 84.2 86.1 85.8 86.0 85.2 83.8 81.6 85.5 84.1 85.3
85.0 84.4 84.7 85.6 81.9 81.3 86.9 84.3 87.5 83.8 85.5 84.4 82.5 80.6 85.0 83.2 85.3
85.1 87.9 86.6 87.0 80.0 80.9 88.4 84.7 87.0 88.8 88.0 87.4 84.7 83.3 89.3 86.3 86.4
88.0 85.9 86.9 92.0 82.0 80.0 88.0 86.1 88.0 84.9 86.3 86.0 86.0 84.0 84.4 85.0 86.6
86.4 86.4 86.4 89.4 83.4 81.8 86.8 85.7 90.0 87.2 88.5 88.5 90.0 82.6 90.0 87.8 88.1
82.1 82.1 82.1 86.2 81.4 81.5 84.0 83.5 84.3 88.0 86.3 86.0 88.0 84.0 88.0 86.5 85.1
80.0 86.0 83.2 84.5 80.0 78.0 88.4 83.4 88.8 80.0 84.0 83.1 86.0 82.0 80.0 82.6 83.4
Overall product reliability Overall product functionality
Base: 802
Source: DQ-CMR Customer Satisfaction Survey 2012
Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Clearly the deciding factor was tilted towards overall product and post sales. So higher satisfaction is directly proportional to proactive post sales
18 | March 15, 2012
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CSA 2012
“Clients are satisfied if you have an understanding of the solutions and have architected them well” —Alok Ohrie, director, systems and technology group, IBM India and SA
it up by improving post sales engagement. We have implemented multiple touch points in the post-sales cycle by having resource delivery excellence advocates who listen to clients and take action for us to better prepare to handle situations. We have also strengthened services planning with planning of parts inventory by increasing deployment points.
IBM has taken over as the new #1 in the enterprise storage segment, what have been some of the key factors that have contributed to this? We are delighted and excited that we have topped the charts. In the server category, we were already the #1 over the last 2 years and with this new development, the story has become complete. All credit goes to the client ecosystem and a huge credit to the team that takes products to the market. There is a clear message of how the clients are benefiting from our solutions and are finding our innovations relevant; there is a clear ratification of helping our clients manage their infrastructure better and for the IT teams deliver value to their internal customers. On the post-sales parameter, IBM has outdone all other players by a significant margin. Your comments? Clients can be highly satisfied not only if your pre-sales engagement has been intense, but also if you have a better understanding of solutions and have architected the solution well. All of this has been done in the last one year, thus making it easy for us to implement solutions to make a good experience for the customers and follow
This year, how do you intend to continue with the #1 position and what are the measures in the pipeline? In the last one year, we have undertaken several customer satisfaction measures like setting up of tech client, increasing touch point for clients, being proactive in spare parts planning by setting up spare part hubs, investing in training of our post-sales teams, upgrading the folks in understanding our products better, treating our partners as an extended arm of IBM, and finally bringing in the lab resources in case there is gap in field resources and client expectations. This year, we will have specialist support available in the field which will work closely with labs for understanding the technology and giving them the visibility of how things were done.
Enterprise Storage: Environment Friendliness of Vendor The vendor seems to have a clear focus on being environment-friendly The vendor takes timely initiative in product redesign (for example, to make product easier to recycle, ease of disposal, or change the manufacturing process to reduce consumption of valuable resources) The vendor always comply with government and/or other regulations in respect to greenhouse emission Vendors provide support to change the functionality in our existing IT systems to support our green programs The vendor has come to us with products having clear energy efficiency advantage The vendor has organized programs & events around green/energy efficiency We have seen clear energy savings by using the vendor’s product over the competitor’s product Note: On a scale of 1 to 5
Industry
Dell
EMC
HP
IBM
NetApp
4.4
4.5
4.4
4.4
4.5
4.3
Oracle/ Sun 4.6
4.1
4.2
4.1
4.1
4.3
4.0
4.3
4.0
4.0
3.9
4.1
4.1
4.0
4.2
3.9
3.9
4.0
4.1
4.0
3.6
4.2
4.0
4.1
4.0
4.0
4.0
3.9
4.2
3.9
3.9
3.9
3.8
4.0
3.9
4.2
3.9
4.1
3.9
3.9
4.1
3.9
4.0
Source: DQ-CMR Customer Satisfaction Survey 2012
Actionable Areas
n Overall product functionality n Convenience in operation and adoption of the product n Credit facility received n Vendors understanding/ Domain knowledge of your business n Expertise of the vendor to resolve problem n Availability of spare parts n Interaction with service team
It’s indeed a good sign to see all vendors working aggressively in upping their green benchmarks
inroads into the SMB segments as well over the last few years. Clearly, the solid sales performance reflects higher customer satisfaction and it got amply reflected on the scores across parameters as well. DATAQUEST | A CyberMedia Publication
Meanwhile, HP despite slipping to #2, is an equal match for IBM in terms of product depth and technology expertise. But what pulled down HP’s scores vis–à–vis IBM were parameters like overall products, visit www.dqindia.com
delivery, installation, post sales and service, etc. On these parameters, IBM did manage to give tough competition to HP. Meanwhile, EMC and Dell retained their #3 and #4 spots, respectively. March 15, 2012 | 19
Cover Story/ Servers / Laser Printers Servers
Serving Up Good Times
IBM retains its top spot, with HP just a step behind. With the server market on a rebound, a tougher battle is expected
S
ervers form the vital computing infrastructure and they enable the much needed computing required for mission critical computing. It is indeed a challenging market as a lot of elements go into making a perfect server and CIOs need to have an elaborate plan to ascertain the best server and the operating environment best suited for running their apps. With a whole lot of technology challenges, delivering customer satisfaction is not an easy task in this segment. But as we look at the outcomes of server satisfaction scores—Big Blue IBM has done it again and made it to the #1 spot, followed by HP and Dell. Interestingly, last year Dell was at #4, and this time around Dell managed to hit the 3rd place. Also it is also good to see Sun (Oracle), which was the tailender last year, bettered its overall scores last year. As an upset of sorts, HCL saw its scores going south and finished the pack as the tailender. Looking at the two key vendors IBM and HP, it has to be told that it was a very closely fought battle with a marginal separation determining the winner. So what
Servers: The Top Vendors Vendor IBM HP Dell SUN HCL
Score 86.8 86.6 85.3 84.7 83.9
Rank ’11 1 2 4 5 3
Rank ’12 1 2 3 4 5
Change 0 0 1 1 -2
sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Big Blue IBM has done it again and made it to the #1 spot, followed by HP and Dell
Actionable Areas n Overall Product Functionality n Vendors’ understanding Domain knowledge of your business n Clarity of Pricing Contract n Credit facility received n Availability of spare parts
Servers: What Satisfies Customers Overall Product Reliability Overall Product Functionality Convenience in operation & adoption of the product Overall - Product Responsiveness of the vendor to your specific requirement Vendors understanding/Domain knowledge of your business Overall - Pre Sales & Marketing Value for Money Clarity of Pricing Contract Credit facility received Total cost of ownership Overall - Price & Commercial Timely delivery/total time to intiate the project Demonstration/training/handholding initiative by the vendor Overall - Delivery & Installation Responsive - Always available for technical queries Expertise of the vendor to resolve problem Availability of spare parts Interaction with service team Overall - Post sales service Overall Satisfaction
All 90.0 86.5 88.1 88.4 86.2 84.6 85.3 86.7 83.4 82.2 86.3 84.9 87.2 84.1 85.6 85.1 83.7 84.6 85.2 84.7 85.9
Dell 90.0 90.0 88.0 89.3 83.3 80.0 81.4 86.1 80.0 78.9 86.1 83.3 87.2 86.0 86.6 84.4 86.0 83.9 87.2 85.5 85.3
HCL 80.0 80.0 87.7 82.9 80.0 84.1 82.3 80.0 80.0 89.4 89.0 84.7 88.2 82.6 85.4 86.0 84.1 85.6 84.1 84.9 83.9
HP 91.3 87.6 87.3 88.8 86.6 85.5 85.9 87.6 83.6 81.9 88.0 85.7 86.6 86.2 86.4 85.5 87.3 84.4 86.2 85.8 86.6
IBM 90.9 88.3 88.9 89.5 87.2 86.7 86.9 88.0 83.7 80.0 90.0 86.0 88.0 83.5 85.8 85.0 88.0 83.5 85.2 85.3 86.8
Sun/Oracle 89.2 85.1 89.7 88.3 83.1 83.1 83.1 83.2 81.1 83.4 83.7 82.9 85.6 84.1 84.9 83.1 81.0 87.2 83.1 83.7 84.7
Source: DQ-CMR Customer Satisfaction Survey 2012 Base: 262 Note: The scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Aggressive pre-sales coupled with well-defined post-sales backed by reliable products acted as the key differentiator in determining the winner on this space
20 | March 15, 2012
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CSA 2012
“Our vision is to become an undisputed technology leader and a transformational partner across all segments” —Alok Ohrie, director, systems and technology group, IBM India/SA
What have been the key drivers for IBM scoring #1 position for server satisfaction for the 2nd time in a row? Our success boils down to 3 distinct advantages that we have in our Systems and Technology Group (STG). The first one is the combination of our deep understanding of our clients’ needs and their changing business environments. The second key advantage is comprehensive system product portfolio. The third important one is our technology leadership and the innovation that we have been driving very hard in our business. Fundamentally we have a very client centric approach and we believe that deep integration and optimization of hardware and software stack that we take it to the market helped the enterprises to solve the business pain points and we are able to manage the overall cost of the infrastructure as well. Vendors’ responsiveness to customer’s specific requirement and value for money got higher scores compared to others. What strategy have you adopted here? The leaders in this marketplace innovate and that gets manifested in our solutions. We call it as smart performance versus raw performance. The need for new performance is getting increasingly clear and we have seen our message resonating and making a lot of sense to our clients, the momentum is coming from our clients. Our solutions are aimed at how our customers can do more with less at superior performance. Yet another key strength area for us is that a significant amount of investments go in for R&D and that kind of vision makes for high degree of innovations and that I believe has translated into high scores on various parameters. Sales-wise, did you attempt anything new given that 2011 was a year in which servers (x86 and non x86) tried hard to tide over the
losses faced during a very bad 2010? What we are doing is fostering a closer working relationships and a closer interaction between vendor sales teams and client organizations. It is not only the IT business teams; we interact with teams across the business lines that lead to better demand understandings and unique requirements. We are thus able to deploy the right resources at the right level and have had aggressive focus on pre-sales side as well. In fact, we have been growing the pre-sales much faster that the sales organization. The same level of commitment at pre-sales gets translated in the post-sales as well. Servers are no longer a box solution. Customers are looking at more compute density, form factors, and a whole lot of measurable metrics. How challenging is delivering higher customer satisfaction in this space? IBM is the only company delivering end-to-end solutions to customers. The depth and breadth of the STG offerings makes us the preferred technology partner. If you look at the server categories, we offer one of the broadest ranges in the industry from entry, mid- to high-end across x86 to RISC/UNIX. We give huge choices to the customer and do not lock into one environment and this open client centric approach obviously gives lower TCO and greater RoI and other deliverables. Your outlook for the year ahead... From the STG’s point of view, our vision is to become an undisputed technology leader and a transformational partner for customers across all segments—small to large. We are effectively leveraging our R&D, labs expertise, sales organizations to better deliver products meeting the India enterprise requirements and maybe some learning can be taken on a global level as well.
Servers: Environment Friendliness of Vendor The vendor seems to have a clear focus on being environment friendly The vendor takes timely initiative in product redesign (for example, to make product easier to recycle, ease of disposal or change the manufacturing process to reduce consumption of valuable resources) The vendor always comply with government and/or other regulations in respect to greenhouse emission Vendors provides support to change the functionality in our existing IT systems to support our green programs The vendor has come to us with products having clear energy efficiency advantage The vendor has organized programs & events around green/energy efficiency We have seen clear energy savings by using the vendor’s product over the competitor’s product.
All
Dell
HCL
HP
IBM
4.4
4.3
4.3
4.3
4.5
Sun Microsystems 4.2
4.2
4.3
4.2
4.1
4.2
4.0
4.1
4.0
4.0
4.1
4.1
3.9
4.1
4.1
4.0
4.1
4.1
3.9
4.1
4.2
4.2
4.1
4.2
3.9
3.9
4.0
3.8
3.9
4.0
3.7
4.1
4.1
4.1
4.1
4.1
3.9
Note: On a scale of 1 to 5
Source: DQ-CMR Customer Satisfaction Survey 2012
Energy efficiency is not new to Servers as it is here concepts like performance per watt originated. On the green side of things vendors aggressively worked on more energy efficiency designs and aggressively evangelized on blade servers
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Cover Story/ Servers / Laser Printers made IBM tick in the end was its aggression in areas like innovation, presales, post-sales and its capabilities to seamlessly offer end-to-end solutions. While HP in no way a laggard in these areas but in the end IBM was able to muster more satisfaction. Also one needs to give credit to IBM’s meshed approach. For instance initiatives like ‘Techline’—a team of highly skilled, readily accessible IT specialists providing quality remote technical sales support to help sell IBM solutions and improve client value. Other instances like ‘Lab Services’—here IBM in addition to having its own staff also has members who are hands-on special-
ists in various complex deployment scenarios. Using Lab Services IBM brings both skills on its products as well as popular third-party platforms; providing customers complete end-to-end technical services that help address complex business, operational and deployment challenges in IT. In addition to other initiatives, instances like creating more customer touch points to understand their challenges and address concerns with sense of urgency—clearly all these initiatives has worked in IBM’s favor in garnering more customer satisfaction. Looking ahead if we look at x86 servers, the market
is increasingly getting plural with newer vendors like Fujitsu and Acer seeing good deal of traction. In terms of IBM’s leadership expected to continue in the coming quarters on the non-x86 front, and it is to be seen how HP and Sun/Oracle are going to counter IBM’s impressive escalation in the UNIX market. Despite that UNIX is clearly becoming very niche by the day at the same time it also proves that it’s the #1 OS for mission-critical apps. While big time hardware refresh cycles are yet to happen, but there is clearly a trend indicating some amount of IT spending going on server purchases over FY11 that acted as the growth driver.
Laser Printers
King, Again! Backed by a strong and reliable product portfolio, HP remained the undisputed leader in the print categories
T
here is no prize for guessing this one—HP is #1 in the printer space. It’s been a while, HP has seen some serious competition challenging its top spot. While there is cutthroat competition, HP’s legendary status on the global printer market with some outstanding products stand in testimony to its high customer satisfaction. While HP and Canon competing head-on creates an impression of bi-polarity in the Laser and MFD space, but looking at the scores, there is serious competition that’s fast catching up. Take the case of Samsung which witnessed a significant spike on its scores compared to last year. In addition to growing its overall satisfaction it also managed to ascend 2 places and in the bargain upseated Epson, went ahead of Xerox and rooted at #3 position. That’s indeed an impressive climb from last year’s #5 spot. If we look at HP domination on the printers, it’s more due to its expertise it has acquired over the years. HP in a way created a new matrix in print solutions by pio22 | March 15, 2012
Laser Printers & MFDs: The Top Vendors
Vendor Score Rank ’11 Rank ’12 Change HP 85.7 1 1 0 Canon 83.7 2 2 0 Samsung 83.2 5 3 2 Xerox 82.5 4 4 0 Epson 82.4 3 5 -2 sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction A solutions approach backed by state of the art innovative products helped HP to hold on to its undisputed # 1 spot
Actionable Areas n Overall Product Functionality n Vendor’s Understanding/Domain knowledge of your business n Clarity of Pricing Contract n Credit facility received n Expertise of the vendor to resolve problem
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Cover Story/ Servers / Laser Printers
“Listening to customers is our top priority” —Nitin Hiranandani, director, laserjet enterprise solutions, imaging & printing group, HP
IPG has come out as a winner once again this year. What has been the guiding force behind this consistency? First and foremost is listening to our customers, respecting our channel partners and backed by a rock solid uncompromising quality of the products has resulted in greater customer traction. And secondly we are able to position our products strategically in the marketplace. We connect with our customers in many different ways and have many engagement models. We take customer feedback very seriously and work closely with the channel partners. At the bottom line the reliability of our products and our ability to address the multi-pronged print requirements puts us in a higher pedestal compared to competition.
Any focused initiatives over the last year, specifically on customer satisfaction? One of the key things we did was the annual audit that enabled us to get the pulse of the market and looked at ways and means to deliver more innovative products and customer satisfaction. We also factored elements like energy efficiency and green aspects and explored ways to become more environmental friendly. Any innovative products launched last year? One of the new concepts we took to market was Smart Install. This feature eliminates the need to have a print driver CD. By virtue of smart install the product drivers and other software reside in the printer/MFP. The user can install them directly from the device, and does not have to worry about losing or damaging the software CD.
Laser Printers: What Satisfies Customers Industry
Canon
Epson
HP
Samsung
Xerox
Overall Product Reliability
86.1
85.2
87.4
89.3
83.4
84.0
Overall Product Functionality
84.2
87.0
84.0
85.0
80.0
80.0
Convenience in operation & adoption of the product
86.6
86.5
86.3
88.3
83.4
84.0
Overall - Product
85.7
86.2
86.0
87.6
82.4
82.8
Responsiveness of the vendor to your specific requirement
84.1
82.61
82.3
86.6
82.9
80.0
Vendors understanding/Domain knowledge of your business
83.5
83.9
80.6
84.1
81.1
84.0
Overall - Pre Sales & Marketing
83.7
83.3
81.4
85.3
82.0
82.1
Value for Money
86.1
85.2
80.0
88.7
90.0
84.0
Clarity of Pricing Contract
81.5
80.9
80.0
83.5
84.0
83.1
Credit facility received
78.8
77.3
80.0
79.6
80.0
81.3
Total cost of ownership
84.7
83.0
80.0
88.0
86.0
84.0
Overall - Price & Commercial
83.4
82.20
80.0
85.8
85.7
83.4
Timely delivery/total time to intiate the project
85.1
87.0
84.0
86.8
85.7
84.2
Demonstration/training/handholding...
83.8
83.0
84.6
84.8
80.6
84.0
Overall - Delivery & Installation
84.4
84.9
84.3
85.7
83.0
84.1
Responsive - Always available for technical queries
82.6
85.2
85.7
84.5
86.0
80.0
Expertise of the vendor to resolve problem
83.0
82.2
78.9
85.6
86.0
82.0
Availability of spare parts
80.3
76.1
78.9
82.9
80.0
80.0
Interaction with service team
84.0
83.9
78.0
84.7
82.3
80.0
Overall - Post sales service
82.5
81.8
80.3
84.4
83.4
80.4
Overall Satisfaction
84.0
83.7
82.4
85.8
83.3
82.5
Base: 304
Source: DQ-CMR Customer Satisfaction Survey 2012
Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Product relaiblity,aggressive pre-sales and products across price bands with intelligent manageablity features were the ones that acted as key differentiators
24 | March 15, 2012
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CSA 2012 Laser Printers: Environment Friendliness of Vendor All
Canon
Epson
HP
Samsung
Xerox
Vendor seems to have clear focus on being environment friendly
4.2
4.0
4.0
4.4
3.9
4.3
Vendor takes timely initiative in product redesign
4.0
3.8
3.9
4.2
4.0
4.0
The vendor always complies with government and/or other regulations in respect to greenhouse emission
3.9
3.8
4.0
4.2
3.8
3.8
Vendors provides support to change the functionality in our existing IT systems to support our green programs
4.0
3.9
3.9
4.1
3.7
3.9
The vendor has come to us with products having clear energy efficiency advantage
3.9
3.7
3.8
4.1
3.7
4.1
The vendor has organized programs & events around green/energy efficiency
3.8
3.5
3.6
3.9
3.8
3.8
We have seen clear energy savings by using the vendor’s product over the competitor’s product
3.8
3.7
3.9
4.0
3.7
3.8
Source: DQ-CMR Customer Satisfaction Survey 2012
Base: 304 Note: On a scale of 1 to 5
What the industry needs at this point in time for hardware devices like Printers is to create industry wide common Green best practices like effective recycling, et al, and educating the users during device refresh cycles
neering what it calls as ‘Balanced Deployment Strategy’. According to information available form HP, it says achieving the optimal combination of cost and performance necessitates balancing the enterprises copying and printing fleet according to need and cost. This approach is what HP calls its balanced deployment model. Balanced deployment ensures that the right functionality is conveniently accessible to users, while providing a manageable number and diversity of devices. An optimum mix of devices with the relevant access to capabilities is designed, so that selective access to capabilities such as color and A3 printing can be monitored and managed. The basis is the careful analysis of user needs, at present and in the future to ensure the ongoing flexibility of the fleet design. Clearly HP pioneered a solution approach to printers and adopted more of a consulting approach. According to HP sources, by using a well-deployed mix of devices (printers, MFPs), a print server and DATAQUEST | A CyberMedia Publication
print server appliances, will help to reduce enterprises network traffic and enable organizations to use their printing and copying resources more effectively, delivering sustainable savings. The required functionality will be closest to the appropriate users, resulting in minimum disruption and maximum productivity. So strategies like balanced deployment and total print management have ensured HP to consistently deliver superior products and achieve higher customer satisfaction. Looking at other vendors in the CSA Printer charts, Epson’s slide to the tail-end is one big upset. And looking at Samsung, it has gone aggressive on the laser and MFD space and it needs to be credited for improving its stature in the market. Clearly Samsung’s impressive escalation makes the top 3 vendor landscapes in printers extremely competitively. In the ongoing year, a tough battle is expected to rage between all the 3 top vendors, more so between Canon and Samsung as visit www.dqindia.com
they fight it for more market share and customer satisfaction. Going by the printer market dynamics, the market is getting increasingly polarized on more simplified and cost effective manageability of the printers over a period of time. It is a well known fact that printer acquisition cost does not matter for enterprises much, as it is the cost of consumables that tops any CIO’s agenda. Going by FY11 DQ Top20 on an overall basis, the printer segment saw a decline of 5% but there has been a strong shift towards purchase of multi-function devices, as there was an increased awareness that color printers are affordable. But the sales of printers are dependent on numerous factors. Even the Japan earthquake had a lukewarm impact on the segment as many companies like Canon, Xerox, etc felt the heat. FY11 was also witness to a major trend of reduction in prices of printers by approximately 10% as a competitive measure while there was an increase in volume of units sold. March 15, 2012 | 25
Cover Story/ IT Services
Satisfaction Delivered
Yet again, in an extremely fragmented market, HCL Infosystems retained its top spot while others followed
D
uring the DQ Top20, 2011, we saw that the Indian IT firms have sought to break away from their conventional linear growth model to outcome-based pricing or hybrid pricing, where the latter is a mix of time-and-materials billing, fixed transaction fees and payments linked to business outcomes. According to a Wharton study, outcomebased pricing or hybrid pricing model definitely scores over conventional time-and-materials transactions with higher margins in the last 200 Indian IT services deals in FY11 and FY10. The fact that while the industry’s employee strength grew by 10% and revenues by 21% in FY11 was a testimony to the growing success of the non-linear model. About 40% of the industry’s total transaction value in FY11 came from fixed-price deals (irrespective of the number of man hours spent), and outcome-based pricing deals accounted for about a tenth of the total. It is a well-known fact that the IT Services market in India is an extremely scattered one with hundreds of players in the fray offering domestic and offshoring services. While every vendor tries to differentiate with its delivery
IT Services: The Top Vendors Vendor HCL Infosystems TCS/CMC IBM Wipro HCL Comnet HP
Score 89.0 86.5 86.3 85.8 85.7 85.5
Rank ’11 Rank ’12 1 1 2 2 3 3 4 4 5 5 7 6
Change 0 0 0 0 0 1
sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction HCL Infosystems took the top honors with pro-active customer connect initiatives working to its favor
models, in the end it is the vendors’ ability to offer most cost effective as well as value driven delivery that differentiates it in the market. Given this backdrop, customer satisfaction indeed was one key metric that forms the key basis for the retention of the clients. Looking at the satisfaction charts, it looks like HCL Infosystems has mastered the art of customer satisfaction—topping in various parameters and retaining its #1 spot. Clearly it transpired as the undisputed leader with
IT Services: What Satisfies Customers Ability to support multi location Scope of service provided Reliability of service provided Overall - Service offering Proactive-ness of the service provider in understanding.... Service providers understanding - Domain knowledge of your business... Overall - Sales & Marketing/Pre contract Stage Price - value parity Clarity of pricing contract SLA / QoS related commercial terms Overall - Price & commercial Terms Technical expertise of the service provider/ Personnel Adherence to QoS/SLA Geographical reach to provide after sales service Routine checks and preventive nature Solution orientetion & time oriented approach Responsiveness & availability of service personnes Turn around capability in case of disaster/crisis Availability of required spare parts & other essentials Overall - Post Contract Stage experience Overall Satisfaction
Industry 87.1 85.4 87.6 86.8 84.9 85.1 85.0 86.2 85.1 85.4 85.6 87.4 82.7 82.5 82.4 83.6 85.4 85.3 84.0 84.2 85.4
HCL Commet 88.0 88.0 89.1 88.4 86.0 86.4 86.2 87.6 88.0 82.0 85.8 90.0 86.0 80.0 80.0 82.7 80.0 80.0 80.0 82.2 85.8
Base: 317
HCL Info 92.0 92.0 96.0 93.5 88.0 92.0 90.1 90.0 90.0 86.0 88.6 82.6 81.6 80.0 84.6 82.0 92.0 83.2 80.0 83.2 89.1
HP 88.0 86.2 86.0 86.7 85.6 88.7 87.3 84.0 79.5 84.0 82.5 88.0 80.5 82.1 82.6 85.1 86.7 87.2 86.7 84.9 85.6
IBM 90.0 88.0 88.1 88.7 87.1 86.2 86.6 86.7 82.9 86.7 85.4 89.1 80.5 82.9 83.8 86.7 82.9 84.3 82.9 84.1 86.4
TCS/CMC 92.0 90.0 90.0 90.7 88.0 88.0 88.0 82.8 84.0 82.2 83.0 86.0 82.8 81.7 80.0 84.0 87.2 84.0 80.6 83.2 86.6
Wipro 88.0 86.0 87.5 87.2 84.0 86.0 85.1 90.0 84.0 86.2 86.7 88.0 82.5 82.5 83.5 84.0 85.0 84.5 85.0 84.4 85.9
Source: DQ-CMR Customer Satisfaction Survey 2012
Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction In an extremely fragmented market, delivering customer satisfaction acted as a key differentiator in client retention
26 | March 15, 2012
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DATAQUEST | A CyberMedia Publication
CSA 2012
“Reliability in service has been a constant feature of our engagement with our customers” —Rajeev Asija, COO, EBU, HCL Infosystems
What are your key differentiators? The company had an action-packed year last year with many initiatives being rolled out. We expanded our services into emerging markets like the MEA, South East Asia and Africa. The company’s Public Cloud Services took off to give additional flexibility to our customers to avail newer services. Also we launched the new ME Tablet, the X1 which is a trendy tablet tailored to suit the needs of the Indian consumers. The Tablet is backed by the unmatched support and service infrastructure spread over 4,000+ cities. The X1 is also loaded with a onetouch service application on the tablet—HCL Touch. Again the key service initiative for HCL Learning in the past one year has been the Customer C SAT initiative which was launched to achieve Sales Excellence and accordingly customer relationship officers were appointed to take care of any issues of existing clients. Reliability in service provided is one of the biggest drawing factors. How have you ensured to serve your customers with reliability? Our standing as a customer facing company is based on strong fundamentals of not only understanding the Indian market conditions well but also being in sync with the needs and aspirations of the consumers and clients. Also Reliability in service has been a constant feature of our engagement with our customers. Customer service and satisfaction is a top priority for us at HCL and it is our constant endeavor to enhance our competencies in this field. In this context we have added and received various cer tifications this year such as SEI CMM Level-5 and ISO 27K/20K cer tifications which include customer centers where we set up adequate infrastructure to receive subsequent cer tifications. To fur ther add to our reliable service quotient we provide 24x7 customer suppor t service and various innovations like a one-touch button for anytime, anywhere suppor t service in HCL products for consumers. An impor tant initiative that we have taken up, after taking into cognizance the varied and detailed needs of customers accessing different services, is aligning us as per the ver ticalization of markets and accordingly creating dedicated teams to address each ver tical and sub-ver tical.
high scores across parameters. It secured one of the highest customer satisfaction scores on overall service offering by leading all three critical sub-parameters like ability to support multi-location, scope and reliability of service provided. But when it comes to the parameter—overall post contract stage experience—the company faced stiff competition from the likes of HP, Wipro and IBM which fared better in this space compared to DATAQUEST | A CyberMedia Publication
How have you ensured better post-contract stage experience be it in relation to responsiveness and availability of service or conducting routine checks, etc? Providing excellent services at every stage of an engagement with a client or customer is an important element in building a long-lasting and fruitful relationship which we sincerely believe in. Putting our belief into action we have moved our customers from traditional metrics to business services which are SLA based. Another initiative that we have taken is automating service delivery to tool based with defined thresholds, escalations etc. Any challenges faced in ensuring customer satisfaction? The whole process of ensuring customer satisfaction is a challenge which we believe we have been able to meet and tackle in a very satisfying manner with our customers. In this context it is important to keep track of the recent developments in the business which has a bearing on providing customer satisfaction. One particular development that we would like to point out is the newer gadgets that are finding their way into converged spaces and hence the need for service requirements which are evolving. This becomes critical because the users are generally the top management of enterprises. What is in store for 2012? We have robust plans for the future that will be realized through various initiatives. We intend to scale up our Services Business to be driven by IMS and AMC Services and VAS. Also there will be traction in delivery models with a mix of onsite, hybrid and remote delivery of services; also focusing on Transaction based Delivery Models, particularly in the Government and BFSI sectors. We will also extend our coverage to include a wider spectrum of products including Multi-Vendor Services as well as Network and the Data Centers. Project Services will also be focused upon across various verticals like E-gov, BFSI, Utilities, Defense and Telecom. There are also plans to provide services in the rural areas like financial inclusion and rural devices. System Integration projects across focused verticals will be another area of importance for us. Amidst all these plans the company will continue to provide best-in-class services and ensure that all the requirements of the customers are met.
Actionable Areas n Scope of service provided n Reliability of service provided n Service providers understanding— Domain knowledge of your business n Clarity of pricing contract n SLA/QoS related commercial terms n Geographical reach to provide after sales service n Routine checks and preventive nature visit www.dqindia.com
HCL Infosystems. Overall, what has worked for HCL Infosytems to secure a higher satisfaction was its service engagement approach through which it constantly looks at widening its services to include the maximum possible consumer and client base availing of different services in the market. Some of the recent initiatives in extending services that it has taken up are offerings in Cloud and Mobility. March 15, 2012 | 27
Cover Story/ Enterprise Software
First Among Equals
SAP emerged a winner but at a very close margin. Its aggressive customer hand-holding exercises all through last year did the trick
I
n a tight-rope finish SAP edged out Microsoft and topped the charts. Clearly what has worked for SAP was putting its customer-first approach. One of the strategies SAP does effectively is ably and closely connect with its customers and try and understand their needs through regular interactions at various levels not only at sales and support but also through its extensive partner and developer networks. One of the key tools—SAP service portal—keeps the customers completely updated about the necessary technologies to apply and provide SAP Service Documents to educate them on topics like security and performance. As we look at the scores across parameters—pre and post sales emerged clearly as strong areas for SAP. For instance, SAP engages with its customers through its tailored initiatives and events. Throughout the year it
Enterprise Software: Top Vendors Vendor SAP Microsoft Business Solution Oracle IBM Ramco
Score 90.0 89.9 88.0 87.6 81.7
Rank ’11 Rank ’12 Change 2 1 1 1 2 -1 3 3 0 4 4 0 6 5 1
sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction SAP and Microsoft locked horns in a closley fought battle and in the end SAP took the pole position
conducts key events including SAP World Tour—SAP’s premier business technology event for executives, IT decision makers, and business managers—with a focus
Enterprise Software: What Satisfies Customers
Overall Product Reliability Overall Product Performance Convinence in installation & adoption Scalability Security aspects of the product Overall - Product Responsiveness of the vendor to your specific requirement Vendors understanding/Domain knowledge of your business Overall - Pre Sales & Marketing Price - value parity Clarity of pricing contract Credit Facility Total cost of ownership Overall - Price & commercial Timely delivery & installation Demonstration/training/handholding... Overall - Delivery & Installation Responsive - Always available for technical queries Geographical reach to provide service Adherence to SLA agreed upon Expertise of the vendor to resolve problem Interaction with service team Overall - Post sales service Overall Satisfaction
Industry
IBM
88.2 86.4 85.3 88.7 88.8 87.6 87.2 85.6 86.4 86.2 83.6 80.5 87.1 84.6 86.2 85.9 86.1 86.9 83.7 85.2 87.5 85.9 86.0 86.2
88.0 88.0 80.0 80.0 88.0 84.7 88.0 88.0 88.0 88.0 87.6 89.5 90.5 89.0 90.5 88.0 89.2 89.5 85.7 88.0 88.0 87.6 87.9 87.6
Microsoft Business Solution/ Navision/ Axapta/ Dynamics 96.0 96.0 96.0 94.0 94.0 95.1 88.0 88.0 88.0 90.0 86.0 84.1 90.0 87.8 88.0 90.0 89.1 86.3 92.0 90.0 90.0 85.1 88.5 89.9
Oracle/ RAMCO SAP People Soft/ Siebel/JD Edward 92.0 94.0 90.0 92.0 89.5 91.2 87.5 90.0 88.8 83.0 84.5 81.5 87.0 84.3 86.5 88.0 87.3 87.0 85.0 87.0 87.0 89.0 87.1 88.0
80.0 80.0 80.0 80.0 80.0 80.0 86.3 87.4 86.8 80.0 80.0 70.0 80.0 77.8 88.42 80.0 83.9 80.0 80.0 80.0 80.0 80.0 80.0 81.7
96.0 96.0 96.0 96.0 94.0 95.5 88.4 94.0 91.2 87.1 84.6 80.0 92.0 86.5 88.4 84.9 86.5 88.6 90.0 85.7 88.6 90.0 88.5 90.0
SAS Institute
SSA Global
Others
93.3 86.7 93.0 93.3 100.0 94.0 86.7 93.3 90.0 86.7 93.3 93.3 100.0 94.0 93.3 86.7 89.8 86.7 100.0 93.3 93.3 93.3 93.0 92.2
93.3 80.0 80.0 86.7 80.0 84.1 93.3 86.7 90.0 93.3 86.7 73.3 86.7 85.2 80.0 86.7 83.6 93.3 73.3 80.0 86.7 86.7 84.7 85.5
82.9 80.0 80.0 80.0 80.0 80.6 77.1 80.0 78.6 74.3 71.4 73.3 77.1 74.3 77.1 77.1 77.1 80.0 77.1 74.3 80.0 74.3 77.2 77.8
Base: 221 Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Product breadth and the ability to offer innovative pricing along with aggressive pre and post sales is the key for survival in this space
28 | March 15, 2012
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DATAQUEST | A CyberMedia Publication
Cover Story/ Enterprise Software
“Growing economies like India present a heterogenous range of requirements” —Deb Deep Sengupta, vice president, enterprise business, SAP India
‘Rapid mission critical support teams’ to our customers. Currently, the teams are located in West and North regions. Our support center in Bengaluru is fully integrated with our developers in SAP Labs. Internally our support processes are subject to quality audits internal and external to ensure our processes are robust to ensure customer service levels.
How would you rate the measures taken to ensure product satisfaction? SAP closely connects with the customers’ needs through regular interactions at sales and support level and also through the extensive partner and developer networks. In 2008, we also enhanced our customer support offering called ‘Enterprise Support Offering’ by adding more proactive services which has shown greater value to our customers. With this, we ensure that customers could gain any information from its rich service marketplace and the support teams ensured that customer are made aware using pro-active engagements. Can you talk about the measures taken at the post-sales service level? SAP follows a world-wide strategy to support customers through a global support backbone to offer uniform seamless service across the world. Also, our client service experts are available round the clock since most of our customers are running their business using our solutions. Being a global organization with presence across geographies, our support organization helps us to leverage the knowledge we have gained across the globe to support our customers in India. Moreover, we are becoming more critical in our customer bases, SAP has recently developed
on local priorities and road shows for customers and partners. Company sources say that these events offer practical insights into how customers’ business fits in with the global marketplace. Apart from these events, SAP presales and value engineering teams also engage with both its existing and prospective customers to engage and educate them about its new technology offerings. At SAP Labs India, it has set up a state-ofart ‘Customer Experience Center’ for its customers to touch-feel and experience the products and latest offerings. All these initiatives clearly helped SAP securing top-of-the-mind customer satisfaction. Microsoft, the previous year’s leader, did miss the #1 spot by a whisker and across all parameters it is at par with SAP and hence putting these two players on an equal plane in most cases. Like SAP, Microsoft 30 | March 15, 2012
On clarity of pricing, credit facility and total cost of ownership... Growing economies like India present a heterogenous range of requirements. SAP’s expanding portfolio of scalable solutions addresses the major IT challenges of businesses including low total cost of ownership (TCO). Our services are designed to provide technical services aimed at improving customer efficiency and thus reducing the TCO. Our Solution Manager is a self-help customer IT tool which can be extensively used to perform ‘Intelligent IT Management’. We offer this free under our services contract and constantly enhance it to ensure that the latest software we acquire also gets supported. Recently our board announced mainstream maintenance for our core solutions till 2020 which gives more time for our customers to deploy and use our software suites. This is being hailed as bold step by our customers and gives them breathing space and reduce overall upgrade budgets.
Actionable Areas n Overall Product Performance n Convenience in installation and adoption n Scalability n Vendors understanding/Domain knowledge of your business n Clarity of pricing contract n Credit facility n Demonstration/training/ handholding n Adherence to SLA agreed upon n Geographical reach to provide service
too has mastered the dynamics of the Indian enterprise market and its focused customer orientation initiatives worked well. Meanwhile Oracle and IBM at #3 and #4 spots gave stiff competition to both SAP and visit www.dqindia.com
Microsoft. For instance, IBM emerged strongly on parameters on overall delivery, price and installation parameters in which it topped the charts. As we look ahead at 2012, going by the current dynamics, IT spending across software and hardware are expected to go up as enterprises go full steam on the much awaited technology refresh cycles which have either stopped or went on a slower mode due to the recession in the core sectors. But in the last one year with newer concepts like virtualization and cloud gaining ground has led to the increased momentum in both inpremise as well as offsite on-demand deployment scenarios. This trend in all likelyhood is only going to gain further momentum during 2012 and it means customer expectations will gain more demanding and vendors need to gear up offering more satisfaction in the days ahead.
DATAQUEST | A CyberMedia Publication
Cover Story/ Notebooks/Desktops
Notebooks
Lapping Up the Points Dell again led the race in the notebook segment with a range of products that connected well with customers
C
ustomer satisfaction on notebooks by and large remained intact with the exception of HP-Compaq going down a place and Lenovo escalating to the #2 spot. Dell was ahead of the pack when it came to overall product, and Lenovo took the pole position in the pre-sales and marketing parameters. Overall, customer satisfaction scores have come down with the exception of Lenovo, which saw a marginal growth as compared to last year. And this also explains its well deserved #2 position. Over the last year, Dell significantly upped its ante on the services side and focused on creating more service networks in the country. According to sources at Dell: “In order to stay in the market, we need to focus aggressively
Notebook: Top Vendors Vendor Dell Lenovo HP-Compaq Sony Acer Toshiba
Score 88.5 88.1 85.8 85.4 82.2 80.8
Rank ‘11 1 3 2 4 5 6
Rank ‘12 1 2 3 4 5 6
Change 0 -1 1 0 0 0
sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note:Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction In a closely fought battle Dell managed to retain its top spot, but Lenovo’s stature is growing by the day in terms of customer satisfaction
Notebooks: What Satisfies Customers Overall Product reliability Overall product functionality Convenience in operation & adoption of the product Overall - Product Responsiveness of the vendor to your specific requirement Vendors understanding/Domain knowledge of your business Overall - Pre Sales & Marketing Value for Money Clarity of pricing contract Credit facility received Total cost of ownership Overall - Price & Commercial Timely delivery/total time to initiate the project Demonstration/raining/handholding initiative by the vendor Overall - Delivery & Installation Responsive - Always available for technical queries Expertise of the vendor to resolve problem Availability of spare parts Interaction with the service team Overall - Post sales service Overall Satisfaction
Industry 88.6 85.4 87.4 87.3 84.8 84.9 84.9 85.6 83.2 80.9 86.3 84.2 86.7 84.7 85.7 83.9 83.5 81.7 84.3 83.4 85.2
Acer 83.9 85.6 80.6 83.1 82.2 77.2 79.7 84.4 82.8 80.6 82.8 82.7 87.2 80.0 83.5 86.0 80.6 79.4 82.2 82.1 82.2
Dell 96.0 94.0 89.5 93.1 88.0 90.0 89.0 85.7 86.0 84.0 85.7 85.4 90.0 90.0 90.0 84.3 86.0 82.7 84.3 84.3 88.5
Base: 362
HP 90.0 90.0 86.0 88.5 86.0 84.0 85.0 86.0 81.8 77.8 88.0 83.9 88.0 88.0 88.0 84.0 83.2 80.0 84.3 82.9 85.8
Lenovo 92.9 89.4 91.4 91.4 88.2 89.4 88.8 89.4 86.7 79.6 89.0 86.5 89.0 86.7 87.8 87.1 86.3 83.5 85.1 85.5 88.1
Sony 89.4 84.9 88.6 87.8 84.5 86.9 85.7 84.5 81.7 82.2 87.4 84.2 84.0 85.0 84.5 84.5 83.7 82.9 85.7 84.2 85.4
Toshiba 80.0 80.0 80.0 80.0 80.0 83.0 81.5 76.0 80.0 80.0 80.0 79.1 80.0 82.5 81.3 81.8 83.5 79.4 84.1 82.2 80.8
Source: DQ-CMR Customer Satisfaction Survey 2012
Note:Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Given that notebooks as a category is undergoing an evolutionary shift with the advent of ultrabooks, delivering satisfaction will become more tough in the days ahead as customer expectations go up
DATAQUEST | A CyberMedia Publication
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March 15, 2012 | 31
Cover Story / Notebooks / Desktops
“Design is an important aspect of our customer strategy”
— P Krishnakumar, executive director, marketing, consumer, and SMB, Dell India and Mobility APJ
In the third phase, which is post-purchase, Dell’s priority is always to address customer concerns related to warranty and service support. To address this issue, Dell offers all customers an on-site service support in most districts today.
How did you manage to secure the top spot? In the last one year, Dell was actively engaged in meeting customer satisfaction through various initiatives. Since we have to win customers and retain them, we have to make strategy through which we could be always be a favorite and emerge as the first choice during their buying decisions. What has been Dell’s customer strategy over the years? Dell India has a 3-phase approach—pre-product, actual customer purchase experience, and postpurchase customer experience. Pre-purchase experience pertains to our product development cycle. During this cycle, we look into different customer segments and try to design products based on the latest trends and customer needs. For customers who are style conscious, Dell has laptops in different variants available. For customers, who are always on-thego, we have lightweight and thin notebooks like Dell XPS. During the second stage, which involves purchase experience, we endeavor to meet customer requirements. We offer all kinds of purchase experiences either through retail outlets, online orders, multi-brand stores and exclusive stores, etc.
How difficult is delivering customer satisfaction for a segment like notebooks? Since I mentioned that design is an important aspect of our customer strategy, Dell India always tries to influence its global design team to understand Indian customer psyche and develop products based on local trends and requirements. It’s always challenging to influence the global teams. But we have successfully done this, as you can see a variety of products meeting multiple customer expectations in the market. Secondly, we have multiple channels through which we reach out to our customers. Retail channel is one such. Training for retail partners was and is on our agenda. They need to be informed about the products. Unlike any other company, we trained our retail partners even in the upcountry markets. Third challenge is to pitch our products against different trends. We try to reach out to them through various channels and awareness campaigns such as TV and print advertisements.
Notebooks: Environment Friendliness of Vendor Industry
Acer
Dell
HP
Lenovo
Sony
Toshiba
The vendor seems to have a clear focus on being environment-friendly
4.3
4.1
4.4
4.2
4.4
4.6
4.1
The vendor takes timely initiative in product redesign
4.2
4.0
4.2
4.0
4.2
4.3
4.0
The vendor always comply with government and/or other regulations in respect to greenhouse emission
4.1
3.9
4.2
4.0
4.1
4.1
3.6
The vendor provides support to change the functionality in our existing IT systems to support our green programs
4.0
3.9
4.2
3.9
4.2
4.1
3.7
The vendor has come to us with products having clear energy efficiency advantage
4.0
3.8
4.0
3.8
4.1
4.2
3.8
The vendor has organized programs & events around green/energy efficiency
3.9
3.8
4.0
3.9
3.8
3.8
3.6
We have seen clear energy savings by using the vendor’s product over the competitor’s product
4.0
3.9
4.1
3.8
4.1
4.2
3.7
Source: DQ-CMR Customer Satisfaction Survey 2012
Base: 362 Note: On a scale of 1 to 5 A tough battle ensured in delivering the Green Quotient among all vendors
on post-sales and to deliver more customer satisfaction we aggressively worked on ways and means to address customer issues once our products are sold. For instance, our service network has spread across 700 cities 32 | March 15, 2012
in India. Today, what makes us apart from the league is our on-site service support in most districts. Besides, the company also offers a complete damage cover for quite a few notebooks for a period of 1 year.” visit www.dqindia.com
Sweet Spot
Lenovo made it to the #2 spot and it was only a marginal separation in terms of overall scores with Dell. And it is really a worrying factor for Dell, which needs to aggressively
DATAQUEST | A CyberMedia Publication
CSA 2012 fight it out with Lenovo in the coming edge performance on devices that Actionable Areas years. Both Dell and Lenovo have weighed less and at the same time huge product-depth oriented strategi- n Overall product functionality. does not compromise on functionality. n Vendors understanding/Domain Thanks to Intel pioneering its secondcally across buying segments, which knowledge of your business has clearly acted as a sweet spot for generation Core family of procesn Clarity of pricing contract both of these vendors. The overall sors and advocating the ‘ultrabook’ n Credit facility received challenges HP’s PC division faced concept that has all the trappings of n Demonstration/training/ a trend in the making. In OND 2011, seemed to have hurt its traction, and handholding with HP coming back on the track all the vendors came out with an n Expertise of the vendor to resolve Ultrabook offering and vendors like with some innovative products in the a problem last quarter will up its ante signifiAcer and ASUS took the lead and cantly in the ensuing year. now all the vendors have an ultrabook offering. Going forward, HP’s latest addition of Foilo Tasks Ahead range of ultrabooks might be a winner. Clearly, 2012 As we look at other vendors in the fray, the ones like will be the year for form factor for notebook space and Acer, Sony, and Toshiba retained their respective places. whoever offers a sub $1,000 ultrabook with features But all these vendors’ customer satisfaction scores like high performance, ultra light, and long battery life dipped a bit as compared to the last year. As we look at will get the most of the enterprise slice. vendors like Toshiba, there is a clear need to up their The Ultrabooks have come at the right time for the ante in customer satisfaction, as despite having some notebook industry. With the rapid escalation of tablets, of the best notebook models it needs to become more many in the industry felt that tablets will start dentproactive when it comes to competing with the likes ing into mainstream conventional notebooks space. But of Dell and Lenovo. Also, vendors like Sony need to with Ultrabooks the buyers now have a clear choice. For become more focused when it comes to enterprise maninstance Ultrabooks are full-fledged Notebooks that offer dates and need to clearly drive home its brand message mainstream computing experience but weighs almost the for the enterprise audience. same as Netbooks. Thanks to Intel’s 2nd generation of As we look at last year, there was an evolutionary Core family of processors and its Ultarbook specification shift in mobile computing devices like notebooks, which that has created a new category in notebooks in the shortfocused on the form factor and tried to marry leading est time frame
DESKTOPS
Coup d’état In a closely fought battle, HP edges out Dell to gain the top spot
D
esktops as a category started facing severe challenges with notebook and tablet form factors threatening its long-term survival. But as we look at the year went by in terms of customer satisfaction, there were few upsets and realignments. Dell’s domination over the years came to an end with HP-Compaq taking the pole position with #1 rank and displacing Dell to #2. While the #3 position was retained by Lenovo, the entry of Acer this year at #4 means HCL vacating last year’s position and went down south in the charts. The prominent exit out of the charts this time is Zenith, which was at #6 the previous DATAQUEST | A CyberMedia Publication
Desktops: Top Vendors Vendor HP-Compaq Dell Lenovo Acer HCL Wipro Assembled
Score 86.7 85.8 84.0 82.7 82.4 82.2 74.3
Rank ‘11 2 1 3 4 5 7
Rank ‘12 1 2 3 4 5 6 8
Changes 1 -1 0 new -1 -1 -1
sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note:Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Dell’s domination over the years came to an end with HPCompaq taking the pole position with #1 rank
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March 15, 2012 | 33
Cover Story / Notebooks / Desktops Desktops: What Satisfies Customers Overall product reliability Overall product functionality Convenience in operation & adoption of the product Overall - Product Responsiveness of the vendor to your specific requirement Vendors understanding /Domain knowledge of your business Overall – Pre Sales & Marketing Value for Money Clarity of pricing contract Credit facility received Total cost of ownership Overall - Price & Commercial Timely delivery/total time to intiate the project/installation Demonstration/training/handholding... Overall - Delivery & Installation Responsive - Always available for technical queries Expertise of the vendor to resolve a problem Availability of spare parts Interaction with service team Overall - Post Sales Service Overall Satisfaction
Industry 86.2 85.1 86.6 86.0 84.1 84.5 84.3 86.1 82.5 79.9 85.2 83.6 84.3 83.9 84.1 83.3 83.0 82.2 83.8 83.1 84.3
Acer 84.1 84.8 85.5 84.8 84.1 80.7 82.4 87.6 81.4 76.3 82.8 82.2 80.7 80.0 80.3 82.1 82.8 82.8 84.8 83.2 82.7
Dell 88.0 86.0 88.0 87.5 88.0 90.0 89.0 85.9 80.0 80.0 80.0 81.4 92.0 80.0 85.8 86.0 86.0 80.0 86.0 84.5 85.8
HCL 88.3 88.3 85.7 87.3 85.3 86.4 85.9 87.9 84.5 81.9 87.9 85.8 80.0 62.0 70.7 80.0 80.0 80.0 80.0 80.0 82.4
HP 90.0 85.0 87.9 87.8 87.5 85.7 86.6 86.0 86.0 82.9 90.0 86.6 87.1 88.0 87.6 85.7 85.0 82.9 86.1 84.9 86.7
Lenovo 90.0 83.4 87.2 87.2 81.7 86.0 83.9 86.4 83.4 80.0 83.4 83.4 82.6 83.0 82.8 83.8 82.1 80.4 82.1 82.1 84.0
Wipro 80.0 80.0 80.0 80.0 80.0 80.0 80.0 84.0 80.0 80.0 85.9 82.8 84.2 88.4 86.3 82.3 83.7 80.0 85.6 83.0 82.2
Assembled 76.0 76.0 88.4 80.5 76.0 60.0 67.9 86.8 84.3 82.2 80.0 83.1 87.9 60.0 73.5 60.0 60.0 85.3 60.0 66.4 74.3
Source: DQ-CMR Customer Satisfaction Survey 2012
Base 344 Note:Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction
Desktop as a category is in for challenging times as thin and powerful notebooks become desktop alternates. Given that vendors are expected to focus on innovative desktop forms like AIOs to retain their marketshare
“We have seen a lot traction for All-In-One PCs” — Ketan Patel, country manager, consumer premium and transactional volume, HP PSG India
Can you run us through some of the key consumer initiatives undertaken by HP in the last fiscal in the desktop space? HP is a leading brand when it comes to consumer preference. In order to retain consumer trust, the company constantly tries to come out with innovative products and services. In the last one year, the company has seen a lot of traction for All-In-One PCs and thus has given a range of options in this category. This is the reason we’ve emerged as a number one choice. HP’s range of All-in-One PCs has innovative design, small form factor, consumes less power, covers less space, and offers better viewing experience. Secondly, the company has an edge over its competitors because of the quality it offers in its products. This tradition has continued in the last one year and will continue. What are some of the challenges you encounter in delivering customer satisfaction? Challenges are opportunities. In the All-In-One PC space, the challenge has been to meet consumer expectations. Since 34 | March 15, 2012
customers come from different strata, thus have different needs. HP has tried to cater to their demands through different models. In order to address this challenge, the company is continuously coming out with compact PCs. Furthermore, length and breadth of the company poses another challenge. To reach out to consumers in the different parts and be able to service them post-sales is a challenge which the company has addressed by building up a strong service network. The company offers its consumers on-site service in all parts of the country. We cover around 1,000 towns in India and have more than 150 service centers. What steps do you take to reach out to customers and deliver on their expectations? Since we don’t sell directly to the consumer, it’s important to beef up the sales network through channel partners. And to communicate the message to the consumers is equally important. We always make efforts to ensure that the consumers get proper information about the products that we have in the portfolio.
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Cover Story / Notebooks / Desktops Desktops: Environment Friendliness of Vendor All
Acer
Dell
Hcl
Hp
Lenovo
Wipro
Assembled
Vendor seems to have clear focus on being environment friendly
4.3
4.3
4.4
4.4
4.4
4.3
4.3
4.4
Vendor takes timely initiative in product redesign
4.1
4.0
4.2
4.2
4.2
4.0
4.2
3.9
The vendor always comply with government and/ or other regulations in respect to greenhouse emission
4.0
3.8
4.0
4.2
4.0
3.9
4.0
4.0
Vendors provides support to change the funtionality in our existing IT systems to support our green programs
3.9
3.8
4.1
4.1
4.0
3.9
4.0
4.0
The vendor has come to us with products having clear energy efficiency advantage
4.1
4.1
4.2
4.1
4.2
4.0
4.1
4.0
The vendor has organized programs & events around green/energy efficiency
3.8
3.6
3.8
3.9
4.0
3.7
3.9
3.8
We have seen clear energy savings by using the vendors product over the competitor’s product
4.0
3.9
4.1
4.2
4.0
3.8
4.1
3.9
Base: 344 Note: On a scale of 1 to 5
Source: DQ-CMR Customer Satisfaction Survey 2012
Commitment to Green initiatives topped vendors’ agenda. They also attempted many ways to comply to various Green requirements
year. Interestingly, the assembled segment did not find any change in its rank.
Actionable Areas
A Closer Look
n Convenience in operation and adoption of the product
As we take a closer look at the parameters, what worked in favor of HP-Compaq were overall price, commercial, delivery, and installation parameters. When we look at overall-pre-sales, Dell was the clear leader, but on all other parameters HP managed to edge the competition out in some cases by a whisker and in some with a wider margin. As we look at product-wise attributes, except for overall product parameter on which the customer satisfaction grew and in all other attributes the overall satisfaction came down as compared to the previous year. Moreover, overall pre-sales is one area that saw significant decline compared to the last year. Clearly, vendors need 36 | March 15, 2012
n Overall product functionality n Vendor’s understanding/Domain knowledge of your business n Demonstration/training/handholding n Expertise of the vendor to resolve a problem n Availability of spare parts.
to do some homework to up their individual scores. While desktop as a category is adopting innovative form factors like All-in-One (AIOs), the buyer segment and profile is so diverse. Even on commercial side, customers looked closely at graphical capabilities, bundling offers like large screen LCD monitors and value for money, which were once the core requirement by consumers. Looking at the parameters and visit www.dqindia.com
vendors faring in it, every vendor has got a sweet spot and it is this sweet spot that tilted the rankings. Also if we look at pre- and postsales, there seems to be a need for continuity of the same momentum at the post-sales stage. It is the postsales that makes for bigger customer satisfaction and all vendors need to look into it more closely going forward. The promises and commitments made in the pre-sales phase need to be delivered 100%.
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Cover Story/ Security
Securing Enterprises With the threat landscape changing by the day, a challenging industry environment was created. Symantec outsmarted every other vendor to retain its #1 position
W
ith growing data comes growing pains and whatever in digital format always faces the risk of getting poached, stolen or getting corrupt by a virus or malware and whole lot of other things. Over the years the reaction to a security threat has changed from a virus centric defensive approach to something much broader. A look at the security marketplace will stand in testimony and there are numerous vendors of all sizes offering a plethora of security solutions. If we look at some available threat landscape statistics, it is indeed baffling in terms the scale of risk enterprises face. Not just external threats, internal attacks too are mounting and are just as serious considering their implications like data loss, market credibility, and compliance-related issues. For instance, 83% of threats faced by Indian companies
Security: What Satisfies Customers Overall Product Reliability Overall Product Performance Convenience in installation and adoption Scalability Overall - Product Responsiveness of the vendor to your specific requirement Vendors understanding/Domain knowledge of your business Overall - Pre Sales & Marketing Value for Money Clarity of Pricing Contract SLA related commercial Terms Overall - Price & commercial Timely delivery/total time to initiate the project/ Installation Demonstration/training/handholding initiative by the vendor Overall - Delivery & Installation Responsive - Always available for technical queries Geographical reach to provide service Adherence to SLA agreed upon Expertise of the vendor to resolve problem Interaction with service team Overall - Post sales service Overall Satisfaction
Industry
Security: The Top Vendors Vendor Symantec McAfee Cisco Microsoft Trend Micro Check Point QUICKHEAL
Score 88.1 85.4 85.2 84.8 84.7 84.3 83.8
Rank ’11 1 3 4 5 2 6
Rank ’12 1 2 3 4 5 6 7
Change 0 1 1 1 -3 0
sUp tDown n No Change Source: DQ-CMR Customer Satisfaction Survey 2012 Note: Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Caption: Symantec managed to retain its top spot and was ahead in the charts with high scores across parameters.
Cisco
87.5 85.3 83.6 85.1 85.4 85.4
Check Point 84.0 84.1 85.9 81.8 83.9 85.0
Microsoft
Quickheal
Symantec
90.0 88.0 84.0 80.0 85.4 84.0
McAfee ( Intel ) 88.8 87.4 84.7 87.9 87.2 86.5
90.0 86.0 88.0 84.0 87.2 82.0
87.7 86.5 78.8 84.1 84.1 87.1
96.0 90.0 85.1 85.1 89.1 88.0
Trend Micro 90.0 85.2 84.0 86.7 86.7 86.2
84.4
84.1
86.0
85.1
86.0
82.4
90.0
84.0
84.9 86.1 82.5 84.6 84.5 86.4
84.5 84.0 81.4 84.7 83.5 86.8
85.0 86.0 84.0 86.0 85.4 90.0
85.8 86.5 83.7 86.1 85.5 84.2
84.1 84.0 82.7 80.0 82.0 84.0
84.6 85.5 85.5 80.6 83.5 85.9
89.0 86.3 81.3 85.5 84.6 90.0
85.1 86.7 80.0 83.3 83.4 86.8
84.3
85.0
80.0
86.5
87.0
84.1
94.0
80.0
85.3 85.6
85.9 85.5
84.7 86.7
85.4 85.6
85.6 87.6
85.0 85.3
92.1 87.2
83.2 85.7
82.1 82.3 85.3 84.5 84.0 84.8
82.3 83.7 83.2 84.6 83.9 84.3
80.8 84.0 86.7 87.5 85.4 85.2
80.5 84.7 81.4 81.9 82.8 85.4
84.9 78.9 89.7 84.3 84.9 84.8
84.1 76.5 82.4 81.2 81.6 83.8
83.4 82.6 88.5 85.5 85.5 88.1
84.3 80.0 86.7 85.7 84.4 84.7
Base: 364
Source: DQ-CMR Customer Satisfaction Survey 2012
Note:Scores are on a scale of 100 with 100 indicating the highest degree of satisfaction Caption: Symantec scored high on parameters like overall delivery and installation and way ahead compared to other vendors on these parameters
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March 15, 2012 | 37
Cover Story/ Security
“Engaging and equipping the partners and skilling them ensures the right product communication is delivered to customers” —Anand Naik, director, systems engineering, Symantec
Symantec has topped the CSA charts on security. What do you think are the key contributing factors for this? There are 3 key areas on which our customer engagements get manifested. For the large enterprise we have direct relationships as well as through SIs and large partners. Right from the pre-sales to deployment to post sales we engage with the customers proactively delivering the best possible value at all levels of interaction with them. The second area is engaging our partners to effectively position our offerings in the market and we ensure that they deliver our product strategy effectively. We have a very strong channel program and ensure that they communicate the right messages. The third critical area is the support mechanism which in turn we get customer feedback at regular intervals. We measure these feedbacks in many different ways and orient out customer strategies. In the overall delivery and installation parameter Symantec is way ahead compared to other vendors. What is your approach here? I think one of the key differentiators we have in our channel organization relates to deepening their skillsets on our product
are due to internal security breach, says a Frost & Sullivan CIO survey. Internal security breaches by employees constituted 43% of the surveyed companies, 42% suffered financial losses, while 35% suffered intellectual property losses. What is more of concern was the fact that a significant number of CIOs in India does not have a fixed budget for IT security. Leading vendors industry surveys last year has revealed that many organizations faced external attacks, including phishing, theft of proprietary data and DDoS while internal theft of information experienced an average of 5.8 times. Given this backdrop as we look the survey findings it signifies how challenging is delivering customer satisfaction is and how the customer equations keep changing. While there were many ups and downs in the vendors rankings, security major Symantec managed to retain its top spot and was ahead in the charts with high scores across parameters. 38 | March 15, 2012
offerings so as to ensure they position our offerings strategically in the market. Towards this end couple of years back we launched our channel specialization program and through which we reached all our partners across and trained them with the necessary knowledge so that they can pass on the right message to our customers and add value at every stage. These initiatives over a period of time has led to our scoring high on these parameters. In an extremely challenging market such as security, what are the key customer centric challenges and how did you address them? The threat landscape is constantly evolving and Symantec has been in the forefront of addressing those challenges. Customers today face a bunch of challenges when it comes to managing their digital assets securely. They need to take a lot of aspects into consideration when it comes to putting in place a security mechanism that needs to factor all the threat scenarios—external, internal, malware, endpoints, data theft, et al. Furthermore they need to address and comply with whole lot of regulatory mechanisms and standards. So for any security vendors, they need to overcome these challenges and advocate the best possible solution that makes enterprises to manage these challenges.
Actionable Areas
n Overall product functionality n Convenience in operation and adoption of the product n Vendor’s understanding/Domain knowledge of your business n Demonstration/training/ handholding n Expertise of the vendor to resolve a problem n Availability of spare parts
Symantec scored high on parameters like overall delivery and installation and way ahead compared to other vendors on these parameters. Probably one big upset was Trend Micro which went down from last year’s #2 position. McAfee bettered its position and inched closer to #1 by taking on the #2 spot. Cisco too climbed up compared to its previous year’s #4 spot. Clearly the changes in #2 and #3 spots indicate how the equations are changing and how visit www.dqindia.com
aggressive vendors compete with each other. As we look ahead the customer expectation on the security market will get tougher by the day as CIOs struggle to create a seamless security strategy as new threats keep surfacing. One can have ample pointers as we look at the 2011 survey done by Symantec last year on the security issues in the Indian Financial Services industry report revealed regulatory and governance mandates as a key driver of IT security for 50% of financial services enterprises. Increasing e-commerce and mobile transactions were identified by one in five enterprises as another reason for increased adoption of security. Moreover during the last financial year, 23% of respondents experienced an external attack ranging from phishing attempts, theft of proprietary information and denial of service attacks. Notwithstanding challenges a booming market for security solution is on the anvil in the days ahead. n
DATAQUEST | A CyberMedia Publication
Cover Story / Analyst View
Tilt in the Market Dynamics
S
omeone once said that many businesses realize their set targets by being able to see through the market dynamics and create a business plan in sync with the current market dynamics, and prepare for the future. We present here the detailed analyses of some of the segments from CyberMedia Research (CMR) analysts on the current dynamics and the road ahead.
Desktops & Notebooks
The PC market sales in India have been impacted by the weak buying sentiments of the consumer as well as the uncertainty in global scenario. While the US economy continues with its painfully slow recovery trajectory, the European crisis had only made matters worse for the famed Indian IT/ITeS companies, which could not increase the IT infrastructure spend. While competition continues to heat up in the PC market, HP faces difficult challenges ahead, bogged down with transition in distribution structure change as well as global flip-flop of the future of PSG group. While Dell continues to ride on both consumer and commercial, Lenovo emerges as a player to watch out for. It has focused on SME in a big way, continues its aggressive journey to penetrate deep into Indian hinterland. Sony remains quite aggressive as well, continues milking the brand and generating higher notebook numbers. Of late, the flood in Thailand has rocked the HDD market dynamics. The assembled PC market has become the biggest victim of the same. The phenomenon is likely to continue till middle of 2012 before things return to normal. Mini notebooks as a form factor continue to struggle, while there is movement on All-in-one 40 | March 15, 2012
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CSA 2012 desktops and ample interest around tablet as a form factor. Consumers are waiting to see how offerings like Aakash shape up, before making a choice. Although in all probability, tablets are likely to coexist for some time now, rather than wipe out the PCs at least in India.
Enterprise Apps
Market Direction: The Enterprise Applications (comprising of Enterprise Resource Management, CRM, SCM, and other applications) market will grow at faster rate in 2012 due to new upgradations and in revamping their IT infrastructure to expand and compete on every area of business. This growth is seen not only in large organizations, but also in the mid-sized enterprises across verticals. Again this year too BFSI, and Telecom would be the major spenders on applications. Telecom is one of the major spenders on ERM and CRM applications. Telecoms are spending on ERM and Business Analytics applications to streamline their back-end and peripheral processes, and also on customer relationship management and contact centers to retain their existing customers as well as to target the potential customers. On the other hand, manufacturing vertical, which has been the mainstay for ERM deployment, has begun investing in SCM applications and contemplating on the BI applications. Other emerging verticals are Media and entertainment due to major investments in digitization of content. Retail and wholesale, travel and transportation, and healthcare remained focused on core activities for their IT spending. Harmonizing Legacy Infrastructures: With the nature of business these days, enterprises need to build their IT assets in a way that will enable the launch of new business models and counteract their competitors’ business models DATAQUEST | A CyberMedia Publication
While the US economy continues with its painfully slow recovery trajectory, the European crisis had only made matters worse for the famed Indian IT/ITeS companies at short notice. Purely from a technology perspective, there are certain challenges. While new generation platforms are rising in the shape of Cloud Computing, Mobile Technology, Unified Communication etc, supporting legacy assets will soon become a liability. Transforming these is something that is not going to happen overnight. However, with the market movements on both the enterprise side and the supply side it looks like things will eventually fall in place. Usability of enterprise applications is something that enterprises are focusing on these days. Usability refers to making products more convenient, practical and functional. Typically, usability as a concept used to be associated only with those applications that were focused on end-users. However, with enterprise applications like CRM, Business Intelligence, and ERP becoming accessible on mobile devices, customers are increasingly looking at infusing the element of usability for enterprise applications. Changes which organizations seek while deploying apps range from introduction of new levels of process flexibility, improvement in the transparency of ownership costs, and acceleration of the speed of process execution. visit www.dqindia.com
With applications evolving towards greater levels of flexibility, enterprises will have a more active role in defining the business processes and performance metrics of the software. Enterprise apps have experienced consolidation over the last few years and have delivered moderate innovation and revenue growth. Keeping pace with this momentum, globalization, rapid market changes and regulations have turned the desire for more agile and usable applications into a business necessity, which means that application vendors must deliver dynamic business Apps or risk becoming obsolete.
India Printer Market
In CY11 the overall IT market remained soft under the global uncertainty clouds; hard disk drive shortages due to floods in Thailand also impacted the printer market in fourth quarter. The demand in the printer category is likely to increase in the longer run. Later on at the fag end of year, pressure of weakening of the Indian Rupee against the USD led to rise in prices. The Overall A4 paper size printer market in CY11 continued to be led by HP, despite the supply shortages faced by the vendor in laser category, followed by Canon, Epson and Samsung, respectively. Vendors like Brother, Panasonic, and Xerox also witnessed a growth in their market share across different regions of the country. In this year, a shift was observed from single function printers to multi-function printers due to decreasing price gap between them in the technology category. In comparison to the last year for single function printers, DMP and Inkjets market was almost static where as laser segment has shown the growth. For multi-function printers both inkjets and lasers witnessed the growth. Also there was technology shift in March 15, 2012 | 41
Cover Story / Analyst View the market from inkjets to lasers. Online shopping sites are upcoming avenue for printer sales. The second half of 2011 was marked with launches of new models by all the major vendors. Epson being quite aggressive in the market, widened its portfolio in inkjet with the launch of L100 and L200, positioned to deliver low-cost continuous printing. They also forayed into the laser MFP space for the first time with the launch of MFP MX14. The new models are expected to show good growth for the vendor. Following the trend, Samsung launched 2 models ML1676 and 3201G, which are compatible with ‘chipless’ toners. In Q4 2011 the market leader, HP launched new models P1106 and 1108 in laser printer category. Canon also came up with the inkjet AIO printer E500 and laser AIO MF3010 in Q4 2011.
Security Solutions
The Security Software market is growing at a CAGR of 14% since 2008. The Security Software market is estimated to reach $180 mn by end of 2012. There are several emerging trends which are contributing to this growth in security market in India. The major consumption of the security software is due to various threat factors which are both internal and external to an organization, technological as well as non-technology related issues. Technological advancements also entail security issues to be addressed in these new technology environments. New technologies and the way users are interacting and collaborating also bringing the major change in the security landscape. Social networks to collaboration portals to technologies like virtualization and cloud are exposing new security challenges. Vendors have started to take notice of this critical aspect and are 42 | March 15, 2012
With the nature of business these days, enterprises need to build their IT assets in a way that will enable the launch of new business models and counteract their competitors’ business models addressing end point security for these increased end points. The web continued to be the prime source of threats. Malware, phishing attacks to gather critical data continue to affect the security landscape. The consumer segment is price sensitive and is being driven by newer engagement models like managed security services and Security as a Service. Large vendors are reaching the enterprises by bundling security software with Security as a Service. Vendors focused on the SMB and mid enterprises segment are offering multiple user licenses at competitive price points. There are also threats to IT Security from cyber terrorism and cyber warfare, critical Government wings have started looking at the options available to secure from these dangerous threats. Government spending will be directed towards addressing these threats from different geographies of the world. Enterprises also need to comply with various regulatory issues in India as well as those from other regions of the world, especially in the BFSI and IT/ITeS sector. BFSI, Telecom and Government were the key adoption verticals for security software. Growth in Related Avenues: The Security Appliances market visit www.dqindia.com
is growing at a CAGR of 18% since 2008. The Security Appliances market is estimated to reach $165 mn by 2012. The growth was driven mainly by increased spending from verticals like IT/ITES, Government and BFSI. UTMs’ market is faring well due to the focus of organizations to deal with the increased threat levels. The UTM market at low price points catering to SMEs is getting very competitive. Vendors are offering scaled down versions of products as well as modular solutions to cater to requirements of SMBs. IPS is also gaining increased attention from organizations in BFSI, IT/ITES and Government verticals. Vendors are increasingly focusing on adding channel partners with a regional focus to increase their reach. Market shares will be significantly impacted by pricing and channel strategy. The trend in the market is now towards integrated security solutions with Security as a Service rather than standalone applications. Going ahead enterprises will focus on securing increasing endpoints as well as the network. Security assessment of enterprises to assess the security situation in their enterprise will be increasingly undertaken to prepare a roadmap for future security related spending. The security solutions market will continue to be addressed by vendors from a consultative approach to enlighten clients on the new and emerging threats and the required steps to be taken to tackle them. The market is going to see newer entrants in the market place and newer appliances with increased capabilities will come in the market catering to different segments of enterprises. n —Sumanta Mukherjee
GM, research & consulting;
Kamal Vohra
senior manager, research & consulting;
Apalak Ghosh
manager, research & consulting, CyberMedia Research (CMR) maildqindia@cybermedia.co.in
DATAQUEST | A CyberMedia Publication
CIO of the Month
Change: Call of the Day As Indian enterprises gear up to take cloud, CIOs seem to be in two minds when it comes to bracing up to it. While a few are hesitant, most are unsure about their role in the changed scenario. But this is not to say that all are on the same side of the fence. In fact, there are CIOs who are transforming themselves into cloud enablers (in order to continue to remain relevant) by tweaking their service and sourcing skills. As per a CIO, to be able to write tight contracts is becoming a prerequisite in the times of cloud. Although CIOs of differing opinions may not agree, however all of them seem to have reconciled to the fact—the CIOs have to play the role of an enabler in order to provision for cloud business services. And the good news is that business leaders too believe that the role of the enabler has to be essayed by IT leaders themselves. Smart business leaders know that cloud is a must; and it is their CIO who can enable their journey onto cloud, but for the CIOs too realignment of their IT skills is required or else there will be a gap between business demand and IT supply. Experts say that realigning for the cloud calls for CIOs to develop internal skills and becoming expert in third-party outsourcing. Security, compliance, and integration are some of the key issues that will determine the success with cloud, apart from of course running due diligence on service providers to ensure that any potential cracks in service delivery do not cataclysmically impact performance. According to a report by CA Technologies surveying the Asia-Pacific CIOs, 70% of the respondents felt that they needed to develop new skills to remain effective in the future. The report titled ‘The Future Role of the CIO’ goes on to reveal that around 55% said that they wanted to acquire new skills like brushing up on their knowledge about regulatory and compliance issues, privacy and data protection laws, and understanding risks. The report only reconfirms what we knew all along that CIOs in the AsiaPacific want to learn new skills that go beyond technology to better manage the changing demands on their job like 54% of the respondents (270) wanted to develop their understanding of commercial procurement, 52% wished to improve negotiation skills, and 46% wanted more competency in legal matters. And, most importantly, 28% wanted to develop their service performance skills, an indication that it’s the right time for the CIOs to understand the business requirements rather than to focus purely on what technology can deliver. CIOs need to understand and admit that their roles are under the scanner and are being redefined. The need of the hour is to maximize and optimize the use of IT, especially when it comes to planning of business goals. Gone are the days when a CIO had to only manage the IT infrastructure, he is now responsible for delivering business services in order to ensure that his organization 44 | March 15, 2012
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stays lean and agile by reducing time-to-market, reducing operational costs, and enhancing productivity. And, once any CIO is able to achieve this, IT will see an increased value delivering business service innovation, discovering new streams of revenues, and most importantly staying relevant in the dynamic times like these. Stuti Das stutid@cybermedia.co.in
Defined Structural Alignment Required for Cloud
A
s a veteran CIO, Samrat Ashim Das, CIO, Tata AIG has seen it all. On cloud, Das believes that there are no right and wrong answers to it. “When it comes to realigning IT skills with the
onset of cloud, I would say that the answer is both yes and no. There is no defined structural alignment required for cloud; but having said that certainly cloud benefits are there for all to see, so whatever marginal alignment in the IT roadmap or IT strategy has to be made, it can be done fairly easily,” shares Das. Das goes on to elaborate that cloud computing is essentially balanced on 3 pillars: Economics, security, and manageability. “From the economics point of view, cloud is an excellent way to move from a fixed-cost regime to a pay-as-use regime to save costs. From the security standpoint, in today’s times, especially from the financial services industry perspective,
Samrat Ashim Das CIO, Tata AIG
security is fundamental since IP is at stake. Therefore before moving to cloud, the CIO will have to decide whether or not security is being compromised.
to be clear on your priorities and at the same time
Similarly, from the manageability viewpoint, it
evaluate the associated risks and rewards and then
makes complete sense to put your IT on cloud and
take a decision on cloud. His advice for all: ‘Don’t
ask someone else to manage it for you,” says Das.
rush in haste’.
However having said that, Das does not forget to
Das also goes on to add that any proposition or
mention that the context is crucial, since no one
service needs some amount of maturity levels, so
solution fits all.
the best way out is to wait for industry maturity and
Cloud evangelists have argued in favor of cloud. For a CIO, cloud is certainly a good solution, but you need DATAQUEST | A CyberMedia Publication
then take the decision whether or not to go on cloud, the realignment is fairly easy.
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March 15, 2012 | 45
CIO of the Month
Be Open to Change
“C
loud maybe a new term but it is ‘old wine in a new bottle’, literally, at least for the old tech people like me,” says Dr Neena Pahuja, CIO, Max Healthcare. At least in the case of private cloud, which is basically a data center hosted on-premise, however when it comes to public cloud, different skill sets are required as they have to take into account factors like security and how beneficial it is for their environment. In the case of public cloud, the alignment is greater. Earlier CIOs were delivering business, but in today’s times, the CIOs are responsible for delivering business benefits and writing tight contracts. Hence managing security are some of the IT skills that will need realignment. “While in the next 2-3 years, I don’t see any visible changes, but yes, I do see a change in the next 4-5 years,” she adds. The realignment is certainly easy for somebody using private cloud. For instance, Max Healthcare had signed Dell Services for converting the IT infrastructure of all 8 Max Healthcare facilities into
46 | March 15, 2012
Dr Neena Pahuja CIO, Max Healthcare a private Multi-Protocol Label Switching (MPLS) cloud running remotely from Dell Services Data Center in Noida.
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DATAQUEST | A CyberMedia Publication
The cloud infrastructure deployment makes Max Healthcare one of the most technologically advanced healthcare chains in India, with a near plug-and-play capability for information technology deployment as they add more hospitals/facilities to their network. Furthermore, the private cloud improves the availability of their healthcare information systems and analytical tools and sets the stage for the rollout of Electronic Health Records (EHR) for enhanced patient care. Therefore as per Pahuja, “If tomorrow I decide to take the services of Amazon, then realignment will
not be that tough, I just have to make changes in the contract.” The arrival of cloud has for some meant loss of power, but Pahuja disputes that such apprehensions are uncalled for. “Change Management is the answer. The world is changing and it is important to realign yourself with the changing times,” she says. Last but not the least, Pahuja signs off by sharing that the key for the CIOs is to be open to changes, if one sticks to old ways then it will not be long before the CIOs becomes outdated. Change is the call of the day.
It’s All About Mindset Change
C
hange is the order of the day and IT department too is no exception. The role of the IT department has undergone a transformation; now enterprises want to fully utilize their resources irrespective of hardware, software, or even manpower, which have to be aligned with business requirements. In the early days, teams used to fall in the trap of hardware acquisition like how many servers to buy, etc, forcing the resources to be involved with maximizing uptime, controlling costs, etc. “With the onset of cloud, situation changed, therefore it has become essential that CIOs understand the full potential of cloud and its related benefits like agility, integration and scalability, full utilization of resources, and acceleration. “Now the focus is on ‘What can I get from it?,” says Ritu Madbhavi, VP IT FCB Ulka. The CIO has to align resource optimization with business needs. As per Madbhavi, when it comes to realignment, CIOs have to identify the applications best suited for cloud. Like in her case, she already has put some applications like Mail Exchange, ERP, Intranet, etc, on cloud. It is for the IT team to understand what is cloud and what are its related benefits—all of this have to be ingrained in the CIOs mindset. The CIOs have to learn to move away from concentrating on maximizing uptime to understanding the organizational business needs and how IT can be aligned to it. For instance, cites Madbhavi, cloud allows you to build your Proof of Concept (PoC) at inconsequential DATAQUEST | A CyberMedia Publication
Ritu Madbhavi SVP, information technology, Draft FCB Ulka Group costs and one does not have to get into building business base. Like Pahuja, Madbhavi also believes that it is all about mindset change. The realignment is not tough but it critical that you get cloud ingrained into the IT culture. She offers a piece of advice to hesitant CIOs: The skepticism has to go and we have to remember that cloud is here to stay. Cloud will not take away the role of the IT department, it will allow you to free up your resources. n
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March 15, 2012 | 47
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Collections as ‘Customer Care’ The companies need to develop and execute strategic plans that leverage the contact center, enterprises, etc, to meet the demands of the consumers
A Technology and analytics that allow the function to be proactive and transparent serve to avert and mitigate reputational and regulatory risk, while also equipping its agents to be in control of information to help deliver the most personalized service 50 | March 15, 2012
s fears of double-dip recession resurface, banks in the biggest emerging economies are losing the confidence of investors. In India the situation is no different. Money is becoming costlier, company revenues are decreasing. Consumer confidence and buying power are down. Lastly, interest burdens are rising worldwide and leading to incidents of loan defaults. The growth in non-performing assets (NPAs) as a percentage of banks’ loan portfolio was almost at a 5-year high in the April-June quarter. Loan-loss provisions at SBI, the nation’s largest lender, rose 77% in the first 3 months of 2011, while net income fell 99%. The trends could worsen if interest rates harden—a strong possibility given that there are no signs of inflation coming down. If high-inflation drives interest rates higher, bad debts are then bound to spiral as rising number of consumers will face a precarious balancing act. The average consumer will be forced to choose between covering basic living expenses or paying down their accrued debt. The banks in India are faced with an uphill task of meeting dueling objectives of driving higher revenue growth, while maintaining customer relationships. How can these banks maintain revenue momentum within this challenging environment?
Measures to Reduce NPAs
The collections have been long perceived as persistent calling with the single intent of getting consumers to pay. From a recovery perspective, the process has always been slow, with no guarantee of delivery or a convenient means of quick response. The process is often inefficient and expensive. The limitation of a traditional phone call to handle a data exchange has also been a major shortcoming for efficiently negotiating collections interaction with a customer. Agents have a difficult time knowing when to call, or what phone call will yield a direct contact. Equally worrisome is the prospect of regulatory action and the frequent policy change in this regard. The time has come to make this a more pleasant experience for collectors and consumers alike—one that helps banks demonstrate empathy to consumers while ensuring that loan defaults are minimized. Efficiency and agent empowerment are the keys. visit www.dqindia.com
DATAQUEST | A CyberMedia Publication
Despite remarkable technologydriven advances, collections remain labor-intensive, and the cost of human capital (agents) is the greatest expense. The functional business metrics are reduced charge-offs, total value collected, and number of customers retained. But for leading indicators, managers have traditionally focused on interim operational metrics such as accounts-per-collector, calls-per-account, penetration rate, agent idle time, and so on. The theory was that if the agents performed well against operational metrics, the functional business metrics would follow suit. This correlation held well enough to be part of most traditional ‘collections’ dashboards. However in increasingly challenging times, the focus for managers need to be on bottom line results. While operational metrics are, and will remain relevant from an operational perspective, ensuring that the business metrics are surfaced and used as the measuring stick for agent performance is the new reality.
Care for the Customer
Most managers fail to capitalize on the availability of newer consumer communication outlets in terms of personalized communications. Be it individual email boxes, personalized mobile ‘smartphones’, instant messaging (IM) contacts, SMS for mobile devices, social networking contacts, etc, the options are innumerable. Consumers are not an amorphous mass of bad loans. The customers who have fallen behind on their payments today may be the customers whose business you will want in the very near future. Clearly, the banks and recovery companies can no longer afford to focus only on collecting money owed; they must also treat individual debtors as future high-value customers to make sure they are DATAQUEST | A CyberMedia Publication
building bridges and helping tide them over their current difficulties, even when the measured goal is avoiding loan defaults. It is time that collections earned its place at the customer care table. It would be a mistake to take a step backwards by denying this function the tools it needs to perform in today’s high-stakes, analytics-driven, customer care world. Given that advanced analytics and decision automation are still in early stages in this function at most banks, the opportunity exists for dramatic initial gains, followed by sustained high performance. Technology and analytics that allow the function to be proactive and transparent serve to avert and mitigate reputational and regulatory risk, while also equipping its agents to be in control of information to help deliver the most personalized service is the ask of the day. Companies like one large financial company, for example, leveraged IT support from Aspect, and managed to significantly decrease abandonment rates. While the national average for over 30 days’ payment delinquencies is approximately 1.63%, following implementation the company was seeing delinquency rates of 0.90% for over 30 days and 0.15% for over 60 days. The group was able to decrease average speed of answer to 60 seconds and decrease abandonment rates by approximately 4%. As a result, they are now averaging a low 2.0% abandonment, along with increased pay-by-phone interactions from 25% to 56%.
Reduce NPA Framework
Consumer is Moving Online: So now is the time to exploit the new web based contact environment. Not just the old telephone network, since the limitations of the Telephone User Interface (TUI) also restrict the flexibility of automated self-service applications, requiring
greater use of live assistance than online web applications. n The Consumer is Mobile: The consumer has a preference of when and were he should be reached. A unified communications approach, coupled with mobile, multi-modal ‘smartphones’, can expand the benefits of outbound self-service applications and reduce the need for live assistance to provide additional information. n Consumers Won’t Move to Universal Online Internet Access: The consumers will also not move to UC and multi-modal ‘smartphones’ overnight. So the function must take a phased approach and continue to support the traditional customer telephone contacts while also transitioning to new UC contacts, with live assistance. Collections can be challenging. But understanding the consumer needs and environment is at the heart of successful debt recovery. Leveraging technology astutely while approaching the customers with debt issues can make all the difference. While phone and web channels remain vital to customer service, the consumers will always explore newer modes of social communication using a channel that suits them, which depends on demographic profile of the customer and the rampant increases in popularity of emerging channels. To be successful, the companies need to develop and execute strategic plans that leverage the contact center, enterprises, right partners, and web 2.0 technologies to meet the demands of today’s consumers. n
n The
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RAJIV SONI
The author is country manager, Aspect India, South Asia, and Middle East maildqindia@cybermedia.co.in March 15, 2012 | 51
IT in Financial Inclusion
An All-round Strategy Low-cost technology strategies for banks to implement and improve the effectiveness of their financial inclusion initiatives, going beyond token enrolment
A
s one of the keys to economic well being, financial inclusion is part of the priority list of governments seeking to bring the world’s 2.5 bn unbanked within the ambit of formal banking. On the surface, many of their inclusion initiatives have succeeded in their goal: Between 2004 and 2008, South African banks signed up 6 mn low-cost, entry-level bank ac52 | March 15, 2012
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DATAQUEST | A CyberMedia Publication
counts. India’s banks responded to the Reserve Bank of India’s call to spread financial inclusion by enrolling nearly 16 mn people within the space of two-and-a-half years. Similar stories abound in other parts of the developing world. However the problem is that many financial inclusion programs lose steam after the initial success with customer onboarding. As a result, a very large number of accounts become inactive within a few months of being opened. What can banks do to improve the effectiveness of their financial inclusion initiatives so that they go beyond token enrolment, and fulfill their real purpose of delivering the benefits of banking to each and every citizen? This article tries to answer that question by exploring various strategies.
Challenges and Strategies
But first, let us take a look at the common barriers to financial inclusion. Many banks have pursued this agenda out of regulatory compulsion, but are yet to discover a viable business case. For example, in India, the no-frills account—which has a zero minimum balance requirement, and attracts negligible transaction fees—is a loss-making proposition for banks. Another problem is that low-income customers do not have the capability to transact often, and when they do, do so in small amounts. Ensuring the security of transactions, and more importantly, convincing customers that their money is safe is another area of concern. Therefore apart from market factors like customer need and competition, banks might like to consider other aspects, ranging from cost of delivery to risk management, while devising a financial inclusion strategy. There are many elements that a financial inclusion strategy can DATAQUEST | A CyberMedia Publication
Finding the right partner with a widespread local network— like consumer products or courier companies—is the key to bringing down the banks’ cost of distribution leverage for success. Let us look at each one in turn. Customer: The profile of the average inclusion customer reads somewhat like this: He/she lives on less than $100 (about Rs 5,000) per month; has limited or no access to banking; and by virtue of not being able to afford fees, does not fit the normal banking model. This customer doesn’t quite understand how forgoing work and wages to make a trip to a distant branch is worthwhile. Banks can overcome these reservations only by tailoring their approach to local needs, attitudes, beliefs and practices. Product: The success of sachet marketing in rural areas shows that products, financial ones included, must be right-sized to fit the micro consumption behavior of customers who make up the inclusion segments. Hence, apart from ensuring that products are accessible through convenient touch points, come with the right features, are simple and intuitive to use, give customers a sense of security and cost very little to acquire and maintain, banks could look at packaging them in small sizes. Starting with a basic bank account to enable transactions, banks could extend their product portfolio to support customers’ needs visit www.dqindia.com
for funding, saving and protection with micro-loans, micro-savings and micro-insurance, respectively. Products may also be tailored to the seasonal nature of demand in such markets, where the requirement for loans and insurance not only follows the planting cycle, but also fluctuates with environmental conditions. Business Model: The prime targets of the normal banking model are customers with low volume but high value, ‘all-season’ transactions; with financial inclusion it is exactly the opposite. With cost being an overarching factor, the goal of any financial inclusion model is to keep it to a minimum. Recognizing that the solution lies in achieving huge scale to bring down the cost per customer and per transaction, banks are trying to penetrate deep into untapped segments using low cost technology and delivery channels, and are offering a wide variety of transactions to encourage adoption. However they cannot go it alone. Current models of service delivery leverage pre-existing distribution networks—for example, by disbursing loans through the field force of a local microfinance institution, loading a bank account on the SIM cards of mobile operators with a widespread network in outreach areas, hiring locals to act as banking correspondents who will deliver financial services at customers’ doorsteps or offering banking services through shops and merchant establishments. In India, banks also distribute their products through the extensive postal system. Going forward, they may be able to leverage television (40% of rural Indian households have one) and the mobile phone (rural tele-density is over 31%) towards the cause of financial inclusion. Finding the right partner with a widespread local network—like consumer products or courier companies—is the key to bringing March 15, 2012 | 53
IT in Financial Inclusion down the banks’ cost of distribution. Banks could even enter into a co-opetitive partnership with other entities, such as mobile operators that also offer basic financial services, with a view to growing the market rather than competing with them for the same business. Banks can also enhance service delivery by integrating the rural business value chain, which is currently exploited by a host of intermediaries sucking value out of it. For that, they need to step out of their ‘pure banking’ comfort zone to understand the functioning of rural businesses and support them at every stage—right from helping farmers or tradesmen sell their produce to funding their working capital requirements. Promotion: In a market like India, neither customers nor banks are drawn towards financial inclusion; customers see no value in having a bank account, and at current transaction levels, banks find it hard to even cover their costs. Since scale is the key to success, banks might consider undertaking promotional efforts to encourage widespread adoption among the masses. Pursuing a dual strategy, they could first educate target customers about the benefits of formal banking, and then encourage them to use such services by providing incentives. Risk Management: Managing collection can be quite a challenge for banks in inclusion markets, where loans are unsecured and borrowers are economically vulnerable. Banks can mitigate repayment risk by resorting to a variety of measures, such as limiting the ticket size, exerting pressure on defaulters through their peer/selfhelp groups, offering incentives for regular repayment and reducing exposure by syndicating or auctioning their loans. Regulation, Compliance, and 54 | March 15, 2012
The need of the hour is a multi-pronged strategy, which can give impetus to financial inclusion by lowering the cost of operations, expanding reach, ensuring data and transaction security, and spreading awareness among customers
Government Support: A supportive regulatory environment is essential for a financial inclusion strategy to be sustainable. In many markets, including India, the authorities have subsidized KYC and documentation requirements for inclusion segments. Government can lend impetus to financial inclusion initiatives by providing subsidies and funding to institutions or routing social security payments and wages to individuals through the banking network. Organization Structure: The financial inclusion organization cannot afford to support the elaborate structure typical of regular banking. Creating an optimal, lean, low-cost structure is a major step towards making the business viable. Technology: Technology is one of the most critical elements of financial inclusion strategy and the only way to bring down the cost of service delivery. A technology strategy built on a solution that is low cost, selfsustaining, nimble, and cloud compatible can make the difference between success and failure of a financial inclusion program. It is very important that the financial inclusion solution mesh with the visit www.dqindia.com
existing assisted delivery network of business correspondents, merchant establishments, etc, as well as support self-service transactions over ATMs, POS terminals, and mobile. Last but not the least, it must overcome the problem of poor connectivity by enabling agents to deliver services using handheld devices and allowing branches to serve customers in offline mode during power outages or when they are unable to connect to the central data center online, in real time. The principal concern about security can be mitigated through the use of smart identity cards, biometric authentication and One Time Passwords, all of which must be supported by the financial inclusion solution. Finally, it must be capable of facilitating advanced transactions, such as bulk P2P payments and domestic remittances.
Prime Focus Area
Financial inclusion is a thrust area of several governments in Asia, Africa, and Latin America, which are home to the bulk of the world’s unbanked masses. Bowing to regulatory pressure, banks in these regions have launched outreach efforts to bring more people within the net of formal financial services. However in many countries, the initial momentum of bank account opening is not followed by actual usage, and a huge proportion of new accounts soon become dormant. The need of the hour is a multipronged strategy, which can give impetus to financial inclusion by lowering the cost of operations, expanding reach, ensuring data and transaction security, and spreading awareness among customers, and of course, the right technology to put all of these into practice. n Gautam Bandyopadhyay
The author is head, Finacle Inclusion and Finacle Digital Commerce Solutions maildqindia@cybermedia.co.in
DATAQUEST | A CyberMedia Publication
STeP-IN Forum
Strengthening the Community The combination of key note speakers and brainstorming sessions on innovation, new technology, etc, made SteP-IN Forum a great success AKANKSHA PRASAD
akankshap@cybermedia.co.in (with inputs from Abhigna NG)
S
TeP-IN Forum, a platform for software test practitioners, has been working towards strengthening the community by bridging the gap between the professionals, the veterans, the academia, and the industry. Finally, the forum, established in 2003, has arrived with over hundreds of professionals participating in STeP-IN Summit 2012, which was much bigger than before. While last year’s STeP-IN Conference 2011 looked at identifying the entire testing market and its key challenges, this time, the summit looked at how cloud and mobility were bringing newer opportunities for the testers. And the importance of testers with the moving focus of delivering better user interface experience to the customers. The 2-day event had 8 technical tracks on interesting topics and 2 panel discussions. The topics covered in the technical tracks were: 10 Mistakes to Avoid When Testing Your Data Warehouse, Failure Isolation in Test Automation, An Aesthetic Approach to Accessibility Testing in Enterprise Applications, Testing for Peak Performance In-house vs Cloud, Outsourcing to the Cloud-compatibility Testing by the Masses, Mobile Performance Testing, System and Method to Analyze Database, and Agile Performance Testing—A Flexible and Iterative Approach. The first panel discussion on ‘Are We building enough quality leaders or test managers? What should this industry be focusing on’, was moderated by VK Kripanand (founder, see beyond technologies), with Srinivasan Desikan (strategy capability management, testing, Hewlett-Packard) and Krithika Swaminathan, (director, software engineering in quality, Intuit) on the panel. The discussion touched various aspects of technology, such as the significance of quality and feature testing rather than quantity testing, building domain expertise than adding experience and breadth to the profile, and moving ahead in the value chain. The other discussion topic was on ‘TaaS–Testing as a Service’, which was taken by Lakshmy Usha, founder, Last Mile Consultants and Syed Mohamed, senior testing practice leader, testing business, CSC India. While everyone is offering service to reduce the cost overheads, a lot of companies are looking at testing by crowdsourcing independent testers and establishing self-owned test environments, which would include cost from infrastructure, availability of skilled engineers, and many more. While still at a nascent stage, but the industry is seeing new players in this field. Sam Guckenheimer, group product planner, Visual Studio, Microsoft delivered a keynote, wherein he talked about the importance of increasing transparency and improving the flow of information, and shared 2 interesting concepts: Cycle time and mean time to repair. While the former is about the time taken from a product idea entering to the availability of working software, the latter defines the time taken from discovery of a problem in production to its final repair. Karthik Srinivasan, deputy general manager, Vodafone elaborated on the significance of applications from consumer to enterprise applications. While developers take the role of building these applications, it’s the testers who define the look and feel of the applications, hence of the quality. This quality becomes the comforting factor for the customers and a differentiating and selling point for the applications’ companies. The boom of mobile devices and applications comes as both challenge and opportunity, to make the 56 | March 15, 2012
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DATAQUEST | A CyberMedia Publication
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STeP-IN Forum
(L to R): Lakshmy Usha, founder, Last Mile Consultants; Srinivas Sundarrajan, director, application services testing, HP; Mahesh Venkataraman, general manager, innovation center, testing services, Wipro Technologies addressing the forum
applications work seamlessly over multiple form factors, makes, carriers, and OS versions. Another deep dive on new technology such as cloud and its significance for the tester was taken by Anuj Magazine, senior manager, products (globalization services), Citrix R&D India. He started with the example of Google, bringing the example of how cloud computing and software testing are related. He said, “As technology becomes more complex, testing becomes more important.” He shared a few examples of helpful tools for testers like uTest, 99tests, etc. And, also talked about the potential impact of cloud on software testing and the emerging roles of test strategy, test execution, test data, test management, usability testing, and performance testing. Mahesh Mani, head, technical services, Micro Focus India, delved in the emerging topics like agile testing. Speaking on ways to adopt continuous quality assurance, Mani shared few industry trends on cloud, mobility, etc. “We will explore emerging trends and new approaches that are challenging the way we think about software development 58 | March 15, 2012
and quality assurance and present us with ways to achieve ‘doing more with less’,” he said. He also talked about the Application Lifecycle Management and ways to align the businesses accordingly, he showed the future directions in software quality and testing tools and how the professional should shape their career. Another aspect of testing which has been gaining traction is Testing in Production (TiP). Anutthara Bharadwaj, lead program manager, Visual Studio Test Tools, Microsoft Corporation, talked about TiP via exposure control, load testing in production, destructive testing, and shared a few examples of TiP practice in other companies. Addressing the software testers community on the second day of the summit, Lautent Gaudy, VP, partners & alliance, Neotys said that technology is the key to quality service with wide varieties of tools. He said, “Technology and globalization are creating a set of opportunities, as most of the companies engage in thinking-intensive work leading to innovation to truly become everyone’s responsibility.” visit www.dqindia.com
He also pointed out that switching from investment based to innovation based strategy is the only norm for successful convergence with technology frontier. Highlighting the emergence of technoscapes in the IT, Gaudy felt that IT moves around and across the globe. “More and more organizations are looking at IT as their critical enabler to tap into the global economy of the future,” he said. Any professional, however skilled, would not grow up after a point, if he lacks leadership and forward thinking. After the talks and sessions on technology and market opportunity, Vinod Malhotra, senior director, Misys, touched the important aspect of self-growth. While speaking on ‘Lead or be Led - The Role of Test Leadership’, he shared how testers can participate way ahead in the process of delivery; volunteer the change in process, functionality, and feature; and get rid of the traditional approach where they are always under pressure to catch up with the late delivery of functionality. He also stated that they should not just work towards clearing up the backlog. In other words, not only verify, but also validate. On similar lines, Sudhir Patnaik, director, engineering & operation, Intuit India Development Center delivered his talk on quality engineering and the need to look beyond what we called ‘black-box testing’. He emphasized on the need to change the mindset, hence switch from mere quality assurance to quality engineering. STeP-IN Summit hosted a special showcase of collaboration from the academia. This was conducted by Deepa R, MS student, IIITB (sponsored by SocGen), who completed the project on ‘Metrics in the field of Software Engineering are used to quantify certain attributes of a piece of software’ under the guidance of Renu Rajani, general manager, IBM India. n
DATAQUEST | A CyberMedia Publication
ISA Vision Summit 2012
Collaborating with the Government
Not only did the conference witness just government participation, but also some key announcements from both union and state governments AKANKSHA PRASAD
akankshap@cybermedia.co.in
W
hat makes a conference successful, the network/connections that you take back or the learning from the sessions? ISA Vision Summit 2012 was one that ensured that the participants get all of these in the fullest. The association started in 2005, to bring collaboration between the industry, government, and academia. The latest ISA Frost & Sullivan report said that the total market of electronics is expected to be $95.6 bn in 2012, against $65.1 bn in 2010. This is the scope of the market that ISA was trying to touch. The 2-day program was organized from February 6-8, 2012, at Taj West End in Bengaluru. The Indian Semiconductor Association (ISA) has been talking about the potential in the country vis-à-vis phenomenal growth in the neighboring countries like China, Taiwan, and Korea. The entire debate would usually stop at the government policies, government initiatives, and requirement of larger support. This time, ISA Vision 2012 had introduced a B2B deal-making session to connect buyers and sellers and also witnessed the highest footfall than before. While other industry events are said to have lost their value on the content side, ISA kept up with the promise. In return, the government was finally all ears to the industry Sachin Pilot, hon’ble Minister of State for Communications and IT, Government of demands. India during the inauguration of ISA Vision Summit 2012 along with Dr Pradip K Dutta, Unlike last year, the conference not only chairman, ISA and PVG Menon, president, ISA saw more government participation, but also some key announcements coming from both union and state governments. Apart from the government spokesperson, Kapil Sibal, union minister, communications, information technology (IT), and human resource development and Sachin Pilot, minister of state, communications and IT, the conference saw many other government dignitaries taking the dais like Dr Omkar Rai, director general, STPI, Government of India; R Chandrashekhar, secretary at DIT and DoT, MCIT, Government of India; Ravi S Saxena, additional chief secretary, department of science & technology, Government of Gujarat; Anurag Goel, secretary for department of IT, Government of Assam; Prof SV Raghavan, chief architect and chairman, technical advisory committee, National Knowledge Network.
ESDM Sector
Speaking at the inaugural address, Sachin Pilot shared the importance of building Indian strength, which was capable of giving quality commitment, and shared the importance of setting up a fabrication in the country. He invited the companies to come forward and set up manufacturing units in India. He also commended ISA for increasing the total membership to 175. 60 | March 15, 2012
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DATAQUEST | A CyberMedia Publication
On the other hand, Kapil Sibal announced to adopt a 6-layered approach to promote the ESDM sector. Starting with a electronic development fund of about `10,000 crore, he proposed to establish a semiconductor Wafer lab. He said, “Today, electronics is the largest and fastest growing manufacturing industry in the world. Current global hardware production is around $1.75 tn and by 2020 it is going to grow up to $2.4 tn.” On the domestic front, electronic-driven industry has emerged as the contributor to national economy. P Manivannan, MD, BESCOM pronounced the major upgradation project that the department is working towards. It would include replacement of around 90 lakh mechanical electricity meters with smart meters. He said, “Starting with the `500 crore project, which would soon roll its first RFP, the department is working on `5,000 crore opportunity for the ESDM sector, which is only 50% of the Karnataka state.” The state governments had a separate session chaired by Ravi S Saxena, IAS, additional chief secretary, department of science and technology, Government of Gujarat and Anurag Goel, IAS, secretary, department of IT, Government of Assam, where they showcased the strengths of their respective states inviting the companies for investment.
Government Attention
The eminent speakers from the industry included Pradeep N Dhoot, group president, Videocon Industries; Dr Aart de Geus, CEO, Synopsys; Ajai Chowdhry, founder and chairman, HCL Infosystems; Dr Walden C Rhines, CEO and chairman, board of directors, Mentor Graphics Corporation; Liam Madden, corporate vice president, Xilinx Inc; Dr Avneesh Agrawal, president, SVP, Qualcomm Inc India and South Asia; and many more. DATAQUEST | A CyberMedia Publication
ISA Vision 2012 introduced a B2B deal-making session to connect buyers and sellers In the inaugural speech, Dhoot highlighted the low investment in ESDM sector, which attracted around 1-2% of the FDI. He stressed on the need of government attentions towards the growth of this sector. He said, “According to the estimates, domestic demand for electronics is set to reach $100 bn by 2014 and by 2020 it would cross $400 bn. R Chandrashekhar, highlighted about the Draft National Policy. He said, “The government has approved the preferential market access scheme last week.” Dr Pradip K Dutta, chairman, Semiconductor Association India, mentioned that the industry welcomed the government’s approval of the ‘preferential market access’ draft. Amongst all the talks about growing the local ESDM sector, Chowdhry rightly brought the global perspective vis-a-via the China, Korea, and Taiwan. He shared that manufacturing was the key to growth and more employment, and government’s projects like Aakash and UID were giving further impetus. The event had 8 panel sessions covering hot topics on energy, innovation and more. The session on venture and startup ecosystem in ESDM was moderated by Pradeep Gupta, chairman and MD, CyberMedia India with panelist Dr Hemant Kanakia, president, Kanakia Ventures LLC; Balaji Kanigicherla, founder & CEO, Ineda Systems; Nitin Komavar, CEO, KeyTone Technologies Inc; and Vijay Naik, CEO & president, Karmic US LLC. The panel identified that the visit www.dqindia.com
start-up and small companies had challenges of sustainability, scaling up, and much more than that the issue of funding. The industry had a high mortality rate with lesser companies looking at venturing into the electronics industry. Pradeep Gupta aptly said that while the industry was worried about the quick exits, it was equally important to encourage and increase the entry points.
Aspects of the Devices
Another session on next-generation of electronics highlighted how memory, user interface, green factor, and other aspects of the devices would play a significant role in coming years. From the iPad to a smart and greener home, how the augmented reality was crucial, and also the need of bringing relevant products for every customer. The panel comprised of Dr Shyam Vasudevarao, president and CTO, Forus Health; Sharon Holt, SVP and GM, semiconductor business group, Rambus Inc; Matteo Lo-Presti, IMS group, VP systems lab & technical marketing GM, subsystems product group GM, STMicroelectronics; Sanjay Gupta, SVP, product engineering solutions, Wipro Technologies; Liam Madden, corporate VP, Xilinx Inc; and Prasanto K Roy, president & chief editor, CyberMedia Publications as the moderator. Similarly, another session looked at the need of energy efficiency in electronics. Arunjai Mittal, member of the management board, Infineon Technologies AG; Kishore Manghnani, VP, communications and consumer business, Marvell Semiconductor; Aninda Moitra, president & MD, Applied Materials India, talked about the growing focus on energy efficiency, with the concern that while even governments were showing willingness to spend on power conservation and sustainable energy projects, the households were still looking the cost factor when buying an LED bulb. n March 15, 2012 | 61
Business Strategy
OITA Canon cell production. One of the lens manufacturing SMT lines produces 11,000 units daily with just 640 people
Through the Looking Glass The camera business is turning out as a major thrust area for Canon even in India
“I see nobody on the road,” said Alice. “I only wish I had such eyes,” the King remarked in a fretful tone. “To be able to see Nobody! And at that distance, too! Why, it’s as much as I can do to see real people, by this light!” —Alice, Through the Looking Glass, Lewis Carroll Rajneesh De
rajneeshd@cybermedia.co.in (The author was hosted by Canon in Tokyo, Yokohama, and Oita)
T
he King in Alice’s Wonderland might have had visual difficulties in the available light, but chances are that he was not looking through the lens of a Canon camera. The global leader in cameras further reinforced its leadership position with the recent launch of 6 Wi-Fi cameras during the annual CP+ photo exhibition in Yokohama in Japan. Canon, thereby became the first company in the world to launch Wi-Fi cameras including 2 digital compact cameras—XS 510 HS and XS 240 HS—as well as 4 digital camcorders including Legria HF R38, HF R36, HF M52, and HF M56.
Shooting, Viewing, and Linking
The launch assumes special significance, especially in the light of the current trend, when mobile phone vendors are incorporating increasingly powerful cameras in their phones targeting the youth who are looking to click photos and instantly sharing them through social networking sites. Therefore no wonder that when Masaya Maeda, chief executive, image communication products operations of Canon Inc asserts that Canon’s marketing strategy for this new range of Wi-Fi cameras is based on the premises of ‘shooting, viewing, and linking’. 62 | March 15, 2012
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The Canon manufacturing plant in Oita acts as the mother factory for all of Canon’s 54 manufacturing facilities worldwide
The camera business is flourishing in India too—for Canon India, the imaging division (camera business) contributed `650 crore in FY11—more than 40% of its total revenues of `1,525 crore—and is expected to grow by 100% in FY12. Compact cameras contributed 60% of these revenues, and SLRs accounted for the rest. With 45% market share, Canon is currently the #2 in digital SLR cameras behind Nikon and with 16% market share the #3 in digital compact cameras behind Sony and Nikon. Incidentally in Asia, Canon is the #1 in digital SLRs (45% market share), #2 in digital compact cameras (18% market share), and #1 in broadcast lens (78% share). It’s only in HD camcorder that Canon is #3 (16% share), though as Maeda asserts, the market for camcorder itself is dwindling as the trend is towards ‘making short-length video clips’. That, however means Canon India, despite its impressive numbers (particularly 32% CAGR over the last 5 years) still has some catching to do and that will be the biggest challenge for Kazutada Kobayashi, the newly appointed president & CEO, Canon India and Alok Bhardwaj, senior VP, Canon India.
Growth in India
According to Bharadwaj, the grey market or more precisely parallel import is still hurting the growth in India. “While the parallel imports for digital compact cameras (`2,000 crore market in India with 32 DATAQUEST | A CyberMedia Publication
Canon Inc headquarters in Shimomaruko in suburban Tokyo
lakh units being sold) has become negligible, it is still plaguing the SLR market in a big way.” While the `500 crore SLR market sells 1.5 lakh units through the legal channel, at a rough estimate another 50,000 units are being sold through the grey market. A back of the envelope calculation would mean the market is losing more than `200 crore because of this with, Canon itself losing out by nearly `100 crore. The lens market is even more seriously affected with nearly 50% going through the grey market. Apart from its impressive market share, the Canon top management is justifiably proud of the fact that it is the only major electronics and IT vendor who completely manages its production and development in-house. Even competitors, like Sony, get most of their manufacturing done by Sanyo. While the factory in Oita city in Kyushu Island in Japan acts as the mother factory, Canon is not involved in any sort of contract manufacturing not just in the other factories in Japan (it has 54 manufacturing subsidiaries) but also those in Taiwan, China, and Malaysia. And it still maintains the economics of scale primarily through a strong Kaizen-driven production cycle. Another reason for Canon’s recent gains in market share, Maeda agrees, has come from the turbulent times at Kodak and its decision to declare bankruptcy. “Kodak’s fall from grace has been due to its failure in digitizing its business,” says Maeda. visit www.dqindia.com
Spreading its Roots
Canon’s consumer business in India is getting the push through its 50 exclusive retail stores across 32 cities, which it plans to increase to 110 stores by the end of 2012 and finally 300 stores by 2014, when it hopes to accrue one-third of its total revenue from these stores. Canon India has its own service centers in 12 cities and authorized collection points in 88 cities. While its own retail stores are generating business worth `25 lakh per month, it does `100 crore worth business from the LFRs. Retail is not the only avenue Canon is looking for in India, it also generates 10% of its revenues through institutionalized selling. Apart from pharma companies gifting cameras to doctors, Canon has also been part of large e-gov projects like the ESIC hospital digitization project of Wipro (where it sold 600 D-SLR cameras) to the passport e-seva project where it sold 1,500 D-SLRs to TCS. Now with its cinema EOS C300 model, it plans to target Bollywood and the TV channels, as well as the movie camera rental units (that being the trend in Bollywood). In the ultimate analysis, cameras are going to be a critical part of Canon’s India biz as it targets to grow by 50% to reach `2,280 crore in FY12. While currently Canon India contributes 1% to Canon revenues globally, it is expected to account for 5% by 2015. In the words of the Walrus in Alice Through the Looking Glass, ‘the time has come’ for Canon ‘to talk of many things’.n March 15, 2012 | 63
E-commerce
India E-shining? India is all set to reach new horizons in e-commerce are the industry players ready too?
SHILPA SHANBHAG shilpas@cybermedia.co.in
S
urf the internet today and and this possibly throws up the truth that e-commerce in India is seeing a steep growth for the past few years. But what needs to be scanned closely, is that this drive in internet is unknowingly taking India to a new horizon. Currently, India which ranks as the third largest internet economy after China and the US, also apparently has notched the position as the second largest nation on Facebook, too. In less than 2 years, India is expected to overtake the US and become the second largest internet economy after China.
The Upward Graph
Are big brands also recognizing this opportunity and looking to move beyond traditional mediums such as print and television? 64 | March 15, 2012
“India will definitely be in the list of top 5 largest internet economies of the world, if not second. The volume of money that was pumped into e-commerce start-ups in last 12-15 months in this country is commendable. The VCs have seen a huge potential in the Indian market and hence have invested in lot of such companies,” feels Abhishek Shah, founder and CEO, Fetise.com. Kashyap Vadapalli, director, category & business development, eBay India says, “In the last 2-3 years, the rate of internet usage has grown. This figure is expected to grow at a faster rate in the next few years on a y-o-y basis. E-commerce companies stand to benefit from this as macro-economic factors like growing population, increased spending, and awareness about brands increases.” Some of the factors that are expected to drive this trend are— n Increasing Broadband Penetration: There are more than 100 mn people logging onto the web in India. According to estimates, the number of internet users is expected to reach 400 mn by 2015, which is 4 times the current number and online shopping population is expected to reach the mark of 38 mn as compared to a meager 9 mn now. n Increasing Shoppers: Another factor is that all e-commerce players in the early days are creating a market for each other by converting more people to online shoppers. visit www.dqindia.com
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digital business “It’s good news for now, but only for those players who will be able to survive and are able to improve their logistics”
Richa Kar, CEO and founder, Zivame.com
“The 2 biggest challenges I foresee are bandwidth infrastructure and language”
K Vaitheeswaran, founder and CEO, Indiaplaza.in
n Growing
Consumerism: Increase in disposable income is driving demand for lot of foreign labels. Availability of greater discounts compared to the offline world is also one of the factors. n Logistics: Improved logistics and delivery. n Alternative Options: Alternative payment options like net banking, cash on delivery, and cash before delivery. n Smartphones: The surge in smartphones in India specially for cheap and easy data access is expected to drive growth.
Good News?
E-commerce is seeing a boom and right now there is room for everybody. But there will be consolidations on all levels and across all verticals in the next couple of years. “It’s good news for now, but only for those players who will be able to survive and are able to improve their logistics and build a reputation DATAQUEST | A CyberMedia Publication
of being a customer-centric company,” informs Richa Kar, CEO and founder, Zivame.com. Seconding this opinion, Yashraj Vakil, COO, Red Digital adds, “It’s good news for those who have waited and more so a thrilling news for those who are willing to wait.” For offline retailers, initially ecommerce may not sound as a very good trend as it is affecting their business directly. But overall market size for all the products is growing, so manufacturers and distributors are welcoming this change. Online retail has the capability to penetrate areas faster than offline retail. So, a boom is expected in the target markets for some set of products.
Challenges to Deal
The challenges related to this upward growth are expected to be at multiple levels. Primarily, the ecosystem needs to be conducive, which requires increased broadband penetration. Even payment methods visit www.dqindia.com
require a better lease of life and the success of m-commerce is expected to be one of the driving factors. Another major challenge is the factor of logistics, where all the e-commerce players are striving to reduce logistics costs and increase efficiency in shipping. Cash-on-delivery (which contributes more than 50% of all orders) is another pain-area. Legacy issues with archaic equipment and requirement of cost effectiveness due to huge license fees would also stare at the face. But the same are expected to be resolved over time. To create meaningful services and products in India, the companies will not only face adoption and entry barrier challenges, but also high offline experience syndrome that the Indians are used to. Indians love to bargain, they love to touch and feel things, and they also love to small talk with the shopkeepers. Having to deal with this customer mindset is going to be an even bigger challenge. “The 2 biggest challenges I foresee are bandwidth infrastructure and language. India needs to build pipes that will allow such a massive base of web users to access the internet and get actual broadband speeds otherwise it will lead to frustration. The bigger issue is language. Currently, the language of the web in India is only English and there are not more than 120 mn Indians who know English. Unless websites come up quickly which have content in Indian languages, the growth of web users may get stunted,” feels K Vaitheeswaran, founder and CEO, Indiaplaza.in. “With online penetration, there is bound to be price erosion. So, innovative merchandizing will be critical for survival. I see this financial aspect as a big challenge. The second challenge will be the availability of talented manpower who understand the internet domain,” says Arindam Bose, managing director and chief customer officer, Timtara.com. March 15, 2012 | 65
E-commerce “The VCs have seen a huge potential in the Indian market and hence have invested in lot of such companies”
Abhishek Shah, founder and CEO, Fetise.com
“The second challenge will be the availability of talented manpower who understand the internet domain”
Arindam Bose, managing director and chief customer officer, Timtara.com
Pull up Your Socks
No processor can beat the processing capabilities of the human mind. They are your biggest asset and it’s important to rightly identify them and keep them close to you. The right people can overcome any demand. The country may be ready to paint a bigger image, but are the industry players ready for this leap? There is no other option for them but to be ready for this change. They should accept the change and ponder on how they can take initiatives in this area by collaborating with marketplaces. Are the big brands also recognizing this opportunity and looking to move beyond traditional mediums such as print and television? Education and preparedness is the key to this. The primary driver for e-commerce anywhere is the user experience. The customers prefer a trusted relationship with an e-commerce site/brand. The conveniences and reliability of e-commerce have to outweigh the benefits 66 | March 15, 2012
of traditional retail outlets. To be a successful internet company, they will have to force implementation of global best practices. Best practices that have driven e-commerce globally are now a key focus of successful internet companies, including merchandizing, customer service, user interface design, and guaranteed delivery and return policy. “Some players are ready for the leap, but many brands are yet to warm up to the internet retail change as they see a challenge in Market Operating Price (MOP) erosion. But it is impossible for them to ignore this channel going forward. So, they will need to firm up their future channel strategy,” informs Bose. Differing on this stand, Vaitheeswaran says, “I think the industry players are not yet ready for the challenge but are planning to do so. The key parameter they have to plan for is scale. Take online shopping. From the current visit www.dqindia.com
base of around 7 mn shoppers, the number is expected to touch 70 mn by 2015. While the market may increase 10 times, large players will be immensely benefited. No one has planned to handle such massive surges in website traffic, online transactions, shipments, deliveries, consignments, and so on.” “We feel that in all categories about 10% of the market will go online. Right now we are not even serving 1% of it collectively including all e-commerce companies, so there is tremendous potential for growth. We are working with these expectations and trying to scale up as fast as possible,” informs Peyush Bansal, founder and CEO, Lenskart.com. Zivame.com’s focus has been to turn online shoppers to its customers, and also to create an alternative private shopping experience for often-shy offline lingerie shoppers. Another focus area for it is customer satisfaction. Meanwhile, Indiaplaza.in plans to make strategic investments in IT to scale their business. It just shifted its entire e-commerce platform to the Microsoft Cloud Azure system. The company is also working on a mobile site and most of its future plans relate to technology investments aimed at business growth. For Fetise.com, logistics is the biggest challenge in the e-commerce space. Currently, it has warehouses in Mumbai and Delhi with plans to open one more in Bengaluru. Additionally, it is also working on the user interface and experience. On a final note, Vakil adds, “It saddens me to see the failure of Simputer and Aakash, as they both held potential to bridge the digital divide. Maybe what we need are just good cell phones with data processing capabilities and electricity in every village to keep the juices flowing in these devices. The day we are successful in doing that India will become the largest internet economy.” n
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Entrepreneur Story
Hungry for More The author reflects on his entrepreneurial journey and risk-oriented ideas that quenched his appetite for success
I
t’s been quite a journey, though it’s just the beginning. From a fresh engineering graduate to working with the best company in the world, to an impulsive decision of leaving everything and coming back to India and then venturing into zones absolutely unknown to people around me. Hence looking back only motivates me to keep walking ahead. Over the last five years, such has been my life. Post my graduation in engineering working on MS Office, my job was to think about features that can be added to it. So, the most important lesson I learnt at Microsoft was that I wanted to solve bigger issues; making already happy Microsoft users happier was not persuading enough. In early 2007, my decision to quit Microsoft was abrupt, which even shocked my parents who always wanted me to come back to India.
Challenging Traditional Business Ideas
However what was more shocking for them was the fact that I was adamant on joining the family business. Though they were mostly supportive towards my out-of-the-box business ideas, I couldn’t avoid the occasional sarcasms coming from them on losing direction in life. By the end of 2007, I was back to the pavilion, chalking my next move. I looked at the student market in India and saw numerous opportunities—one of them being accommodations for students in university campus and other areas. I brought a software developer on board and started www. searchmycampus.com, a classifieds’ site that soon went beyond accommodations to books, part-time jobs, carpool facilities, and internship opportunities. Our motto was to solve any and every issue that a student might have. Initially, the venture was completely bootstrapped, because money-making wasn’t the goal—it was more to see whether I could solve a problem. In hindsight, this was probably a Microsoft hangover. I was trained to uniquely focus on solving customer problems and I diligently applied the same philosophy here. Unfortunately, there was no handsome pay packet waiting to get deposited into my account.
Exploring Various Ways
Money was becoming a problem, and the pride of being self-sufficient and going against what the family wanted, stopped me from asking for money from them. Notably, a lot of educational institutions were interested in this database, since this was their target audience. We went to colleges, offered to perform the marketing activities on our website on their behalf, assured them a certain number of inquiries and charged them per inquiry. The money started flowing in. Soon, we were working for almost every big college in India. Despite the success we saw, I was sure that this wasn’t the business I wanted to be in. Soon, 68 | March 15, 2012
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digital business I was sure I wanted to get into products and services business, which is slightly difficult to scale up.
Creating Business Alliances
I was reasonably confident about driving sales and making money now. We started working with small retail set-ups in the US—selling jewelery, cosmetics, eyewear, etc— who wanted to expand their online presence. Managing their online activities from India, we got these companies from point zero to a point where they registered better figures online than offline. Now, we were sure about starting our own productfocused e-commerce website.
Eyeing the Eyewear
The education services business was touching almost `2 crore/annum when we started our e-commerce gig in the US. Among the categories we worked with, I saw an opportunity in eyewear. The Amazons and eBays of the world weren’t quite interested in this segment and we launched Flyrr. com in the US, which exclusively sold eyewear. I wanted to pick up a segment where we could become leaders and we did. Irrespective of which brand of sunglasses one looked for, search sites always threw up our website. In six months, we were clocking almost $100,000/month. Our business model was simple: We put ourselves in the dominating position. We took orders, distributed them among our dealers and they shipped it to the customers in the US. I gave a mark up on their cost and the rest was mine. Even after these escalations, the prices offered to our customers were reasonable and the volumes guaranteed good returns.
Time to Introspect
However, as the orders started getting bigger, we found it difficult to manage the shipments as we had no DATAQUEST | A CyberMedia Publication
The most important lesson I learnt at Microsoft was that I wanted to solve bigger issues; making already happy Microsoft users happier was not persuading enough control over our dealers in the US. The delivery time sometimes went as high as 20 days, a problem faced by quite a few e-commerce sites in India and abroad. The going was good, but we weren’t happy because our customers weren’t happy. It was time to introspect. The Indian scenario looked quite appealing, hence in November 2010 we established Lenskart.com, which began by selling only contact lenses. In February 2011, we included eyeglasses and in March sunglasses as well. Although services (searchmycampus.com) and Flyrr were doing well, our focus slowly moved to just Lenskart. I come from a business background and I had a great job at Microsoft. No wonder, my family had no clue why I kept jumping from one venture to another. I got lengthy sermons from relatives who tried to brainwash me with white-collar figures—for example, the money I could have earned in Microsoft. I left my previous ventures when they were at their peak to sell something like eyewear in India. My parents found it a tad hard to digest. Apprehensions about my future hounded them all the time. As we became the market leaders with Lenskart.com, we started looking at other verticals. The result was the launch of Watchkart in May and Bagskart in August 2011. Again the visit www.dqindia.com
idea is not to sell 10 odd designs. We have the same set of USPs: Variety, quick delivery, right prices, and efficient customer support. A lot of market research determined our choice of the next website. With Watchkart we brought to focus a brand which people in India had almost written off—Casio. I was again looked at with raised eyebrows when Watchkart sold only Casio watches for a couple of months. But, undeterred by any criticism or smirk, we stocked these watches in huge numbers and it caught up quickly with timely delivery. Many more brands followed because of the revenue generated from sales of Casio watches, proving me right again. Questions about our choice of product and the offline versus online debate remain. But I am looking at a huge market with almost 95% players in the unorganized segment. In the segment of eyewear, the entry of Reliance and Titan is just going to make it a lot more interesting marketplace because eyewear is a phenomenal vertical. Almost one-third of our population has a vision correction problem and of these only 25% use any kind of eyewear. The market in India is worth around $2 bn, growing at 2530%. A business is good when you can see future in it and that way, eyewear makes a great business sense. We are looking at orders from small cities, cities that we never imagined we’d get a response from. We started with 10 orders a day and have grown 20 fold over the past 11 months. Maybe we can be a billiondollar portal. Even if that doesn’t happen, we want to be the best at what we do. n
PEYUSH BANSAL The author is CEO and Founder, Lenskart.com maildqindia@cybermedia.co.in March 15, 2012 | 69
Kaleidoscope
digital business
Top Social Media
Influencers
It’s the time to spot people and brands in different categories who ruled the social media... COMPILED BY RUKHSAR SALEEM rukhsars@cybermedia.co.in Source: www.pinstorm.com
Top 10 Indian Residents
Top 10
Indian Non-residents
Top 10 Indian Brands
Top 10 Indian
Politicians
1. Shashi Tharoor
1. Deepak Chopra
1. NDTV
1. Shashi Tharoor
2. Priyanka Chopra
2. Om Malik
2. CNN-IBN News
2. Subramanian Swamy
3. Ram Gopal Varma
3. Aziz Ansari
3. ESPNcricinfo
3. Sushma Swaraj
4. Sonam Kapoor
4. Dr Sanjay Gupta
4. Jan Lokpal
4. Narendra Modi
5. Hrithik Roshan
5. Padmasree Warrior
5. Firstpost
5. Vijay Mallya
6. Kiran Bedi
6. Dharmesh Shah
6. The Newshour
6. Jan Lokpal
7. Farhan Akhtar
7. Vinod Khosla
7. Zoom
7. Omar Abdullah
8. Amitabh Bachchan
8. Sree Sreenivasan
8. Deccan Chargers
8. Digvijay Singh
9. Akshay Kumar
9. Vivek Wadhwa
9. MTV India
9. Rajeev Chandrasekhar
10. Siddharth
10. Avinash Kaushik
10. Samsung India
10. Ajay Maken
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E-commerce
Will the Boom Sustain? E-commerce is a very exciting space for today’s online community, and India’s young start-up economy is going along for the ride
W
hat happens when you see a cattle being sold on eBay—you roar with surprise, tweet it, Facebook it, and talk about it with your friends. When this happened yesterday, I did the same. This is the reality of the beginning of 2012. Tomorrow this would become a norm. This is why I say that 2011 has been a superb one for the Indian e-commerce businesses. We saw a surge in new e-commerce ventures like setting up of shops, funding flowed in, and companies blossomed. The executives from large firms started out on their own with e-commerce ventures. In a short period of time, e-commerce grabbed eyeballs, garnered attention of all the quarters, and generated enough traction from some brilliant minds to sustain it. A lot of e-commerce ventures approached us for online marketing with an enthusiasm that was contagious. I was delighted and optimistic about their campaigns, stemming from my close association with this industry. However the argument lies in the psyche of the consumer: Should I purchase online? Will the product be good? How will I pay? The touch and feel factor still holds good with a lot of segments like clothes, jewelry, perfumes, footwear, groceries, and the likes. What will the apparent 100 mn Indian internet users do? My verdict is that e-commerce boom is here to stay, and here’s why I say so— n A Market to Tap: If the rumors are to be believed, then the size of the industry would be $40 bn by 2015. However time will test this theory. Irrespective of this, currently the industry attracts about 6.8% market share within the e-commerce segment. It’s a far cry that more than 70% is occupied by online travel, and travel does not have any touch and feel factor attached to it. Given the limitations, and assuming that the internet penetration would not go up, we would still see a sizable volume for the market to tap. n An Evolving Ecosystem: An unheard concept in the US—cash-on-delivery; in India, it was this very concept that formed the backbone of the Indian e-commerce transactions. With most of the e-tailers offering cash-on-delivery, collection of the money by trusted sources is a risk that will be omnipresent. But companies understand the psyche of the consumer—an underlying fundamental, a huge reason for the consumers to trust and buy online, without credit cards and no risks involved. Besides, every now and then, I hear of a new start-up in the e-commerce industry. What this segment has done is to increase the number of entrepreneurs in the country, increase in the number of jobs offered in related streams 72 | March 15, 2012
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digital business (developers, testers, etc), and given birth to logistics companies that handle the deliveries and cash collections. Surely a good thing for the economy, which we can equate to better spending power of individuals and more trust in online transactions compared to the previous years. With the seeds already sown in 2011, the one factor that would give hope and wings to e-commerce would be opening up of FDI in multi-brand retail.
How many of these companies that began in 2011 are going to flourish in the next couple of years to show
2015 what it needs to see? Going by the numbers from 2011, we can safely assume that about 40% of them should live to see 2015, given the amount of money that is being pumped into this sector currently. There are ventures that have seen 310 orders a day, with an average buy of `300, while the more established ones see over 3,000 sales per day. The smaller guys are happy with what they are doing, just after a few months of existence, with very little money spent for branding on any media—television, print, online, OOH, or mobile. Most of them are either on the verge of getting decently funded or have just been funded. From individuals to investors, a lot of futures are at stake and each one of these entities will put their energy to keep the momentum going. Having laid down some underlying signs of boom, some observations also discourage my optimism— n Booms Have a Twin Personality: They open opportunities for employment in related businesses and most importantly FDI, which is very good for the economy of any country. But when the bubble bursts, hurt prevails. Not everything can turn out to be successful. The stage in which Flipkart was in 2007, is what a host of the new e-commerce ventures are in right now. What made Flipkart a success was its attitude towards the customers. Be it the expansion of its product offerings, their delivery schedules, their return policies, or their payment options. There was excellence in every department that drove to their success. How many of the current crops can maintain that standard, is what remains to be seen and this is surely going to be the most important factor that would determine the success or the failure of a venture. And yes, the market is capable and ready to accept many such ventures, but sustaining them-
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What’s Not Selling
From travel to cattle (almost), online shopping has moved ahead, and is not what it used to be a couple of years ago. Back in 2009-10, e-commerce comprised of a big chunk of online travel ventures like Yatra and MakeMyTrip, with a few e-tailers like eBay and Amazon. Today, the market is filled with names like Myntra, Flipkart, Koovs, Inkfruit, Zovi, and UrbanTouch, etc, that offer a basket of products ranging from shoes to high-end television sets, with the price ranging from a meager `250 to `75,000. We also see a lot of customized products coming up online. There are various models emerging, for example, etailers starting their own brand lines to even getting into manufacturing. There is also the breaking down of the e-tail market into apparel, health, footwear, perfumes, gifts, baby products, various services, and not to forget companies like Dabur coming up with their e-commerce sites. This is developing into a huge bubble and very clearly, this bubble contains a big chunk of e-tailers. Some would die, some would survive, but consumers would continue to trade online and get the best from the industry.
Futures at Stake
selves is what the ventures have to take care of on their own. n A Cautious Market: I am not very sure if we can call it a good sign or a bad sign, but it is seen that these new ventures on the e-tail segment have been very careful about how much they spend and where they spend. It is a known fact that hardly any of the e-commerce ventures, from online travel to condoms, have not broken even and a big chunk of them are very far from this mark. It is a different story that the biggies like Flipkart, have invested a lot of money while the other babies have probably invested less than 5% of what Flipkart has. Most of them double up their homes as offices while others have taken up small portions of residential properties on rent to save on the costs incurred in picking up commercial properties. There is clearly the trend to spend small and begin small. The babies seem to have a lot of patience when it comes to growing up. Probably, the history of such booms have played a part in the strategies and in the minds of the wannabe biggies in e-tailing. There have been cases of people starting big, spending millions, and then vanishing without a trace. This fact gets very clear when we see that about 830 new ventures started in 2011, but we have not seen a corresponding increase in the marketing spends, which should have been the case. The underlying fundamentals are strong, but the monies are being spent far too cautiously, and there is a huge market to tap. A lot of initiatives, by the e-commerce sector, will have a cumulative effect on how big the boom would be in 2012! n
KIRAN GOPINATH The author is founder and CEO, Ozone Media maildqindia@cybermedia.co.in March 15, 2012 | 73
news
Needed, A National Information Security Action Plan With India being a target of continuous attacks by its cyber adversaries, it is time to tackle the issue with an integrated approach at the national level
A
Arthur W Coviello, Jr, executive chairman, RSA
n attack by a Chinese team of 2 called Evil Shadow, attacking the Microsoft store in India. At around the same time, many government websites such as those of SEBI, India’s stock market regulator, Maharashtra highway police, and All India Radio were hacked. Earlier, Chinese hackers were behind most of these attacks. But increasingly, even those from Pakistan and Bangladesh are managing to succeed in hacking these sites. It is not that the government departments are not aware of this development. But most of them are trying to take some ad hoc measure for tackling the issue at the departmental level. Clearly, that is not enough and adequate. There needs to be a formal approach of tackling it at the national level. The US, a major target of the Chinese hackers, was the first country to seriously take note of this development. In fact, last year in October, the US Congress invited Arthur W Coviello, Jr, executive chairman, RSA, The Security Division of EMC, to testify before its permanent select committee on intelligence on the nature of cyber security threats. In his testimony, he identified 3 categories of potential actors: 76 | March 15, 2012
Cyber criminals (who want to commercially exploit), non-state actors such as political groups and terrorists who want to attack the government and sensitive websites to send a political message, and nation states. The phenomenon of attacks by nation states have been referred to as cyber warfare. And it is common knowledge that one of the most advanced in this regard is China, with which India has border and other disputes. Coviello strongly advocated creation of an ecosystem to tackle these cyber adversaries. “Just as our cyber adversaries create their own ecosystems, we must improve information sharing within the industry and with our partners in government, both in the US and abroad,” he says in his testimony. “The more actionable and real-time information sharing that we have, the better chance we have in keeping pace with cyber adversaries rather than simply reacting after they strike,” he adds. When Dataquest asked Coviello about what should be the approach for a state like India, he was unequivocal that the country’s ‘information security’ should be planned as an essential part of the overall security policy. “Planning of a country’s information security is absolutely important as lives are at stake and should be planned as an overall security policy, not in isolation,” he says.
What Should be the Approach?
“It’s important to understand the risk, which is a function of vulnerabilities but also the probability that the vulnerability would be exploited and the materiality of consequences of that happening. If there is a vulnerability but the probability is low, you might not spend much money securing that. However you may want to give it a second look if the materiality of the consequences are that lives are at stake. It’s all about creating a balance. If you look at it through the prism of vulnerability, probability, and materiality of consequences, then you will be able to deploy your resources in the most effective manner. The strategy should be to protect information from inside out and not from the outside in,” he tells Dataquest. n
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Lately, many people have started believing that the PC market has reached its maturity or saturation because of the tablet trend picking up. But Sungwon Song, senior vice president and leader of global PC sales & marketing, Samsung, has a different viewpoint. He rather believes that there are multiple reasons for PC adoption to grow. Also, he clearly demarcates the territories for the PCs and the tablets. In a recent visit to India, Dataquest stole a moment to discuss with him about PC market trends and get insights on the India strategy.
Sungwon Song senior VP and leader, global PC sales and marketing, Samsung
‘We enjoy 8% of the PC market share’
W
hat is the outlook for the PC market in India? Has the tablet eaten up some of its demand? The PC market is growing exponentially in India. Lately, the market has witnessed many evolutions and product innovations with a slew of slate PCs, all-in-one PCs, Chromebooks, Ultrabooks, etc. As far as smartphones and tablets are concerned, we do not feel that one product segment is cannibalizing the growth of the other. Both PCs and tablets have clear-cut differentiators and are targeted at different segments. Tablets are used more for consuming lighter content such as email, IM, movies, etc, and PCs are more utilized for business purposes. Hence both markets are growing together and are also supporting each other. Last year, there were some factors, such as depreciating rupee and the rising input costs due to the floods in Thailand, responsible for the slowdown in PCs, especially in the third and the fourth quarter. But the total growth throughout the year was great. What are your key growth drivers in India? Although Samsung entered the NotePC segment in 2009, but in a short span of time the company has scaled up its offerings in netbooks/notebooks segment. Since then, we have witnessed a double-digit growth every year and we are expecting a 100% growth this year as well. Globally, we see Samsung India as one of the crucial contributors to our overall mandate. It’s the only brand in the world that designs and manufactures notebooks end to end. DATAQUEST | A CyberMedia Publication
How is Samsung’s PC portfolio different from its competitors? Currently, for PCs we enjoy 8% of the market share in India and we aim to increase it to 12-13% this year. Samsung has an extensive portfolio of over 30 netbook and notebooks models in India, priced in the range between `15,990 and `100,000. We have introduced a richer configuration and a whole host of color variants. For instance, last year we launched Samsung series 9, the first-generation laptops, which were considered one of the thinnest notebooks in the world. Similarly, we are planning to launch our much-hyped Ultrabook series 5 in the Indian market later this month. The product captured the attention of the global audience at CES 2012. What are your sales target for the PC division? How do you plan to reach out to customers? We have a significant thrust on the channel division for our PC segment. Our retail outreach includes the Samsung exclusive retail—comprising of Samsung IT brandshops, Samsung Smartphone Cafés, and over 300 Samsung Digital Plazas—as well as the large format retail stores like Croma and multi-brand retail stores. In terms of our B2B business, we are now in a position to offer our consumers integrated solutions across notebooks, mobiles, and large format displays. We have over 3,600 service centers in India for our entire product portfolio. n
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‘We are educating our customers about the importance of big data’ Today in the market, the industry is talking a lot about big data. What actually is big data and how it has the potential to change the way the businesses are done in the future? Please explain. For decades, the companies have been making business decisions based on transactional data stored in relational databases. However beyond that critical data is a potential treasure trove of non-traditional, less/multi-structured data like weblogs, social media, email, sensors, device logs, and images that can be mined for useful information. This multistructured data is typically referred to as big data. According to the industry analysts, only 5% of information created is structured and the remaining 95% is multistructured in nature and increasing at an exponential rate that far outpaces the growth of structured data. When big data is distilled and analyzed in combination with traditional enterprise data, organizations can develop a more thorough and insightful understanding of their business. This can lead to enhanced 78 | March 15, 2012
over the next 5 years. We believe, verticals like BFSI, retail, media, and government sectors will adopt big data immediately owing to the enormous data flow, while sectors such as healthcare and telecom are likely to be among the early adopters before most verticals adopt big data solutions. —Sundar Ram, vice president, technology sales consulting, Oracle Corporation Asia Pacific
productivity, a stronger competitive position, and greater innovation, all of which can have a significant impact on the bottom line and find new avenues for top-line growth. You have recently launched your combination of software and hardware products to capture big data. What is your target market? There is a strong latent demand for big data and analytics platforms in the market. The most recent annual survey on data warehousing by the Independent Oracle Users Group (IOUG) found that approximately 48% of enterprises expect a significant or moderate increase in the unstructured data analysis
How will big data affect the market of BI and data analytics? Big data will enhance the need for BI and analytics, not just because of the volumes and velocity of the data involved, but because of the different nature of analysis required. So, tools that extend from the core BI capabilities to handling such different analysis types will come to the fore. Today, the organizations need to address new sources of data and carry out distinctive type of data analysis. Oracle solutions like Oracle Exadata Database Machine, Oracle Exalytics, Oracle R, and Oracle Big Data Appliance consist of integrated hardware and software, which is pre-configured, pre-tested, and engineered for a certain class of data management requirements. Oracle’s big data platform provides the following: Deep analytics, high agility,
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massive scalability, and low latency. What is Oracle’s strategy to push this service/product in the global and Indian market? Oracle’s big data strategy is centered on the idea that the organizations can evolve their current enterprise data architecture to incorporate big data and deliver business value, leveraging reliability, flexibility, and performance of Oracle systems to address their big data requirements. We are educating our customers on the importance of utilizing these data and the importance of deploying big data technologies to derive business value. We aim to give our customers a seamless and lessdisruptive technology. But this influx of new data creates challenges for IT departments. By using the Oracle Big Data Appliance in conjunction with Oracle Exadata and Oracle Exalytics, enterprises can acquire, organize, and analyze all their enterprise data, including structured and unstructured to, make the most-informed decisions. RUKHSAR SALEEM
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DATAQUEST | A CyberMedia Publication
‘We will soon be manufacturing headphones in India’ As a solution provider, which segments are you primarily focusing on? Our core strength is in voice based solutions and we solely focus on this area. We not only provide and set up the voice systems, but also cater to a holistic deployment mode to optimise the use of voice solutions in IT, for example, BPOs comprise our key segment. As a solutions company, why don’t you focus over partner tie-ups? As our focus is niche and specialized, we need to offer the best solution suite in accordance to demands, but as a whole we are not majorly into IT solutions. Partnerships will attract targets and revenue constraints
operational scope and would become a burden.
—Manish Kumar, chief executive officer, WildCard Techno Services
and we don’t want to concentrate on this front. For the solutions aspect, we cater to customers of all sizes, whether SMB or corporate, in accordance to their needs and budget. Since inception, WTS has not focused majorly over vendor partnerships, as we feel it will limit our
What are your plans in the near future? Besides our focus over solutions, we are planning to enter into manufacturing of headsets. Interestingly, unlike most other importers and so-called manufacturers in India, we won’t be importing materials from China and assembling in the plant. All the parts will be 100% made in India and will be of superior quality. By the end of this FY, the factory, most likely in Jharkhand, will be fully operational. Why did you opt for the factory in the eastern region, when north India has
better manufacturing prospects? The first consideration was to set up the factory near our head-office which is in Kolkata. In the second place, after the new government was sworn in, we wanted to help in the re-industrialization of Bengal by setting up our plant here. However on account of the impending land allotment issues and the ‘babu attitude’ prevalent in the state, we had to shift to a nearby region. In a way, I feel disillusioned by the state of the industry in the state and the further detoriating condition of trade in West Bengal. AVISHEK RAKSHIT
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People Wayne Berkowitz Joins Mindteck as New CEO and MD
Mindteck India, a product engineering and IT solutions provider, has appointed Wayne Berkowitz as its new chief executive officer as well as managing director. Berkowitz succeeds Pankaj Agarwal who has stepped down citing personal reasons. Prior to this, he has served IBM software group for 20 long years in various senior roles.
Shivaranajan Gulvady Calls Off His Innings at Zenith Computers
Shivaranjan Gulvady has called off his long innings as the vice president, corporate communications at the Zenith Group, where he served for more than 11 years. Gulvady plans to pursue his other interests now. Prior to Zenith Group, he was with Tandon Group of Companies.
Wolters Kluwer Financial Services Appoints Dharpan Koul
Wolters Kluwer Financial Services, a compliance and financial risk management company, has appointed Dharpan Koul as head of professional services for its FRSGlobal business in India. Koul will be based in Bengaluru and will be responsible for professional services team to assist banks in the region as per their specific needs. DATAQUEST | A CyberMedia Publication
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‘Customer behavior will drive outcomes’ What are the challenges that the companies would have to counter? The companies will have to play a bigger role in creating a productive, competent, responsive, and skilled workforce. It will also be important to offer IP based offerings to ensure specialization, enhance productivity, and achieve scalability. Their ability to leverage on technology trends to drive newer business models and ensure better branding and positioning the business to drive newer business models will be the focus. Considering the fact that the customers will exert increased pressure on lowering their total costs on y-o-y basis, combined with steady increase in wages in India, the workforce will have to become more productive, otherwise
daunting in a situation where almost 75% of the fledgling graduates are unemployable and have to be put through at least a year of further specialized training and coaching on the job.
—AV Asvini Kumar, chairman and managing director, Thinksoft Global
there will be a shortage of qualified and capable people and a danger of losing out on the business growth and opportunities. For example, the BFSI sector, which accounts for almost 50% of the testing business and where additional domain-related expertise and competencies are the must-have skills. The task looks very
How could this be best dealt with? Business growth can be taken to new levels by depending on the drive towards specialization, using a combination of increased application of domain expertise, largescale test automation frameworks, leveraging of newer paradigms like cloud computing, and development of specialized methodologies and techniques. This necessarily means that a lot of attention and effort need to be given to the methodology research,
innovation, tool creation, and knowledge management systems. The sum total of all these efforts could result in a y-o-y productivity increase of 10%. What steps do the software companies need to take? In the future, customer behavior will drive outcomes, and not tools, technology, or the service provider intentions. Only the emergence of new business and customerdriven paradigms will propel the outsourced testing services industry to put into place all the necessary methodologies, tools, technology environments, business models, governance structures, etc. SHILPA SHANBHAG
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People McAfee Appoints Jagdish Mahapatra as MD for India and Saarc Region
McAfee has announced the appointment of Jagdish Mahapatra as its managing director, McAfee India and Saarc. Mahapatra will be based in Mumbai and will be under Wahab Yusoff, vice president, McAfee South Asia. He will be responsible for the enterprise and consumer-driven product revenues, enhancing the customer base across verticals, channel partners, and alliance engagements.
Xerox India Names Rajat Jain as Managing Director
Xerox India, the indigenous arm of Xerox Corporation, has made an announcement about the appointment of Rajat Jain as its managing director, effective from February 20, 2012. Prior to this new role, Jain has served Mobile2win India and Walt Disney India. Jain will handle Xerox India’s strategy implementation and business development, along with marketing, brand recognition, and customer service operations. 80 | March 15, 2012
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‘SC 2012 manages public cloud workloads with a single pane of window’ What is the cloud market scenario in India? According to a study by Zinnov, global management consultants, the global cloud computing market will grow up to over $70 bn by 2015. Gartner estimates that the overall cloud service market in India is currently worth $110 mn and expects it to grow up to $1 bn by 2014. Zinnov expects it to grow up to $1.08 bn by 2015 and predicts that an estimated 300,000 additional jobs related to cloud services will be created in India in the next 5 years. How is System Center 2012 going to help the Indian businesses? What is the RoI that it promises? System Center 2012 enables businesses to build and operate private clouds for the delivery of
public cloud workloads with a single pane of window.
—Srikanth Karnakota director, server and cloud business, Microsoft India
business applications across both private and public cloud platforms. It also helps businesses to manage their IT environments across traditional data centers, private and public clouds, client computers, and devices. With native support to manage any hypervisor, System Center 2012 gives the power to manage data centers or
Does it allow interoperability and cross-linking with other platforms? To help you carry forward your existing data center investments and skillsets, System Center 2012 offers integration and interoperability for your heterogeneous data center environments, including multi-hypervisor management, crossplatform monitoring, and integrated automation across management tool sets from multiple vendors. System Center operations manager offers best-of-breed monitoring for Windows based environments while providing first-class support for heterogeneous environments (eg, various distributions of Linux/Unix and Sun Solaris).
How do you plan to pitch this product, given the competition in the space? With System Center 2012, we promise all our customers better economics. While our competition is still fighting the battle of economics, Microsoft believes in building cloud on the terms of the customers and at an affordable price. With System Center 2012, businesses can now focus on innovation over maintenance, to streamline costs and agility in responding to business needs. System Center 2012 highlights the cross-platform attribute and common fabric across public and private cloud. Microsoft’s partners in India are betting big on the economics of System Center 2012. ONKAR SHARMA
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People Chetana Anagol Joins Ozone Media
Ozone Media has appointed Chetana Anagol as its vice president, operations and delivery. Anagol has to handle expansion strategy of the company in various locations and drive business development in global markets. Prior to this, Chetana was the vice president of AOL media. Before AOL, she has rich experience of working with Commerce One, Go.com, Internet Shopping Network, and Worldview Systems (Travelocity).
Vineet Fogat Joins Epicor Software Corporation
Epicor Software Corporation has appointed Vineet Fogat as its country manager for India. Fogat will handle the expansion of the company’s operations in India. Before working with Epicor, Fogat has served Xmediaries (3i Infotech), Pentasoft, and Mahindra Network Services. DATAQUEST | A CyberMedia Publication
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‘Our India PSU business has been seeing great traction in the last one year’ What is the update on the SAP’s public sector business in the last one year? Globally, our public sector business continues to contribute 20%. From Asian perspective, we have the maximum market share, for instance, in Singapore and Australia 25 out of 27 federal departments use SAP solutions, however in Singapore small federal bodies do not use SAP. In India, we are seeing a greater traction, while Thailand, Vietnam, and Malaysia too are doing well. In the Indian context, we have seen a good year and we took our PSU investments very seriously. You have to understand that while dealing with the government, you
—Adaire Fox-Martin, SVP, industry business solutions, SAP Asia Pacific Japan
would need patience and empathy, especially when it comes to the length of the process in the context of political cycle, and there are challenges in terms of the time invested and procurement process is arduous.
What are some of the solutions targeted at the PSU sector? It’s a combination of our backbone strategy with a new strategy; like in our core ERP, we identified 20 corporate processes and put them in shared services to avoid duplication. In analytics, it is not just about system engagement but also custom development like the advent of HANA solution, an application targeted at the PSUs for analysis of projects with huge data volumes like tax evasion, social reforms, etc. Another solution—the document management— is in play in digital secretariat. In revenue collection, the focus is on
spend pattern and not on collection which should not be the case. What are some of the overall trends in the PSU segment in India? There is a massive consolidation of data centers and processes. One is also seeing the use of mobility as a platform for delivery of citizen services for covering the last mile. Most importantly, cloud for the public sector has arrived in developed countries like Australia. Similarly, Singapore has taken the lead by preparing for private cloud and China has prepared papers, but it plans to take it up city-wise. STUTI DAS
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People NCR India Appoints Kunwar Kishore Arora as Country Head
NCR Corporation has appointed Kunwar Kishore Arora as the country head for NCR Services India. Arora will be based in Mumbai and will handle NCR’s services strategy and has to penetrate its services in India. Arora brings in rich experience of serving multinational organizations in the US and Africa. Before joining NCR, he was with Bharti airtel.
Cisco Names Lalit S Chowdhary for India and Saarc Region Cisco has named Lalit S Chowdhary as the senior vice president, system engineering for its India & Saarc sales region. Chowdhary will work under Naresh Wadhwa, resident and country manager, Cisco India and South Asia. He will be responsible for Cisco’s technological leadership in borderless networks, collaboration and data center, and virtualization architectures in government, services providers, and enterprise customers in the region. 82 | March 15, 2012
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Industry BigGaddi.com Claims to Be the Largest Used Car Network BigGaddi.com claims itself as the largest used car network in India. This 3-year portal has joined hands with 3 new dealers in Bengaluru and owns a network of 7,000 used car dealers in 400 cities and towns in India. The buyers/sellers for used automobiles can get reverts from online users as well as network of used car dealers in the country.
Stellar Launches Stellar Phoenix Messenger Password Recovery V2.0 Stellar, the data recovery software provider, has made an announcement about the launch of the updated version of Stellar Phoenix Messenger Password Recovery V2.0. This newly launched tool will help the enterprises in recovering back the lost or forgotten user name and password of the instant messaging clients. Stellar Phoenix is a do-it-yourself tool, which helps users to get back their lost or forgotten user name, password, and domain name of the messenger immediately and gives an option to save the retrieved password. Phoenix Messenger Password Recovery V2.0 will aid all the messengers and is compatible with Windows 7, Vista, XP, and Servers (2003-08).
Deals and Partnerships Mahindra Satyam Signs MoU with Dion Global Solutions
Mahindra Satyam has announced that it has signed a Memorandum of Understanding (MoU) with Dion Global Solutions, which provides software solutions for global capital markets. As per this MoU, Mahindra Satyam will takeover a stake in Dion, therefore that stake will be priced as per SEBI regulations.
Symphony Service Corporation and Teleca Plan a Joint Venture
Symphony Service Corporation, a provider of Independent Software Vendors (ISVs), has signed an agreement with Teleca, a supplier for original equipment manufacturers (OEMs) and telecommunication operators supplier to form Symphony Teleca Corporation. The merging companies claim that this newly formed company will be the first company to solely focus on aiding clients in developing, managing, and supporting software for the cloud and enterprise mobility solutions, globally. DATAQUEST | A CyberMedia Publication
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‘Innovate and Deliver’ TBSC provides a great platform for the partners and customers from across the globe to collaborate and exchange innovative ideas and best practices
C
SC, one of the largest services firms, rolled out its annual Technology and Business Solutions Conference (TBSC) in India. This is for the first time that it had happened outside the US. TBSC is a common platform for the global IT service provider’s vast ecosystem of partners and customers to share insights and expertise, analyze business challenges, and discuss future developments in IT. The theme for the India event was Innovate and Deliver. Featuring participants from across CSC’s technical, client, and partner 84 | March 15, 2012
communities, TBSC India 2011 had 4 plenary sessions, 90 CSC sessions, and 81 partner breakout sessions. A featured panel discussion focused on ‘Transformation, Innovation, and Strategic Change: The Keys to Great Customer Experience’. The panel included Rajan Jha, director, IT, TH Group of Companies Vietnam; Saurabh Ganeriwala, CTO, GE Capital India; along with CSC executives Lem Lasher, president, Global Business Solutions; Brian Manning, president and managing director, CSC India; and Narendra Nayak, director, India Sales, CSC India. Shyamanuja Das,
editor, Dataquest moderated the discussion. The discussion focused on how customer experience flows from the overall positioning of the company, challenges in the emerging markets, how they are different from mature markets, and role of innovation in customer experience. The panelists also took a deep dive into areas such as customer analytics/intelligence, using social media analytics, and role of partner ecosystem in a company’s overall customer experience delivery. Other CSC executives such as Frank Heitman, president, Global Ap-
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plications Delivery and Bill Koff, VP & CTO, CSC Office of Innovation also spoke at the conference. CSC’s India operations are the company’s second largest globally, with a strong team of 23,000+ professionals across its development and delivery centers in 7 locations in Noida, Indore, Hyderabad, Chennai, Mumbai, Bengaluru, and Vadodara. CSC recently announced their entry into the Indian domestic market with a special focus on banking, insurance, manufacturing, healthcare, and government sectors. DQ REPORT
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news
MAIT Wants Budget to Boost IT Industry MAIT has penned down 7 key pre-budget recommendations and submitted to the National Manufacturing Council and Ministry of Finance for the Union Budget, which is to be announced on March 16, 2012
T
he IT industry of India is in a doldrums phase. Hence to boost the IT hardware industry, MAIT, the apex body representing India’s IT hardware industry, has penned down 7 key prebudget recommendations and submitted to the National Manufacturing Council and Ministry of Finance for the union budget, which is to be announced on March 16, 2012. Broadly, the association is asking for the removal of minimum alternate tax and abolition of 4% special additional duty (SAD) to boost the PC industry, which is facing declining sales and demand. As per MAIT’s estimate, the sale of personal computers in India is expected to grow by single digit, ie, 3% this year. According to Dr Alok Bharadwaj, president, MAIT, “2012-13 is a very challenging year for computer makers. While keeping in mind this challenging time, we have designed these recommendations in a way, which will directly and indirectly expand the local manufacturing of IT and electronic products.”
—Dr Alok Bharadwaj, president, MAIT
MAIT has also given emphasis on the stable governance. The abrupt alterations in the government policies change the entire taxes, prices, and polices, which gives out a negative signal to foreign investors and impact the sentiments of consumers. Therefore MAIT wants the government to encourage finance schemes for PC purchase at low interest rates, provide subsidy on broadband access charges in rural areas, and create
DATAQUEST | A CyberMedia Publication
local language applications, which will grow PC penetrations. Talking about the local manufacturing, Bharadwaj comments, “The local manufacturing is pegged to be $400 bn industry in 2020. But the core issue is that only $100 bn will come from India and majority will be imported, and this will create trade deficit. Thus to push local manufacturing, we need to bring international IT manufacturing policies in place. Having said that, the government has a clear intent to push local manufacturing, but lack of political consent is playing a barrier.” The other area of concern for MAIT is the delay of GST implementation. “We want confirmation on the GST. The IT industry is sensitive to movement of goods across the country. Therefore we want GST implementation at the earliest and issuance of transfer pricing guidelines,” shares Bharadwaj. Besides budget recommendations, MAIT is also acting as a nodal agency for the e-waste management. As e-waste regulations are set to rollout in the month of May 2012, the association is launch-
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ing a new mechanism to help e-waste management. “We are planning to launch e-waste information portal, where all the central and state pollution control boards, all 43 recyclers of India, bulk customers who want to dispose their e-waste, and manufacturers of electronic products will get registered. This will help communication information exchange amongst all the stakeholders of IT,” he says. The association is also rolling out 3 specialized vertical chapters for SIs, SMEs, and recyclers. The association is appointing 3 chairmen. These chapters will act as house within a house. Every month, MAIT will organize debates and discussions among the stakeholders. The association has identified 8 IT associations to form a federation. “Essentially, we want to tie-up with large associations. Regional and small associations will not find much value additions. Already we have tiedup with Compass, TAIT, Confed-ITA, ACMA, and we are going to rope in CMDA Pune,” concludes Bharadwaj. SANDHYA MALHOTRA
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DQ SNIPPETS
Leisure
Learning Business Ethics
IBRAHIM AHMAD ibrahima@cybermedia.co.in
g the Bearin Weather Rough Will the various egovernance projects, either under deployment or in the pipeline, not be able to take an advantage of the cloud technology? Some vendors are saying that large projects, which started with an IT infrastructure from a single vendor or a team of mutually collaborating vendors that subsequently moved to different vendors (thanks to the L1 tender system), now find themselves with disparate hardware. And moving it to the cloud model is proving to be tough. Apparently, Aadhaar is running into some rough weather because of this.
Nahi Vyapar ar Vyavah
oke? A Bad J
Tally, a leading financial accounting cum ERP software company, is on a different trip these days. In a nationwide whirlwind of workshops called ‘Mathematics of Happiness’, its top bosses are meeting about 15,000 partners, and telling them that their aim in life should be Vyavahar (conduct) and not Vyapar (business). Apparently, it is this unexpected theme that is drawing partners in hordes. The end objective of this workshop might be to train partners how to win the hearts and minds of customers, but it is good to see a philosophical approach rather than a materialistic approach being followed even in the tough times.
At a recent conference on ‘3G services and what the industry needs to do to get it going’ (we are still at 16 mn 3G active users after 2 years of its launch), one expert offered a simple solution: Stop all 2G services, and the users will automatically be forced to move to 3G. He cited the Korean example to support his case. One conference attendee, in a lighter vein, remarked that perhaps the Supreme Court could come out with another order canceling all the remaining 2G licenses. At a time when the telecom industry has still not recovered from the shocking SC order canceling 122 2G licenses, I am not sure if this humor was appreciated.
Trust Deficit
channel partners are taking them a team of telecallers to check if their A leading hardware vendor has set up ing from the principal by l partners who manage to get special pric for a ride. Thanks to some smart channe ally sell these machines at a actu order. Ironically, they e larg a s— hine mac 10 ts wan r ome tomer to check claiming that the cust cipals’ telecallers call up the end-cus prin the , this curb To . gins mar e mor ticians retail price and make stry is surely keeping pace with the poli indu IT s. hine mac 10 for r orde an ed if they have actually plac when it comes to trust.
86 | March 15, 2012
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Roundup
Leisure
Celebrities Steal the Show at NASSCOM ILF 2012
While it was business as usual, the sentiment was neither too upbeat nor gloomy as in 2009
Shyamanuja Das shyamanujad@cybermedia.co.in
Sir Richard Hadlee The all-rounder who also excels as a business ambassador
F
or the people in Indian IT industry, the mood at Nasscom’s India Leadership Forum (NILF) in February each year is the most accurate barometer of the state of the IT business—more so the offshoring business. For those already in the industry, it is a platform where they validate if their mood is actually the mood prevailing in the industry; for outsiders, it gives an idea of where the industry is in, in terms of sentiments. The NILF 2012 was business as usual. The mood was surely not upbeat. Neither was it too gloomy, as it was in, say, 2009. Interestingly, something for which NILF has been known, was even more evident this time. That is while the registration was good, and there was good crowd in the conference area of Grand Hyatt, the hall (this time, there was just one main session for most part of the program) was half empty in most sessions. The sessions that got the most crowd were those of the celebrities—Richard Hadlee on the first day, Shekhar Kapoor on the second day, and Abhishek Bachchan on the third. While this writer could not attend the last one, the other two were surely impressive—not just by the audience size but also by the content. DATAQUEST | A CyberMedia Publication
Sir Richard Hadlee, one of the greatest allrounders the game has produced, impressed with his wit while doing a thorough job of selling New Zealand. He actually generously sprinkled cricketing examples and anecdotes to make his point. Australia chose its team of 11 from a population of 23 mn, India does that from a population of 1 bn, while New Zealand does that from a population of 4 mn, adding that the world can learn a thing or two from how to score with limited resources. He also referred to the 1992 World Cup where New Zealand stunned the world by opening the bowling with a spinner—Deepak Patel of Indian origin. That was disruptive thinking. New Zealand had topped the table with seven straight wins in that World Cup. Hadlee also made the entire audience play a game related to cricket while gave away a prize to the winner. While answering a prize-winning question—what should IT learn from cricket and what should cricket learn from IT—he elaborated on the need for sports technologies.
Shekhar Kapur, an Indian film director and producer
Shekhar Kapoor who tried to initiate a debate on—if social media could challenge the idea of nation-states— said that social media is reassessing the role of the gatekeeper and has handed the power back to the community. He upheld the value of shared ideas as he said no creative person gets the ideas just from inside his brain but by observing and learning from people. So, a crowd-creative act is better than an individual creative act, he concluded. He also received some of the most stirring questions. n
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March 15, 2012 | 87
art
India’s Affair with Art
With big and renowned names descending on the Indian Art Fair, to showcase their artworks, art is being consumed both visually and materially by one and all. Class distinctions, as prominent earlier, have been shown the door
C
orporate houses, especially IT firms, are religiously investing in art and artists. The concept of art as a stock or an asset is slowly sinking in the philosophy of the market. Why are popular IT houses like HCL investing in art? It might sound as a revelation, but as per experts, “Art is the only form of investment where prices don’t come down”, hence by investing in art we can diversify risks and also gain aesthetic benefits. So we see our rich—though not ready to mingle— corporate houses patronizing artists by opening up museums and online 88 | March 15, 2012
KUSUM KUMARI kusumk@cybermedia.co.in
galleries. CMC (now part of TCS) was the first corporate house to tread into the hitherto forbidden path of investment in art. Similarly, Shiv Nadar Foundation (HCL) made the right steps towards art economy by opening the Kiran Nadar Museum (a privately-owned museum), which boasts of big names in art. Therefore it was not difficult to judge why the Indian Art Fair is getting grander and bigger day by day.
Art and Technology
Visitors dressed in the latest sartorial fashion and art lovers and dreamers closely observing each visit www.dqindia.com
art work, well, this was the most common sight in the Indian Art Fair. For a while, you tend to forget your mundane and uninteresting routinized life among the art works. Some art works draw attention for their color, pattern, and realistic representation, while others for experimentation and out-of-thebox thinking. Contemporary art has gone through a sea of changes, suddenly we see installation and digital art works have occupied the art space, globally. Undoubtedly, art has kept pace with the changes in time. Although the medium of art is continuously undergoing
DATAQUEST | A CyberMedia Publication
Leisure were categorized as a part of Indian handicraft. Therefore the Indian Art Fair played a key role in bringing forth the distinction between art and craft. Proliferation of economy (when it happened) and educational institutions’ efforts have reaped rich dividends for art.
Analyzing the Fair
changes, but traditionally defined media still stand winners despite challenges from digital devices. For art lovers who earlier spent a fortune to catch a glimpse of their favorite art works, technology has brought both admirers and artworks on the same platform. This year this event not only went through a name change but also witnessed a change in venue. Suddenly, the lesser known and illreputed Okhla was the cynosure of visitors and artists, traveling from different parts of the world to go through art works. As we all know, art fairs are organized to not only attract art lovers but also investors and buyers. Economically, such fairs ensure more investors with fat green bucks turn up to build infrastructure and ensure employment. This correlation between art and economy can be fathomed, ie, more corporate house means more art works would be sold. Society-wise we are far behind many countries, where awareness and admiration towards art and artists stand unquestioned. For long, Indian art and artists have been undermined and their skills DATAQUEST | A CyberMedia Publication
This year the Indian Art Fair witnessed famous and till now far and beyond reach descending to show their art such as Anish Kapoor, Damien Hirst, etc. Speakers’ forum, a key component of the fair, has become immensely popular among the visitors, academicians,and researchers continuously hunting for art-related news. Interestingly, we had issues that are relevant and pressing, and sometimes beyond the grasp of a layman. So we saw talks related to following topics drawing attention: Corporate Involvement in Art and Culture, “European Reception of Contemporary Indian Art, and The Arab Spring and the Broadening Gulf. Art, for long, has been forcefully categorized by prejudiced policymakers as an aspect of a society that can only be aesthetically enjoyed by the haves. This stands refuted when one sees common faces, carrying a common countenance, religiously visiting each and every gallery booth and enlightening their kids on each work.
The Age of Experimentation
Interestingly, this year photography and digital art occupied a larger space. Also, artists this time concentrated upon experimenting with the medium and ideas, which fascinated one and all. One of the stars of the event was the renowned photograph ‘Afghan Girl’, a shot that brought Steve McCurry name and fame. Also, we had a strange combination of old masters who used traditional mediums and convisit www.dqindia.com
temporary artists who sumptuously indulge in experimentation. Therefore visitors feasted on both old works and contemporary works such as Vivek Vilasani’s photograph that tried to portray the idea of art for common masses by replacing sculptures with common faces in Madurai Temple’s image, Marina Abramovic’s performance, Bharti Kher’s intelligently exhibited sculpture, Subodh Gupta’s nostalgic work, etc. Indian artists by adopting modern mediums and methods are no more lagging behind the international artists. Rather with their intelligent and conceptually rich works, they have earned respect in the art world. The art of art appreciation has grown to a large extent among the masses, undoubtedly, due to art fairs being organized and advertized at a large scale. Ironically, our rich Dilliwalas, whose appreciation about art is clouded by the color of money, also turn up in huge numbers at such fairs, primarily to show off their rich collection, flaunting big names in the art world. Rich Dilliwalas can make anyone prostrate before them, after all they know how to make money, despite being an unaesthetic mundane ride devoid of any adventure and pleasure. The Indian Art Fair, like other art and literature festival, has played a crucial role in inculcating new culture and habits in the Indians. Hence common masses, who till now were trapped in the heaviness of a regular life (as portrayed in Bela Tarr’s movie ‘The Turin Horse’), are suddenly getting intimate and fascinated with the unexplored terrain of art. Although trends such as performance by international artists such as Yoko Ono’s ongoing performance, public art, biennale, etc, have fired the public’s imagination, we still need concrete institutional reforms to ensure the trickle-down effect of art. n March 15, 2012 | 89
Afterthought
Shyamanuja Das
So, What’s New?
The author is Editor of Dataquest shyamanujad@cybermedia.co.in
“S
o, how was Nasscom?,” asked a friend from an IT services firm, who could not attend the NASSCOM India Leadership Forum (NILF) this year, but otherwise is a regular at the forum. Nasscom, in his question, of course, referred to NILF. I wish I could have given him a very articulate answer. Not that he was expecting it. He apparently had asked the question to a couple of more attendees—his colleagues—but was probably expecting a more analytical and reflective answer from an editor. Business as usual, not too enthusiastic, not gloomy—I replied, the 140 character restriction of a tweet still trying to play somewhere in my mind. I guess I had tweeted the same words some time on the first day and as the event progressed, my conclusion was not proved wrong. The answer, of course, was neither reflective nor catchy. But more importantly—it was not about the event itself, which was his question. It was about the mood prevailing. And even he was perfectly okay with that—maybe, he too was expecting that. He seemed a little relieved. Our conversation moved seamlessly to the global business environment and not to the content of the NILF. For years now, NILF has become—more than anything else—the barometer to measure the mood of Indian offshoring industry. It is an event you attend to see where the mood lies, validate your mood against that of the fraternity, and make corrections/create benchmarks in your mind. For that reason alone, NILF will continue to remain the most important event in the Indian IT. That is why every outsourcing company worth its name ensures that some senior execs attend the event, even though they keep complaining about not enough buyers coming in, not enough attention to the small and medium companies, and so on. The media and analysts complain about the lack of enough good 90 | March 15, 2012
sessions, but no one gives it a pass, unless there is some strong reason not to be able to attend. Some of the criticism, per se, is valid. People go to NILF to validate the mood and do some networking. But there is some expectation from the largest such event in the world: That it would provide a direction on where things are going in the next few months and the next few years. As an organizing body, Nasscom is doing a pretty good job. There are innovations in the format; there are new features that are getting added; the event has embraced social media and so on. But the newness in content is missing. It is the same issues, same faces from industry, taking the same stands. Not that they are unimportant, irrelevant, or uninteresting. But the discussion is rarely about new trends. It is rarely about hypotheses. It is all about what companies are doing, and worse still, have already done—by definition, the present and the past. Remember when a Tom Friedman enthralled the audience, with his take on outsourcing? Not only he talked about what he had written in the first edition of The World is Flat but he actually gave a glimpse of what he was going to incorporate in the second edition. One can still remember an injured APJ Abdul Kalam on video leaving a lasting impression on all foreign delegates (“Well, now, we know why India is what it is”) by elaborating what he wants the IT industry to achieve, in clear terms. All that is missing. It is easy to point fingers at the organizers and shy away from the real issue. Isn’t the lack of newness in an industry forum a reflection of lack of that newness in the industry itself? Is the IT industry serious about experimenting, about debates? The problem with a B2B, horizontally spread industry like IT services is that lack of enough newness would not impact it immediately. But ultimately, it would. And that is not a very comfortable thought for any of us
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