VOL III-SEGMENTS
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www.dqindia.com
VOL XXXI No 18 I SEPTEMBER 30, 2013
THE BUSINESS OF INFOTECH
THE STORY DQ TOP 20, VOL-III
OF DIFFICULT
GROWTH
Rough ride for desktops, overall PC market grows by mere 6% Notebooks make up 55% of PC shipments Tablets, the only segment that saw triple digit growth-104% Enterprise applications grew well in mid-market System software grows but vendors need more big ticket wins to sustain the momentum SEPTEMBER 30, 2013
Printers converge on lasers as inkjet market further slides Challenging times for servers as both x86 and non x86 take a big hit Unified Communications market grows as concepts like BYOD gain traction Despite global slowdown Indian semiconductor market poised for big growth 126 pages including cover
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SEPTEMBER 30, 2013
DQ Top 20 Vol.III Segment Analysis Desktops & Notebooks....................................................... 37 Monitors........................................................................... 44 Unified Communications...................................................... 48 Network Security............................................................... 55 Printers............................................................................. 60 Servers............................................................................. 68 Structured Cabling............................................................. 71 Systems Software............................................................. 75 Tablets.............................................................................. 82 Telecom Software............................................................... 86 IT Channels........................................................................ 90 IT Distribution.................................................................... 93 Enterprise Apps................................................................. 97 Managed Services............................................................ 102 Storage........................................................................... 105 Semiconductor................................................................. 108 UPS................................................................................ 111 SECTIONS
REGULAR INDUSTRY ENTERPRISE
REGULAR 08
Edit
10
DQ Team
DIGITAL
12
Feedback
LEISURE
124 Last Matter
PEOPLE GOVERNMENT
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CONTENTS
LEADERSPEAK 18
LEADING VIEW
Word of Mouth
The Hard Journey of Hardware Manufacturing
Ajai Chowdhry Founder, HCL
CN Raghupathi
Xu Dejun
Head, India Business, Infosys
CEO, ZTE India
Rajiv Srivastava
Anuj Mathur
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PEOPLE
President, PPS, Hewlett-Packard India
CEO, Q3 technologies
Execution of Non-disclosure Agreement or Data Confidentiality 114
Tony Mira
Group CEO, Ajuba Solutions India
Karthikeyan Natarajan
Bindu Sharma
CEO and founder, Origiin IP Solutions, Bengaluru
Importance of the ‘New Hire’ On-boarding Process
Global Head, IES, Tech Mahindra
115
Koustuv Mitra
managing director, XecuteHR Solutions
Sriram Rajaram
President, Strategy & Corporate Development, Cigniti
Ramandeep Singh CEO, Calsoft Labs
INDUSTRY V Sreenivasan
Senior Vice President, ITC Infotech
Santosh Pandey
India Country Manager, Dell Wyse
117 News Analysis 122 Short Takes
Rajeev Mehta
Group Chief Executive, Industries and Markets, Cognizant
B Rudramuni
Executive Director and Head of R&D, Dell India
P Sridhar Reddy
Founder & CEO, CtrlS
Srihari Srinivasan Head of Technology, ThoughtWorks India Enterprise Apps
Hitesh Shah
Director, Commercial Relationship, BlackBerry, India
N Mahesh
COO, Maveric Systems
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Vikram Gulati
MD & CEO, Happiest Minds
Ranjit Nambiar
Director, IAM, South Asia, HID Global
A CyberMedia Publication
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September 30, 2013
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EDIT
Ibrahim Ahmad ibrahima@cybermedia.co.in
Power Hunger
A
t a recent conference for small sized enterprises where one speaker after the other was extolling the virtues of how IT can be leveraged to make it big, one delegate took me by the arm and said that instead of IT we should do conferences and awareness workshops for the government on how to generate more power. All these conferences are a waste if there is no adequate and good quality power supply to run the computers and servers in offices, and to charge all the laptops and mobile devices on the move. I might have felt a bit offended at this upfront feedback, but what he said was true. All GDP growth rate related claims and counter claims by rival politicians, economists, and business leaders might be debated endlessly, but the fact is that the power supply situation has not improved. Ask the common man, and he/she will say it has gone down. No amount of statistical jugglery is convincing. So what IT and consumerization of IT are we talking about. We need to consumerize power first, and not seems to be happening on this front. Millennium city and Indian capital Delhi’s prized suburb Gurgaon does not have power supply for a few hours every day. Go to Sikandrabad, about 45 kms from Delhi in western UP, and there is no power supply for 6-7 hours in a day. Forget about places such as Bettiah in Bihar, Purulia in West Bengal. The point is that the places where consumerization of IT is most essential are also the places where power supply is the poorest. A recent news that the Asian Development Bank will provide $500 mn to build a power transmission system for clean electricity from wind and solar power projects in Rajasthan in Northwest India to the state and national grids is a welcome news. This environment friendly photovoltaic and solar thermal project is part of Rajasthan’s aim to reach about 8,000 megawatts of solar and wind generation capacity by 2018, largely from the private sector. One would only like to hear about its progress and success, and also more stories like this. We must remember that Indians bought about 12 mn desktops and laptops, 105 mn mobile phones and roughly 35 mn smartphones in the last fiscal. These are rough estimates, and I am not even counting the number of servers, networking equipment, and other enterprise level ICT machines which are power guzzlers. It would be interesting to calculate how much power they would consume. Is the country’s power supply keeping pace with this kind of a demand. I will not believe if anyone says yes. Government of India will not achieve much with IT and its growth if it does not push for power reforms aggressively. In fact, poor power infrastructure will have a direct bearing on how IT spreads in the country. Even the IT industry needs to keep this in mind as they go around selling products and solutions. I feel the road from here will start getting rough and thorny. I was talking about Sikandrabad earlier because I met a boy from a village nearby who was excited that he had received a laptop from UP Government, but said that he gets power only for a few hours, that too in the middle of the night. Consumerization of IT will not happen unless there is consumerization of power.
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EDITORIAL GROUP EDITOR: Ibrahim Ahmad EDITOR: Ed Nair ASSOCIATE EDITOR: Shrikanth G (Chennai) ASST EDITOR: Onkar Sharma, Krishna Mukherjee (Gurgaon) SR CORRESPONDENT: Jalaja Ramanunni (Bengaluru) BUSINESS Corporate HEAD of SALES & MARKETING: Satish Gupta (satishg@cybermedia.co.in) MARKETING: Arvind Razdan (Asst Mgr) Kuldeep Khatana (Asst Mgr Design) DELHI/NCR Amresh Mishra (Mgr Sales) BENGALURU T Roshan Sahadevan (Mgr Sales) Subhadeep Sen (Asst Mgr Sales) MUMBAI Meenakshi Madan (Asst Mgr Sales) PUNE Sunay Choudhury (Mgr Sales) CHENNAI T Roshan Sahadevan (Mgr Sales) KOLKATA Sandeep Roy Chowdhuri (Sr Mgr Sales) HYDERABAD Srinivas S (Asst Admin) INTERNATIONAL Vikas Monga (Mgr Sales) Operations GENERAL MANAGER: CP Kalra SR MANAGER: Anuj Sharma MANAGER: Debabrata T Joshi MANAGER: Jayant Singhal Shared Services VICE PRESIDENT: Manish Verma PRINT SERVICES: T Srirengan (GM) CIRCULATION & SUBSCRIPTION: C Ramachandra (Sr Mgr) Jagdeep Khanna (Mgr) Raghavendra S (Mgr) Raju Salve (Asst Mgr) Srinivas Gangula (Sr Exec) AUDIENCE SERVICING: Sarita Shridhar (Mgr) MIS & DATABASE: Ravikant (Mgr) PRESS COORDINATOR: Harak Singh Ramola (Exec)
CORRESPONDENT: Prerna Sharma SUB EDITOR: Charu, Ruchika Goel ASST MANAGER DESIGN: Bhagbat Pattnayak, Harnek Singh, Pramod S Rawat COVER DESIGN: Pramod S Rawat EDITORIAL ADVISOR: Prasanto Kumar Roy OFFICES GURGAON Cyber House B-35 Sector-32, Gurgaon, Haryana – 122 001 Tel: 0124 - 4822222, Fax: 0124 - 2380694 BENGALURU 401, 4th Floor MBC Building, #134, Infantry Road Bangalore – 560 001 Tel: 080 – 43412000, Fax: 080 – 22862971 CHENNAI 5-B, 6th Floor, Gemini Parsn Apartments 599 Mount Road, Chennai 600 006 Tel: 044 – 28221712, 28229116, 28220360 Fax: 044 – 28222092 KOLKATA 23/54, Gariahat Road, Ground Floor Near South City College, Kolkata – 700 029 Tel: 033 – 65250117/18, 65341101, 40011506 MUMBAI 306, 3rd Floor Acropolis, Military Road, Marol Andheri (East), Mumbai – 400 059 Tel: 022 – 29204142/43/44 Fax: 022 – 29203964 PUNE Flat# 9, Popular Heights-3, F- Block,North Main Road, Koregaon Park, Pune – 411 001 Tel: 020 – 66203378, 66203379 Fax: 020 – 66203377 SECUNDERABAD Room No. 5&6, Srinath Commercial Complex, Sd Road, Secunderabad – 600 003 Tel: (040) 27841970, 27841665 Fax: (040) 27808134 INTERNATIONAL Cyber Media (Singapore) Pte Ltd #14-03, High Street Centre, 1 North Bridge Road, Singapore – 179 094 Tel: 00 – 63369142, Fax: 00 – 63369145 Email: Naveenb@cybermedia.co.in CALIFORNIA Huson International Media President, 1999, South Bascom Avenue, Suit 1000, Campbell, Ca95008, USA Tel: +1-408-879 6666, Fax: +1-408-879 6669
Dataquest (not affiliated with Dataquest Inc., a division of Gartner Group, USA), is printed and published by Pradeep Gupta, on behalf of Cyber Media (India) Ltd, printed at M/s Karan Printers, F 29/2, Phase II, Okhla Industrial Area, New Delhi, published at D-74, Panchsheel Enclave New Delhi 110017, India. Editor Ibrahim Ahmad. Distributors in India by IBH Books & Magazines Dist. Pvt. Ltd, Mumbai. Subscription (Inland): `1200 (24 issues), `2400 (48 issues), `3600 (72 issues). Subscription (Foreign): US $145 (SAARC Countries), US $75 (Rest of the world) By Airmail. (For subscription queries contact our Reader Service Executive: rsedqindia@cybermedia.co.in) Dataquest does not claim any responsibility to return unsolicited articles or photographs unless accompanied by adequate returnpostage. All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publishers.
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RUDE BEHAVIOR p. 66
YOUR GYM AVATAR p. 84
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VOL XXXI No 17 I SEPTEMBER 15, 2013
THE BUSINESS OF INFOTECH
CONSUMERIZATION OF IT
CONSUMERIZATION OF IT
HAPPY BIRTHDAY GOOGLE
DATAQUEST
This is with reference to the article published on your website. This is a good step taken by IRCTC, but the question remains how effective is this going to be. Will the ticket booking be faster or will we have to face the same problem even logging into the site. Vikas via email
MICROSOFT-NOKIA p. 70 www.dqindia.com
IRCTC GOES TECH SAVVY
SEPTEMBER 15, 2013
FEEDBACK
This is with reference to the article published online. It’s really nice to see Google making such elaborate future plans. I hope these plans do succeed and we get more out of the website which forms a major part of all our lives. I am really glad that this informative article was published here. Raj Via email
A Dataquest Special feature in Association with
Why Converged
Infrastructure
SEPTEMBER 15, 2013
BLACKBERRY THROWS UP, GOOGLE PICKS UP This article talks about the smart move taken by Google. But I wonder how will this affect BlackBerry. What has BlackBerry officials got to say about this? Won’t it demoralize the remaining BlackBerry employees in the office? Raka via email
Q
Q&A Antonio Julio Executive Director, Dell 88 pages including cover
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BITTEN BY THE GOOGLE BUG
AMAZON’S NEW TABLET COMES WITH A TWIST
This is with reference to the article published online. I am really thankful that you people published this article. I was really worried about what was happening and thought it was only my account that was behaving so weird. This kind of stuff by google is not expected. I hope a speedy recovery. Rajesh via email
This is with reference to the article published online. This is an informative article. But I wonder how will this product last in this high-end competition market. Won’t it be thrown out by the already existing large masters? Can it last the market competition. I would love to see a detailed analysis on this. Sakir via email
CORRIGENDUM Inadvertently Epson India was left out of the DQ 100 ranking. We have revised the Top 100 and as per the new list Epson India now stands at rank #97. The oversight is deeply regretted. President: Toshiyuki Kasai www.epson.co.in
Epson India
It was an eventful FY13 for Epson India that was marked by slew of new launches. The company launched its L and M Series Ink tank Inkjet printers that saw huge success. Its key USP being lowest printing costs that worked well with Indian consumers. On the market share front, Epson’s Inkjet value market share went up while it became the #1 projector brand in India (value share of 17.6% as per CMR in CY12). Meanwhile Epson’s market share in DMP and POS printers remains above 50% (as per CMR data).
97
2012-13
703
2011-12
604
16%
HIGHLIGHTS
•• Launch of Moverio head mount display device, new home theatre projectors •• L series ink tank printers brought in added focus to consumer and home market apart
Source: DQ estimates revenue (`crore)
from traditional strength in business segment SEND YOUR FEEDBACK TO SERVE YOU BETTER For subscription related issues, contact us at
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INDUSTRY | LEADING VIEW
Ajai Chowdhry maildqindia@cybermedia.co.in
The Hard Journey of Hardware Manufacturing India has a large domestic market and hence it is essential that we draw investments into India. However, the Indian manufacturing industry has failed to keep pace with its global counterparts and continues to struggle
turers/exporters and have contributed significantly to the growth of their economies. Today China has taken the leadership position in electronics manufacturing. However, in the last few years with the cost of manufacturing going up in China due to new labor laws, currency correction, etc, global companies have been looking at a China +1 strategy. As a result many countries like Vietnam, Thailand, Indonesia have moved fast to lure the manufacturing market towards them. THE INDIAN MARKET
M
anufacturing has long been recognized to be at the core of India’s economic growth but the journey for domestic hardware manufacturing continues to be arduous. In FY09 domestic production of electronics was at $20 bn, whereas the imports stood at $45 bn. The electronic import bill continues to be a cause for grave concern. Further, demand for electronic products is expected to reach $400 bn by 2020, whereas domestic production at current CAGR will remain at $104 bn. This will lead to a huge deficit in balance of trade. It is therefore a critical imperative to bring favorable policy environment to promote domestic manufacturing of electronics. Domestic manufacturing has been successfully contributing to economic growth in countries around the world. Initially, manufacturing moved from the USA to Japan, soon to Taiwan and then eventually to China. Over the last decade and a half, countries such as China, Korea, Taiwan, Singapore, and Malaysia have all emerged as leading global IT hardware and electronics manufac14
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On the contrary, India has a large domestic market and hence it is essential that we draw investments into India. However, the Indian manufacturing industry has failed to keep pace with its global counterparts and continues to struggle with extremely low domestic production. For sustained growth of GDP and productive employability, it is imperative that the growth in the manufacturing sector picks up. Domestic manufacturing industry has the potential to create enormous employment opportunities both high skilled and low skilled for our country. It will also be extremely necessary to maintain a good balance of trade. My journey to establish manufacturing in India in electronics started in 1999 when I was part of the hardware task force of the PM, led by the late Dr Seshagiri under Jaswant Singh’s leadership. The report was drafted comprehensively so that with the proposed guidelines the industry can show proactive enterprise, just-in-time alertness, market aggressiveness, and inventive resilience but despite a lot of support it could not be implemented. I also chaired a committee that wrote a report for the Department of Information Technology in 2005 of which only the SIPS policy for establishing a semiconductor and component ecosystem was implemented. Further, in 2009, I chaired a task force set up by the Government of India, where various measures were recA CyberMedia Publication
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INDUSTRY | LEADING VIEW
INDIA HAS A LARGE DOMESTIC MARKET AND HENCE IT IS ESSENTIAL THAT WE DRAW INVESTMENTS INTO INDIA
ommended to stimulate the growth of this industry. From these, the following were accepted to be taken by the government as a package. National Electronic Mission: To set up a National Electronics Mission with industry participation to evolve programmes in pursuit of the laid down policies and also to create institutional mechanisms to advance the implementation of various programmes aimed at achieving the objectives enumerated in the national electronic hardware policy and to promote India as an electronics hardware manufacturing hub and suitably market ‘Brand India’ in electronics. Preferential Market Access (PMA): Preference for ‘Manufactured–in–India Electronic Products’/’Indian Electronic Products’ for all government procurements and procurement by government licensees except defense procurement. Modified SIPS/Electronic Manufacturing Clusters and Standards: Encourage manufacture of specific high priority electronic product lines in India including standards to regulate manufacture in India and import of the sub-standard goods, Modified Special Incentive Package Scheme (SIPS-II) and creation of electronics manufacturing clusters with adequate incentives. Semi Conductor Fab: To facilitate setting up of two semiconductor wafer fab facilities and its ecosystem for design and fabrication of chips and chip components. Electronic Development Fund: To create an electronic development fund for promoting the development of the electronics sector. This electronic development fund will promote innovation, IP and R&D, commercialization of products, etc, in the ESDM, nano electronics, and IT sectors by providing appropriate funding/incentives to industry/academic/R&D institutions. Most of these are currently under implementation and form a major component of the electronics policy. The initial reaction for the policy has been good and investments worth around Rs 5,000 crore have also been committed. |
A CyberMedia Publication
TAKEAWAYS oo Demand for electronic products is expected to
reach $400 bn by 2020, whereas domestic production at current CAGR will remain at $104 bn oo Over the last decade and a half, countries such as China, Korea, Taiwan, Singapore, and Malaysia have all emerged as leading global IT hardware and electronics manufacturers/exporters and have contributed significantly to the growth of their economies
With a large domestic market, I believe that India is uniquely suited to attract huge investments into manufacturing. Our needs in education, government social sector projects, UID, telecom and strategic sectors like defence/space/atomic energy itself present huge opportunities. However, there were lot of impediments to bring investments into electronics for India like poor infrastructure, tax issues, unorganized logistics and supply chain management, and inflexible labour laws along with high transaction costs. In addition, as a signatory to the WTO we were the first industry to face zero import duty from 2005 so it collided with the interests of the nation as with low import costs, manufacturing wouldn’t receive the due impetus. The PMA policy was thus introduced as a part of a strategy to develop indigenous capability in domestic manufacturing and build in a demand generation piece as the government is the largest buyer in India. THE PMA POLICY
However, now with the recent decision to review the PMA policy and concerns raised that PMA is anti WTO, I would also like to mention that along with increase in domestic production it is important to add value. The stipulation of value addition is in accordance with the WTO rules for origin of goods according to which origin would be a www.dqindia.com
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country where it is wholly produced or where the substantial transformation took place. India is not a signatory to Government Procurement Agreement of the WTO (GPA) and, therefore, is not constrained by the stipulations of the GPA. WTO does not discourage countries to develop policies to promote domestic manufacturing. There have also been voices raised that the quality will be sacrificed. The policy clearly enumerates that demand will be met by products made in India if they are technically and commercially competitive for government procurement, therefore implying that there will be no compromise on quality and price. This policy is crucial for kick starting India’s manufacturing growth and a more balanced GDP coupled with GDP growth. Else for every dollar of imports the jobs will continue to be created in China and US not in India. 16
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Being a part of the Indian IT ecosystem, I have seen and been a part of this journey for 14 years to help devise a mechanism to build India’s manufacturing capabilities. What is crucial in the current scenario is a clear vision for the manufacturing sector supported by suitable policy interventions, implementation of the PMA policy, increase in government demand to spur innovation in the sector, and strategies to enhance the scope of domestic manufacturers to move up the global value chain. We need to create an ecosystem that can create high value addition and differentiation for India. Hence, the capability of our semiconductor design, fabless shops, etc, has to be harnessed to design and manufacture in India. Only then can we emerge as a global manufacturing hub. The author is Founder, HCL A CyberMedia Publication
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DQ Team maildqindia@cybermedia.co.in
Word of Mouth The industry reflects on the IT industry, the opportunities and India’s prowess...
I
ndia is poised for immense growth over the next two decades and is perceived to be emerging as one the world’s fasting growing economies. However, this growth is hindered by the lack of a strong IT backbone that cannot support India’s technology needs. The public sector is already leveraging technology to improve the lives of Indian citizens. E-governance initiatives undertaken by the government are still in the nascent stage and hence, the potential for IT players is huge. Apart from the central government, individual state governments are also rolling out projects such as digitisation of land records, computerization of state treasuries, etc, which are resulting in large contracts. In the private sector, verticals such as energy, telecom, utilities, retail, and education are showing signs of promise in terms of IT adoption. Infosys has been associated with several government and private sector IT initiatives designed to improve the flow, use, and management of information. We are already working with leading organizations in India like India Post, Airtel, the Income Tax department among others to deliver a range of solutions that help optimize investments, generate new revenue streams, and accelerate transformation.
—CN Raghupathi Head, India Business, Infosys
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—Xu Dejun CEO, ZTE India
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he Indian telecom industry witnessed a slow growth in the last couple of years. The times ahead will be comparatively exciting and driven by newer technological innovations and primarily shaped by the telecom policies. From a wireless standpoint, LTE will continue to complement FTTx with the latter holding great potential for India. Unclear regulatory policies and slow 4G deployment have dulled the overall wireless infrastructure growth, however, the future lies in allocation of additional spectrum and thrust on LTEbased services. As operators work towards increasing the quality of service in the 3G environment, the segment is likely to witness substantial investment. From a LTE perspective, 4G will be most sought after growth this year. Yet another apparent trend driving the overall Indian telecom arena is the surge in the handheld devices market driven by smartphones and tablets. The data cards and smartphone market will be driven by the humongous growth in social media, data proliferation, and the demand for intelligent and sleek devices. ZTE forayed into the Indian open market with our smartphones and data cards portfolio for the Indian consumers, we see huge growth potential in this segment which will continue to be focus for this year. www.dqindia.com
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LET’S BUILD A SMARTER PLANET.
INDUSTRY | LEADERSPEAK
T
o understand the current IT industry trends one needs to look at the emerging trends in today’s enterprises. Businesses are leveraging their IT portfolios to keep up with new marketplace demands and to make use of the rapidly changing IT scenario. Cloud computing solutions, mobility, social media, and analytics form the basis of any enterprise IT portfolio today. While IT continues to drive overall efficiency and productivity, there is a growing trend in the enterprise to leverage technology to collect consumer and business data in real time, from structured and unstructured sources, and be able to act on it—also in real time. Boundaries, geographical, physical, and logical are being blurred—the trend is to make as much information available to as many people as possible, everywhere, and all the time. Trends in the IT industry are mirroring these trends in the enterprise. With the rapid and extensive adoption of smartphones, tablets, and BYOD policies, enterprises are looking at mobility across the workforce, allowing them realtime access to data without physical limitations. Migration of applications to cloud hosted environments allowing large data stores and low-cost on demand scalability, social media integration, and big data analytics are all part of this larger trend of ensuring data availability and the desire to generate real-time actionable intelligence from this data to boost productivity and profitability.
—Anuj Mathur CEO, Q3 technologies
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—Rajiv Srivastava President, PPS, Hewlett-Packard India
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e are seeing a new style of IT taking hold where powerful trends of cloud computing, mobility, social media, and analytics are changing the way we consume technology at work and at home. Social media and cloud are driving an increasingly collaborative work style with seamless communication across multiple devices. Work and life is converging, creating demand for a device as functional in the office cabin as in a club. The workplace itself is increasingly mobile and virtual, and employees demand access to their content whenever and wherever they are. Our strategy at HP is closely aligned with this transformation and today we are delivering a new class of printing and computing devices that are best suited for this new style of IT. For example, we are witnessing a reimagination of the personal computing form factors—the new hybrid or convertible PCs from HP bring extreme mobility to users and allow them to create and collaborate better than ever before. Our printers today connect to the cloud and can automate or optimize document workflows—bringing unprecedented gains in productivity to businesses with paper-based workflows. Information security is a common theme running across our printers and PCs portfolio; allowing customers to access and share their content freely across devices, and in digital or in paper format without a worry.
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oday’s IT scenario is experiencing a growing phase, especially with reference to healthcare IT. According to recent reports, the global healthcare IT market is estimated to grow at a CAGR of 7.0% to reach $56.7 bn by 2017 from $40.4 bn in 2012. The demand for clinical information technology, administrative solutions and services is seeing a tremendous increase owing to the recent Healthcare Affordable Act (Obamacare) in the US. In this regard, healthcare outsourcing has gained mileage especially in emerging markets like India, China, and Philippines. Growing healthcare IT costs and the transition of the International classification of Diseases from (ICD9-10) that is used by medical coders to identify and classify diseases based on symptoms have subsequently contributed to this increase in demand for healthcare IT solutions. The need to streamline workflow and manage such large patient information makes India an outsourcing destination for providing quality healthcare IT solutions. The high end healthcare contracts that are being outsourced to India have created opportunities for professionals from medical and financial backgrounds such as actuaries, nurses, physicians, etc, and enter the IT world from their core healthcare practice. The Indian service provider space that offers professionals a global platform for growth is a major factor for this shift. This being the scenario healthcare IT is no more just a vertical in the IT space but has gained sufficient traction as an independent IT service.
—Tony Mira Group CEO, Ajuba Solutions India
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—Karthikeyan Natarajan Global Head, IES, Tech Mahindra
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e witness consumerism across world being fuelled by a convergence of connected technologies anchored by new trends such as internet of things, autonomous vehicles, intelligent applications infrastructure, embracing connectivity as a potential source of differentiation. With the need of man to man, man to machine and machine to machine connections rising, the industry is seeing a surge of interest around these technologies of the connected world in the past few months. Industries such as consumer electronics are embedding mobile technology that allows consumers to remotely monitor and control their devices as well as allow sharing of content across devices like TVs, PCs, gaming consoles, smartphones, etc. Adoption of cloud computing and big data is transforming the way organizations make decisions and offer services to customers. Industrial sectors like heavy machinery and construction are also deploying remote monitoring and diagnostic technologies to improve safety and security. These industry-specific connected engineering solutions align technology, businesses, and customers through innovative frameworks. To name a few of such solutions such as connected car, connected home, remote health monitoring, smart gateways, and industrial internet which are uniquely defined by billions of connections and brilliance of analytics. These are going to be very instrumental in bringing a complete transformation by building a digital world, making businesses future ready by making consumers drive these innovative trends.
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he new transfer pricing rules announced by the finance ministry will help small to medium sized IT companies by providing greater flexibility and certainty in their taxes. This is a right move to signal the government’s intent which has been coming across lately as business unfriendly with many tax disputes with Indian and MNC companies. The safe harbour provisions mean transactions up to `500 crore for companies showing operating profits of 20% will not be questioned on how they arrived at the transfer pricing. We assume the need for documentation has been reduced for companies under this threshold. However, the large IT companies, especially subsidiaries of multinationals will be outside the ambit of these safe harbour rules and how the tax authorities deal with these situations will determine how large multinational companies view India as an investment decision. We believe with the right training the tax authorities can be more business friendly while continuing to ensure the country collects all taxes due. Simplification of tax laws, reduction of documentation, and reduction of corporate taxes will go a long way in creating a vibrant business environment. The next level of innovation in the IT industry is happening in small product companies that do not have the armies of accountants who can help them deal with all these complex issues. If the government wants the Indian IT industry to flourish at the next stage, we have to simplify taxes and train tax authorities to be more friendly.
—Sriram Rajaram President, Strategy & Corporate Development, Cigniti
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—Ramandeep Singh CEO, Calsoft Labs
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ndustry has started to evaluate and adopt new technologies in the field of cloud orchestration, mobility, and analytics. Projects in areas like Network Function Virtualization (NFV), Software Defined Networking (SDN), BYOD security, SaaS and mobile enablement, and big data are gaining momentum. With increased adoption of cloud services by enterprises and consumers, the adoption of NFV and SDN is gaining momentum to improve network visibility and control, scale network performance in line with application workloads, enhance security and Quality of Experience (QoE), and allow dynamic network (re-configuration) when rolling out new services. Telecom operators are leading the NFV/SDN evolution to improve network manageability and accelerate the deployment of new services while reducing both Capex and Opex. For large network operators, SDN gives the capability to scale the network using commodity hardware, without having to buy expensive proprietary hardware. With PC and mobile users shifting to large screen handheld devices in significant numbers, mobility architecture and enterprise mobile application integration has emerged as the top priority for CIOs and (consequently) ISVs that cater to enterprise market. Better connectivity (Wi-Fi/3G/4G) is fueling demand for new applications in several sectors like healthcare (remote patient monitoring), education (m-Learning) and media & entertainment (OTT applications).
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INDUSTRY | LEADERSPEAK
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ustomer relationship management has been going through a drastic transformation over the years. Increased customer reach, technology revolution, and widespread behavioral change has caused a radical shift in CRM for enterprises. Till recently, CRM or customer relationship management was a ‘nice to have’ and ‘not so clear in terms of business benefits’ solution area. The story today has reversed completely as customers are now more reachable than ever. Saddled with monolithic CRM systems, the CIO’s office is trying its best to adapt and play a balancing act between cost, flexibility, speed to market, and future proofing. The wide array of ISV solutions and the all pervasive c+loud angle is making this an interesting and yet challenging activity. Customer is king, and customer experience is key! A great customer experience is critical for business growth. Having realized this basic success mantra, enterprises today are more focused towards adopting comprehensive CRM solutions. To address this spurt in demand, CRM vendors and service providers have continued to expand their offerings with new features and functionalities and offer the users customized and consolidated solutions, enabling them to meet their business requirements.
—V Sreenivasan Senior Vice President, ITC Infotech
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—Santosh Pandey India Country Manager, Dell Wyse
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A CyberMedia Publication
ccording to a recent IDC report, in 2013, over 6.8 mn units of thin client devices are likely to be shipped worldwide, representing a 7% Y-o-Y growth of these devices. The research firm expects thin clients to reach 9.2 mn units by 2017. With organizations getting more and more tech savvy, they expect to have corporate resources at their fingertips. Given this, cloud client computing and thin clients are trending within organizations. Cloud client computing delivers streamlined user experience with greater security. Further, it provides users with an optimum experience for accessing corporate content, from productivity to multimedia applications, on any device. It enables IT departments to provide users with an appropriate access experience for the task in hand, helping them increase productivity while reducing operational expense. It also provides choice and flexibility to IT departments and users alike: Additionally, it provides greater reliability than more distributed models by enabling IT departments to analyze, diagnose and solve issues centrally in a fraction of the time of traditional client / server networks, by providing a centralized point of management and control. With regards to this area the key focus of Dell Cloud client computing is thin client and reducing the challenges associated it end point devices. Dell Cloud Client Computing enables IT departments to manage and provision content securely from a centralized location to users regardless of their location over nearly any network.
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INDUSTRY | LEADERSPEAK
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he foundation for a new normal is built on three pillars: A new generation of highly distributed and virtualized business models; a new generation of social, mobile, analytics and cloud (SMAC) technology architectures; and a new generation of born-digital workers and consumers, the so-called Millennials. In this virtualized, globalized environment where SMAC technologies intersect with the millennial generation, enterprises are looking to embrace better ways to organize teams, cultivate innovation, allocate resources, and reinvent knowledge processes. With secular shifts in the economy, business and technology enterprises are being forced to re-examine how they operate. This environment is driving fundamental changes in client demands. They are looking to move from merely incremental levels of performance efficiency towards building new digital business capabilities, increasingly wanting service providers to do more than just help them manage their businesses better. Clients are turning to Cognizant to address their dual mandate of ‘running better’, or enhancing performance in their current businesses, and ‘running different’, or helping improve the positioning of their businesses for future success. It is increasingly about challenging status quo, driving fundamental innovation, and unleashing new potential across organizations.
—Rajeev Mehta Group Chief Executive, Industries and Markets, Cognizant
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—P Sridhar Reddy Founder & CEO, CtrlS
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ew technology, burgeoning market demand and the need for greater cost efficiencies are all critical factors that are revolutionizing the IT industry and introducing new trends that are shaping the future. The market for big data infrastructure and cloud computing is witnessing heightened demand as heavy duty analytics have become affordable and rapid research is on to build a high-performance computing platform that can deliver in volatile work environments: Technology that can handle mission-critical cloud and huge data workloads with faster speeds, higher performance, greater bandwidth and better cost-efficiencies. The cloudscape is transforming with new technologies in cloud computing such as public & private cloud and many more offerings such as IaaS, DRaaS, etc. CtrlS’ Zero Data Loss product offers SLA of 99.995% uptime for both DC and IT infra. Data centers are witnessing developments such as the shift to modular architecture, thin client roll-outs and other leading-edge technology such as fabric-based computing systems, virtualization and open compute for enhanced performance. The networking market is being driven by mobile software growth and the demand for mobile broadband. The Global Cloud Security Software is another space witnessing transformational change as innovation by influential vendors is creating greater efficiencies.
www.dqindia.com
A CyberMedia Publication
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ENTERPRISE | IN FOCUS
The Whole World Location based services can improve service delivery, customer support, and workforce and marketing effectiveness
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t has been known that technologies make the world simpler but with Location Based Service (LBS) the world has also became much smaller.
THE ADVANTAGES
Through LBS a person can identify the location of another person or object, such as discovering the nearest banking cash machine or the whereabouts of a friend or employee. LBS includes parcel tracking and vehicle tracking services; mobile commerce when taking the form of coupons or advertising directed at customers, based on their current location; personalized weather services and even location based games. These are the example of telecommunications convergence. While driving past a neighborhood movie theater you receive an SMS offering a 70% discount on tickets if you can catch the movie in the next 15 minutes. Or while driving through an area that has a fast-food restaurant, you get a message giving a 30% discount on pizza if you reach before they close in the next 30 minutes. It can be an SMS while shopping at a mall offering great discounts at an apparel store on the premises‌
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Team DQ maildqindia@cybermedia.co.in
in your Hand
TOTAL CONVERGENCE
Taking telecom convergence to a new level, LBS can provide wireless ‘mobile content’ location-specific information to mobile users even as they move from one place to another. These versatile services seamlessly push location-specific information to a mobile phone. The possibilities they hold for customers and telecom service providers are endless. LBS can prove to be an advantageous addition to the telecom service providers’ portfolio of value added services—providing them with increased consumer loyalty and retention, higher ARPUs, and more revenue through additional SMSs and MMSs. Turning such a scenario into reality, however, requires a well-integrated ecosystem of telecom service providers, technology providers, merchants and customers. Even though telecom service providers in India have the network capability to introduce mobile advertising targeted at specific subscribers, they have not been able to build the ecosystem necessary to exploit the potential of LBS and are, therefore, clearly missing out on a huge opportunity.
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A CyberMedia Publication
Gartner already sees the convergence of location functionality with social networking, news, information, search and entertainment services and expects almost 800 mn location based service users worldwide by the end of 2012. Revenue generated by consumer location based services is forecast to reach $13.5 bn in 2015, of which advertising will be the dominant contributor. Applications that will generate the highest interest in the near term will be navigation, location search, and friend finder/social networks. Aided by a recovery in overall ad spending, the mobile advertising category has accelerated its evolution during the past year, despite lingering issues such as privacy, metrics, and standards. According to Gartner, expect the mobile advertising market to more than double during the next 2 years and to increase twelvefold by 2015 to $20.6 bn worldwide; or about 4% of total ad expenditures. This growth is being driven by the robust adoption of smartphones and media tablets, and their increasing use as all-purpose information, entertainment, and social networking devices.
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July 15, 2013
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n an economy and an industry that is fast changing, it is imperative to maintain an unwavering commitment to deliver new and better solutions that directly addresses customer needs. It is also critical for a product development organization to meticulously plan and utilize their investment through innovation and efficiency improvement. To deliver effective solutions that address customer challenges, a company should focus on setting pivotal standards and processes that drive future technology innovation. At Dell, we believe that a culture of innovation can be created through rigorous idea generation, Proof Of Concepts, prototyping, piloting and scaling through use of Agile process and development methodologies, and challenging the status quo in a constructive manner. As far as the future is concerned, we see three big opportunities. Big Data and dealing with data explosion due to mobility and social media will emerge as a challenge and pose a huge opportunity for the Indian IT industry. Various converged infrastructure products and solutions and transformation momentum at the client and enterprise side is likely to continue. The convergence of Compute, Storage and Networking technologies glued by software is expected to satisfy the big data needs. Secondly, with an increase in the entrepreneurial spirit in India, more new start-ups are expected to emerge in the future. Although innovation has been accepted as a necessity, moving forward risk taking would be an essential tenet. Finally, acceptance and adoptability of cloud based technologies is going to be the trend among SMBs in India.
—B Rudramuni Executive Director and Head of R&D, Dell India
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—Srihari Srinivasan Head of Technology, ThoughtWorks India Enterprise Apps
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he activity in the big data ecosystem can broadly be categorized into two streams—Infrastructure and Applications. While the infrastructure solutions have already reached a stage of maturity there are still some optimization efforts going on in this space. Adapting Hadoop for the cloud—Open Source projects such as the Savanna platform from Open Stack and a host of Hadoop-as-a-Service offerings from different commercial organizations are trying to make it easier to deploy Hadoop in multi tenant cloud environments. SQL-on-Hadoop—The SQL-on-Hadoop trend continues to make progress with solutions like Apache Drill and Impala. Efficient cluster management—Soon after enterprises adopt different distributed processing frameworks the question how can we utilize clusters more efficiently opens up. This question is something the distributed systems community has been trying to address for a while now. Apache Mesos, which recently became a top level Apache project, is a cluster manager that provides efficient resource isolation and sharing across distributed applications, or frameworks. As infrastructure solutions become more mature and we are beginning to see a gradual shift in trends and investments away from the infrastructure layer more towards applications. New data integration solutions are emerging that enables organizations to algorithmically curate data from heterogenous sources efficiently at scale. This is a space to watch out for in the coming months.
www.dqindia.com
A CyberMedia Publication
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INDUSTRY | LEADERSPEAK
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he surge in smartphone penetration has ensured that the power of computing is just a click away from the users. This has led to the emergence of the BYOD trend across enterprises, which in turn poses interesting challenge for the CIOs in terms of data security and reliability. As the demand for business critical tools increases, it comes with the added baggage of incorporating these apps within the existing standards and policies so that optimum value can be derived from these mobile apps in changing the workforce dynamics. A recent Gartner report has predicted that by 2017, 25% of enterprises will have their own app stores designed specifically for employee usage. The move will be caused by a diversification of the smartphone and tablet software industry. As per Gartner, the mobile world will increasingly start to look like the PC market business, with a vast variety of vendors, applications and platforms to choose from. As the mobile market grows more complex, security and control will become more important than ever. In order to design an enterprise application, organizations must consider and balance an enormous array of application requirements such as the goals set by the organization, number of users it supports, the speed at which information has to be delivered among users, address budget constraints and ease of operations and the kind of security protocol required. Enterprises are privy to the benefits of a mobile workforce and are constantly seeking newer avenues for development.
—Hitesh Shah Director, Commercial Relationship, BlackBerry, India
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—Vikram Gulati MD & CEO, Happiest Minds
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e have observed globally as well as in India that companies no more engage with IT service providers with the sole aim of reducing costs. Rather, they consider information technology as an engine of business growth. Companies are focused on understanding how newer technologies like cloud, analytics, social computing etc. can create competitive advantages for them. Despite subdued economic sentiments, companies want to increasingly embrace these technologies so that they are able to connect with endconsumers, partners and employees in entirely new ways. Our customers want to spend on these disruptive technologies to analyze the vast amounts of structured and unstructured data, collaborate effectively within their organizations and create uniform multi-channel experiences, in highly secure environments. Companies in sectors such as media & entertainment, retail, CPG, banking and insurance are at the forefront of adopting these new technologies. They are looking for partners who understand their business needs and have expertise in these technologies and their interplay. These technologies have leveled the playing field for large enterprises as well as smaller companies because now even smaller companies can access these technologies without large IT investments and reap business benefits.
www.dqindia.com
A CyberMedia Publication
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INDUSTRY | LEADERSPEAK
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he first decade of the 21st century saw the emergence of Software Testing as a discipline, not only offering independence in the delivery of QA / QC services but also defining it as a specialized career stream within the IT services industry. Delivered by independent testing focused organizations as well as specialized divisions of integrated IT service organizations, ‘Software Testing’ has already become a well tracked and researched quadrant in the IT services space. Taking software testing to the next level, IT Lifecycle Assurance, assures quality throughout the Software Development Lifecycle (SDLC) and is increasingly gaining acceptance by customers. Facts show that 8 out of 10 technology absorptions don’t meet QCT goals “first time right” and atleast 33% rework effort is caused by poor requirements definitions in over 6 out of 10 programs. Accountability is fragmented as there is no single entity assuring quality from requirement to release. Hence, customers felt the need for a trusted partner who can build and verify quality through the IT Lifecycle to assure quality throughout the SDLC creating a new category called ‘IT Lifecycle Assurance’. Today, global IT Lifecycle Assurance market is estimated to be about $39 bn. While ‘Software Testing’ is more about Reactive Detection, ‘IT Lifecycle Assurance’ is a proactive and continuous infusion / management of quality from Requirements to Release. In brief, ‘IT Lifecycle Assurance’ includes: n Requirements Assurance n Program Assurance n Application Assurance
—N Mahesh COO, Maveric Systems
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—Ranjit Nambiar Director, IAM, South Asia, HID Global
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he increased security breaches and have heightened the awareness around security. Changes are taking place in the access control industry as enterprises across all industries are deploying new products aimed at improving productivity while increasing security. The demand for increased convenience, lower total cost of ownership and achieving higher levels of security will continue to dictate market development. The adoption of high frequency smart cards is also on the rise as they offer higher security and the capability to combine multiple applications on a single card for building access, vehicle tracking, energy management, time and attendance, cashless vending and other applications. Combining multiple applications in one single card also reduces overall costs. The industry is taking steps to embe d the next-generation access control technology directly into smartphones to take full advantage of digital credentials. Recently HID Global announced its plan to support iCLASS digital keys and mobile secure identity on NFC-enabled smartphones. The partnership with Mobile manufacturers, enables smartphone users to use iCLASS digital credentials for door access by simply holding their NFCenabled smartphone in front of a door reader in the same way physical smart cards are used today.
www.dqindia.com
A CyberMedia Publication
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INDUSTRY | DESKTOPS & NOTEBOOKS
Shrikanth G shrikanthg@cybermedia.co.in
The Volume Game It’s a rough ride for desktops as portables started eating into their slice. Looking at the current trends, FY14 will see desktops getting further marginalized. The question is how long the vendors can play the volumes’ game?
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he Indian PC industry in some ways is different from other geographies in the West. While the mobility products have started cannibalizing on the desktop market but one can say that the onset of cannibalization effect though felt but one can say it’s rather slow and steady. But as we dissect the PC market that was in FY13, going by a conservative estimate, the overall PC market in value terms grew my just about 6% to Rs 30,273 crore. In unit terms as per our estimate—all vendors put together—pushed around 12 mn units (both desktops and notebooks) during FY13. |
A CyberMedia Publication
DESKTOP DYNAMICS
As we look the market dynamics, in the overall PC shipments, Desktops makes for 45% in terms of units. While desktops are getting trounced by notebooks but large enterprises like IT and ITeS and verticals like manufacturing still has a lot of desktop buying. The companies which dealt with lots of mission critical data deliberately favored desktops against laptops as they will have a better discovery and insight into what is happening in each of the desktops within their enterprise. That apart, there is also a cost factor involved and hence www.dqindia.com
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DURING FY13, THE COMPOSITION OF NOTEBOOKS ONLY GOT BETTER AND AS THEIR SHARE IN UNITS’ TERMS IN THE PC MARKET IS ESTIMATED AT 55%
India PC Market 2012-13
30,273
2011-12
28,560
(In `crore)
6%
(Revenue in `crore)
PC Market Composition Vendors % Notebooks
55
Desktops
45
Analyzing PC Vendor Market Share Vendors % HP
17
Acer
14.5
Lenovo
14
Dell
13.5
Others
41
Total units 12 mn (Desktops and Notebooks) Source: DQ Estimates mostly the enterprise offered desktop as the device of choice for the entry level employees. Moreover, in some of the enterprises, despite employees having a notebook, they had desktop as a secondary option and used that in a complimentary way—as some of the task demanded a desktop kind of a form factor. These are some of the 38
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TAKEAWAYS oo FY13 saw intense battle for market share with quarter on quarter swings oo The rapid escalation of tablets and phablets is altering the personality of the PC industry
uppers for the desktop market and beyond that it’s a platform that has hit the plateau and hence as we move forward, desktops numbers and volumes will considerable shrink. In the last two years one is seeing a lot of form factor innovations coming into fray in the desktop space and one is seeing the escalation of the AIO desktops that is becoming a choice device in the consumer space. All vendors are locking horns in the AIO turf and companies like Lenovo and HP and others significantly upped their ante in the space. NOTEBOOK DYNAMICS
In the last two years notebooks have taken a dominant position and during FY13, the composition of notebooks only got better and as their share in units’ terms in the PC market is estimated at 55%. And it’s growing by the day eating on to the desktop slice. The notebook numbers went up as it rode on large big ticket government wins by vendors like HP and Lenovo which saw big wins from UP and Tamil Nadu government respectively. But in terms of failures in the notebook space is Ultrabooks and Netbooks. While in some ways the vendors killed the Ultrabook form factor conceived by Intel. Only post the Ultrabook concept, many vendors used that as an inspiration and launched their own slim line range of notebooks and positioned the Intel defined Ultrabooks at a premium cost that is beyond the reach of many. In all, 2013 can be called tapering out of the Ultrabooks as a form factor as none of the A CyberMedia Publication
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INDUSTRY | DESKTOPS & NOTEBOOKS
vendors (with exception of ones like Acer and Lenovo) demonstrated any big traction in that space and thus making Apple’s MacBook Air as the one and only true Ultrabook.
has a strong market Share in the education segment saw its share going up to 27% in Q4 FY13 and took the pole position. The company also upped its position in the Very Large Enterprise (VLE) space and transpired into #1 player.
VENDOR DYNAMICS
As we look at the vendors’ performance and take into consideration HP, it closed the fiscal with a bang, with a market Share of 17%, while Acer and Lenovo locked horns and they managed to post in excess of 14% market Share and Dell managed about 13% market Share. The Q4 of FY13 was particularly good for HP as it saw its market Share going up in excess of 22% in that particular quarter. So clearly HP had a very good start if we go by 2013 from a calendar year perspective. With populist measures by governments and its free laptop distribution schemes is one major opportunity to expand the notebook volume and unit market Share. But such volumes come at the expense of value and hence the PC segment continues to be mired by tight margins. If we look at other vendors like Acer, it continues to leverage its traditional expertise in verticals like government and education that panned out well. But Lenovo and Acer are increasingly battling head on, and interestinly last year Lenovo which also 40
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OUTLOOK
With the rapid escalation of tablets, phablets, and smartphones over FY13, the personality of the computing devices market has changed in many ways. While tablets are eating into both conventional notebooks and desktops space at the same time, India per se both desktop and notebook market will hold on and sustain it for the next few years. But there will be intense battle for market Share and big quarter on quarter swings. Like one big ticket multicrore government win will totally change the vendors’ performance that quarter. But government is a big vertical, but there is an element of risk associated with it as vendors might get into extended payments default if their projects were caught in bureaucratic and political wrangling. In all, FY14 yet again looks like a mixed bag, and it will be an achievement for vendors to sustain and retain their market shares, if not growing it. A CyberMedia Publication
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INDUSTRY | MONITORS
Onkar Sharma onkars@cybermedia.co.in
Not a Rosy Picture The PC display market continues to face a stiff challenge from tablets and price fluctuation due to rupee free fall, etc. However, the trends such as 3D and IPS caught up further in the consumer psyche
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he PC monitors market is intrinsically linked to the growth of PC market. The truth is that the PC market is passing through a perpetual rough road in India, though last year being an exception due to a number of government contracts which helped revive the shipments for laptops rather than desktops. Hence the faint growth in the PC monitor market can directly be attributed to the performance of overall PC market in India. While there is still a strong demand for laptops, the desktops that alleviate the PC monitor vendors have struggled to find substantial takers. Whatever the growth number is, it has given blows to the outlook. Sales, if any, in the last year, are mainly 44
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because of the extra effort and initiatives which the PC vendors have put in to keep the customer sentiment alive for the monitors. Jabbing in the face was the free fall of Indian rupee against the dollar. Since the monitors are not manufactured in India, this had a severe impact on the profitability side. Even the prices of various monitors were raised to compensate for the dwindling rupee, the move led the customers out of the stores. Thus, dollar surge and weakened global growth is reinforcing Indian markets to remain more cautious around their spending on IT products/services, resulting in an evident slow down across businesses. A CyberMedia Publication
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INDUSTRY | MONITORS
LG WITNESSED AN INCREASE IN SALES IN FY13 AS THE COMPANY INFUSED A NEW LIFE INTO THEIR CHANNEL STRATEGY
Indians showed no love for assembled PCs which used to be the biggest driver for monitor sales traditionally. Customers found no value in assembled devices, since their cost continued to remain high because of global factors and higher hard disk prices. Further eaten by the onset of different form factors such as smartphones, phablets, and tablets, etc; the monitor sales were mainly characterized by smart monitors that came embedded with different features and add-ones to lure the customers. The overall PC display market remained concentrated around the traditional vendors such as LG, Acer, Samsung, AOC, and Dell. Marred by the weak outlook, various research firms including Dataquest magazine are forced to keep a low forecast for the PC display market. But what can really catapult the demand are some of the government initiatives such as 5-year e-governance program, coupled with poll manifestoes such as the order from Electronics Corporation of Tamil Nadu for 912,000 laptops and the Uttar Pradesh free laptop scheme where about 15 lac laptops are to be given to students. The overall PC monitor market stood at `5215 crore out of which bundled monitor market was `2,805 crore
5,215
2011-12
5,130
14%
The Indian monitor market was lacklustre given the demand for desktop was on damp note throughout the segments. Major setback was given by the assembled PC market that would result into higher monitor sales in the Tier2 and Tier 3 towns Source: DQ Estimates |
A CyberMedia Publication
and assembled/standalone market was `2,410 crore. Assembled PC monitor market suffered a setback and went down. The dynamics of the market witnessed a change due to the onset of low cost tablets in the market as people preferred tablets as their first computing device instead of a PC. The overall PC display market was dominated by LG with a market share of about 27%, followed by Acer (22%), Samsung (21%), AOC (17%), and Dell (9%). As far as the zonal spread is concerned, South zone continued to dominate with a hefty contribution of 38%, followed by West, North, and East. INDUSTRY TRENDS
Indian Monitors Market 2012-13
TAKEAWAYS oo While there is still a strong demand for laptops, the desktops that alleviate the PC monitor vendors have struggled to find substantial takers oo Parallel imports have been a critical issue in the display segment affecting both Samsung and LG
(Revenue in `crore)
It has been a while since the Thai floods hurt the PC industry in India and globally but the ghost continued to haunt in FY13, for the price-hike caused by these floods to the hard disk drives had the assembled PC market completely shackled. In other words, it resulted into slackened sales of monitors. Similarly it exerted an adverse impact on the bundled PC sales as many vendors failed to deliver on the contracts they had won on a fixed price. However, the market recovered partly in H1 in FY13 as the supply was restored. The demand of LED and 3D technologies drove the overall display market during FY13, though the market crawled at a snail pace with new players entering the field. The entry level screen size like 15.6inch and 18.5inch were the top www.dqindia.com
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INDUSTRY | MONITORS
THE OVERALL PC DISPLAY MARKET WAS DOMINATED BY LG WITH A MARKET SHARE OF ABOUT 27%, FOLLOWED BY ACER (22%), ETC
Market Share Vendors % LG
27
Acer
22
Samsung
21
AOC
17
Dell
9
Source: DQ Estimates contributors to the monitor market in FY13, but slowly the customer’s interest for bigger sizes like 20 inch started to grow. The segment of buyers with additional budgets who would have otherwise gone for a larger screen size had to go for a smaller screen size, to adjust for the increase in hard disk prices. The prices of LED monitors, because of the high drop in demand, reduced the differential with LCD in H2 2013. VENDOR HIGHLIGHTS
LG witnessed an increase in sales in FY13 as the company infused a new life into their channel strategy. The company consolidated the number of regional distributors. It reduced the number of their regional distributors from 200 to 80 which helped the company in gaining efficiency and hence market share. The display leader also called off 15.6 inch LCD monitor category, given the decreasing demand for the category. LG continued to be strong in West followed by equal contributions originating from both North and South. All in all, new products in 3D and IPS category coupled with revitalized distribution and aggressive consumer offers contributed to its market share. Samsung had issues with its inventory after it suffered from non-availability of stocks which affected its market share in FY13. But the company tried hard to liquidate its older products through channel incentives and 46
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aggressive pricing as competitors like AOC and LG had already moved on to the new models. Samsung failed on the premium pricing strategy as it found no takers in the channel to support that. The result was obvious and indiscreet—it lost the market share. While most vendors have taken back their 15.6 inch LCD monitors, Acer continues to hang on. Maybe its presence in obsolete categories has led the company to increase its sales, even though a range of new models in 3D, etc, has helped it stay in competition. South region contributed more than half of the sales, followed by equal contributions from other regions. The shining star of last year, AOC was in the woods due to issues related to distribution and support for its products in FY13. Although it capitalized on the challenges and manifested dominance in the remaining assembled PC segment in smaller cities. It allowed distributors to run channel schemes which received an overwhelming response in the north and south. However, the schemes were focused on tier 3 towns. AOC was also aggressive with new range of products including IPS monitors and 3D monitors in 2012. Thus, it had a rich portfolio to cater to a variety of customers. MANY A FACES, MANY A RACES
Parallel imports have been a critical issue in the display segment affecting both Samsung and LG. Because of the price difference for same products, the companies continue to face this challenge of parallel imports. At present, there is no law prohibiting parallel imports. Besides, the entry of many other players caused a significant impact on the revenues of bigger players. As the leading players vacated some of the monitor categories, vendors such as Intex, Beetel, Simmtronics, etc, jumped into the fray. Perhaps this led LG and Samsung to rethink their strategy and forced them to re-enter the withdrawn categories. A CyberMedia Publication
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INDUSTRY | UNIFIED COMMUNICATIONS
Prerna Sharma prernas@cybermedia.co.in
A New Hope Smartphones and tablets have given UC a new meaning and have brought new hopes to the vendors
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INDUSTRY | UNIFIED COMMUNICATIONS
IN FY13, AS PER VENDORS IN THE FRAY, BYOD ACTED AS A CATALYST FOR UC
U
nified Communications (UC) market, India shines amidst the depreciation of the local currency, political/regulatory instability, and dip in IT spending from across verticals. Due to the high initial cost attached with UC, it was never a cup of tea for SMBs. So far, only large enterprises, that converge voice, instant messaging, video, etc, on to one platform, were able to enjoy the benefits of UC. But as we look at the evolution of enterprise computing infrastructure at this point in India, organizations can no longer afford to shy away from UC. It’s interesting to note growing traction of concepts like BYOD are jump starting the UC market. For instance in FY13, as per vendors in the fray, BYOD acted as a catalyst for UC. Employees are spending their maximum time in traveling which reduces their efficiency in work. So, to overcome this problem, companies are redirecting this time to working while traveling. Some are even given a choice to work from home or field locations to save on travel time and costs. All these factors are compelling organizations to take enterprise communication beyond their offices and make it available to its employees, irrespective of their location or time zone. Therefore, UC is starting to find relevance. Besides growing their business and innovating to reduce cost and improve productivity, organizations are also facing competition to go-to-market faster and engage customers
Unified Communications Market 2012-13
4,206
2011-12
3,647
Source: DQ Estimates |
A CyberMedia Publication
15%
(Revenue in `crore)
TAKEAWAYS oo Corporates are moving towards consolidating their communication platforms to reduce costs and increase efficiency oo As BYOD takes firm root, the focus for organizations in 2013 would be managing, securing, and controlling personally owned mobile devices as well as their applications and information
quicker than before. In this fast moving environment, there is very limited time not only for buyers to understand any new product, but also to catch up with another vendor regarding something equally competitive. A perceived benefit to the users of this unification is the ability to access services at any time, at any place and on any device. Given this backdrop, UC helps to merge new architectures and communication tools together that helps businesses and individuals to manage all of their communications through a common platform. GROWTH DRIVERS
In FY13, the UC market in India showed a significant 360 degree growth which involves not only customer acceptance but technology advancement, innovative portfolios, and a competitive landscape. Mobile, social, and visual communications are reshaping how people communicate and collaborate. “With organizations becoming increasingly fragmented, departments are more exible and employees more mobile,” says Alok Anand, Marketing Head, India & Saarc, Polycom. Some of the factors that will drive the growth of UC in coming years include: n Access to Information: With majority of the official data being stored online, it has become important for companies to give access to stakeholders on this information. UC enables employees to work smarter and www.dqindia.com
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VENDORS NEED TO HAVE CLEAR JUSTIFICATION AND IMPLEMENTATION PROGRAMS TO SUPPORT THEIR CUSTOMERS
Market Share Vendors % Collaboration Platform
40
Audio Visual
16
Voice Solutions 44 Source: DQ Estimates better, by making available key support information on laptops and smartphones. Similarly, during conference calls, unified communications packages play a role in enabling desktop-sharing, which lets the conference participants to jointly view and edit documents in real time. n BYOD: Bring your own device (BYOD) means fewer mobile devices to carry and maintain. As BYOD takes firm root, the focus for organizations in 2013 would be managing, securing, and controlling personally owned mobile devices as well as their applications and information. The biggest challenge is the gap between products and practices both for deployment and increasing enduser adoption that will continue to mature during the next several years. Vendors need to have clear justification and implementation programs to support their customers. n The Volatile Economic Environment: This has also led to corporates cutting costs and that is exactly what UC solutions help them to do; it uses telecom and IT infrastructure to provide seamless, integrated voice mail, email, conference calling, and IM services, thereby giving employees the ability to reach colleagues wherever they may be, with the help of an appropriate communication tool. n Green IT: With organizations becoming increasingly conscious about their carbon footprint, UC solutions are widely accepted as they help reduce travel which in turn helps the environment stay greener. n Convergence: Corporates are moving towards consolidating their communication platforms to reduce costs 50
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and increase efficiency. The need for convergence has created a paradigm shift that focuses on an unified domain instead of silo-based architecture. “The transformation of traditional PBX networks into IP based systems, reiterates this development,� says Bala Mahadevan, CEO-India, Orange Business Services. n Cloud-based Solutions: As companies look to shift IT costs to a predictable operational expense, and not to a periodic and big capital investment, cloud services, hosted solutions, and managed services are taking fast flight. Cloud has captured the imagination of businesses of all sizes. Most of the small and mid-size businesses (SMB) use cloud services today. Web hosting and email top the list, but in 2013 one can expect collaboration and IP telephony to migrate to the cloud. n Social Customer Service Emerges: Companies are looking to successfully integrated social media into their traditional sales, service, and support channels that can open up the conversation in new and exciting ways. n Virtualization: Most organizations have virtualized many applications and servers in their data centers, but they have been slow to virtualize UC applications. But with mature solutions, companies can virtualize communications and collaboration applications. WHAT IS RESTRAINING GROWTH OF UC:
Gartner highlighted some key factors restraining the growth of UC such as: n The biggest challenge is the gap between products and practices both for deployment and increasing enduser adoption that will continue to mature during the next several years. Vendor need to have clear justification and implementation programs to support their customers. n Second major challenge, which is immaturity, unpreparedness or lack of geographic coverage, of necessary understanding, skills, and services in the vendors channels. For some vendors, the concern was mostly about the regional availability of the channels and support for A CyberMedia Publication
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INDUSTRY | UNIFIED COMMUNICATIONS
EARLIER UC WAS ADOPTED BY ENTERPRISES BUT NOW ONE CAN SEE IT HAS ALSO BECOME CRUCIAL FOR SMBS
UC. That would not be a specific vendor concern for companies operating only in well-supported regions. But for most multi-national companies, consistent skills and support coverage will be an issue. If one looks at UC adoption dynamics there are some early movers in this space. “BFSI segment is one early adopter. However, one can also see lot of interest in verticals beyond ITeS. Although, private sectors adoption rate is high there is an increased usage of UC solutions in the public sector, education, hospitality, judiciary, healthcare, manufacturing, and the pharmaceutical industry,” says Bobby Joseph,Country Director India and Middle East, Plantronics. COLLABORATION MARKET
Globally, the UC market is divided between on-premise, hybrid, etc, whereas Indian market vendors are split under audio visual, voice solutions, and collaboration platform. FY13 has seen businesses demand more effective access to scalable, sophisticated, real-time collaboration tools. A lot of organizations, both large and small now understand the power of collaboration which stands to offer a host of benefits. They realize that it can streamline their business processes and boost productivity, reliability, and competitiveness. “The way companies communicate and collaborate is evolving rapidly driven by four significant shifts brought about by BYOD, mobility, cloud-based services, and social media. The need for an integrated approach to telephony, video, networking, and security has been pivotal as businesses opt for manageable, out-of-thebox packages that will help them manage costs and increase efficiencies,” says Arun Shetty, Head, Unified Communications, Avaya India. Earlier UC was adopted by enterprises but now one can see it has also become crucial for SMBs. Mobile enterprise has enabled employees, customers, partners, and suppliers to communicate and collaborate better. 52
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Video has been added as a new dimension to mobile enterprise as personalized customer service is becoming increasingly important especially in the BFSI sector. Effective integration of video solutions has helped deliver more effective collaboration. To capture this high growth market, various vendors adopted different strategies. VENDORS STRATEGIES
Though the UC market have various issues related to investments, user demand for advanced functionality, etc, still vendors bring various solutions to overcome these hiccups. In order to grab a better picture of the fiscal that breezed past, let’s put the top player under the scanner. A CyberMedia Publication
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INDUSTRY | UNIFIED COMMUNICATIONS
CISCO COLLABORATION PORTFOLIO INCLUDES A COMPREHENSIVE UNIFIED COMMUNICATIONS (UC) SUITE, WHICH COVERS VOICE, VIDEO, INSTANT MESSAGING (IM)/ PRESENCE, AND OTHER UC APPLICATIONS
CISCO
The company continued to be the market leader with offerings like IP communications, messaging, conferencing and collaboration, and contact center applications in addition to networking solutions. “Cisco collaboration portfolio includes a comprehensive unified communications (UC) suite, which covers voice, video, instant messaging (IM)/presence, and other UC applications”says Minhaj Zia, Director, Collaboration Sales, Cisco India & Saarc. In 2012, the company launched Cisco Jabber—a solution that unifies IM, Presence, video, voice, voice messaging, desktop sharing, and conferencing capabilities securely into one client. This can operate on desktops or other mobility devices such as smartphones or tablets. The company also launched a virtualized web conferencing server that can unify audio, video, and web conferencing in a single solution. Cisco’s focus lies in making video solutions truly pervasive by imbibing mobility, hardware, and software solutions along with cloud-based solutions that will enable the reach of video to everyone. MICROSOFT
After launching Microsoft Lync 2010, company has come up with Lync 2013 which offers several significant improvements over its Lync 2010 predecessor. The new Lync includes broader mobile client capabilities, improvements to its telephony and video functionality, and partial Skype integration. The Lync Web App allows PC and Mac users to join a Lync Meeting from within a HTML5-based browser, and delivers a full Lync meeting experience, including multiparty HD video, voice over IP, instant messaging, desktop, application, and PowerPoint sharing. AVAYA
This year Avaya has announced new and enhanced video collaboration solutions to support the mobile enterprise. 54
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The family of Avaya video collaboration solutions delivers the most comprehensive, easy to use video functions from the broadest range of mobile consumer devices, desktop, and room-based systems. The video collaboration solutions include hardware and software-based infrastructure, applications, and client endpoints. With Avaya IP Office 8.1, Avaya has delivered enhanced mobility, centralized management, increased security options and Avaya first services and support offer customized for SMEs. These features help SMEs thrive in rapidly changing workforce environment, increasingly characterized by a BYOD and advanced mobility. IP Office 8.1 also scales significantly higher to provide mid-market organizations and the partners that serve theme with a rich array of collaboration capabilities in a simple, easy-to-use solution. POLYCOM
In FY13 Polycom introduced various new solutions in UC space. The company introduced Polycom RealPresence CloudAXIS Suite that brings contacts from even Facebook, Skype, gtalk, Yahoo! Messenger, etc, into a global directory of participants that you can drag and drop into a Polycom video collaboration session for a secure, enterprise-grade collaboration experience. Besides Polycom RealPresence Mobile allows employees to connect and collaborate face-toface while on the move. OUTLOOK: WHAT LIES AHEAD
While UC is finding acceptance beyond the enterprise segment, the focus in the future would be greatly on delivering the same enterprise communication on mobile devices. With the growing adoption of 3G mobile network and strong wireless corporate communication, smartphones and tablets would be strong growth drivers for UC in the days to come. A CyberMedia Publication
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INDUSTRY | NETWORK SECURITY
Ritu Singh ritus@cybermedia.co.in
Collaboration is the Key As the security environment worsens due to a complex set of threats and vulnerabilities, network security must be dealt with at different levels and in a much more comprehensive manner.
W
ith each passing day, the industry is adopting newer and advanced technologies to make life smoother, boost productivity, and gain power. But meanwhile, the same technologies can be used with mala fide intentions. Networks are expanding and they are running a plethora of applications that in turn, drive many of the businesses. This growth and expansion of enterprise networks and increasing reliance of businesses on them have given rise to new challenges of securing these networks. As the security environment worsens due to a complex set of threats and vulnerabilities, network security must be dealt with at different levels and in a much more comprehensive manner. |
A CyberMedia Publication
As the complexity and the number of threats increases, the menace cannot be fought just with complex solutions that most enterprises don’t understand. Network security can be best ensured by following a process, assessing and determining risks, designing a security policy, building a security architecture based on it, and then looking for tools that are aligned to it. An enterprise must constantly change and monitor the security policy and system in accordance with the changes in the external environment and the business model it follows. A GLANCE AT THE TRENDS
Last year saw some disruptive trends in the Indian www.dqindia.com
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INDUSTRY | NETWORK SECURITY
FINANCIAL GAIN IS NO MORE THE SOLE DRIVE FOR THE SECURITY ATTACKS. HACKERS ARE ATTACKING RELIGIOUS, GOVERNMENT, AND CORPORATE WEBSITES
communications industry as well as in India Inc, in general. Death of routers was a key trend. Enterprises were averse to buy any standalone router or switch. They preferred buying CPEs that can multitask. This also increased the security risks involved among the enterprises. Another trend was the availability of 3G and high speed broadband services. This generated the demand for large capacity firewalls to be deployed. The third but most important trend was that the year saw blended attacks. The security attacks became sophisticated. The pattern was unprecedented, multiple methods were blended to launch attack on vulnerable networks, making enterprises helpless in shielding themselves. Also, financial gain is no more the sole drive for the security attacks. Hackers are attacking religious, government, and corporate websites. They are not stealing information for financial gains, but most of their attacks are DDoS (distributed denial of service), means they hack into public sites and restrict the service to public after the attack. KEY THREATS
There is nothing called minor or major threats for enterprises. There is no way that enterprises can afford to ignore any of them. For enterprises, security threats pour in from all directions. These threats could be in the form of—physical threats, environmental threats, unauthorized access, malicious misuse, unintentional (accidental) errors and omissions, intentional, which includes insiders, virtual insiders (by planting a Trojan inside the infrastructure to obtain information) and outsiders; identity theft, virus, data leakage, online banking fraud (for banking industry, and includes phishing, farming and identity theft). Though the security threats remain almost the same year by year, they simply assume new avatars every time they appear. But the biggest threats, the enterprises should consider are: 56
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TAKEAWAYS oo An enterprise must constantly change and monitor security policy and system in accordance with the changes in the external environment and the business model oo In India, outsourcing of security had been a tough decision for network managers but currently remote management from central location is taking off oo Security management should be outsourced to a reliable (MSSPs)
Complacency: Many organizations fail to take threats to their security seriously, taking instead the view, “it won’t happen to us”. The first step towards safeguarding information from harm is recognizing that threats do exist and deciding that information warrants security measures Poor Execution: Half-hearted security measures are worse than none at all. An inadequate security system not only fails to ward off threats, but also offers a false sense of security to the organization. The Naive Employee: Human nature can be the weakest link in any security regime. Many users find security procedures a nuisance and skip them to get the job done. Due to these threats, the enterprises face data loss, loss of service, negative publicity, and loss of reputation. THE HURDLES
The next big wave of network deployments is likely to come from VoIP networks. Currently, these networks are relatively safe, as their numbers are small but as they grow in popularity, the hackers are also likely to be attracted to them. Thus, the current trend of dealing with VoIP like just another application will need to be refined and upgraded. With or without security, it is important to note that if the latency introduced by equipment is more A CyberMedia Publication
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ActiveReports
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INDUSTRY | NETWORK SECURITY
IN INDIA OUTSOURCING OF SECURITY IS STILL A TOUGH DECISION FOR NETWORK MANAGERS
than 120 milliseconds, the voice application will perhaps not be used for business applications. OUTSOURCING SECURITY MANAGEMENT
To outsource or not to outsource security management is a difficult call for CIOs. The promised benefits of outsourced security are attractive. The potential to significantly increase network security without hiring half a dozen people or spending a fortune is impossible to ignore. In countries like Japan and South Korea, the security of the networks has moved towards an outsourced management kind of environment. A Pricewaterhouse Coopers report says that the SMB segment would increasingly look at the use of outsourced security management of their first line of defense, including firewall, IDS, and incident reporting services. In India, outsourcing of security is still a tough decision for network managers. Slowly, the outlook is changing and there has been a rise in the management services space. Though the enterprises are shying from completely handing over the security to a third party, remote management from a central location is taking off. Also, the potential risks of outsourcing are considerable. Again selecting a wrong vendor is a costly affair. There are stories of managed security companies going out of business, and bad experiences with outsourcing in other areas of IT. If deciding whether to outsource security is difficult, deciding what to outsource and to whom seems nearly impossible. Over the past few years, we’ve seen many different companies offering different capabilities under the general category of ‘managed security services’. The field is so confusing that even the industry analysts can’t agree on how to categorize the services offered. One offers vulnerability scan, another managed security policies and the third one offers network monitoring services, etc. Security management should be outsourced to a 58
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reliable Managed Security Service Providers (MSSPs). The business models that can be adopted include: managing security infrastructure from the partner’s location Security Operation Center (SOC), or building a captive Security Operation Center (SOC) within the customer’s premises. However, the business model finally adopted needs to be chosen based on the customer’s requirement and accepted service level agreements (SLA). COLLABORATION—THE KEY
Over the years, it has been observed that the threats and attacks are not working in silos. The attacks are coming from all spheres using all available means. However, the security managers and CIOs at enterprises, to a great extent, are still using solutions that keep them safe from one channel. Industry watchers, analysts, and the security product and solution vendors feel that the industry is missing the key approach—to collaborate among various stakeholders. An attack to an enterprise can come from various sources, like telecom operators, broadband service providers, hardware installed, banks and multiple devices working and exiting from the network. Though the enterprises do adopt solutions that can keep the threats away by deploying solutions at each individual layer, a collaborative approach is needed where all the stakeholders can join hands to get themselves secured. The recent ATM fraud in India in various places through various banks is a classic example of lack of such a kind of collaborative approach. However, in the recent past industry stakeholders, most importantly government agencies have started waking up to the ever increasing security threats and they are working along with network operators, service providers, and security solution providers to protect organizations. Though it’s a very positive sign, industry watchers feel there is still a long way to go. A CyberMedia Publication
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THE REAL COST
AUTHENTICATION TCO COMPARISON Management Costs
OF STRONG AUTHENTICATION
Solution Costs
Implementation Costs Server Solution
Assessing the Real Cost of Strong Authentication by comparing the Total Cost of Operation of On-Premise vs. Cloud-Based Authentication Solutions
175 150
COST ($K)
125
RIGHT
CONSIDER UP-FRONT MANAGEMENT AND IMPLEMENTATION COSTS
100 75 50
WRONG
25
CONSIDER UP-FRONT PURCHASE PRICE ALONE
10
50
100
250
500
USERS
Cloud Solution
175 150
60
SAVINGS IN TOTAL COST OF OPERATION
%
90
COST ($K)
UP TO
125
UP TO % REDUCTION IN ADMINISTRATIVE OVERHEAD COSTS
100 75 50 25 10
50
100
250
USERS
$$ FLEXIBLE OPEX PRICING! $$
99
.999
MANAGEMENT COSTS INCLUDE: %
SERVICE AVAILABILITY
Incident resolution Change installation System documentation Virus/security management Reporting Housekeeping Performance capacity management System software upgrades
Quality and Security standards Print admin User Management, Provisioning and On-boarding Storage management Token admin Billing and Invoicing
IMPLEMENTATION COSTS INCLUDE:
2013 2017 UP TO
"Gartner predicts that, by 2017, more than 50% of enterprises will choose cloud-based services as the delivery option for new or refreshed user authentication implementations, up from less than 10% today." -Gartner Magic Quadrant for User Authentication 2012
99.999% Availability User data backed-up Resilience provided Support overhead removed Expert 1st and 2nd line support provided No up-front purchases Opex vs. capex No ‘x’ year renewal cycle Reduced environmental Concerns/ carbon footprint Proactive network monitoring
Proactive server monitoring On demand growth capability No-fork lift implementation Simple integration High level of security High level of data integrity Ability to focus on core business Multi-company/ department capability Multi-tier distributed management
Servers and server licenses Database Maintenance Disaster recovery sites/plans/testing
60% COSTS SAVINGS WITH A CLOUD BASED STRONG AUTHENTICATION SOLUTION
Choosing your authentication solution based on the solution cost alone is a misleading indicator for its Total Cost of Operation. When you carry out a real on-premise vs. cloud comparison you must take into account the overall management and implementation costs. It is clear that the cloud-based solution is more cost effective, with savings of up to 60%, depending on the number of users.
To learn about SafeNet Authentication Service and join a free trial visit http://safenet-inc.com/sas THE D ATA PR OTECTION COMPANY
SafeNet India Pvt. Ltd.
6 Floor, Tower C, Logix Technopark, Sector 127 Noida 201301, India Ph: +91 – 120 – 4020555 Email: info.apac@safenet-inc.com
INDUSTRY | PRINTERS
Onkar Sharma onkars@cybermedia.co.in
Win Some—Lose Some India’s printer market is going through a rough phase with Inkjet and Dot Matrix shrinking fast. But laser printer market continues to perform better
I
t often springs surprise when any of us spends money on printers in this digital age. The trends over the year on printer market sales are in line with this perception. While decline in overall print consumption is a source of worry, that does not mean organizations and individuals will shun printing. That’s the hope this market rides on. Experts do not disregard the role of a printer yet see it as an equipment limited to a few business functions than it was. The digital document management is in vogue and is so handy that the perception with which people lived about hard copies now seems to have taken a downward path. The volume of work which offices and individuals 60
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preferred to do with the help of printers is easily bypassing them. But it does not mean that printers do not have role in today’s or tomorrow’s world. They are still an integral part of the business lifecycle. It will be perhaps a bit too early to predict if their importance is getting reduced in most business functions. Notwithstanding, their role is getting redefined. This is apparent in the DQ Top20’s analysis of the printer market for FY12-13. The growth figures have hit the dead end for printer market. The picture appears lopsided when figures are classified into segments such as dot matrix, inkjet and laser. A CyberMedia Publication
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INDUSTRY | PRINTERS
INDIA’S PRINTER MARKET SAW A STEADY SHIFT FROM SINGLE FUNCTION PRINTERS TO MULTI-FUNCTION PRINTERS THAT COMBINE SCAN AND COPY FUNCTIONS. THERE HAS BEEN A MAJOR SHIFT IN DEMANDS OF LASER-BASED MFPS
THE SHADOW IMPACT
The IT industry is going through a tough time and FY13 was a mixed bag. The printer segment was equally the victim of this sentiment. But domestic issues had played a role to dampen the buyer mood. The rupee slid further, forcing vendors to raise prices. Even if many of them did continue with the same prices, they had to shun the margin giving jolt to their channel partners who in return did not show interest in putting the printers in the front row of their sales counter. The vendors had to struggle to improve sales in the light of the fact that many large enterprise customers did not show eagerness to upgrade their infrastructure. THE INNOVATION CURVE
India’s printer market saw a steady shift from single function printers to multi-function printers that combine scan and copy functions. There has been a major shift in demands of laser based MFPs. In FY13, vendors such as HP and Epson tried their best to resuscitate the inkjet market through their B&W inkjet offerings. However, the move did not result into sales. Technology to ensure cloud computing compatibility also had traction. A lot of stress was laid around printing cost. HP and Epson tried to reap on these issues through their range of printers to improve the printing performance against a cartridge. Owing to general inflation and high interest rates, there was a standstill on investments in expansion which is evident from the fact that the national retail chains like Croma did not expand. MARKET AT A GLANCE
In this backdrop, Indian printer market has been found going through a rough patch in FY 13. Due to a significant
TAKEAWAYS oo The printer market has contracted over the last one year but there is still some hope from laser printers as they have registered good growth oo The ever-growing market for multifunctional devices over single function devices is triggered by the adoption among the small and medium size businesses as well as large enterprises
downfall in numbers in segments such as Inkjet and Dot Matrix printers, the overall market hit the dead end. In FY13, the total size of the printer market stood at `2,090 crore as compared to `2,113 crore in FY12. Thus, the market suffered a de-growth of 1.1%. It is obvious for peers to interpret the numbers in different ways. One thing which has surfaced in our analysis is that the Indian printer market is going through a transitional phase and reinventing its ways to settle in a world where printing needs are getting a different shape. For instance the category which gives a ray of hope is the laser category that is growing in double
The Overall Printer Market 2012-13
2,090
2011-12
2,113
-1.1%
The printer market went through a rough phase witnessing a degrowth because of low demand and less enterprise buying Source: DQ Estimates
(Revenue in `crore)
Know The Right Moves For Your Business |
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INKJET PRINTERS HAVE GONE DOWN. ACCORDING TO OUR ESTIMATES, THE MARKET FOR SINGLE-FUNCTION INKJET PRINTERS DECLINED SIGNIFICANTLY TO `50 CRORE IN FY13 WITH 37% DECLINE OVER LAST YEAR’S REVENUE OF `80 CRORE
Single-function Inkjet 2012-13
50
2011-12
80
Multi-function Inkjet -37.5%
Single-function inkjet is out of fashion and fast loosing sheen (Revenue in `crore)
Market Share Vendors % HP
60
2012-13
190
2011-12
200
-5%
The market was lacklustre despite HP and Epson pitching their B&W inkjet printers with muli-functions (Revenue in `crore)
Market Share Vendors % HP
69
Epson
26
2012-13 Canon
Canon
11
Epson
13
Others
3
Others
3
15
Source: DQ Estimates
Source: DQ Estimates
digits. This also means that printers like dot matrix and inkjet are perhaps not able to serve the need of the market.
technology the inkjet has not reached the efficiency levels which laser technology is capable of. HP has been an undisputed leader with more than 60% market share followed by Epson (26%) and Canon (11%). Since the market is squeezing, there are only few players left which share the pie. It is probably the single-function inkjet printers that would be out of the market in few years from now. Yet, any technological shifts might change the fate but that is a far-fetched thought and highly unlikely.
SINGLE-FUNCTION INKJET PRINTER
Inkjet printers have gone down. According to our estimates, the market for single-function inkjet printers declined significantly to `50 crore in FY13 with 37% decline over last year’s revenue of `80 crore. Clearly, consumers are not showing any interest in a technology which is cheaper on upfront investment but consumes more in the long run. Moreover, despite advancements in
MULTI-FUNCTION INKJET PRINTER
The downward trend continued with multi-function inkjet
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INDUSTRY | PRINTERS
AMONG PRINTERS, LASER PRINTER IS THE ONLY SEGMENT WHERE SALES GREW POSITIVELY AND THE GROWTH RATE WAS AROUND 14% OVER THE LAST FISCAL YEAR. THE CONSUMPTION WENT TO 1.57 MN UNITS FROM 1.38 MN UNITS
Single-function Laser 2012-13
720
2011-12
620
Multi-function Laser 14.5%
The laser market continued to grow in FY 13 despite challenges (Revenue in `crore)
Market Share Vendors %
2012-13
650
2011-12
571
14%
The battle in the multi-function laser market is heated with the entry of new players (Revenue in `crore)
Market Share Vendors %
HP
49
HP
38
Canon
36
Samsung
27
Samsung
8
Canon
23
Xerox
4
Ricoh
2
Ricoh
2
Others
10
Others
1
Others
1
Source: DQ Estimates
Source: DQ Estimates
printers also, though decline was only to the tune of 5% as the market stood at `190 crore in FY13 over `200 crore in FY12. HP is the leading player with 69% market share, followed by Canon and Epson with 15% and 13% market share respectively. As against the single-function inkjet, this segment is yet to stay in the market. It would be too early to say anything regarding this category because of the demand for colored prints. But the degrowth is purely pointing towards a change this category needs.
SINGLE_FUNCTION LASER
Among printers, laser printer is the only segment where sales grew positively and the growth rate was around 14% over the last fiscal year. The consumption went to 1.57 mn units from 1.38 mn units. Single function laser market stood at `710 crore in FY13 over `620 crore in FY12. The market leader was undoubtedly HP with market share of 49%. Canon is closely chasing it with 36% while Samsung is way behind.
Adopt Innovation, Improve Efficiency & Reduce Costs |
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INDUSTRY | PRINTERS
IN THE LIGHT OF PRINTING AND EQUIPMENT COSTS GOING UP, THE TRENDS SUCH AS DOCUMENT OUTSOURCING GAINED FURTHER GROUND. IN TERMS OF NEWER PRODUCTS WITH GREATER FUNCTIONALITY ONE SAW HIGHER TRACTION ON PRINTERS WITH WI-FI AND BLUETOOTH THAT MADE IT TRULY AGILE
Dot Matrix Printers 2012-13
124
2011-12
177
However, the market is attracting a number of global players. Ricoh also tried to cash on the pie last year.
-30%
Dot Matrix Printers is slowly walking into sunset with barely any takers (Revenue in `crore)
Market Share Vendors % Epson TVSe WeP Periperals Others
58 18 22 2
366
2011-12
305
20%
PoS printers are on the rise as the retailers are going digital (Revenue in `crore)
Market Share Vendors % Epson TVSe WeP Periperals Others
60 20 9 11
Source: DQ Estimates 66
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Demand for multifunction printers is increasing as they enhance productivity and functionality for an organization. Other factors pushing the adoption include higher level of efficiency, lower total cost of ownership, high quality prints, easy of use, and value the MFDs offer. With a multifunction color laser printer, one can create, communicate, collaborate, and go green. It is believed that soon the MFP market will outpace the single-function in all categories. HP is leading in this category with market share of about 38%. Samsung is competing at the second place with 27% while Canon is at the third place with 23% market share. THE JOURNEY HEREON
PoS Printers 2012-13
MULTI-FUNCTION LASER
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The printer market may have contracted in the last one year. But there is still some hope. The market is taking a turn to newer business models. As discussed earlier the market will not look the same as it used to be. That is why sales of inkjet and dot matrix printers have taken a sharp downfall. But the steady growth in the laser printer, both single and multifunction, to the tune of 14% indicates towards the consumer behaviour. While it is a good news for traditional players like HP, Canon, Samsung, etc, that laser market is on the rise and will continue to perform better in the coming years, it brings a bouque of challenges too since a number of small players are witnessing the trends and want to jump in the fray with more models and offers to customers with competitive prices. Brother strengthened its portfolio with new launches in the Indian market recently. It rolled out three new mono laser products to its existing wide portfolio of mono laser, colour and inkjet multifunction centers and printers. A CyberMedia Publication
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WHAT ELSE WOULD YOU EXPECT FROM AN INDUSTRY
LEADER? PRINT | ONLINE | EVENTS | CUSTOM | DIGITAL | SOCIAL | RESEARCH | WEBINARS For ways to engage contact Arvind Razdan@ +91 997 178 2277 or arvindr@cybermedia.co.in
INDUSTRY | SERVERS
Shrikanth G shrikanthg@cybermedia.co.in
Going South The year went by was not a good one for the server business—volumes of both x86 and non-x86 went down—as companies rationalized on their IT spend
S
erver market in India has been oscillating between hope and despair for last few years. For instance in 2010, in one of the worst years for servers—the segment saw a whopping decline of 17%. If one looks at FY13, it’s not as bad as FY10 but it saw a decline of 6% after two consecutive years of single digit growth. But the non-X86 UNIX market took the blood bath as the market went deep down as compared to last year. But it’s an expected trend as UNIX is becoming an infrastructure for the asking and its loyal buyers like the BFS segment. 68
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THE X86 STORY
With an aim to offer differentiated level of solutions—HP’s strategy was aligned last year to offer the best of cross platform best of breed solutions. Initiatives like Project Odyssey—which unified x86 and UNIX platforms—are seen as the way forward for HP which saw growing traction and interest over the last year. It also helped HP to deepen its mandates on the server space during FY13. Meanwhile yet another aggressive move by HP was its launch of the world’s first commercially available Moonshot systems at the end of FY13 fiscal. These servers delivered A CyberMedia Publication
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INDUSTRY | SERVERS
SERVERS ARE A KEY COMPONENT OF THE ENTERPRISE IT’S KEY MISSION CRITICAL INFRASTRUCTURE
compelling new infrastructure economics of scale by using up to 89% less energy, 80% less space, and costs 77% less as compared to traditional servers. The new Moonshot is the second-generation server from HP’s Project Moonshot. This new class of server is engineered to address the IT challenges created by social, cloud, mobile, and big data. HP Moonshot servers are built from chips more commonly found in smart phones and tablets, which allow the servers to deliver reduced energy use and a high-density footprint, all at a significantly lower cost. Meanwhile HP’s arch rival IBM also upped its ante on the x86 space- for instance, it focused on its eX5 enterprise systems that the company termed the leading edge of innovation for the new era of enterprise computing. IBM says that in this business environment, bigger is not enough and today’s enterprise computing solutions must be flexible enough to adapt to evolving day-to-day business requirements while providing exceptional performance, scalability, and reliability. It is in this backdrop that IBM’s eX5 portfolio; with systems, management, and support options was positioned as a server that can solve for workload optimization, intelligent analytics, virtualization, asset utilization, data center efficiencies, and IT economics. Meanwhile IBM also announced enhancements
The Indian Server Landscape 2012-13
2,650
2011-12
2,817
Source: DQ Estimates |
A CyberMedia Publication
-6%
(Revenue in `crore)
TAKEAWAYS oo As concepts like consolidation and virtualization gained ground had an impact on server volumesoo With the advent of powerful x86 architectures dented UNIX numbers as UNIX became an exclusivity of certain verticlas
across its systems portfolio that are designed to help organizations adopt cloud computing as they build toward Software Defined Environments (SDE). It enhanced its new High Performance Computing (HPC) solutions to bring HPC capabilities to mainstream servers to help more clients crunch their ever-mounting volumes of data faster. The new capabilities added to the IBM PureSystems are designed to help clients reduce the security risks often faced when deploying cloud solutions, as well as enable quick recovery and restoration after disasters. A new mobile solution based on IBM Worklight server on PureSystems for both Power and x86 was created to accelerate clients’ access to millions of mobile users by allowing mobile applications to be deployed in as little as 30 minutes. Other players like Dell also made aggressive strides and launched products that offered the best fitment to the demanding computing scenarios of today’s computing environments. THE NON-X86 STORY
IBM and HP lock horns in this space. HP is tied with Intel Itanium for its UNIX play. And while Intel has announced a firm roadmap for Itanium, but yet some of the analysts feel that HP is playing a gamble here—as it’s dependent on Intel for its processors. Significantly few months back, Intel made a very important update. A release by Intel some time back said, “We (Intel) have updated the definition of the www.dqindia.com
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INDUSTRY | SERVERS
IBM ROLLED OUT NINE NEW POWER SYSTEMS OFFERINGS, EACH PROVIDING ADVANCED CAPABILITIES IN BIG DATA ANALYTICS AND CLOUD COMPUTING
The x86 : Going Down – FY13 (units market share) Vendors % HP
35
IBM
28
Dell
25
Others
12
Total units
105,000
The Non x86: Tough Times FY13 (overall units) 2013
2,400
2012
3,680
-35%
Source: DQ Estimates
Meanwhile for IBM, it rolled out nine new Power Systems offerings, each providing advanced capabilities in big data analytics and cloud computing. The five packaged solutions for the healthcare and retail industries represented IBM’s latest in a series of new industry-themed solutions that combined IBM Power Systems with specialized software to meet big data and analytics needs unique to specific industries. For healthcare, the new solutions are designed to improve patient care and experience, reduce healthcare costs, and maximize health resource utilization; while the retail solution aimed towards helping retailers provide customers with more personalized shopping experiences. Three additional solutions from IBM provided organizations in any industry sector with advanced computing capabilities including predictive analytics, scoring and optimization techniques, as well as turnkey cloud offerings that support ‘pay-per-use’ business models or fit-for-purpose private cloud infrastructures. Built on Power Systems’ open platform for choice, both cloud solutions manage industry-standard Linux, AIX, and IBM i operating system environments. OUTLOOK
next generation Itanium processor, code name ‘Kittson’. Kittson will be manufactured on Intel’s 32nm process technology and will be socket compatible with the existing Intel Itanium 9300/9500 platforms, providing customers with performance improvements, investment protection, and a seamless upgrade path for existing systems. The modular development model, which converges on a common Intel Xeon/Intel Itanium socket and motherboard, will be evaluated for future implementation opportunities.” Some of the analysts felt that Intel is going slow with future innovation and Itanium form factors as the new Itanuim chips are not on 22 nm process. 70
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Servers are a key component of the enterprise IT’s key mission critical infrastructure. But there are too many disruptive developments that are consistently altering the server landscape year after year. While x86 numbers are expected to be saturating at the same time, the growing uptake of cloud augurs well for the data center business. So the cloud infrastructure providers will invest in a lot of computing infrastructure and that will kick start more volumes and growth in this segment. Meanwhile on the UNIX space, things are really getting tight. But traditional UNIX verticals like BFS will continue to base their mission critical IT on a UNIX platform but volumes will continue to slide. A CyberMedia Publication
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INDUSTRY | STRUCTURED CABLING
Malini N malinin@cybermedia.co.in
Crippling, but Marching Ahead In FY13, mid and a very few smaller players were blessed with modest revenue numbers, while bigwigs such as TE Connectivity, Commscope, and Digilink felt the heat of the market
H
it by currency fluctuations and depreciation of rupee, the structured cabling market in India lost its charm in the fiscal year 2012-13. Although it had recovered from the global recession in 2009-10 and had performed fairly better in FY2011 and FY2012, but several projects were seen shelved off in FY2013. VENDORS SNAPSHOT
In the meagre `1,570 crore structured cabling market, over 18 to 20 players are struggling for a pie in India. |
A CyberMedia Publication
The market also witnessed lay offs at the end of 2012 and beginning of 2013 from big wigs which is another clear indication of volatility in the market. In this financial year 2013, mid and a very few smaller players were blessed with modest revenue numbers, while big wigs such as TE Connectivity, Commscope, and Digilink felt the heat of the market. TE Connectivity had recorded a sluggish growth. The company is yet to capitalize on ADC Krone acquisition. Despite the doldrums in the industry and degrowth, TE has not lost its vigor. www.dqindia.com
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INDUSTRY | STRUCTURED CABLING
THOUGH RECOVERED FROM THE GLOBAL RECESSION IN 2009-10 AND HAD PERFORMED FAIRLY BETTER IN FY11 AND FY12, THE STRUCTURED CABLING MARKET IN INDIA LOST ITS CHARM IN THE FISCAL YEAR FY13
TAKEAWAYS oo The structured cabling market recorded a flat growth in FY 2013 oo A few players have given up the cabling battle and are focusing on their core areas oo Paralyzed policies are a major concern as they are not ensuring smooth economic activities in the country and better return on investments
It is heading to benchmark across products and services, it is aggressive in B and C class cities, focusing on resellers, newer verticals, technologies, and it is expanding horizontally. The company is setting up a new factory at Devanahalli, it would be open for operations in 2014. Commscope mainly relied on large and global accounts. As there was no significant large deals in FY2013, the company did not have a compelling growth story. It has recently began to target SMEs and government sectors. The company got some contracts from IT/ IteS, health care, and hospitality. It is offering two types of enterprise brands—Systimax and Uniprise Digilink by Schneider Electric recorded a flat growth. Its local market performance is yet to improve. But the acquisition has given a boost to Digilink because earlier the company focused more on the domestic market but now the manufactured products are being exported to other countries as Schneider has a global presence. Molex partnered with Delhi police to provide cabling installations for security initiation across all markets in the city. The company expanded 15% of sales into newer territories viz Jaipur, South Gujarat, Cochin, Chennai, and Chandigarh. It got some projects from ONGC, automotive, from government for state wide area network and from APDRP. 72
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Top Players (FY 2012-13) Players
Revenue (in `crore) Growth FY 2011-12 FY 2012-13 (in %)
TE Connectivity
470
475
1.1
Commscope
244
245
0.4
Digilink by Schneider
186
190
2.2
Molex
156
165
5.8
R&M
104
110
5.8
Dlink
72
80
11.1
Panduit
70
72
2.9
208
165
-20.7
1,510
1,503
-0.5
Others Total
Other include: 3M, Dax Networks, Hubbel, Leviton, Siemon, and Corning V&D Estimates The fourth quarter in FY2013 was greener for R&M as it bagged a few significant deals. The company has won significant deal from an IT services organization—it is providing a large number of installations and providing over one mn nodes. It is a combination of Cat 6 and 6a technology. The other deals include one it has signed with two large global mobile organizations and another with a few large hospital chains . ADC Krone’s acquisition was a blessing in disguise for a few mid-level cabling vendors. R&M was one such player, a few significant deals shifted to it. One of the IT giants Tata Consultancy Services (TCS), which had a long term association with ADC, flew to R&M. DLink also grabbed a small pie of Digilink’s domestic market share after it was acquired by Schneider Electric. DLink’s significant deals in FY2012-13 include CCTNS (for copper and fiber solution), Bharat Heavy Electrical A CyberMedia Publication
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INDUSTRY | STRUCTURED CABLING
IN FY13, MID AND A VERY FEW SMALLER PLAYERS WERE BLESSED WITH MODEST REVENUE NUMBERS, WHILE BIG WIGS SUCH AS TE CONNECTIVITY, COMMSCOPE, AND DIGILINK FELT THE HEAT OF THE MARKET
closed operations in September 2012. Nexans is also more likely to scale down operations in India. CABLING TECH TRENDS
(BHEL) for fiber solution, Asea Brown Boveri (ABB) for fiber solution, and Indian Oil Corporation (IOCL) for 10G copper solution installations. Corning has won a few significant deals for its fiber solutions. It has remained active in the market since 2010-11—its key deals include Tulip Data Center (Panduit won copper category), Cisco, and Barclays. The other mid-level player Nexans is also grappling in the market. Newer entrant 3M, which was active since its foray into the Indian cabling market, is grappling for the pie. The company seems to be in chaos as the top personnel in the cabling division, Navin Jacob Mathew, has quit. Leviton’s growth dipped in H1 2013 and it picked up after that and grew by over 40% in FY2013. It closed deals in IT/ ITeS, BPO, infrastructure, healthcare, and KPO. It bagged a deal from one online retailer, aviation industry, and Omega Healthcare in Trichy. A few players have given up the cabling battle and have headed to focus on their core areas. Belkin and Belden have downsized cabling operations in India as they failed to meet revenue standards that was set. Belden’s presence in the market declined considerably. Belkin |
A CyberMedia Publication
Category 6a holds the reigns in the copper cabling category. Customers at present are opting for a combination of cat 6 and 6a on copper cabling and fiber. On cat 7 standard, just the cabling is defined but there is unavailability of components. Technically, there is not much difference between cat 6a and cat 7; there is only 1% increment in terms of performance. But there is considerable difference in pricing-–vendors/ system integrators have no choice but to install cat 7 cable with cat 6a components. This might lead to the natural death of cat7. Cat 7a is still in the developmental stage. The entire industry is in a dilemma to either invest on cat 7 components when the performance is very less or to discard it. In the fiber category, OM3 and OM 4 installations are more and it is the high end technology. Currently, GPON, FTTH, FTTX, and PON technologies are gaining prominence. Plug and play solutions are also gaining preference as they are easier to install and manage. Multimode (50/125, 62.5/125um) OM1, OM2, and OM3, single mode (9/125um) in the fiber category are ruling the market. OM4 fiber cabling was seen last year in parts. OM3 fiber cabling is gradually picking up and plug-andplay copper and fiber solutions have been employed in key installations. Outdoor plant fiber cabling also saw an increase in usage last year. OS2 (Low Water Peak FiberG652.d) is the standard for most deployments. OM4 in multi-mode technology will see increased deployment to support 40G and 100G applications. Fiber requirement has gone up to address campus networking situations. Intelligent cabling has stolen the show of late. IT managers are demanding intelligent cabling as it enables proactive network monitoring and fault diagnosis. It is more efficient, reduces costs, and resolves issues like www.dqindia.com
September 30, 2013
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73
INDUSTRY | STRUCTURED CABLING
CUSTOMERS ARE DEMANDING INTELLIGENT CABLING SOLUTIONS BECAUSE TRADITIONAL NETWORK MANAGEMENT TOOLS OFFER LIMITED VALUE BECAUSE INFORMATION THROUGH THESE ARE COLLECTED MANUALLY
unplanned downtime, inefficient manual moves, reliability, redundancy, additions and changes, redundant ports, and inaccurate records. It will provide real-time management of the physical layer. Having an intelligent cabling solution enables an immediate rectification, as this system can indicate where exactly the network is experiencing problems. It can track IP based addresses and the network manager can access, control, and manage them from one central location, thereby troubleshooting them remotely. Customers are demanding intelligent cabling solutions because traditional network management tools offer limited value because information through these are collected manually. But the manual process is time consuming, sometimes inaccurate, and can prove to be costly in terms of money, man hours, and network downtime. The intelligent infrastructure management system allows easy planning and detection of MAC’s while maintaining accurate records for handling help desk tasks. The solution offers features that help to trace all devices connected to the network and in mapping and documentation of the ‘end-to-end’ physical infrastructure. It helps in monitoring all connections and events. The automatic log reports, alarms, and alerts generated by the system in case of changes and/ or disruptions in the network allow network managers to detect and trouble shoot problems much faster. CONCERNS
Industry consensus that there is a need for a stable government. Paralyzed policies are a major concern which is not ensuring smooth economic activities in the country and better return on investments. India needs licensed technicians who can help to enhance the quality and performance. OEMs ought to focus more on creating more awareness about performance, standardization, higher bandwidth capabilities, and good system integrators in 74
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the market. The market is impacted by the competition, pricing pressures, reliance on third party suppliers, and fluctuations in foreign currency exchange rates. OEMS are facing tough times in meeting the price expectations vis-a-vis margins trade off. Further reduction in prices would be difficult for the players considering steep rise in dollar. Most of the OEMs are not based in India; as they import, thereby increasing the cost of material which ultimately results in higher cost of ownership. Several organizations are reducing capital expenses (capex). Telecom is one of the strongest verticals for structured cabling market. But its contribution is relatively low. The government is also slowing down but not finalizing any decisions. Liquidity has also impacted the industry. Industry consensus states that the whole supply chain is under pressure. There is a severe shortage of quality system integrators in the market. THE SLIVER LINING
The industry anticipates a huge growth potential of the market in 2015. Calculated decision will help to take the industry ahead. Industry dynamics is slowly changing as the technological needs are changing—there is more and more adoption of convergence, GPON, cloud computing, and others. UIDAI is boosting banking, it is in turn leading to expansion of banks and cabling vendors can get a pie out of it. State data centers, hospitality sector are on an expansion mode. There is an increase in fiber deployments. Digital content delivery, reliance on online applications and demand for broadband is expected to increase. Increasing security requirements for sophisticated networks crave for intelligent networks which can locate and identify physical intrusion. Collaboration via unified communications and video is also driving the cabling market to handle bandwidth hungry application. A CyberMedia Publication
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Onkar Sharma onkars@cybermedia.co.in
INDUSTRY | SYSTEMS SOFTWARE
Pulling On To jumpstart growth, vendors need to scale up the market and get sizeable new mandates
T
he trends such as big data and cloud had a deep influence on this market in FY13. This transformation led the market to stay active throughout the year even with the challenges around. the vendors like IBM, Oracle, Microsoft, and SAP, among others did what they do best—an aggressive marketing strategy supported by best of breed products and solutions. |
A CyberMedia Publication
DATABASE IS HOT
The database market has turned into a hot bed of competition. Oracle Corporation’s database products maintained a reasonable lead in total RDBMS market share and at the end of the fiscal, it stood at excess of 63%. Its closest competitors such as Microsoft and IBM trailed way back in the Indian market. What puts Oracle www.dqindia.com
September 30, 2013
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75
INDUSTRY | SYSTEMS SOFTWARE
ORACLE CONTINUES TO RULE THE RDBMS MARKET WITH 63% MARKET SHARE, THEREBY DOMINATING THE MARKET AND BEING ABLE TO CONTROL THE TRENDS WITHIN
RDBMS Market 2012-13
2,285
2011-12
1,970
16%
(Revenue in `crore)
Market Share Vendors % Oracle
63
Microsoft
18
IBM
13
SAP
3
Others 3 Oracle continues to lead the RDBMS market, even after the competition is stiff from rivals Source: DQ Estimates way ahead of its competitors is its preparedness to deal with the ongoing trends. Moreover, the kind of technical support it offers is still a dream for its counterparts. But the landscape is taking fast turns. SAP is bullish with its HANA and Sybase offerings and attempting to make its presence felt in the Database market through multiple means. Microsoft’s SQL Server product is also very much in the competition but its role is mainly confined to Windowsbased systems while other vendors’ products are available on a variety of platforms. MIDDLEWARE: IS THE CHARM STILL ALIVE?
Traditionally, middleware projects increasingly spanned on-premise. But since cloud and big data are increasingly 76
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TAKEAWAYS oo Despite challenging market conditions, vendors like IBM and Oracle showed solid growth. Oracle closely walked behind with 31% market Share oo When it comes to productivity suites, Microsoft is the dominant player that continues to grab close to 98%
Indian Middleware Market 2012-13
1,702
2011-12
1,507
13%
(Revenue in `crore)
Market Share Vendors % IBM
34
Oracle
31
Microsoft
5
SAP
2
Others
28
IBM Tivoli leads the market with Oracle closely following with its middleware brands such as Fusion Middleware Source: DQ Estimates becoming mainstream among enterprises globally and in India, vendors need to make their way into the cloud-oriented world with their middleware offerings. Middleware vendors should leverage their expertise to offer competitive cloud services in addition to onpremises software products. Although the transition from A CyberMedia Publication
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INDUSTRY | SYSTEMS SOFTWARE
IBM RETAINED ITS LEADERSHIP POSITION, AS IT INCREASED ITS MARKET SHARE TO 34%
Infrastructure Management Software Mkt 2012-13
1,519
2011-12
1,462
4%
Development Tools Market in India 2012-13
1,887
2011-12
1,644
(Revenue in `crore)
Market Share Vendors %
16%
(Revenue in `crore)
Market Share Vendors %
HP
42
Microsoft
63
CA
37
HP
17
IBM
16
IBM
8
Others
5
Others
12
Infrastructure management software market in India was dominated by HP. Players such as IBM, CA and BMC endeavored to catch up in the mid-tier market
Microsoft is an undisputed leader in the development tools market. It is leading the race inviting developers to develop apps for its marketplace to enhance acceptance on the mobile platform
Source: DQ Estimates
Source: DQ Estimates
on-premises to cloud computing will take an extended period of time, the demand for hybrid use of platform technologies is present now, and is projected to grow rapidly during the next two to four years. End users can judge the long-term viability of a platform as a service (PaaS) provider in part by its ability to attract independent software vendors (ISVs) and other partners into its ecosystem. IBM retained its leadership position, as it increased its market Share to 34%. Despite challenging market conditions, vendors like IBM and Oracle showed solid growth. Oracle closely walked behind with 31% market Share. Microsoft and SAP need to go a long way in the middleware category in order to stand a chance to compete with IBM and Oracle.
DEVELOPMENT AND PRODUCTIVITY TOOLS
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A CyberMedia Publication
Microsoft’s constant efforts to catch on the cloud race ahead of competition is paying well for the company. Microsoft has over 15,000 Azure customers in India, and is adding over 1500 new India customers every month for Windows Azure. Also the company has witnessed a growth of over 150% YoY in Windows Azure revenue. When it comes to productivity suites, Microsoft is the dominant player that continues to grab close to 98%. The company rolled out Office 2012 with a lot of new features and cloud-capability further enhanced. Yet it has yet to sell the productivity suite. It expects the sales to zoom up in the coming year and also hopes a cycle of PC upgradation would pick up with support to XP coming to end. www.dqindia.com
September 30, 2013
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77
INDUSTRY | SYSTEMS SOFTWARE
DESPITE MICROSOFT’S LAUNCHES, THE CUSTOMERS GLOBALLY SHOWED MUTED INTEREST ON EMBARKING ON TO THE WINDOWS 8
Productivity Suites Market in India 2012-13
890
2011-12
840
6%
Microsoft has a near monopoly in the productivity suites market where other players are struggling to have noticeable presence (Revenue in `crore)
Systems Software market 2012-13
2,960
2011-12
2,695
10%
SYSTEMS SOFTWARE MARKET
(Revenue in `crore)
Market Share Vendors % Microsoft
65
Linux
14
HP
3
IBM
3
Others
15
Microsoft tried to sell Windows 8 but faced the dearth of buyers who could upgrade to the new OS. Therefore, the market witnessed a lackluster trend Source: DQ Estimates 78
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Competitors such as Google, OpenOffice, and CoreDraw Office are also in competition. But Microsoft is way ahead. Plus, Google which is seen one of the most challenging among competitors would take time to threaten Microsoft’s productivity suite revenues. Google is leading in the cloud space. But Microsoft is also bullish on the cloud, making its apps available on the Skydrive.
www.dqindia.com
Systems software market continue to suffer, mainly from the dismal performance of the PC market in India. Tablets and smartphones with their affordability, efficiency and portability have changed the whole scenario. Despite Microsoft’s launches, the customers globally showed least interest on embarking on to the Windows 8. Perhaps its competition was not this year with Linuxor so but with Android. Only the server landscape offered a ray of hope, since most of the enterprises are moving to a virtualized data center format and hence are upgrading their infrastructure. But in the server space, Microsoft has to compete with Red Had which leads the open source market and steals a chunk of the server market. In the tablet space, Google Android and Apple iOS are ruling. While Microsoft is doing its best to compete in the mobile category, the efforts are short. It now bets big on the Nokia acquisition. A CyberMedia Publication
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INDUSTRY | TABLET
Gyana Ranjan Swain gyanas@cybermedia.co.in
Flying High The tablet market witnessed a 104% increase in FY13, indicating brighter days ahead
TAKEAWAYS oo The tablet that really shook the Indian perspective about such devices was the ‘Aakash’ tablet. It was touted as the world’s cheapest tablet, and the Goverment of India choose this tablet as its pet project to help India bridge the digital divide oo The central government is in the process of coming up with a global tender to provide low-cost Aakash tablets to 220 mn school children
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A CyberMedia Publication
T
he Indian tablet industry in FY2012-13 witnessed the same trend that the Indian mobile phone sector had seen couple of years back. Anticipating a huge and growing market, many of the existing handset players as well as some new entrants started launching and rolling out newer models at a regular interval. In 2009-10, there were more than 100 handset companies operating in Indian soil that included the MNCs, local players as well as Chinese brands. Similarly, for tablet business in 201213, the market saw more than 50 brands that included www.dqindia.com
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83
INDUSTRY | TABLET
SAMSUNG AND APPLE RETAINED THEIR #1 AND #2 POSITIONS, RESPECTIVELY, IN FY13 TOO. SAMSUNG’S GALAXY TAB IN VARIED MODELS HELPED THE COMPANY TO DRIVE SUCCESS
home grown players like Micromax and Karbonn, MNCs like Apple and Samsung, and many Chinese brands, luring the Indian customers. And irrespective of brands, quality, and durability, Indian customers adopted this new age mobile-internet-enabled device with open arms. Though this digital device was new for them, Indian customers with varied expectations and requirement did not hesitate much in doing some experiment to find out how it helps them. This was evident from the fact that the Indian tablet industry grew by 104% to touch `4,098 crore in FY13, compared to `2,013 crore in FY12. VENDORS IN THE FIELD
Samsung and Apple retained their #1 and #2 positions, respectively, in FY13 too. Samsung’s Galaxy Tab in varied models helped the company to drive success. Besides, the company saw a good traction in some sectors like education, retail, and healthcare where devices like tablets are set to play a big role in the near future. Samsung’s revenues stood at `1,999 crore, as compared to `1,109 crore last year, a rise of around 80%. It holds a market share of 48.8%. The success of Samsung can be attributed to multiple factors like timely entry into the Indian market, quality products within affordable range, and compelling marketing and branding campaigns. The Korean major ruled the Indian devices market in FY2012-13. In the second place, it was Apple which continued to woo the market by its ever evolving features and niche offerings, notwithstanding its iconic brand pull. The Cupertino-based company clocked revenues worth `823 crore, against `442 crore, a rise of 86%. With this, the company enjoys a market share of 20.1% The growth of Apple in the Indian market happened probably because of the company’s changed attitude towards the world’s fastest growing market. Its evident from disruptive marketing strategies like EMI 84
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Top Players (FY 2012-13) Players
Revenue (in `crore) FY 2011-12 FY 2012-13
Samsung
Growth (in %)
1,109
1,999
80.25
442
823
86.2
Micromax
51
201
294.12
Karbonn
NA
112
NA
Datawind
NA
103
NA
RIM
121
83
-31.4
Apple
HCL
38
67
76.32
Others
252
710
181.75
2,013
4,098
103.58
Total
Others include- Lava, Zync, Spice, Swipe, Intex, Asus, Acer, Wishtel, Sony, Google, Teracom and Viewsonic V&D Estimates schemes and exchange offers. Micromax, which has been giving tough fights to all its competitors for the last four years in mobile phone space, did well in tablet business too. The company grew almost 300%, 294% to be precise, to clock revenues of `201 crore in FY13, compared to `51 crore in FY12. Its Funbook series has been doing wonders for the company since its launch. Though the first two quarters were difficult for the company, the next six months made up for the loss. It commanded a market share of almost 5%. Besides these top three, the fourth place holder in VOICE&DATA 100 survey, Karbonn Mobiles perhaps performed the best among all the tablet players. Just one year of operations in the tablet space and the company raked in `112 crore of revenues. When the company launched its first tablet model Karbonn Smart Tab, it was one of the best tablets available in the market with all the A CyberMedia Publication
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INDUSTRY | TABLET
THE DEVICE THAT REALLY SHOOK THE INDIAN PERSPECTIVE ABOUT TABLETS WAS THE AAKASH TABLET MANUFACTURED BY DATAWIND
advanced features and at a price thanks to the mobile phones, that’s perfectly suited the Indian but the introduction of tablets budget customers, who wanted pushed the envelope little farther Total Market Size: `4,098 crore by offering bigger display, more to use a tablet but wished not to splurge. At present, Karbonn storage space, and faster or 1.6% HCL Mobiles has a market share of equivalent processor speed. All 2.0% 2.7%. this combined helping the users 17.3% RIM Others But the tablet that really in carrying the device anywhere 2.5% Datawind shook the Indian perspective and let them in accessing their 48.8% about tablets was the Aakash favourite movie or video, and 2.7% Samsung Karbonn tablet manufactured by getting them connected to their 4.9% Datawind. It was touted as the virtual world through social Micromax 20.1% world’s cheapest tablet, and the media networks. Apple Goverment of India choose this The second driving factor tablet as its pet project which it was the differentiation it claimed would help India bridge created over its smaller the digital divide. Though many brother—the mobile phone, ups and downs come in the way of for adoption. It could be a reality Datawind in terms of goof ups in or a marketing strategy, but the delivery, experts being apprehensive tablet scored over the mobile phone about its quality, etc, the company in terms of acceptance among ( in `crore) performed well in FY2013 to clocked educational institutes. The taboo Revenue (FY 2012-13) revenues worth `103 crore with a factor that mobile phones still have 103.58% 4,098 market share of 2.5%,and is placed in educational institutes is no more fifth in the survey table. there for tablets. In fact, educational institutes, who have traditionally WHAT DROVE THIS GROWTH banned the use of mobile phones in The growth of tablets happened and school premises, have distributed is growing day by day because the tablets to their students, for free 2,013 hunger for acquiring a mobile phone or at discounted price. It is being is dying down. Plus, this new device marketed as well used as an enabler is offering almost all the features that of bridging that ‘digital device’. a bulky, more expensive laptop was Even though, the tablet ecosystem offering. However, what the traditional is at a nascent stage, the proliferation laptops were unable to offer is what of tablets is expected to increase being offered by the tablets—the significantly with the launch of faster 2012-13 2011-12 personal touch. Today’s generation data technologies and growing is now glued to the social media— awareness among customers. V&D Estimates
Market Share
Market Size
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INDUSTRY | TELECOM SOFTWARE
Malini N malinin@cybermedia.co.in
Weathering the Storm Telecom software providers have withstood uncertainties caused by the economic slowdown and changes in the industry
TAKEAWAYS oo Telecom software vendors can leverage various components of communication eco-systems spanning across semiconductors, mobile devices, network elements, and service providers oo Telecom software providers will have no dearth of opportunities, as the vast array of technology companies optimize the software delivered by them
T
raditional computing has been transformed, computing has shifted from desktops to finger tips due to rise in an explosive growth in the adoption of smartphones and tablets. The telecom industry is focusing more on newer and efficient technologies like LTE, M2M, newer operating systems, etc. There is an enormous pressure on networks due to the internet access on smartphones or tablets. As a result, communication service providers are enhancing network performance to remain competitive; mobile operating systems are getting hotter; and the nexus of forces between social, mobile, location, cloud are enriching the way we communicate — hence companies (such as device manufactures, semiconductors companies, CSPs, ICT providers) are shifting their focus towards software and it will indeed be a key differentiator. In the financial year 2012-13, the telecom software market was hampered by a degrowth and decreased investments from telecommunications; rupee depreciation, which led to increase in cost, while the companies import electronic components, software, and products. Software providers have weathered the storm caused by economic uncertainty and changes in the communication industry. Though there is increased pressure on returns, yet the industry has remained resilient and is making constant efforts to rebuild revenue loss and accelerate growth. 86
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INDUSTRY | TELECOM SOFTWARE
THE KEY TREND WHICH IS DRIVING GROWTH IN THE TELECOM SOFTWARE SPACE IS M2M COMMUNICATIONS THAT WILL BRING IN THE CONCEPT OF SMART LIVING IN THE CURRENT GENERATION
Despite the fact that the market is volatile, yet there are tremendous opportunities, which have brought charm— smart devices are creating surge in the processing power, which ought to be packed in semiconductors; carriers are deploying broadband wireless networks, and devices are migrating from legacy operating systems to Android and Windows. Telecom software vendors can all time leverage various components of communication eco-systems spanning across semiconductors, mobile devices, network elements, and service providers.
Top Players (FY 2012-13) Players
Revenue (in `crore) FY 2011-12 FY 2012-13
Growth (in %)
TechM
5,490
6,873
25.2
TCS
5,171
6,032
16.7
Wipro
4,698
5,459
16.2
Infosys
3,441
3,880
12.8
HCL Tech
1,817
1,831
0.8
520
475
-8.7
SEGMENT’S BOOSTERS
Sasken
The key trend which is driving growth in the telecom software space is Machine-to-Machine communications (M2M) that will bring in the concept of smart living in the current generation. Many products like televisions, home theaters, set-top boxes, and alarm systems are being integrated with a wireless chipset to enable communication capabilities. The quest to dwell in a smart digital living room will drive demand for semiconductor vendors in developed markets. Secondly ultra thin laptops are competing with new era computing devices such as smartphones and tablets, providing opportunities for semiconductor vendors. Thirdly, the march towards green technologies is driving the demand for technologies that can capture energy from the environment via photovoltaic, piezoelectric, or thermoelectric transducers. Fourthly, the pressures in performance of embedded processors that support smart devices will be relentless and drive them towards higher integration, supporting an ever increasing number of cores and higher clock speeds. Fifthly, the push to testing the edge of smaller geometries is leading to semiconductor manufacturers ramping up on leadingedge 22nm nodes. Lastly industry experts forecast that among semiconductor devices; microprocessors, ASSPs, and microcontrollers will register higher revenue growth than overall semiconductor revenues, but memory will
Others
4,455
4,855
9.0
Total
25,592
29,405
14.9
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A CyberMedia Publication
Others include: IBM, Accenture, Mindtree, CSC, Patni, Oracle, Aricent, NSN, Ericsson, ALU and Huawei V&D Estimates continue to show negative growth. Apart from these, there is a proliferation of LTE broadband networks across the globe, and in India the trend will gain traction next year—several operators have announced their vendor partners, who will provide them the network infrastructure to support LTE. Smartphone and tablet vendors are also aggressively pushing LTE devices. On the enterprise mobility side, Bring-YourOwn-Device (BYOD) will play out as more enterprises build the requisite policy control and security layers to enable this. These trends will create greater opportunities and enhance growth for software providers. Operators continue to focus on opportunities in the M2M services arena. PLAYERS
In fiscal 2013, Tata Consultancy Services had an impressive growth from telecom, including media and entertainment with a growth rate of 21.52% (17.24% in www.dqindia.com
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INDUSTRY | TELECOM SOFTWARE
INFOSYS’ REVENUES FROM INDIA INCLUDING SOFTWARE SERVICES AND PRODUCTS HAVE INCREASED FROM `740 CRORE TO `833 CRORE, WITH A GROWTH RATE OF 12.4% IN FY12-13 Y-O-Y
FY2012) over fiscal 2012. TCS has invested in 3G and LTE space unveiled niche platform, namely from two major perspectives— cloud based telecom-in-a-box, solutions for decreased time to cloud based device management Total Market Size: `29,405 crore market for equipment vendors platform, and next generation and deployment solutions analytics platform for telcos to for validation and integration 1.6% 16.5% Sasken leverage their operations. The services for operators and Others 23.4% company is expecting a nonservice providers. TechM 6.2% linear growth through these Wipro’s telecom vertical HCL Tech platforms. It has initiated to revenue stands at 14.3% of the 13.2% 20.5% focus on collaboration in areas of company revenues for FY12-13. Infosys TCS infrastructure services, mobility, Wipro has performed extremely 18.6% cloud, and SMB platforms. TCS well in both service provider Wipro has performed uniformly well and telecom equipment space. across telecom service provider Some of the significant deals and equipment vendor segments. bagged by the company include The company has signed a multi-year, multi-million a significant deal from an Asean operator to implement dollar deals, across the two segments and some of a large-scale telco-analytics solution, an outsourcing representative wins include – a managed services deal contract for a large telco in India, and a project from a from North American communications solution provider large telecom service provider in the field of multi-country, to provide application support and maintenance services multi-LOB, ERP consolidation in Africa. A few other deals for their core business processes. include a contract from European telecom vendor to In order to provide better customer experience and design and maintain its network management product agility, a UK-based telecom service provider for providing portfolio, a large telecom operator in North America has managed services support across infrastructure, signed a strategic alliance in the M2M space and an application systems and business processes, a deal operator in Korea has chosen Wipro for transformation from US based communications company for back office and 4G enablement of OSS stack. Wipro is investing transaction processing, and a European telecom handset heavily in Asean, Saarc, Africa, and LATAM regions apart manufacturer has awarded TCS a large transformational from North American and European markets. outsourcing deal to drive innovation, operational Infosys’ revenues from India including software services efficiency, and building of new business capabilities. and products have increased from `740 crore to `833 TCS is focused on building and consolidating its crore, with a growth rate of 12.4% in FY12-13 Y-o-Y. Out offerings looking at the changes in the priorities and focus of the total revenue, India contributed a meager 2.3%. As of service provider as well as equipment vendors. BI/ Next part of the telecom related business, Infosys has bagged Generation Analytics, big data, cloud based solutions, over 18 deals related to enterprise mobility across areas LTE, and IP Networking and enterprise mobility including like business and technology consulting, customer M2M are some of the key focus areas to address the newer outreach, mobile marketing, field services, and enterprise challenges of the telecom service providers. TCS has efficiency in the fourth quarter 2012-13.
Market Share
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INDUSTRY | TELECOM SOFTWARE
HCL HAS SIGNED A GLOBAL PARTNERSHIP DEAL WITH SAP TO PROVIDE MANAGED MOBILITY WHICH INCLUDES ROAD MAPPING, APPLICATION DEVELOPMENT, ETC
Tech Mahindra consolidated revenues 2.2% in its telecom business in the for FY12-13 at were `6,873 crore, up calendar year 2012. HCL has signed 25% Y-o-Y. The momentum in its non a global partnership deal with SAP ( in `crore) -BT business continued with a 21% to provide managed mobility which growth for FY13. Comviva and Hutchison Revenue (FY 2012-13) includes road mapping, application Global acquisitions have worked well development, mobile application 29,405 14.9% in adding value to its customers even management, mobile application 25,592 though its journey together is still in early testing and mobile outsourcing. As stages. Tech Mahindra and Royal KPN part of the deal, HCL resells and NV (KPN) entered into an international hosts SAP Mobility platform (Sybase partnership to further improve KPN’s Unwire Platform, Afaria and Syclo) efficiency and effectiveness in its IT licenses. environment and operational processes Sasken, which was traditionally and to jointly address strategic growth catering to the needs of modern areas. As a first step, both companies and connectivity, smart devices and have signed a multi-million, multi-year system software, IC design, networks, contract for development and support of and semiconductor solutions, has over 150 applications in the operational now expanded into areas like M2M IT systems. It bagged a multi-year communications and mHealth. 2012-13 2011-12 multi-million dollar managed services The company has developed a V&D Estimates contract from a leading telco in the UK. comprehensive automated test As part of the contract, Tech Mahindra will be providing platform, the Sasken Automation Test Suite (SATS), ICT Operations Managed Services along with running which is a complete test automation framework designed a service operations transformation program over the for testing of Android devices. It has an integrated test contract duration. It has also won a significant deal from suite comprising of kernel, modem, UI, functional, and Airtel. performance tests. HCL Infosystems has won a seven year managed services engagement deal from UIDAI. As part of the MARKET OUTLOOK deal, HCL has been implementing and managing the Telecom software providers will have no dearth of central ID Repository. HCL’s key segment operations opportunities as the vast array of technology companies within telecommunication space includes distribution of optimize the software delivered by them. Opportunities telecommunication and other digital lifestyle products; are abound due to the trends like mobility, better social sales of office automation products and providing network experience, and improved quality of experience. related comprehensive maintenance and allied services; Constraints of limited battery capacity are offering ample and providing repair services (including online support) opportunities for telecom software companies. In the for telecom and computing products. The company had next couple of years, the market is more likely to be much a change in its leadership team—Anant Gupta replaced more stable as India will harness the potential of LTE, big Vineet Nayar as the CEO of HCL. HCL had a dip by data, and cloud to the fullest.
Market Size
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Rajneesh De rajneeshd@cybermedia.co.in
Back to the Future The Emerging 50 players could well graduate to the Top 50 list next year
‘E
merging’ as a word has different connotations for different people. Some feel offended when getting tagged with the term—they often feel that they have done enough in their respective domains to have ‘emerged’ and calling them ‘emerging’ still is condescending. There are others though who feel proud to be regarded as ‘emerging’—they take it as an acknowledgement of their potential and the possibility that tomorrow they will become leaders. There were similar considerations before us at DQ Chaanels while compiling the list of the Gold Club Emerging 50. While the Top 50 lists of distributors and solution providers are more clear cut, there is always a grey area about the parameters on choosing the Emerging 50. Revenues not being the yardstick, the choice assumes a much more subjective nature. The kind of work these players are doing, what they are attempting and what potential they have to grow in the future, becomes important. In our list of Emerging 50, obviously solution providers outnumber traders or distributors significantly. After all 90
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there is not much scope for innovation in trading, and most of our emerging players have made it to the list due to the innovations they are bringing to their solutions business. We do acknowledge distributors who are expanding their portfolios in more value-oriented businesses and they too have got included in the list. Revenues has been another area where we have been more flexible this time. For Fold Club Top 50 lists of both distributors and solution providers, revenues have been the sole criterion. Not so in the Emerging 50 list. While we have provided revenues, the companies have not been ranked on that basis. Also, while most of these players are still low on toplines, you will find certain companies who should have been in either one of our Top 50 lists according to their turnovers. Either their information reached us late, or we were able to track them down later. There are chances that while their overall toplines might be high, the kind of work for which we are acknowledging them might still be not so significant. So one should not feel surprised or offended to see some of these ‘apparently emerged’ companies in the list. Another interesting facet is that half of these emerging companies are not from metros or large cities but from far flung places like Sangli, Surendranagar, Guwahati and Udaipur. That again proves what I have been asserting for years that Indian IT’s real growth now is taking place only in tier-3 and tier-4 cities. Over the past few years, tier-2 and tier-3 cities in India have shown maximum business potential and more or less every distributor and solution provider responded to the call by increasing their upcountry networks. These markets are already signaling signs of maturity attracting these companies to be more active towards generating higher business growth from the Indian upcountry hinterlands. Understanding the growing potential of smaller towns beyond the T1 and T2 boundary, the vendors too are now paying more attention to go deeper A CyberMedia Publication
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INDUSTRY | IT CHANNELS
TIER-2 AND TIER-3 CITIES IN INDIA HAVE SHOWN MAXIMUM BUSINESS POTENTIAL AND MORE OR LESS EVERY DISTRIBUTOR AND SOLUTION PROVIDER RESPONDED TO THE CALL BY INCREASING THEIR UPCOUNTRY NETWORKS
Emerging 50: tomorrow’s leaders Emerging Companies
2012 2011 2010 Cities -13 -12 -11
Emerging Companies
2012 2011 2010 Cities -13 -12 -11
4G Identity Solutions
200
110
55
Hyderabad
Krishna Agencies
57
48
42
Patna
Acuvate Software
16
11
5
Hyderabad
Magnamious Systems
37
30
26
Mumbai
Agraya Info Solutions
5
3
Lucknow
Maheshwari Computers
9
110
65
34
New Delhi
27
26
Kolkata
4
4
3
Surendranagar
Micro Solus Systems & Software
31
Apurva Computer Technologies
Minitek Systems
64
64
42
Nashik
Astric Computers India
33
27
33
Patna
Netcom Infotech
40
31
27
Kolkata
Binary Solutions
17
17
16
Kolkata
Netsol Technologies
2
2
1
Pune
BMG Informatics
23
20
18
Guwahati
Ninth Dimension
9
6
1
Bengaluru
Bodhtree Consulting
43
44
19
Hyderabad
Origin Group
98
80
65
Kolkata
C-DOT Systems
18
18
23
Pune
PH Teknow
35
30
22
Mumbai
Chabria Infotech
35
25
28
Kolkata
Power Centre
45
35
Comparex India
131
50
New Delhi
Proactive Data Systems
58
52
36
New Delhi
Datatech Computers
26
35
29
Ahmedabad
Ria Computers
53
48
41
Surat
Datasoft Network Solutions
46
42
40
Mumbai
Rox Trading
45
36
Dev Information Technology
42
35
24
Ahmedabad
Shani Peripherals
32
45
40
Ahmedabad
Sigma Computers
23
19
16
Ranchi
Diamond Infotech
43
35
29
Kolkata
Spectra Computech
30
25
24
Chandigarh
E-Connect Solutions
36
30
25
Udaipur
Sysware Infotech
11
10
6
New Delhi
ESDS Software Solution
30
28
34
Nashik
Essen Vision
12
11
Mumbai
ETSC Computers
5
4
4
Future Netwings
26
24
20
Albion Infotel
Chennai
1
1
1
Mumbai
Trisita Marketing
33
34
33
Kolkata
Jaipur
Vanpac Systems
60
55
42
Bengaluru
Kolkata
Veetrag Computers
35
23
20
Sangli
Mumbai
Veltronics India
10
10
8
Indore
Versatile Infosecurity
10
5
5
New Delhi
28
Bengaluru
103
ITCG Solutions
24
21
12
Vadodara
Vignesh Infotech
45
38
Kiosk Technologies
16
13
11
Kolkata
Xpress Computers
12
11
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45
Chennai
TechGyan
Galaxy Office Automation
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Indore
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UNDERSTANDING THE GROWING POTENTIAL OF SMALLER TOWNS BEYOND THE T1 AND T2 BOUNDARY, THE VENDORS TOO ARE NOW PAYING MORE ATTENTION TO GO DEEPER AND CAPTURE THESE UNTOUCHED MARKETS
Geographical Spread of Emerging 50
More than half of hte emerging 50 are from new metros; more than 30% are from relatively small citites.
Revenue Spread of Emerging 50 Revenue
20% of the Emerging 50 should have been in either of the Top 50 lists; this year many more can graduate to the list next year.
and capture these untouched markets. With time the scalability and nature of projects delivered by these solution providers have changed drastically. They have started taking up and delivering large scale and more complex projects for their customers, a capability neatly built over time and with much effort. Some of them have also started actively venturing overseas. 92
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Geographical expansions are must now as there are various unexplored territories with lots of opportunities and it is up to the solution providers to explore the same as much as possible. One particular domain where most of these emerging players are starting to make a mark is with SMBs. The IT challenges of SMBs are inherently different from that of large enterprises. In fact, these challenges often end up being far more complex for SMBs purely because of the restraint that has to be exercised by them on the budget front and on various other issues like server space, what model to go for, vendor management, getting the right skill set, etc. To add to these, while a typical SMB in a tier1 city shall still have someone on the lines of a CIO, the mid sized organizations in tier-2 cities and further down may not even have an IT department. Add to this, in organizations in smaller towns, these problems get further magnified; in addition to lack of skillsets, an overall lack of exposure to the modern technical and business updates virtually make IT a nonstarter for most of them. There is a wide gulf in maturity between the metros and other tier-1 cities with the hinterland. The issue of digital haves and digital have-nots get ruthlessly exposed here. This definitely puts more responsibilities on the shoulders of upcountry partners— not only are they focusing on these SMBs merely to generate moolah, but they are performing that role of IT evangelists to build an overall tech ecosystem there. As the delivery portfolio and efficiency enhances, so does expectation and competition. To sustain and thrive in this business it is very important to follow the current market trends and upgrade skills on regular basis to catch up with latest technology and develop solutions around them. Services is an area wherein one has to provide end-to-end solutions to his clients. Therefore, continuous evolution is essential and its now up to these emerging companies to see how fast they can shape their way to join in the big league. A CyberMedia Publication
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INDUSTRY | IT DISTRIBUTION
DQTeam maildqindia@cybermedia.co.in
Distribution: Tough Times,Tougher Men Telecom software providers have withstood uncertainties caused by the economic slowdown and changes in the industry
‘O
ne man’s foodmeat is another man’s poison’, that succinctly sums up what happened within the Indian IT distribution fraternity in FY13. That the impact of the recession would slow down both consumer and commercial business was obviously anticipated; that it would put considerable pressure on the working capital was also a foregone conclusion. It did not need astrologers to predict that there would barely be any opportunity to sustain margins on the volume business products; the likes of Ingram Micro and Redington braced themselves for the backlash and accordingly tightened their belts. Some managed to do it better than the rest—for example Ingram Micro which grew slightly more than Redington and wrested back its #1 slot in the Gold Club. HCL Infosystems, though witnessed decline in its distribution business—by the year end they were changing their entire model and were on the way to become a primarily channel company. In stark contrast though, the tier-2 players like Savex and Supertron probably had their best years in recent memory. Even many tier-3 sub-distis or regional distributors recorded high growth in topline, though the margin squeeze was more secular. The contradiction in contrasting toplines was indeed difficult to explain considering that the same set of market dynamics were applicable to all. The paradox could be entangled only from two angles; firstly, it could be argued that though the biggies anticipated most of the problems, it was their sheer size and the number of principals that prevented them from taking preventive measures from all corners. There were bound to some businesses that would do worse than others and thereby pull down the overall figure. The year started on a low note and the anticipation of bad weather ahead proved true for FY13. It was this anticipation that resulted in the biggies revamping strategies to stay afloat. This surely ensured that they stayed ahead in the race but with a few injuries though. |
A CyberMedia Publication
Even some of the challenging issues like credit policy continued to plague the segment. Several companies of the order of Supertron, Savex, Mediaman Infotech, Savex, Sogo Computers, among others continued with challenges of ‘cheque bouncing’ and partners ‘not paying on time’. The entire distribution segment is estimated to be plagued by this trend leading to a bad debt scenario. Apart from that in continuance to the trend of FY12, the distributors adhered to its credit policy while the channel partners kept on raising the issue of stockpiling and hoarding. Distributors blame that lack of effective credit control and policy is resulting in stockpiling and undervaluation of the commodities for the channel partners while the counter argument raised is that there is flux in market operation price and trade terms. Also, distributors have often been blamed for the ongoing scenario of putting partners under pressure for hoarding and the impending case of DoA (dead on arrival). Even the natural calamities seemed to weigh hard on the segment with the Thailand floods resulting in a hard disc crisis in India. The unavailability and shortage of essential components led to the products being sold at 60% more than their normal price. The inability in meeting demand owing to shortage of products had a negative impact on national and regional distributors alike and also fueled panic in the market. This led to some distributors even hoarding products. South and west India emerged as the regions that were badly impacted by the crisis. To add fuel to the fire that was already burning the segment, the rupee continued to weaken against the US dollar. A US dollar that grew from strength to strength meant dearer imports resulting in the retail and corporate segment hitting the panic button. It was a wait and watch policy for this segment for the last fiscal. SMBs and SMEs acted as the cushion during this crisis. The crisis that plagued the market led to corporate billings declining by 2.3% and an estimated retail loss of 1.8% of market potential. www.dqindia.com
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Top 25 Company Name
FY FY FY 12-13 11-12 10-11
Top 25 Company Name
FY FY FY 12-13 11-12 10-11
1
Ingram Micro
12024
10547
9766
27
Caltron
198
198
240
2
Redington
11746
10938
9274
28
196
195
195
3
HCL Infosystems
9883
10840
12137
Comexcell Technologies
4
Savex Computers
4681
2957
1916
29
Elcom Trading
172
153
127
5
Compuage
1961
1598
1414
30
172
150
160
6
Rashi Peripherals
1792
1502
1097
Mega Compu World
31
Sakri IT Solutions
169
88
50
7
Neoteric Informatique
1624
1400
1135
32
Savera Marketing Agency
160
123
69
8
Iris Computers
1600
1269
965
33
Aegis Infoware
157
158
122
9
Supertron
1408
1189
1107
34
148
141
121
10
Fortune Marketing
552
480
327
Datamation Services
11
Maxtone
450
415
382
35
148
142
140
12
Mediaman Infotech
432
425
369
Supreme Technologies
13
Datacare Corp
431
431
432
36
Suntronic Systems
130
126
107
14
Technocrat Infotech
330
287
224
37
Creative Peripherals & Distributo
127
124
144
15
Sogo Computers
300
224
189
38
NCS
125
90
60
16
Jupiter International
296
290
280
39
Park Group
118
121
116
17
Roop Technologies
263
260
220
40
Aarohi Infotech
105
105
120
18
Balaji Solutions
250
235
195
41
Ozone Systems
105
180
70
19
Shwetha Computers & Peripherals
246
240
225
42
Computer Gallery
102
94
85
43
Peripheral Engineers
97
87
84
20
Ample Technologies
240
190
101
44
Saboo
91
101
95
21
Eastern Logica
222
192
148
45
SA Infosys
86
80
80
22
Alco Infotech
220
164
150
46
75
164
175
23
Compage Computers
215
198
211
Venktron Digital Systems
47
Bluecom Infotech
58
50
32
24
Aldous Glare Trade & Export
211
245
175
52
60
25
Lalani Infotech
208
220
220
26
Supreme Computers
205
193
148
95
90
48
Nigama
55
49
Balaji Lifestyle Technologies
50
50
CCS Infotech
39
In FY13, the distributors did stick to their credit policies while the channel partners kept on raising the issue of stockpiling and hoarding. Distributor blame thatlack of effective credit control and policy is resulting in stockpiling and under-valuation of the commodities for the channel partners while the counter argument often put up is over the flux in market operation price and trade terms. Also, distributors have often been blamed for the onging scenario of putting its partners under pressure for hoarding and over the impending case of DoA 94
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INDUSTRY | IT DISTRIBUTION
THE UNAVAILABILITY AND SHORTAGE OF ESSENTIAL COMPONENTS LED TO THE PRODUCTS BEING SOLD AT 60% MORE THAN THEIR NORMAL PRICE
The Indian Distribution Landscape
Datacare Corp
Roop Technologies
Comexcell
Elcom Trading
Park Group
120
105
118
121
116
172
153
127
195
12137
11746 10938
9883 10840
2012-13
Aarohi Infotech
2012-11
Sakri IT Solutions
2011-10
Top 5 RDs from West
552 480 327
1408 1189 1107
1600 1269
965
1624 1400 1135
1792 1502 1097
Top 5 RDs from South
1961 1598 1414
1916
2957
4681
Mediaman Infotech
9274
10547 9766
88 50
Maxtone
105
2011-10
195
2012-11
2011-10 196
2012-13
2012-11
169
263
2012-13
220
260
Top 4 RDs from North
12024
431
431
369
432
369
415 450
425
382
Top 5 RDs from West
2012-13
2012-13
Sogo Computers
Shwetha Computers & Peripherals
Ample Technologies
Compage Computers
Aldous Glare Trade & Export
Technocrat Infotech
220 164
150
192
101
148
195
222
224
175
235
250
290
2011-10
280
296
287
245 211
211
215
198
240 190
225
246 224
240
2011-10
189
2012-11
330
300
2012-11
Jupiter Balaji Solutions Eastern Logica Alco Infotech International
What was conceived as a prestigious escalation of national from ‘regional’ has now lost its focus and some of the regional players are contended and happy with the revised regional models the vendors are putting into effect. However, regional distribution remains lucrative but at the same time volatile and too risky. Stronger regional players are emerging mainly in the South and West; from north, there are only four RDs in the Gold Club this year 96
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INDUSTRY | ENTERPRISE APPS
Onkar Sharma onkars@cybermedia.co.in
Steady Movement The enterprise applications market is mainly driven by the adoption in the mid-segment through cloud offerings
T
he enterprise applications market grew at decent rate, if the market conditions are taken into account. The 15% growth indicates that the adoption trends shifted from large ticket customers to mid-size customers. While the big customers showed lack of interest in upgrading their IT, the new models such as cloud fared well both for vendors as well as customers, keeping the growth engine chugging. The first half of FY13 was a challenging period in the light of Eurozone crises. In the end half of the year, the Eurozone showed signs of recovery which helped |
A CyberMedia Publication
ease the sentiment in the domestic market. Enterprise customers had to smartly utilize their IT spending on applications, which were business critical. The result was that they continued to look out for alternatives for business continuity. All said and done, FY13 witnessed a healthy growth of enterprise apps in the smaller markets. SAP, Oracle, Salesforce, and others tried to capitalize on the vast SME market. SAP was bullish to enter the tier-2 and -3 markets through their partner network. But experts are concerned because of the continued www.dqindia.com
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INDUSTRY | ENTERPRISE APPS
INDIAN BUSINESS INTELLIGENCE (BI) SOFTWARE MARKET WAS ON THE GROWTH PATH BUT GROWTH CAME DOWN TO 16% IN FY13 FROM 35% IN FY12
Enterprise Applications 2012-13
7,924
2011-12
6,885
15%
The Enterprise Applications market continue to grow with a steady pace despite challenges in the market. The mid-size customers drove the growth (Revenue in `crore)
Indian ERP Market
TAKEAWAYS oo FY13 witnessed a healthy growth of enterprise apps in the smaller markets oo Constituting the biggest chunk of the enterprise software market, the ERP market is governed by Germany’s SAP and US-based Oracle
caution shown by Indian enterprises. This sentiment has hurt the growth of the segment. IDC, a market research firm, recently stated that it has ‘slightly downgraded’ its expectations for the ERP market in India due to a ‘continued mindset of caution and tactical investments’ among organizations in India. ERP: SLOW AND STEADY
2012-13
1,993
2011-12
1,780
20%
The ERP market grew at 12%, with growth primarily driven by small and mid-size buyers (Revenue in `crore)
Market Share Vendors % SAP
47
Oracle
17
Microsoft
11
IBM
1
Sage
3
Others
21
Source: DQ Estimates 98
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Constituting the biggest chunk of the enterprise software market, the ERP market is governed by Germany’s SAP and US-based Oracle. For a couple of years, the enterprise resource planning (ERP) software market is growing at a turdy rate. But the growth is more or less steady. Interestingly, the growth did not cease, despite the slowdown in the global markets. Undoubtedly, SAP is the leader in the ERP space, as market sees SAP synonymous to ERP. The company holds close to 47% of the market, followed by Oracle India and Microsoft with 17 % and 11% respectively. SCM MARKET IN INDIA
Recently, SCM is gaining importance due to globalisation. Several factors are driving an emphasis on SCM. First, the cost and availability of information resources between entities in the supply chain allow easy linkages that eliminate time delays in the network. Second, the level of competition in both domestic and international markets require organizations to be fast, agile, and flexible. Third, customer expectations and requirements are becoming much more stringent. So to satisfy consumers, SCM A CyberMedia Publication
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INDUSTRY | ENTERPRISE APPS
SAP IS LEADING THE SUPPLY CHAIN MANAGEMENT (SCM) SOFTWARE MARKET, AHEAD OF ORACLE
Indian SCM Market 2012-13
1,018
2011-12
863
Indian CRM Market 18%
There was immense focus on streamlining the supply chain that led customers to invest on SCM solutions heavily (Revenue in `crore)
Market Share Vendors %
2012-13
1,600
2011-12
1,250
28%
The CRM market in India is one of the high growth category in the enterprise apps as there is a big focus on addressing customer issues (Revenue in `crore)
Market Share Vendors %
SAP
35
Oracle
23
Oracle
33
SAP
12
JDA
1
Avaya
19
IBM
1
Salesforce
13
Infor
4
Microsoft
3
Sage
1
Infor
1
Microsoft
1
IBM
1
Others
24
Others
28
Source: DQ Estimates
Source: DQ Estimates
system should operate with the two main objectives— promptness and quality. SAP is leading the supply chain management (SCM) software market, ahead of Oracle. SAP had market share of 35% in the SCM market. Oracle, the 2nd software vendor in the SCM software market, with 33% share is quite close to SAP. The other major SCM software vendors include: JDA Software, IBM, and Infor. In FY13, IT budget decision makers remained cautious overall, but supply chain investments kept their priority status and moved forward.
CRM MARKET IN INDIA
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A CyberMedia Publication
The enterprise software market is dominated by Oracle Siebel, SAP CRM, and Amdocs. Oracle’s Siebel product and Amdocs have largely penetrated the Indian software landscape along vertical markets, while SAP CRM has been more broadly adopted in largest part riding on the coattails of SAP’s highly successful enterprise resource planning (ERP) software suite. While Oracle CRM and PeopleSoft are gradually being phased out on a global basis, these legacy solutions are expected to operate longer in India than other global regions. www.dqindia.com
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INDUSTRY | ENTERPRISE APPS
THE LAST THREE YEARS HAVE WITNESSED THE RISE OF ON-DEMAND CRM SOLUTIONS LIKE SALESFORCE.COM AND MICROSOFT DYNAMICS CRM ENTERING THE MARKET
Indian BI Market 2012-13
1,790
2011-12
1,550
Indian PLM Market 16%
Analytics market is on the rise as there is focus on taking better and informed decisions based on the data collected and lying in the company systems (Revenue in `crore)
Market Share Vendors %
2012-13
769
2011-12
740
4%
The Product Lifecycle Management market seems to have hit the roadbloack since there was less manufacturing activity in the country last year (Revenue in `crore)
Market Share Vendors %
SAP
27
Siemens PLM
22
IBM
23
Dassault Systems
20
SAS
16
Autodesk
18
Oracle
10
Altair
10
Microsoft
7
Ansys
8
Qilk Tech
3
Oracle Agile
2
Tibco
1
SAP PLM
2
Others
13
PTC
7
MSC
3
Others
8
Source: DQ Estimates
Source: DQ Estimates The small and mid-size businesses (SMB) market has also been historically pursued along industry lines by suppliers. There is competition now from CRM software competitors such as Microsoft Dynamics CRM, Sage SalesLogix, Salesforce.com, Impel CRM, and SugarCRM. The last three years have witnessed the rise of ondemand CRM solutions like Salesforce.com and Microsoft 100
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Dynamics CRM entering the market. It opened doors to a very large and growing SMB market space. Competing software as a service (SaaS) solutions Rightnow and Netsuite have started establishing their presence in India, following the early success of Salesforce.com. Open source software solutions like SugarCRM and vtiger have also found some footprint in India. However, A CyberMedia Publication
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INDUSTRY | ENTERPRISE APPS
INDIA’S PRODUCT LIFECYCLE MANAGEMENT SOFTWARE MARKET, WAS ADVERSELY AFFECTED BY THE SLOWDOWN IN THE MANUFACTURING SECTOR IN INDIA, MAINLY DUE TO THE SLOWDOWN IN THE AUTOMOBILE SECTOR
Indian Graphics Software Market
also share a considerable portion of the market. INDIAN PLM MARKET: THE ROADBLOCK
2012-13
754
2011-12
702
7%
Adobe is investing heavily on its cloud suite to woo more customers (Revenue in `crore)
Market Share Vendors % Adobe
48
Autodesk
36
Others
16
Source: DQ Estimates
these products are largely accepted by the small businesses and have yet to achieve the traction. BI MARKET IN INDIA
Indian business intelligence (BI) software market was on the growth path but growth came down to 16% in FY13 from 35% in FY12. Pressures from customers, environmental policies, government and industry regulations, international standards of quality, and internal operational efficiency, continued to force enterprises to improve their operations and processes to become both agile and efficient in a volatile marketplace. These internal and external pressures are driving increased adoption of analytics solutions across the country. SAP led the market with 27%, closely followed by IBM with 23% market share. SAS, Oracle, Microsoft, Qilk, etc, |
A CyberMedia Publication
India’s product lifecycle management software market, was adversely affected by the slowdown in the manufacturing sector in India, mainly due to the slowdown in the automobile sector where sales of cars went unexpectedly low. Players such as Siemens PLM, Autodesk, Dassault Systems, etc, had a tough time enhancing sales. Besides, the PLM market witnessed the growth of new technologies such as 3D and HD. Though they were around for quite sometime, the adoption rate went high for new technologies. In FY13, the PLM market grew marginally with 4% growth. Led by Siemens PLM with market share close to 22%, the market tried to explore avenues in the remote markets and tried to bring in small and mid-size players under their fold. Dassault Systems follows closely with 20% market share while Autodesk has 18% market in its hold. The PLM market largely depends on the manufacturing activity in India, which is expected to see a hayday in coming years based on the incentives announced by the government through policies such as electronics policy and others. There is emphasis on setting up countryspecific business and manufacturing clusters in the country, which is expected to bring cheers to this segment. However, it is too early to resort on such expectations. GRAPHICS SOFTWARE MARKET
Graphics software market continued to grow at a steady pace of 7%. Since Adobe has launched its creative suite on cloud in the Indian market, the company has observed a positive growth and adoption. The company is vying on the move and expects it to add to its growth and revenues. Adobe holds 48% of the market followed by Autodesk with 36%. www.dqindia.com
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INDUSTRY | MANAGED SERVICES
Pravin Prashant pravinp@cybermedia.co.in
Hunting for Opportunities Old deals are coming under price pressure and new deals are limited to RCOM and Uninor only
TAKEAWAYS oo RCOM offers billion-dollar converged managed services contract to both Alcatel-Lucent and Ericsson oo IP and Wi-Fi managed services are getting traction and will increase as broadband picks up oo LTE managed services deal to gain traction in couple of years oo Today, Ericsson has 10 ongoing managed services deals with eight customers 102
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T
he telecom market slowed down in FY2012-13 and this had an impact on managed services. Old deals were under severe price pressure as operators were negotiating on KPIs or increased services for the same price. Newer deals were very few in number as TDD-LTE failed to take off in a big way as operators were only interested in pilots and not in full scale deployment. Even on the technology front, the focus was on multi-technology, multi-year, and multi-vendor management, making things complicated for the vendor. The focus was also on maintaining and managing both wireless A CyberMedia Publication
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INDUSTRY | MANAGED SERVICES
ERICSSON HAS DONE WELL IN MANAGED SERVICES IN FY13. THE COMPANY IS PRESENTLY PROVIDING MANAGED SERVICES FOR BHARTI AIRTEL AND IDEA CELLULAR IN 15 AND 5 TELECOM CIRCLES RESPECTIVELY
and wireline services, simultaneously. So, there was an increase in complexity in managed services. Nokia Siemens Networks (NSN) continues to enjoy leadership position in managed services and the company has executed over 250 mn subscribers for top seven private operators with presence in 35 circles. In toto, the company is managing over 160,000 base stations under managed services. In addition, NSN manages over 175,000 transmission nodes and over 4,000 IP routers and switches which are multi-vendors and multi-year contracts. In FY2012-13, NSN has renewed all its contracts while increasing service scope and improving KPI and SLA requirements. DEALS IN MANAGED SERVICES
Some of the deals won by the company in FY2012-13 include 3G managed services renewal with an operator in three circles; assisted managed services for 3G in Bihar circle for an operator; and 2G, 3G managed services expansion and renewal for one of the largest operators in eight circles. 2G deals managed by NSN includes 2G managed services renewal with an operator in seven circles; Bihar circle 2G managed services expansion for an operator; 2G managed capacity renewal and expansion for one of the largest operators in eight circles; 2G and 3G managed services expansion and renewal for one of the largest operators in 8 circles; and LTE, fixed, and NGN maintenance contract renewal for one of the largest operators. Today, Ericsson has 10 ongoing managed services deals with eight customers. The company provides services in 23 telecom circles in India and their customers include Bharti Airtel, Aircel, SSTL, Idea, Uninor, Tata Sky, and Reliance Communications. Ericsson has also done well in managed services for FY2012-13. The company is presently providing managed |
A CyberMedia Publication
Top Players (FY 2012-13) Players
Revenue (in `crore) Growth FY 2011-12 FY 2012-13 (in %)
NSN
2,106
1,780
-15.5
Ericsson
1,402
1,675
19.5
Huawei
979
453
-53.7
Alcatel-Lucent
934
421
-54.9
ZTE
205
205
0.0
Total
5,626
4,534
-19.4
V&D Estimates services for Bharti Airtel in 15 telecom circles for all types of wireless technologies deployed. The company is also managing managed services for Idea Cellular in five circles. The company has also partnered with Aircel to manage its GSM, WCDMA network operations, and VAS services in six circles—Himachal Pradesh, Bihar, Orissa, Jammu and Kashmir, North East, and Assam. With this deal, Aircel managed to streamline its network operations, reduce operating costs and adapt to demand-driven operations while improving the quality of service level for its customers. Ericsson won its first managed services contract covering fiber transport and wireline networks from SSTL, which operates under the brand name of MTS. The existing contract got expanded in August 2011 to include four more telecom circles (Rajasthan, Gujarat, UP (East), and UP (West). It equipped Tata Sky, the Indian leading direct-to-home (DTH) operator, with ‘advanced TV system’ for the users. This is based on Ericsson’s Media Delivery Network (MDN), a content delivery, distribution, and management solution. It is also providing managed services for the operation and maintenance of the project. In early 2013, a $1-bn deal with Reliance Communications in 11 circles was signed. With this deal, www.dqindia.com
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INDUSTRY | MANAGED SERVICES
IN FY13, THERE WAS AN INCREASE IN COMPLEXITY IN MANAGED SERVICES. THE FOCUS WAS ALSO ON MAINTAINING AND MANAGING BOTH WIRELESS AND WIRELINE SERVICES
Market Share
Ericsson has further expanded services, the company has capabilities in fiber, wireline, Metro invested in lot of tools like: Nastar, Ethernet, and enterprise network. MOS 5100, MOS 5200, Total Market Size: `4,534 crore DAMS, As Wi-Fi becomes of greater interest and MOS 7100. The company to operators for complementing has also invested in GNOC, WFM 4.5% ZTE 9.3% 3G, the company has leveraged its system, and CNAC team. Alcatel-Lucent asset and signed the India’s first ZTE has managed to sign a Wi-Fi managed services deal with NGN managed services deal one of the leading mobile operators with Idea. The company has also in the country. signed NGN managed services 10.0% 39.3% Huawei NSN Beginning of the year in 2013, roll out with TTSL. The company Alcatel-Lucent announced firsthas also won Aircel 3G managed of-its-kind, end-to-end network services in UP (East). Today, ZTE 36.9% Ericsson managed services contract with offers complete managed service Reliance Communications aimed suite that is active/passive/VAS/ at delivering superior customer NGN and by virtue of its global experience for customers in experience offers multi-vendor eastern and southern India catering to managed services. The company has a both wireline and wireless. full-fledged NNOC running in Gurgaon The billion-dollar converged managed which is well integrated with center of services contract was followed by excellence. ( in `crore) another landmark deal with Uninor for Revenue (FY 2012-13) business transformation and operations THE FUTURE -19.4% 5,626 support in three of their largest circles We are seeing trends towards customer in India--Gujarat, Maharashtra, and experience management related Andhra Pradesh. The company provides operations and maintenance contracts 4,534 manged services through its GNOC and higher focus on analytics, IP and based out Bengaluru and offers full suite Wi-Fi management services, and of services based on the ETOM and ITIL very soon spectrum refarming related models. initiatives on managed services Huawei has a lot of managed services contracts. under its belt. These include four Aircel We are seeing foray of independent GSM/UMTS circles (8,000 sites); seven Indian IT companies like Wipro and circles Tata GSM/UMTS (12,000 sites); Tech Mahindra in MVMS resulting in one circle Bharti Airtel UMTS/LTE (4,500 more competition. Managed services sites); two circles MTS (1,400 sites); for 4G will happen in a big way in a 2012-13 2011-12 and Idea Cellular STP, NGN, DWDM couple of years as presently operators managed services. For managed are understanding its nitty-gritty. V&D Estimates
Market Size
104
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INDUSTRY | STORAGE
Malini N malinin@cybermedia.co.in
Moving North Despite storage being an integral to any IT deployment, the market remained flat during FY13
T
he data deluge generated both by consumers and enterprises; transition from analog to digital TV, adoption of mission critical IT applications across verticals, uptake of cloud computing, virtualization, and mobility have kept the storage ship sailing smoothly in India despite the economic volatility in 2012-13. As storage is very integral to any and all IT deployments be it small, medium or large, the storage market has shown a slightly positive growth in the fiscal 2013. Digital cosmos is expanding multi-fold; storage and data management market is also rapidly evolving. MARKET PERFORMANCE IN FY2013
The buzzwords in the storage market included software |
A CyberMedia Publication
defined data centers, flash storage, deduplication at the storage source big data, and cloud. According to Symantec, software defined storage will have significant impact on cloud, appliances, and SSDs/ flash storage implementations. The industry is replacing tier-1 storage with flash storage. There will be an increase in solid state/ flash storage adoption. Flash storage will be trialed at nearly every fortune 1,000 enterprises through the year 2013, and will begin to replace tier-1 storage. The target dedupe appliance market will be disrupted and replaced by integrated backup appliances. Deduplication at the storage target will increasingly be replaced by deduplication closer to the source. Purpose built deduplication appliances will be replaced www.dqindia.com
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105
INDUSTRY | STORAGE
THE INDUSTRY IS REPLACING TIER-1 STORAGE WITH FLASH STORAGE. THERE WILL BE AN INCREASE IN SOLID STATE/FLASH STORAGE ADOPTION
with integrated backup appliances that combine source and target deduplication, backup software, replication, snapshots, security, and cloud integration in a single appliance. Big data investments stay small but risks increase dramatically. The risks associated with big data will significantly increase, especially when it is inefficiently stored and managed. Backup and disaster recovery appliances and cloud service providers are innovating more secure and efficient recovery of data and applications. Hypervisor market share will dramatically change with greater diversity of virtualization solutions. This hypervisor diversity will cause specific hypervisor point tools to be ripped out and replaced by platforms with more capabilities that support multiple hypervisors, physical, virtual, snapshot, and cloud-based infrastructures for backup, recovery, and management. This scenario will push SMBs to virtualize and use multiple hypervisors in both testing and production environments From the past couple of years, unified storage architecture has gained huge traction – there is now no division on NAS and SAN lines, however, enterprises are free to leverage either NAS or SAN storage architecture. While vendors do offer DAS, NAS, and SAN differently, storage vendors provide end-to-end storage solutions for both high-end and mid-range segments. Small and medium businesses (SMB) are opting NAS and IP-SAN. TAKEAWAYS oo The buzzwords in the storage market are software defined data centers, flash storage, deduplication at the storage source big data, and cloud oo Storage vendors are grappling with increased price competition for products; higher overhead costs; negative impact from increased financial pressures on customers, distributors, key suppliers, and resellers
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WHAT PLAYERS DID IN FY13...
EMC has been heading with a horizontal growth. It is aggressively focusing on cloud computing and big data. EMC has introduced video-surveillance-as-a-service, which was built in association with Mindtree. It is doing a few pilot projects in the Middle East and as a result, has bagged a couple of deals for this solution. The company has added a couple of government departments. It is in talks with NIC to implement eSaksham. Since 200405, EMC has been on an internal cloud journey which is in three phases namely, standardization, virtualization, and automation—it is through with the first two phases and automation phase is on going. It exited Oracle applications and is integrating SAP applications on cloud internally. The company invests over 12% on R&D and 10% on technology acquisitions. To increase market share, NetApp is focusing on diversifying multichannel distribution strategy. It is strengthening existing partnerships and investing in new partnerships with system integrators and cloud service providers. NetApp has strengthened its association with SAP and it is offering integrated solutions and A CyberMedia Publication
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INDUSTRY | STORAGE supporting SAP HANA platform and the company’s services business also SAP NetWeaver. remained strong. In the fourth quarter, Dell’s Enterprise Solutions Group, it saw an increase in transformation which comprises of end-to-end and migration projects, as well as ( in `crore) solutions, clocked a consolidated Revenue (FY 2012-13) large-size deals. HDS revenue in revenue of $3.1 bn, a 10% increase the modular space remained strong, -0.8% 1,645 year-on year. This division represents boosted by the strong demand for 1,632 30% of Dell’s overall revenue. But the Hitachi Unified Storage VM (HUS company’s storage revenue declined VM), the unified storage product that 10 %. In the CIO Choice awards 2013, provides enterprise-class virtualization Dell was awarded for its solutions in for all data types (block, file and object), the storage space amongst others. including heterogeneous storage. To strengthen storage portfolio, Dell acquired EqualLogic, Exanet, Ocarina VENDORS’ WOES Networks, and App Assure. It has Storage vendors are grappling with added Dell EqualLogic Storage blade increased price competition for arrays to its storage products portfolio. products; higher overhead costs; Despite a challenging Q4 FY12, negative impact from increased from a macroeconomic standpoint, financial pressures on customers, 2012-13 2011-12 Hitachi Data Systems’ focus on helping distributors, key suppliers and V&D Estimates customers maximized its IT investments resellers; at times discontinuance and increases efficiency within the data center which of product lines and asset impairments; and risk of enabled them to record growth in FY2012-13. HDS India excess and obsolete inventories. At times, vendors have had high double-digital growth and the company has issues in effectively integrating acquired products and seen significant traction in its business in India. Growth in technologies.
Market Size
XL-500
XL-500
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INDUSTRY | SEMICONDUCTOR
Shrikanth G shrikanthg@cybermedia.co.in
Bullish Optimism Despite global recessionary trends, the Indian ESDM and semiconductor space is showing resilience and growth
F
Y13 was the year of identifying new opportunities for the design captives in India. While slowdown is now an accepted fact but since semiconductors are a part and parcel of electronics industry, it will always be on a growth trajectory—at least for coming few years. But companies in the fray need to indulge in range of innovations as market saturation happens and hence they need to foray into new verticals that secures them a good growth. As a matter of fact, the economic slowdown over the few years acted as catalyst for the companies to set up more design captives wherein they can source high quality work to offshore locations like India. And high-end work shifted from the developed economies to emerging markets like India. However, companies in the fray over the years have become leaner in an effort to save costs; they focused on their core strengths, consolidating and realigning resources to complement the existing product lines. Time-to-market pressures and design complexities are critical challenges that design teams face even today. MARKET DYNAMICS
The India Electronics and Semiconductor Association (IESA), the premier trade body representing the Indian Electronic System Design and Manufacturing (ESDM) and Semiconductors, released the 6th ISA-F&S Report on the India ESDM Market (2011-2015) earlier this year. The report indicates that the Indian ESDM industry is on a growth trajectory of 9.9% CAGR—from $64.6 bn in 2011 to a forecasted $94.2 bn in 2015. This clearly drives home the current opportunities and gives a sense of bullishness of the market. Growth rate of 9.9% for the Indian ESDM industry is fantastic considering a tough global economic environment. With a growing market demand, worldclass talent and favorable government policies, it is the time for India to seize the opportunity of $94.2 bn market through innovative domestic product development and value 108
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INDUSTRY | SEMICONDUCTOR
SEMICONDUCTOR DESIGN HAS AN EARLY MOVER ADVANTAGE SINCE OVER THE YEARS INDIA HAS PROVED ITS CAPABILITIES IN THIS AREA
added manufacturing—rather than relying on imports and low value add screw driver assembly. Information available from IESA suggests that the ESDM ecosystem would also bring to the fore the talent and know-how of small and medium enterprises in India, who could play a crucial supporting role to global companies, Indian PSUs, and Indian multinationals engaged in the design and manufacture of electronics. Bodies like IESA are also working actively to encourage entrepreneurship and innovation in the ESDM sector in India and believes that these will be crucial to achieve the vision of building the $400 bn ESDM industry in India. Quips PVG Menon, President, IESA, “The next few years will be crucial for the growth and development of the Indian ESDM industry. The ESDM industry must now focus on the number of areas where India can increase self-reliance and both create and leverage intellectual property assets and the high-design capability found in India to develop unique global products for and from India. Examples are areas like computing devices and smart electronics, aerospace and defence, and medical electronics.” If one looks at the taxonomy of the EDSM market, as per IESA, the market in India is composed of: Electronic Products Electronic Components Semiconductor Design Services Electronics Manufacturing Services (EMS) Let’s look at each of these sections individually. The electronics products have both domestic and exports and IESA says this market was estimated at $52.4 bn in 2011 and is expected to reach about $74.6 bn in 2015. The domestic demand is said to be driven by growing affordability that will power up domestic consumption. Meanwhile the electronic components industry has two constituents—semiconductors and passive components. Industry sources say that most of the |
A CyberMedia Publication
TAKEAWAYS oo semiconductor design has traditionally been the strength for Indian ESDM industry generating revenues of $8.8 bn in 2011 oo If we look at the EMS industry services contribution as per IESA, it is expected to grow at a CAGR of 27.8% from $0.4 bn to $1 bn in 2015
electronic products are enabled by semiconductor components, so it is important to analyze the overall consumption of semiconductors which is expected to grow from $6.1 bn in 2011 to $9.66 bn in 2015. Local demand and sourcing of semiconductors is limited ($2.94 bn in 2011 and increasing to $3.69 bn in 2015) due to import of electronic products and low domestic manufacturing. Since currently there is no semiconductor manufacturing in country (might change soon with approval of fabs), the entire consumption is met through imports. Let’s look at semiconductor design, which is one of the important areas for India given its skills in this area. Here IESA report says that semiconductor design has traditionally been the strength for Indian ESDM industry generating revenues of $8.8 bn in 2011. There are more than 120 companies in India focused on semiconductor design for global products. This industry has witnessed a robust growth of 17.3% since 2009 and today boasts of a 5.1% share of the global pie. Compared to other areas of EDSM, semiconductor design has an early mover advantage since over the years, India has proved its capabilities in this area. IESA says that over the years, Indian semiconductor design industry has developed significant capabilities and currently is working on state-of-art products. Growing technical competence combined with stringent IP protection environment and www.dqindia.com
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INDUSTRY | SEMICONDUCTOR
GROWTH RATE OF 9.9% FOR THE INDIAN ESDM INDUSTRY IS FANTASTIC CONSIDERING A TOUGH GLOBAL ECONOMIC ENVIRONMENT
The Indian Semiconductor Market Dynamics Rapidly growing domestic ESDM industry CAGR of 9.9% industry will grow from $64.6 bn in 2011 to an estimated $94.2 bn in 2015. Reliance on imports continues to be high, with 65% of the demand for electronics products being met by imports. In the absence of policy interventions, imports are likely to grow from $28 bn in 2011 to $42 bn in 2015. High value added manufacturing to decline to 6.7% in 2015 resulting in a cumulative opportunity loss of $200 bn during 2011-2015. Total semiconductor market expected to clock in about to $9.7 bn by 2015. Local demand and sourcing will touch $3.6 bn by 2015, due to heavy reliance on imported electronic products. Achieving 50% total domestic manufacturing by 2015 will create additional direct employment of 2 lakh.
a trend towards localization of contents will help this segment continue to grow. If we look at the EMS industry services contribution as per IESA, it is expected to grow at a CAGR of 27.8% from $0.4 bn to $1 bn in 2015. Both the conventional and emerging industry segments are anticipated to maximize the benefits from this industry. OUTLOOK
With a bullish growth potential, it is clear that India will emerge both as a consumer of semiconductors and a design captive. As a big fillip, recently the government has approved the setting up of two semiconductor fabs in the country some months ago. It may be recalled that the government has shortlisted two consortium to set up chip fabrication units in the country. The first consortium is led by the Jaypee Group that has drafted IBM as its technology partner, while the other is led by 110
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chip-maker Hindustan Semiconductor Manufacturing (HSMC) which has partnered with Geneva-based STMicroelectronics NV. The government had received close to 13 proposals, out of which only two have qualified. It was well received by the industry as well. IESA said that the fab will be a highly strategic game changer for India, welcoming the fructification of the proposal. Some of the world’s leading economies including the USA, France, Germany, Ireland, Japan, Singapore, Taiwan, and China besides a number of developing economies like Malaysia and Israel have their own fabs. These fabs continue to contribute significantly to the growth and development of the economy of their respective countries and we hope that this would be the case in India as well. Clearly, India is making all the right moves and the companies in the fray are also leveraging the ecosystem well and contributing to the growth. A CyberMedia Publication
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INDUSTRY | UPS
Jalaja R Jalajar@cybermedia.co.in
Powering Up There are areas where continuous, efficient, and clean power is crucial, and as long as India faces a power deficit, the UPS market will continue to grow
W
hen life gives you lemons, you make lemonade. And when India gets an inconsistent power supply, the power backup industry grows. Demand for power backup devices in India will continue to increase as long as there’s a power deficit in the energy sector. India has grappled with a power deficit situation for decades now. The country faced peak power deficit of 12,000 MW in 2012-13 according to a report by the Central Electricity Authority (CEA). However, less than 20% of this market has been addressed by uninterrupted power supply (UPS). To run smooth operations in services |
A CyberMedia Publication
sectors such as banking, healthcare, IT and hospitality, the demand for UPS systems in India has increased. The UPS market segment in India has grown by about 14% this year, and the Indian UPS market size has touched about `4,200 crore. Single phase UPS (20KVA and under) still continues to contribute a major chunk of the revenue compared to three phase (20KVA and over). Computerization of various departments of the government and penetration of the IT/ITeS sector in tier-2 and -3 cities are key drivers of the UPS segment. UPS suppliers are also moving to a more solution/service-oriented business model. www.dqindia.com
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THE UPS MARKET SEGMENT IN INDIA HAS GROWN BY ABOUT 14% THIS YEAR, AND THE INDIAN UPS MARKET SIZE HAS TOUCHED ABOUT `4,200 CRORE
The real growth comes from smaller towns and cities which are still buying desktops and investing in IT. The entry level UPS products and mid-range UPS for the SMB segment are gaining good traction from these segments. UNDER 20KVA—A GREEN THEME
A large part of the Indian population is still connected to PCs. The market, though shrinking Y-o-Y has seen a minimal growth that contributes to single phase UPS sales. It is being used in home environments that use PCs and audio visual equipments, SOHO, and SMEs. The adoption of single phase UPS for the purpose of efficiency has gone up considerably. Cleaner, efficient, green trends are catching up. There are efficiency standards that organizations have to meet, and with the increasing cost of power, energy savings is among every organization’s top priorities. The IT penetration in the country has improved and the adoption of computerization has increased, leading to a growth in single phase UPS. Besides, the government has taken initiatives that will increase computerization in different areas. This is expected to impact UPS growth in the country. This, backed with the announcement about launching over one lakh ATMs in tier-2 and -3 cities will further increase the demand for it. UPS is also increasingly being controlled by software, especially for across location connectivity. It observes and analyzes the overall health of the UPS across locations.
TAKEAWAYS oo The biggest challenge faced by the UPS market in India is cheap imports from China and Taiwan oo Computerization of various departments of the government and penetration of the IT/ITeS sector in tier-2 and -3 cities are key drivers of the UPS segment
Cloud is more than just a buzz word in India, “The cloud adoption here is comparatively fast. There is more off-site equipment and less on-premise,” commented Jayabalan Velayudhan, Director, Strategy & Business Development, Schneider Electric. “Data centers comprise small server rooms and are connected to a cloud provider. The use of cloud is also changing the way UPS is used in a business environment,” he adds. STUNTED GROWTH
Though India has been ahead of the US and Europe in the UPS segment, we have seen a much lower growth in the year 2012-13. When the Indian UPS market grew by 10% in 2010-2011, and 12% 2011-12, it prompted analysts to predict a healthy mark of `5,000 crore by 2013, but the industry has failed to live up to analysts expectations. However, the industry growth was dampened by various factors.
India UPS Market
OVER 20KVA
The need for efficiency is a key driver for the growth in the three phase UPS offering the five nines reliability. Modularity is a trait that customers today look for in a three phase UPS. Customers prefer to invest in scalability. The UPS architecture has a structure that is capable of supporting future growth, and customers invest in modules according to current requirements. For instance, a UPS can be scaled from a 250 kva used today to 1 MW. 112
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2012-13
4,200
2011-12
3,671
Source: DQ Estimates
14%
(Revenue in `crore) A CyberMedia Publication
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INDUSTRY | UPS
THE UPS MARKET WAS LARGELY DRIVEN BY THE DESKTOP MARKET. THE ATTACH RATE OF A UPS IN THE DESKTOP MARKET IS CLOSE TO 70%
UPS Market Composition Single phase Three phase 55%
45%
Where is single phase going? 30% à Home environment 20% à Small Server Room/Computer room environment/SME 40% à SME data center (single rack to 3 rack) 10% à Non-IT environment (Commercial establishment)
The Three-phase Customers 65% à Non-IT applications (Commercial establishments like telecom, healthcare, BFSI, manufacturing, transportation, etc) 35% à SME data center 15% à Large data center 10% à Non-IT environment (Commercial establishment) Source: DQ Estimates The average selling price of UPS in India has dropped with aggressive prices from all vendors. This is because of innovations in creating the bill of materials that can be used to create cheaper entry-level UPS products. It is predicted that the prices are bound to go up with the recent softening of the rupee against the dollar. Many raw materials components used in a UPS are imported. This increased the overall cost of manufacturing a UPS. The economic slowdown, on the other hand has made customer decision-making a longer process. The Indian IT spending has also dipped by over 10% during the corresponding period. The UPS market was largely driven by the desktop market. The attach rate of a UPS in the desktop market is close to 70%. Laptops have been the norm for a few years, |
A CyberMedia Publication
and this year has seen a huge adoption of smartphones and tablets in India. The downfall of the PC market has directly affected UPS sales in the single phase segment. The biggest challenge faced by the UPS market in India is cheap imports from China and Taiwan. However, some players in the industry argue that products to suit the Indian market can be made only in India, after studying the market needs specific to the country—like harsh environment conditions and higher mortality of batteries. OUTLOOK: A POWER-FULL FUTURE
Global regulations and standards are being adopted by most organizations that adhere to international standards. Many are getting tier-3 and -4 certifications for data centers. This is creating a better demand for power backup. Solar-based UPS is also finding its way into the India market. “There are some regions that face power outages up to 16 hours a day. Charging the battery for UPS in ATMs installations is a challenge, and Indians are gradually warming up to the idea of solar power in such scenarios. Product customization will be a key competition strategy. End-users of UPS have specific applications and they expect product customization to suit their requirements. It is important for suppliers to offer customized solutions to users to survive in this fiercely competitive market. The Indian government has also been pressing for changes in infrastructure with the introduction of about 40 metros. This provides a huge opportunity for the UPS segment and many more industries in India. Ironically, one area that players in the market are apprehensive about next financial year is the government. “The government is our biggest vendor, but we don’t know what to expect with the elections next year. The landscape keeps changing,” Velayudhan reveals. However, slow growth may be in the coming years, backup power is indispensable in India, given the importance of up time and shortage of power. www.dqindia.com
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PEOPLE | LEGAL PAD
Bindu Sharma maildqindia@cybermedia.co.in
Execution of Non-disclosure
Agreement or Data Confidentiality Execution of NDA is the most common practice in businesses to ensure confidentiality of the information shared with vendors
Q. Is execution of non-disclosure agreement with vendors or employees enough to ensure confidentiality of data we are sharing with them or do we need to have further measures?
A
Non-disclosure Agreement (NDA), also known as a Confidentiality Agreement (CA), is a legal contract between at least two parties (discloser, who discloses and recipient, who receives the confidential information), primarily executed to safeguard confidential material, knowledge, or information that the parties wish to share with one another for certain purposes. An NDA is a contract and creates a confidential relationship between the parties to protect any type of confidential and proprietary information or trade secrets. A very critical part of NDA is the definition of confidential information. A NDA contains the purpose for which the NDA was entered into and the reasons behind such disclosure of information as these will ensure better protection of the confidential agreement and better enforcement of the NDA. NDA may be for a specific period or forever (ie, as long as such confidential information does not enter the public 114
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domain). The validity period of a NDA is decided by the parties to the NDA and is mentioned in the NDA. A well drafted NDA contains the clauses covering the eventualities if any of the parties breach the terms of the NDA, thereby ensuring that the party breaching the NDA will face the consequences of such act. Execution of NDA is the most common practice in businesses to ensure confidentiality of the information shared with vendors or the employees and hence it is important to ensure that NDA so executed is legally enforceable and has all essential clauses of a valid contract. With employees, execution of NDA is important because during the course of employment, they get access to critical trade-secrets and confidential information that the employer would not like to be shared by any third party. Mere signing NDA is of no use till NDA is drafted well and is capable of being enforced in a court of law. In order to enforce the contract, it will need to be presented in court to prove the fact that you had entered into it legally, and to prove the validity of the terms of the contract. Some of the important considerations to have a legally enforceable agreement are as below: According to Indian Contract Act, 1872, for an agreement to be legally enforceable, it shall be executed by parties who have reached the age of majority and have sound mind, there has to be lawful object, consideration, free consent, intention to create a legal relationship, etc. In case any one or both parties are companies, registration of such company (ies) is important. Stamping of the agreement for `20-200 is important for an agreement to be accepted in Court. Further, a NDA may be registered as per the Registration Act, 1908 as Registration helps a long way in proving the accuracy of the contents of a particular document. The author is patent attorney and CEO, Origiin IP Solutions LLP, Bengaluru A CyberMedia Publication
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PEOPLE | HR QUOTIENT
Koustuv Mitra maildqindia@cybermedia.co.in
Importance of the ‘New Hire’ On-boarding Process Organizations do have processes where new hires get supported through a process of buddy or peer assist programs, yet there is a similar despair or a sense of getting lost in the maze of the new organization
This, coupled with an expectation of high performance in immediacy, can become detrimental. The way this process is planned could ensure that the new employee is aware, knowledgeable, and ready and feels that he is welcome to the new team. THE THREE PHASES
Q. How important is the ‘New Hire’ onboarding process. Does it make a difference to productivity and employee moral?
L
et me share with you an experience that I had recently while visiting a client, waiting in the reception lobby. There three young men who seemed to have just joined the organization were having a discussion around the problem being faced by one of them. This colleague was seemingly not offered what he was promised. To add to the situation, he was not aware of a ‘go to person’ to resolve his issue. Interestingly, many organizations do have processes where new hires get supported through a process of buddy or peer assist programs, etc, yet there is a similar despair or a sense of getting lost in the maze of the new organization. A new organization is not just another organization, it is also about new culture, people, work ways, work ethics, etc. All the steps in the first 90 days can definitely redirect a high performer of an organization to become an average performer in another organization. |
A CyberMedia Publication
On-boarding On-joining Connect Post-joining Acclimatization The process of on-boarding is about early engagement. This starts from the moment the ‘offer for employment’ is shared and is accepted by the employee. This way the organization can make the process of joining more predictable. I have seen 100% turnout of new joinees once you put a structured keep-warm and on-boarding process in place. So starting early is essential in the journey of an employee’s on-boarding .The early stages are about ensuring that the new employee gains appreciation about the new organization and the role that he is getting into. The early stage or pre-joining stage is about getting the employee to understand the joining formalities and completing it. The desirable aspect at this stage is to share the cultural nuances and the folklore of the company so that the person starts taking pride in being a member of the team. This is the stage when the link between the HR department and the employee has to be very strong. This is also the stage when the employee starts knowing his supervisor as a person. This would ensure that the person understands the relevance of his role vis-à-vis the larger scheme of things . The next phase would start with the person reporting on the day of his joining, it is important that the new employee understands the organization terrain, the critical people and their importance, the strategic objectives of the company and a clear understanding of the definition of success. This is a critical point as the definition of success varies from organization to organization. It is imporwww.dqindia.com
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tant over here to show direction to the employee to get some early wins. This process would only reinforce his new learnings and create a greater urge to learn more. Taking feedback at every stage is very important, this would ensure that the path to success is assured. THE PATH TO SUCCESS
Preparation Connect with new joinee with information to plan their on-boarding Orientation Introduce through a new hire orientation for addressing their needs Co-ordination & integration Welcome new hire Ensure closure on all actions Manage day one with delight Engagement as per plan Establish personalized connect with all employees joining, with personal guidance and assistance in terms of introduction to the office colleagues Follow up intermittently 116
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TAKEAWAYS oo It is important that the new employee under-
stands the organization terrain, the critical people and their importance, the strategic objectives of the company and a clear understanding of the definition of success oo Employee engagement is one of the most critical factors in workplace productivity and the best way to successfully engage new employees is through a meaningful on-boarding process Manage interaction with the new hire that does not end but continues in the form of employee acclimatization We all know that employee engagement is one of the most critical factors in workplace productivity and the best way to successfully engage new employees is through a meaningful on-boarding process. On-boarding ensures that new employees feel welcome, informed, prepared, and supported as he is aware, knowledgeable, and ready. The author is managing director, XecuteHR Solutions A CyberMedia Publication
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INDUSTRY | NEWS ANALYSIS
Sriranjani Datta sriranjanid@cybermedia.co.in
NaMo Goes Viral with New Game Run Modi
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ot long after Narendra Modi smartphone called Smart Namo created a buzz among buyers and fans, Modi has hit the spotlight again—this time not on the political turf—but on Google app store, Google Play. The game, called Run Modi, features Narendra Modi, running through all the states, gathering votes and reaching the ballot box and eventually winning the election. The game is created by Dexati, and was released on the Google Play-its app store. In this game, Modi runs through Gujrat, Maharashtra, Uttarakhand, Karnataka, Kerala among few others. The game is more like a Super Mario than Temple Run, though the name suggests otherwise. In this game, Modi is seen jumping, running, and trying to reach the ballot box, with the Arabian Sea in the back ground for Maharashtra. The players have to help Modi win the election by crossing all the 12 levels. Each level is one state and the background changes to different historical monuments to represent the state. And all the while, Modi collects votes in the form of diamonds. However, the makers of the game declared clearly, “This |
A CyberMedia Publication
game is not endorsed by Modi or BJP. This game is purely for entertainment, made as a parody of the Indian Election System.” The game went viral with many tweets about the same. Some tweets are mentioned here: @tarungandhi: The Modi run game is a little amateur compared to the other games that are there on play store. But I’m sure Modi fans will download the game and love it. @sheetal_pande: There’s nothing out of the world about the game. Gamers will not like it, but Modi lovers will have fun as they will feel they are helping the Gujarat CM win the game and the Lok Sabha polls ending up as PM in 2014. As a concept it’s a great idea by the makers—Dexati. @rahul_ironman: It’s fun watching Modi, the big man jumping in his dhoti and at times slipping and falling off. @priyankabajaj: No doubt this game is fun, but it can be seen a bordering on offensive. Modi is a great man, not just some video game fellow after all. It doesn’t matter if you’re pro or anti-Modi. You can either help Modi win the virtual election, or enjoy watching him slip on wet rocks and drown in the sea. www.dqindia.com
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Shrikanth G shrikanthg@cybermedia.co.in
BlackBerry—Sold Fairfax! BlackBerry—Sold totoFairfax!
B
eleaguered Canadian smartphone maker BlackBerry is going private in a $4.7 bn deal. A group led by Prem Watsa, Chairman and CEO of Fairfax Financial Holdings and BlackBerry’s biggest shareholder (holds 10% share) has agreed to buy the company. According to a statement by the company, “We have signed a letter of intent agreement (LOI) under which a consortium to be led by Fairfax Financial Holdings has offered to acquire the company subject to due diligence.” The letter of intent contemplates a transaction in which BlackBerry shareholders would receive $9 in cash for each share of BlackBerry share they hold, in a transaction valued at approximately $4.7 bn. The consortium would acquire for cash all of the outstanding shares of BlackBerry not held by Fairfax. Fairfax, which owns approximately 10% of BlackBerry’s common shares, intends to contribute the shares of BlackBerry it currently holds into the transaction. It may be recalled that last month the company’s board of directors has formed a ‘special committee’ to explore strategic alternatives to enhance value and increase scale in order to accelerate BlackBerry 10 deployment. These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the company. With that announcement, Prem Watsa, Chairman and CEO of Fairfax Financial left BB due to potential 118
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conflicts that may arise during the process. During that time Watsa said, “I continue to be a strong supporter of the company, the board, and the management as they move forward during this process, and Fairfax Financial has no current intention of selling its shares.” But though it was speculated that Fairfax might bid, but analysts were skeptical whether Watsa can pool in other investors. But Watsa, hailed as Canadian Warren Buffett has somehow pulled this coup of sorts. Coming to the deal, the diligence is expected to be completed by November 4, 2013. The parties’ intention is to negotiate and execute a definitive transaction agreement by such date. During such period, BlackBerry is permitted to actively solicit, receive, evaluate, and potentially enter into negotiations with parties that offer alternative proposals as part of the deal’s go shop’ period. FINALLY IT’S DONE...
It’s been a traumatic Q3 for the ailing BB that has gone into intense public scrutiny and trail by media—as one after the other the company’s strategies failed. Last week the company shed 40% of its workforce and also launched a bigger smartphone—z30. But BB10 is yet to see any major success against Apple or Google OS devices. Now what will the consortium do—can Prem Watsa undo the company’s challenging outlook? That’s the big question. Analyst Brian Colello at Morningstar, told BBC that BlackBerry going private would allow the company to reorganize without being under the glare of Wall Street investors. Based on the company’s disastrous earnings warning, I think a deal had to happen and the sooner the better. This is probably the only out for investors and the most likely outcome.” BlackBerry-formerly called RIM—Research in Motion— saw its fortunes going south since 2010 as Android and iOS bipolarity threatened others like Nokia, Microsoft, and BB. The last one year has been so rough for BlackBerry, and with this deal the company gets a lifeline. A CyberMedia Publication
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INDUSTRY | NEWS ANALYSIS
Sriranjani Datta sriranjanid@cybermedia.co.in
Anand Mahindra Makes to the Global CEOs Social Media List
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any Fortune 500 companies’ CEOs have lately become very active on social media. Some have joined LinkedIn while others prefer being active on Twitter. LinkedIn recently published a report on the top 60 CEOs on social media based on the www.worldofceo. com’s rankings. For creating this list, www.worldofceo.com has monitored Twitter and LinkedIn activities of all CEOs from the Fortune 500 global, FTSE100 to Silicon Valley. We give you the top 10 CEOs who are the most active and may be worth following. Richard Branson: This 63-year-old business magnate and investor, is best known as the founder of Virgin Group. He started his venture at an early age of 16 with a magazine called Student. Then he went on to set up a mailorder record business, which later came to be known as the Virgin Megastores. He is also the fourth richest citizen of United Kingdom, according to Forbes 2012 list of billionairs. He has got 3,503,966 twitter followers, 4,070 tweets, and 2,546,712 LinkedIn followers. Twitter id: @ RichardBranson Jeff Weiner: This young man started the business related social networking website—LinkedIn in 2008 as an interim president. His hard work and the use of American |
A CyberMedia Publication
Business skills helped the website to reach sky heights. He soon became the CEO of the company. He has got 57,899 twitter followers, 1,501 tweets, and 812,886 LinkedIn followers. Twitterid: @JeffWeiner Marissa Mayer: This 38 year old young lady was the key spokesperson for Google. She became the CEO and President of Yahoo! in july 2012. She was ranked #14 on the list of most powerfull business women of 2012 by Fortune Magazine, and the #32 most powerfull women of 2013 in Forbes Magazine. She has got 415,748 twitter followers, 907 tweets, and she prefers staying out of LinkedIn. Twitter: @MarissaMayer Arianna Huffington: This Greek Americanauthour is best known for her news website, The Huffington post. In 2009, she was teh 12th in Forbes First List of Most Influential Women in Media. Even after Huffington Post was acquired by AOL, she continued to remain the President and the Editor in Chief of the Huffington Post Media group.She has got, 1373300 Twitter followers, 15504 tweets and 839095 LinkedIn followers. Twitter: @AriannaHuff www.dqindia.com
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ANAND MAHINDRA HAS BEEN RANKED #58 IN INDIA’S RICH LIST OF 2011 IN FORBES AND HAS GOT 837,336 TWITTER FOLLOWERS AND 542 TWEETS
Elon Musk: The 42 year old graduate from Queens School Of Business, founded Space X, Tesla Motors and also cofounded Pay Pal. He is a self taught computer programmer and sold the computer code for a video game at the age of 12. He has got, 383791 Tweeter Followers and 762 tweets. He prefers to stay out of LinkedIn. His Twitter Username is: @ElonMusk Anand Mahindra: This 58 year old graduate from Harvard College is presently the chairman and the managing director of Mahindra & Mahindra. He ranked 68 in India’s Rich List of 2011 in Forbes. He has got 837,336 twitter followers and 542 tweets. He is also not on LinkedIn. Twitter id: @AnandMAhindra Kaifu Lee: This 51 year chairman and CEO of Innovative Works is a Chinese IT venture capitalist, executive, writer, and micro-blogger. He became the focus of the legal dispute between Google and Microsoft. He 120
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has got 1,061,348 twitter followers, 1,177 tweets, and 167,898 LinkedIn followers. Twitter id: @Kaifulee Jeffrey R Immelt: This American business executive is currently the chairman of the board and executive officer of the US based conglomerate, General Electric. He has got 12,905 twitter followers, 90 tweets, and 70,483 LinkedIn followers. Twitter id: @JeffImmelt Jack Welch: The founder of Welch Management Institute is an American business executive, authour, and chemical engineer. He was earlier the CEO of GE between 1981 and 2001. He has got 1,411,453 twitter followers, 2,269 tweets, and 1,116,132 LinkedIn followers. Twitter id: @Jack_Welch Angela Ahrendts: The 53 year old CEO of Burberry Groups is a graduate from Ball State University. Before Burberry, she was the executive vice president at Liz Caliborne. She has got 22,359 twitter followers, 136 tweets, and 139,286 LinkedIn followers. Twitter id: @AngelaAnhrendts A CyberMedia Publication
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LEADER? PRINT | ONLINE | EVENTS | CUSTOM | DIGITAL | SOCIAL | RESEARCH | WEBINARS For ways to engage contact Arvind Razdan@ +91 997 178 2277 or arvindr@cybermedia.co.in
INDUSTRY | SHORT TAKES
Sriranjani Datta sriranjanid@cybermedia.co.in
SAP to Host Second Edition of SAP Techniversity
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AP will host the second edition of its youth focused event—SAP Techniversity at KTPO in Whitefield, Bengaluru on September 28, 2013. The day-long event will see 5,624 students from 348 colleges across India and learn about the latest trends in technology and unwind though a variety of cultural performances. The technology focused sessions will cover a broad range of topics such as ‘The power of SAP HANA’; ‘Massive Online Open Courses (MOOCs) and their impact on higher education’; ‘Megatrends shaping the world’; and ‘The future of mobility and cloud computing’. “It is important for organizations today to play an active role in developing more readily employable talent. Through the engagements that SAP undertakes, students from across Karnataka are exposed to and educated on the latest trends and technologies that shape the IT industry in our state,” said MN Vidyashankar, Principal Secretary Commerce and Industries Department, Government of Karnataka.
Bitten by the Google Bug?
IRCTC Goes Tech Savvy
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I
t can be very embarassing to type on the wrong window while using gtalk, especially with your colleagues. This time, if your messages get delivered to your co-workers, you can say it’s not your fault. Many Google accounts have been affected by a bug. No one has figured out the pattern in the message and it seems like gtalk selects random people and sends your messages to them. According to the update on Google app board, Google is looking into this glitch. The update read, “The problem with Gmail should be resolved. We apologise for the inconvenience and thank you for your patience and support.” Earlier, there was a problem with email delivery. They were apparently triggered by a dual network failure. Google said its a rare event and should not be blown out of proportions. 122
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he railway ministry had announced earlier this year that they would undergo a massive overhaul. They would bring in three times more booking per minute and also six times more number of simultaneous users. There were also proposals of free WiFi on some trains and implementing systems through which passengers can give instant feedback to railway authourities about cleanliness and hygiene. However, this haven’t been implemented yet. But there is something interesting launched by the IRCTC. They had launched a next-gen e-ticketing journey planner. Now what is that? That is nothing grand but just a new look sported by the IRCTC. This is not a complete overhaul, but would definitely make booking tickets faster and more user friendly.
A CyberMedia Publication
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INDUSTRY | SHORT TAKES
Industries in Gujarat to Go Online
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ecently, Google had launched a campaign called ‘India get your business online’. Google India, through this campaign, plans to get 50,000 small and medium industries in Gujarat, to go online. Google would be providing them with free websites and hosting services for SME’s. The main agenda for this campaign is to bring down the barriers that stop the SMEs from getting on to the internet. Besides, Google along
with HostGator targeted traditional markets in Ahmedabad, Surat, Vadodara, and Rajkot and built websites for around 5,000 SMEs helping them get access to the world through the internet. Along with providing companies with websites, Google has also created Google maps and Google Plus Business pages, for these businesses. They will also have 24x7 customer support for free advertising. Research has shown that SMEs who use internet had a 51% growth and saw 49% increase in their profits. Gujarat, which already represents 10% of internet population in India, with greater representation now with this campaign can expand their business footprints. Google India has also chalked out plans to hold several workshops along with its 200 partners for better hand holding with the SME’s. As part of this initiative, Google has already developed and created 250,000 websites for small and medium business in India spread across 8,200 cities and towns. It may be recalled last July Google India had launched a campaign to make it easier for the users to get instant and to the point answers to their queries. This campaign was called ‘Start Searching India Campaign’. This campaign was launched in Bhopal and was quite a success all over India.
Cyber Security:
Growing Threat
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ith cybercrime increasing every hour, cyber security has become one of the major concerns for enterprises to disrupt adversary marketplace. It is very important for them to manage risk and extend their security capabilities to protect themselves against a growing landscape. According to Ponemon Institute’s ‘Enterprise Security Benchmark Survey’, cybercrime continues to increase with 92% of Forbes Global 2000 companies reporting data breaches in the last 12 months. This growth is presumably due to the adversaries forming a more sophisticated and collaborative marketplace through which they share information and advanced data theft tools. Additionally, with the advent of BYOD, IT no longer controls the endpoint, offering the adversary many more control points to attack. |
A CyberMedia Publication
Big Data Balloon can Lack Air
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ig data investments in 2013 continue to rise, with 64% of organizations investing or planning to invest in big data technology compared with 58% in 2012, according to a survey by Gartner, Inc. However, less than 8% of survey respondents have actually deployed. “The hype around big data continues to drive increased investment and attention, but there is real substance behind the hype,” said Lisa Kart, Research Director at Gartner. “Our survey underlines the fact that organizations across industries and geographies see ‘opportunity’ and real business value rather than the ‘smoke and mirrors’ with which hypes usually come.” www.dqindia.com
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LAST MATTER
Ed Nair ednair@cybermedia.co.in
A Leap Ahead
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eptember 2013 holds special significance for India’s technology industry. It was the month the momentous decision that India would set up semiconductor manufacturing facilities moved into the phase of concrete action. It denotes the dawn of an era of high value domestic manufacturing in India. The move would set in motion the creation of the ecosystem required to support the electronic systems design and manufacturing (ESDM) sector. The two facilities announced are: the first one, Jaiprakash Associates along with IBM (USA) and Tower Jazz (Israel) will set up the fab at an outlay of about `26,300 crore at Greater Noida; and the second one, Hindustan Semiconductor Manufacturing Corporation (HSMC) along with ST Microelectronics (France/ltaly) and Silterra (Malaysia) will set up the fab at an outlay of about `25,250 crore at Prantij, near Gandhinagar, Gujarat. According to government sources, the first facility will have a capacity of 40,000 wafer starts per month of 300 mm size, using advanced CMOS technology. Technology nodes proposed are 90, 65, and 45 nm nodes in Phase I, 28 nm node in Phase 11 with the option of establishing a 22 nm node in Phase Ill. For the second facility, the capacity is of 40,000 wafer starts per month of 300 mm size, using advanced CMOS technology. Technology nodes proposed are 90, 65, and 45 nm nodes in Phase I and 45, 28, and 22 nm nodes in Phase II. The two facilities would enjoy a package of incentives laid out by the government that includes incentives already available under the Modified Special Incentive Package Scheme (M-SIPS), tax deduction available for expenditure on R&D under the Income Tax Act, and also investment linked deduction under Section 35AD of the Income Tax Act. The government will provide Viability Gap Funding (VGF) in the form of an interest free loan for a period of 10 years. Why are fabs important and strategic for India? The wafer fabs lay the foundation for ESDM in the country which in turn holds great economic benefits beyond the value chain of the electronics industry. According to IESA, India today consumes close to $7 bn of semiconductor products every year. By 2020, when the total ESDM market is expected to reach $400 bn, this consumption is expected to rise to touch $55 bn. With the location of a fab in India, the country could achieve a degree of self-sufficiency in electronics, and partially reduce the very high supply chain risks that India is exposed to, without an alternate source for procurement. The government hopes that it will stimulate the flow of capital and technology, create employment opportunities, help higher value addition in the electronic products manufactured in the country, reduce dependence on imports and lead to innovation. The proposed fabs will create direct employment of about 22,000 and indirect employment of about one lakh, government reports say.
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