Connections Unlimited by Bhupinder Sharma

March 2010

Vol 2 issue 08 | A 9.9 Media Publication

Connections Unlimited Social networks like Facebook, Orkut and LinkedIn are increasingly being used by channel partners for personal as well as professional benefits

Budget 2010-11

Key execs in the Information and Communication Technology industry share their perspectives on the Union Budget

Vendor Speak

Yathindra Nath of Lenovo India reveals the companyâ&#x20AC;&#x2122;s channel development plans

Game for Growth

A shift towards visual computing means the discrete graphics card market is set to enter a high growth orbit

editorial

Networking is Social L sanjay.gupta@9dot9.in

Social sites are being used by millions of workers and businesspersons as a newfound way to keep in touch

et’s Face(book) it: This social networking site is the fastest-growing ‘medium’ in human history to cross the 400-million-user mark. It is significant to note that barely one year back, Facebook members hovered around half that number. And if founder Zuckerberg and his poke-marked gang keep on building the steam they have gathered since 2004, it might soon touch half a billion. Facebook is, of course, not alone in the current phenomenon of social networking sites vying with each other for an increasingly expressive cyber crowd. With all the chirp-chirp going on at Twitter, another website that’s more aptly described as a micro-blogging platform, it is being seen as the world’s first giant ‘mirror’ that instantly reflects what people everywhere do, feel and believe – about things as trivial as their nail paint to as critical as an earthquake. Then there are many sites with a business or professional approach (LinkedIn and Hi5 are just two examples). They are being used by millions of workers and businesspersons as a newfound way to keep in touch, reach out to prospective buyers/suppliers and, as a Naukri.com ad depicts, just look for ways to make your boss the ex-boss. “All hot air!” claim some detractors of social networking. “Passing fad,” pontificate many editorials. “Time wasters,” moan the office puritans. Really? With hundreds of millions all across the world posting messages, chatting, viewing videos, looking at online resumes, playing games and doing

sundry other things they also do in the physical world, I don’t think so. The main reasons social networking receives much flak include employers’ fear that employees will watch YouTube when they should be doing office work; increase in bandwidth costs; and loss of privacy. These are valid objections. But don’t people ‘waste’ time in the physical world by taking a stroll or a break? Don’t they spend money on phone calls? Isn’t a lot of our personal information known through other means as well? So, why single out social networking sites? Besides, just as there are ways to make people more productive and guard our personal information in the offline world, so are mechanisms and tools available for controlling or managing them in the connected realm. If anything, social networking is a wonderful tool in the hands of cyber socialites. And armed with this tool, they are happily tweaking and twirling the nuts and bolts of how people relate with each other. What could be fundamentally wrong with that?

SANJAY GUPTA Editor Digit Channel Connect

sounding board sounding board

Write to the Editor E-mail: editor@digitchannelconnect.com Snail Mail: The Editor, Digit Channel Connect, B-118, Sector 2, Noida 201301

DIGIT CHANNEL CONNECT

March 2010

Mousumi Thakurta Nag, CEO, Aryan IT Solutions: “What most employers forget is the benefits associated with social media. Social networking can help a company market its products. And by accessing these websites, employees can also help decode what the customers need.”

Vishal Tripathi, Principal Research Analyst, Gartner: “Social networking demands a lot of time and one needs to have the inclination of using it for business purposes. If one is not careful about the way they promote their services or products it can easily be misunderstood as spam.”

Abhinav Karnal, Product Manager (Asia Pacific), Trend Micro: “It is no longer possible to ignore social networking at the workplace and one should accept it as part of the business culture...By blocking access to these websites, you might be ignoring the biggest transformation since the Internet.”

contents

Vol 02 issue 08 | March 2010

Managing Director: Dr Pramath Raj Sinha Printer & Publisher: Kanak Ghosh Editorial Editor: Sanjay Gupta Sr. Correspondents: Charu Khera (Delhi), Soma Tah (Mumbai)

Connections

Design Sr. Creative Director: Jayan K Narayanan Art Director: Binesh Sreedharan Associate Art Director: Anil VK Manager Design: Chander Shekhar Sr. Visualisers: PC Anoop, Santosh Kushwaha Sr. Designers: Prasanth TR & Anil T Photographer: Jiten Gandhi

Unlimited

Social networks like Facebook, Orkut and LinkedIn are increasingly being used by channel partners for personal as well as professional benefits

Brand Communication Product Manager: Ankur Agarwal Sales & Marketing VP Sales & Marketing: Navin Chand Singh National Manager - Events and Special Projects: Mahantesh Godi (09880436623) Business Manager (Engagement Platforms) Arvind Ambo (09819904050) National Manager - Channels: Krishnadas Kurup (09322971866) Asst. Brand Manager: Arpita Ganguli Bangalore & Chennai: Vinodh K (09740714817) Delhi: Pranav Saran (09312685289) Kolkata: Jayanta Bhattacharya (09331829284) Mumbai: Sachin Mhashilkar (09920348755) Production & Logistics Sr. GM Operations: Shivshankar M Hiremath Production Executive: Vilas Mhatre Logistics: MP Singh, Mohd. Ansari, Shashi Shekhar Singh

Best of Biz

Cover Story

Business Performance

With a growing focus on ‘green’ initiatives, it’s a good time for CFOs to expand the scope of their responsibilities

Twitter for your Business You cannot afford to take Twitter as just another passing fad in cyberspace

Channel champs Sr Co-ordinator - Events: Rakesh Sequeira Events Executives: Pramod Jadhav, Johnson Noronha Audience Dev. Executive: Aparna Bobhate, Shilpa Surve OFFICE ADDRESS

Others

Focus Budget 2010-11

Key execs in the Information and Communication Technology industry share their perspectives on the Union Budget

Vendor Speak “In 2010, our focus will be on core channel development” -Yathindra Nath, Director – SMB and Consumer Sales, Lenovo India

Editorial.......................................................... 04 TRENDS.............................................................. 08 Focus-graphics cards.................................. 14 GUEST EXPRESSION........................................... 35

advertisers index HP...............................................................................IFC EMC................................................................Back Cover Canon....................................................Inside Back Cover Rashi..............................................................................3 iBall...........................................................................5,35 IBM.............................................................................7,9 Pushpam.......................................................................11 K7 Computing...............................................................13 Epson...........................................................................15 Jupiter..........................................................................17 Intel..............................................................................19 India Antivirus...............................................................21 Supertron......................................................................23 Lenovo.....................................................................24,25 Sharp............................................................................27 SMC.............................................................................31 Abacus.........................................................................33 Quick Heal....................................................................37 Mega Network..............................................................43

Nine Dot Nine Interactive Pvt Ltd., KPT House, Plot 41/13, Sector 30, Vashi, Navi Mumbai - 400 703 Phone: 40789666 Fax: 022-40789540, 022-40789640 Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt Ltd. C/O KPT House, Plot 41/13, Sector 30, Vashi (Near Sanpada Railway Station), Navi Mumbai 400703 Editor: Anuradha Das Mathur C/O KPT House, Plot 41/13, Sector 30, Vashi (Near Sanpada Railway Station), Navi Mumbai 400703 Printed at Silverpoint Press Pvt. Ltd, TTC Ind. Area, Plot No. : A - 403, MIDC, Mahape, Navi Mumbai - 400709

cover design : prasanth t r

DIGIT CHANNEL CONNECT

March 2010

trends Worldwide PC shipments to grow 20 percent in 2010: Gartner

orldwide PC shipments are projected to total 366.1 million units in 2010, a 19.7 percent increase from 305.8 million units shipped in 2009, according to the latest preliminary forecast by Gartner, Inc. Worldwide PC spending is forecast to reach $245 billion in 2010, up 12.2 percent from 2009. This forecast is more optimistic than Gartner’s December 2009 forecast, which anticipated 13.3 percent growth in PC shipments in 2010 and 1.9 percent growth in spending. Gartner anticipates all regional markets will return to growth and exhibit more normal seasonality in 2010. The market will remain robust with unit growth continuing to increase strongly over the next few years as home PC demand accelerates and professional replacements rise in the recovery from the global recession. “The PC industry will be overwhelmingly driven by mobile PCs, thanks to strong

home growth in both emerging and mature markets,” said George Shiffler, research director at Gartner. “Mini-notebooks are again forecast to boost mobile PC growth in 2010, but their contribution is expected to decline noticeably afterward, as they face growing competition from new ultra-low-voltage (ULV)

ECS to consolidate channel sales in India

aiwan-based Elitegroup Computer System (ECS) is looking to consolidate its motherboard business in the Indian channel through Rashi Peripherals. Esther Teng, Regional Marketing Manager, Global Channel Marketing Dept., ECS, said, “India is a fast growing market, which we have identified as a unique opportunity to increase our brand presence. Globally, we are the one of the top three OEM suppliers of motherboards unit shipment wise. A considerable amount of our India shipment goes to the OEM sector, for various multinational (40 percent) and indigenous brands (20 percent), while 30 percent of the unit shipment goes to the assembled PC segment, through channel mainly. As part of our India plan, we want to make the OEM and channel business ratio 50:50 this year. We are essentially looking to reach more C and D class cities for this.” ECS India sales have been dropped 30 percent last year (from 1.2 million units in 2007-08) due to some specific supply issues coupled with global recessionary reasons. This year they would like to rebound the sales by focusing more on brand building exercise in the Indian channel along with Rashi. Taking the Indian users price sensitiveness into account, ECS has a clear mid market positioning stance, where it will compete with brands like MSI, which are in the second rung of the market. ECS is also looking for a distributor to promote its graphics cards in India, revealed Teng. n

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March 2010

ultraportables and next-generation tablets. Desk-based PC shipment growth will be minimal and limited to emerging markets.” “We expect mobile PCs to drive 90 percent of PC growth over the next three years,” said Shiffler. “In 2009, mobile PCs accounted for 55 percent of all PC shipments; by 2012, we expect mobile PCs to account for nearly 70 percent of shipments.” Apple’s announcement of its upcoming iPad has created much discussion in the marketplace regarding market opportunities for traditional tablet PCs and nextgeneration tablet devices, such as the iPad. Gartner’s initial thinking is that vendors could ship up to 10.5 million traditional tablets and next-generation tablet devices worldwide in 2010. “User requirements are clearly segmenting, and the mini-notebook proved this point,” said Ranjit Atwal, principal analyst at Gartner. n

Microsoft India unveils Azure cloud platform

icrosoft India has unveiled its end-to-end offering for customers, partners and developers in India. To mark the occasion, Microsoft India also announced commercial availability of the Windows Azure Platform, an internet-scale cloud services platform hosted in Microsoft’s data centres. The move will enable companies in India to strengthen their IT roadmap by including the cloud as a core component of their strategy to drive higher productivity and efficiencies. ‘Microsoft has always led the industry in the software space. With businesses looking to the cloud to bring higher efficiencies, it is natural for us to extend our strength and expertise of the past 15 years in the cloud space and offer the value of our experience to customers,’ said Rajan Anandan, Managing Director, Microsoft India. While with the Windows Azure Platform, Microsoft is making the Platform available as a service, over the last two years Microsoft has already launched several products and solutions in India across other layers as part of its Cloud Strategy for Enterprises. These include hosted Dynamics, Office Web Apps, Microsoft Online Services [comprising Exchange Online, SharePoint Online, Office Communications Online, and Office Live meeting], Windows Server, SystemCentre and the Dynamic Data Centre Toolkit. ‘This completes our cloud stack,’ said Anandan. ‘All of our popular products are already cloud-ready, and we have a clear future roadmap to provide anytime, anywhere access across diverse devices spanning computer, mobile and Internet. We are ready today to help customers leverage the benefits of cloud services.’ n

trends Epson awards partners in Goa

FORM IV Statement about ownership and other particulars about newspaper DIGIT CHANNEL CONNECT to be published in the first issue every year after the last day of February

pson has announced the completion of its annual nDimension Awards for Certified Channel Partners (ECC’s) in Goa. As per the company, 140 partners gathered for three days in Goa to enjoy this annual event. The full day event started with Epson’s senior management and business managers presenting their road map and plans for each of the product categories. This was followed in the afternoon session by a walk through exhibition of all the Epson products placed in the actual potential user settings. The exhibition was an eye opener for the partners about all the potential applications for the vast range of Epson products. Separate sections for home, banking, retail, hospitality, office, etc were set up with simulated environments for the same. This was followed by an interactive quiz conducted by renowned quiz master Mark Rego. Finally discussions and Q&A was held with key Epson personnel to discuss implementation and strategies to drive Epson’s share in each segment. In the evening a gala awards night and dinner was held by the beachside with great entertainment flown in from different parts of the world. At the gala awards night, the key performing partners of the previous year were presented awards. n

1 Place of Publication

Mumbai

2 Periodicity of its Publication

MONTHLY

3. Printer’s Name Nationality 1[(a) Whether a citizen of India? (b) If foreigner, the country of origin] Address

KANAK GHOSH INDIAN YES NOT APPLICABLE KPT House, 41/13, Sector 30. Vashi, Navi Mumbai 400 703

4. Publisher’s Name Nationality 1[(a) Whether a citizen of India? (b) If foreigner, the country of origin] Address

KANAK GHOSH INDIAN YES NOT APPLICABLE KPT House, 41/13, Sector 30. Vashi, Navi Mumbai 400 703

5. Editor’s Name Nationality 1[(a) Whether a citizen of India? (b) If foreigner, the country of origin] Address

ANURADHA DAS MATHUR INDIAN YES NOT APPLICABLE KPT House, 41/13, Sector 30. Vashi, Navi Mumbai 400 703

6 Names and Addresses of individuals who own the newspaper and partners or shareholders holding more than one per cent of the total capital

NINE DOT NINE INTERACTIVE PVT LTD., KPT House, 41/13, Sector 30. Vashi, Navi Mumbai 400 703 NINE DOT NINE MEDIAWORX PRIVATE LIMITED, K-40, Connaught Circus, New Delhi 110 001

I Kanak Ghosh, hereby declare that the particulars given above are true to the best of my knowledge and belief. Signature of Publisher Date: March 2010

Dell launches Vostro series laptops

ell has announced the launch of Vostro 3000 series laptop for business customers. As per the company, they are thin, lightweight and durable laptop computers and features powerful processors, high-end graphics and various built-in security features. Vostro 3000 series spor ts Intel Core p r o c e s s o r t e c h n o l og y, i n c l u d i n g, t h e optional Core i7 Quad Core processor available on the Vostro 3700. For those that demand portability and productivity, the Vostro 3300 is a thin commercial 13-inch laptop with an integrated optical drive. Moreover, the 14-inch Vostro 3400 offers a full day of mobile productivity with up to 8 hour of battery life with an optional

DIGIT CHANNEL CONNECT

March 2010

9-cell battery. “To succeed, small businesses need simple, reliable and affordable technology solutions,” said Ravi Bharadwaj, General Manager, Small and Medium Business, Dell India. “These entrepreneurs want technology that makes them more productive and helps them compete, and the Vostro 3000 delivers in a package they will be proud to show off in the airport or the boardroom.” All of the Vostro 3000 laptops have embedded webcam and microphone for collaboration through videoconferencing, while the Vostro 3500 and 3700 offer the option of high definition WLED screens and the 3700 offers the option of up to 1GB of NVIDIA GeForce discrete graphics to help

ensure one of the best visual experiences. With the built-in HDMI port, users can even make high definition presentations to clients when required. These new Vostro notebooks are also backed by a dedicated and specially trained small-business sales and support team of experts, which is a key pain point for small businesses that typically have little or no IT support. The Vostro 3000 laptops sport durable hinges and are encased in aluminium for extra protection. The Vostro 3000 notebooks also feature a suite of customizable service and support solutions to keep business data protected and business moving at an affordable price.

trends A-DATA appoints Rashi as its national distributor

-DATA Technology Co., Ltd., a worldwide leader in DRAM memory and flash application products, has announced the appointment of Rashi Peripherals as its National Distributor for its range of memory products. Commenting on the tie-up, Shalley Chen, Executive Vice President at A-DATA Technology, said, “We recognize the leadership of Rashi Peripherals in the distribution arena pan-India. This is the right time for us to enter the Indian market, which is poised to grow. Rashi’s presence all across the country will ensure that our products are easily accessible to partners and customers alike. Together with Rashi we will aim to build a brand name for ourselves in the Indian memory market.” Rashi will distribute and market Memory products focusing on brand building and market penetration. Speaking about this new partnership, Kapal Pansari, Director - Marketing, Rashi Peripherals, said, “We are very excited to have A-DATA in our portfolio as this almost completes our component line of business. A-DATA products are high on quality and Rashi has always taken care to add only quality products to its distribution kitty. Our widespread distribution channel will help us make A-DATA brand a name to reckon with in the Indian market and the products will be easily available for Indian consumers.” Rashi will be initially distributing Supreme Series with major chipset in DDR2 & DDR3 versions. n

Abacus organises multi-city roadshows

bacus Peripherals, a manufacturer of Zion memory modules and national distributor of Biostar motherboards, Sparkle graphic cards and IQ Flash drives, has announced a series of roadshows all across the country for creating awareness about its products. As per the company, with these events, Abacus Peripherals intends to highlight its innovative and upcoming brands in the market like Zion 4B DDR2 and DDR3 RAM, Biostar TH 55 high-end motherboards; IQ Pro Pen drives and Micro SD Cards. In addition, it plans to extend its footprints in tier-2 and 3 cities, and provide technical updates to the channel partners. “The main objective of the roadshows is to educate partners about

the new technologies and products in the market,” said Subhashis Das, VP Business Development of Abacus Peripherals. “The computer market trends are changing daily

and the customers of IT products and services are very tech- savvy. We will be displaying the entire latest products to help our buyers evaluate all the options before making their purchase.” n

Seagate intros storage solutions for small business

eagate has announced a complete portfolio of products designed to protect data for sustained business continuity and optimum uptime - BlackArmor product line. It is the family name for a suite of network-attached, workstation and por table storage solutions designed to meet the digital asset management needs of small business professionals. The new solutions – the BlackArmor NAS 440/420, BlackArmor NAS 220 and BlackArmor NAS 110 Rajesh Khurana at the launch network storage servers and the BlackArmor WS 110 external drive workstation - share the same suite of robust backup applications for business professionals and home office use. Designed as a simple, easy-to-install and easy-to-manage solution for businesses with little or no IT support, BlackArmor storage solutions are perfect for small office environments with up to 50 employees as well as self-employed professionals. Additionally, the BlackArmor line of solutions provides software management tools that are compatible across the family, providing a consistent user experience and future growth path with minimal training or the need for additional support. n

The strategy is set. Media plans are in place. The country is waiting.

DIGIT CHANNEL CONNECT

March 2010

trends DataTraveler 310 USB drive, ultra-low voltage memory from Kingston

ingston Digital has announced the release o f 2 56GB DataTraveler 3 1 0 U S B f l a s h d r ive. T h e DataTraveler 310 replaces the 256GB DataTraveler 300. “We saw an opportunity to push the capacity envelope for USB Flash drives in the marketplace. Customer feedback and our research determined that this is a great solution for designers, engineers and architects who have a need to easily store and transport large data files,” said Nathan Su, Flash Memory Sales Director, APAC Region, Kingston. “For the enthusiast who wants easy access to their full media library, the DataTraveler 310 can store up to 365 CDs, 54 DVDs or 51,000 images. This device makes an entire collection of data easily portable.” T h e D a t a T r ave l e r 3 1 0 features Password Traveler software, which allows the user to create and access a passwordprotected privacy zone. The secure area of the drive can account for up to 90 percent of the drive’s capacity and does not require administrator rights. The DataTraveler 310 has a

Gigabyte announces scheme for end users

igabyte Technology announces the “Award Winning Celebration” promotion for its end customers in India. Under this promotion, end customers purchasing award winning Gigabyte motherboards stand to win gold coins, iPods, digital cameras and other exciting Gigabyte products through a lucky draw. Effective from 15th February to 30th April 2010 this promotion is open to all end customers who buy award winning Gigabyte motherboards. The purchased motherboards’ boxes will have scratch stickers on it, which will contain a code. The customer will have to register online http://event.gigabyte.com.tw/india2010, the code and the serial number of the motherboard. First 2000 registered will get assured gift i.e. a GIGABYTE mouse. The registered customers can win gold coins, iPods, digital cameras and other exciting products through a lucky draw. “The promotion highlights the confidence that Gigabyte has in its motherboard product quality,” commented Alva Liu, Sales Manager, Gigabyte. “The awards given by Chip, Digit, VARIndia, Erovod.com have further recognized Gigabyte’s efforts into products of higher performance and durability!” Gigabyte has a service network spread over 100 locations across the country. The pick and deliver service that was introduced as an initiative to reach out and provide support to recent locations was introduced in 2009. Gigabyte has a call centre service outsourced in collaboration with Accel Frontline. n

DIGIT CHANNEL CONNECT

March 2010

protective cap that snaps onto the back for the drive for convenient storage when not in use. This drive is available only in 256GB and is backed by a five-year warranty and free tech support. In another announcement, Kingston released an ultra-low voltage memory running at 1.25 volts at 1600MHz. The new offering is part of the new Kingston ‘LoVo’ (low voltage) HyperX DDR3 High-Performance memor y product line. The dual-channel kit comes pre-programmed with two XMP-ready profiles: 1.25 volts at 1600MHz and 1.35 volts at 1866MHz. “Kingston is proud to lead the charge with memory for the new generation of energy efficient systems that yield higher performance,” said Ann Bai, DRAM Memory Sales Director, APAC Region, Kingston. “Energy-conscious consumers need to look no further for memory than the HyperX ‘LoVo’ line when they are assembling the components needed to achieve better PC power performance.” The flagship product, running an ultra-low 1.25 volts at 1600MHz, is the lowest voltage to date for desktop PCs. n

KODAK i4000 scanners for automated document capture

odak recently announced the KODAK i4000 Series Scanners, designed to help end users, especially those in small-to-medium sized businesses (SMBs), cost-effectively automate document capture and management. The new capture platform of the i4000 Series Scanners combines walk-up ease of use, one touch scanning, comprehensive software capabilities and simplified integration within new or existing document management processes, for a complete information management solution. “Over the next two years, business demand for IT-driven growth and innovation will outstrip the supply of qualified people to fulfil job roles, and as a result, traditional IT tasks are moving outside the IT department,” said Debra Logan, distinguished analyst and Vice President, Gartner, Inc. “Information management has never been an explicit job role…everyone has been the manager of their own information.” The i4000 Series Scanners’ compact, ergonomic design makes it easier for average users to integrate document capture into new and existing information-driven business processes. Kodak’s Smart Touch functionality allows end users to send digital documents to common destinations including e-mail, desktop applications, shared file locations and Microsoft SharePoint Server. n

focus Graphics Cards

Game for

Growth

With many PC users shifting towards power and visual computing, the discrete graphics card market is set to enter a high growth orbit Soma Tah

raphics cards have increasingly been adopted by PC and game enthusiasts for the past couple of years. The trend is driven by visual computing and user demand for graphics-rich content. This ranges from mainstream applications and visualization of complex data to high-definition video content and gaming software. According to a recent Jon Peddie Research (JPR) study, 20.3 million graphics cards were shipped globally in Q3’09, up 21 percent over the previous quarter. Though any separate growth statistics on the Indian discrete graphics card market are not available, it is believed that the segment is in for rapid growth given the nascent stage of the market for high-end computing. “The users are no longer happy with their PCs performing the basic computing tasks, and looking to get optimum performance out of their PCs, which is essentially about harnessing the power of GPU along with the CPU- a reason we see a potential buying decision emanating from the upgrade needs,” says Deepak Gupta, Country Manager, Zotac. “The add-in graphics market for the assembled PCs is set to grow around 16-17 per cent this year with an average of 35,000-40,000 assembled PCs getting sold with standalone graphic cards.” “In the consumer space, the biggest customer base would be the gamers. The console based gaming is yet to catch up in the Indian market, and since PC remains an important gaming platform for Indian gamers- a sizeable growth will continue to come from the PC based gaming only, at least for the coming 2-3 years. Besides PC based games are highly customizable and vendors are also doing

DIGIT CHANNEL CONNECT

March 2010

lots of game development and promotional activities around it,” says Avishek Kejriwal from Tirupati Enterprises who is distributing a couple of graphics card brands nationally. Entertainment is also touted to be a major driver for growth in discrete graphics segment. With the price of large screen monitors continuing to fall, an increasing number of people are buying large format screens for their PCs these days, mostly for home entertainment. Bigger screens usually tend to draw attention to the limitations of lower end graphics and hence make people invest more in separate high-end graphics cards.

Specific growth areas The trend toward bringing out more realism in games will bring a considerable growth into graphics card sales. Nishant Goyal, Head of Consumer Graphics, South East Asia, NVIDIA says, “As the demand of games are shifting from 2D to stereoscopic 3D as well as the explosion of demanding Flash-based web applications like Facebook and games such as Farmville is getting popular, one thing is clear: all these trends will exploit the GPU power.” Rajshekhar Bhatt, National Sales Manager, ATI product line chipset business, AMD India, says, “The faster video format conversion requirements for transferring video content onto the different handheld devices and the amateur video editing applications bundled with HD camera, handycams, etc. will also drive the market for standalone graphics cards. The usage of graphics cards for multitasking needs is also growing fast - the reason ATI has come up with EyeFinity technology which supports six outputs from a single machine to run different applications.”

focus Graphics Cards On the other hand, the demand for workstation graphics cards to support hardware optimization needs for performing specific high-end engineering applications and designing tasks is also increasing among medium and large enterprises. The CUDA (Compute Unified Device Architecture) technology will also the drive market further. This is a parallel computing architecture propagated by NVIDIA, which allows offloading parallel applications from the CPU to the GPU and can bring impressive acceleration for tasks such as video processing, seismic data analysis and financial modelling, etc. With Microsoft and Apple leveraging the GPU’s power in their latest operating systems like Windows 7 and Snow Leopard, this might also make more people invest in standalone graphics cards. In fact, various study reports mention that selling PCs with Windows 7 has also contributed to the growth of graphics cards. The mainstream consumer graphics cards are usually priced between Rs. 2,500-15,000, while performance

and workstation cards cost starts at Rs. 6,000 and can go up to lakhs of rupees. However, the graphics cards market for the PC and game enthusiasts segment which are priced Rs 35,000 and onwards are still very bleak. Mostly, buyers procure them online from outside India, as the cards of the same specifications come at considerably higher prices in India. Also, more and more consumers are nowadays demanding PCs with the latest technologies which are also affordable. Therefore, from the pure price point of view, the maximum unit growth will be coming from within the Rs. 2,500-7,000 price band, while there will be a consistent but somewhat restrained growth come from the 7,000 and onwards price category, say the industry watchers.

A guide for partners “Some of the most significant opportunities for channel partners lie in their ability to maximise the computing experience by offering optimised PC solutions to their customers. By redistributing investment in a PC, adding a high-end graphics card (with included features like CUDA and

With the price of large screen monitors continuing to fall, an increasing number of people are buying large format screens for their PCs, mostly for home entertainment. Bigger screens usually tend to draw attention to the limitations of lower end graphics and hence make people invest more in separate, high-end graphics cards.

3D Vision, etc) alongside a less powerful CPU, users can have a powerful system, which is more economical in terms of the performance. We offer profitable business opportunities for the hardware channel as partners can bundle associated software for richer consumer experience. There are various applications available on our CUDA zone also which potentially could add more profit to the channel partners,” says Goyal. The market also throws a couple of challenges in terms of technology obsolescence and due to a volatile pricing of memory chips worldwide. As KK Seth of A&A Computech says, “The key is not to overstock, keeping track of the market trends and having a good understanding of user requirements. We generally keep limited stocks of the cards which are priced a bit on the higher side, and do business on back-to-back order basis.” Bhatt of AMD says, “We do believe in sharing technology trends and encourage partners not to indulge in short-term tactics like dumping stocks. But pricing is beyond our control sometimes.” n Soma.tah@9dot9.in

DIGIT CHANNEL CONNECT

March 2010

cover story Social Networking

Connections Unlimited Social networks like Facebook, Orkut and LinkedIn are increasingly being used by channel partners for personal as well as professional benefits

DIGIT CHANNEL CONNECT

March 2010

cover story Social Networking

ive or six years ago, would anyone have believed that social media would get so big? Hardly. But today most industry watchers and analysts say that 2009 saw explosive growth in the number of users signing up on social networking sites. Worldwide, there are over 400 million active users of Facebook, Orkut boasts of over 100 million users and LinkedIn claims as many as 60 million. Then there are countless other sites vying with each other to grab as many cyber socialites as they can. The channel partner community in India, too, is catching on to the social media bandwagon – although not to

the same extent as the yuppie crowd. Two schools of thoughts exist in the channels when it comes to using social media. While one set believes that social media is purely personal and users don’t like to be bombarded with messages/advertisements on networking websites, there are others who are quite optimistic about the marketing potential of these sites. The latter group believes that apart from collaboration and knowledge-sharing perspective, social media tools (blogs, for instance) and sites can provide the channel with various marketing benefits while raising brand awareness and good will.

“Channel has not exploited social media to its fullest” How well has the Indian channel community adopted the concept of marketing their products/services through social media? The channel has not exploited the concept of social media to its fullest, as most of them are not tech savvy. It is gaining traction in India but it’s not as effective as it is in the West. Also, return on investment in India (in social media) is definitely not as high as in the West. But the future of social media looks optimistic. Vishal Tripathi, Principal Research Analyst, Gartner

What are some key reasons for channels to use social networking? Most partners lack knowledge about the benefits of social media. They do not trust and many also doubt its genuineness. Most consider it as a trap wherein one can face a threat with regard to personal or professional information. Also, social networking demands a lot of time and one needs to have the inclination of using it for business purposes. If one is not careful about the way they promote their services or products it can easily be misunderstood as spam. Do you think there is scope for partners in this domain? There is a huge scope for this medium in the future due to the effect of globalisation. The channel community looks optimistic to increase its presence through this medium. Social networks can serve to be a good medium for doing business when it comes to branding and reputation management. Incorporating social media advertisements with social media networking practices can give more [page] impressions to the companies’ targeted users as well as a channel partner for users to connect with the company they trust. Rather than think of social media as part of the marketing toolkit, it would be more accurate to consider social media as a communications channel.

DIGIT CHANNEL CONNECT

March 2010

Some popular social networking platforms n n n n

“Social networks enable one to communicate and hunt for information from total strangers without any problem. We got at least three new customers in the last quarter because of reference from the network.” Paresh Shah, Director, PH Teknow

“I managed to sell my products to a PR guru for Bollywood who got in touch through social media. He has now appointed me as his technical consultant.” Sampath Iyengar, CEO, Sam7 Computers & Networks

LinkedIn Facebook Twitter Yammer Orkut

n n n n n

Plaxo MySpace Hi5 iBibo Google Buzz

We at DCC recently conducted a survey that helped us cull out some very interesting facts on social media. Despite the fact that 90 percent of respondents (over 80 partners responded to the survey) said that they spend less than half an hour on any social networking websites, an optimistic 46 percent said they use social media to develop business opportunities and 38 percent of use these sites for professional networking. Still, there’s a long way to go for the channel. As many as 34 percent of people surveyed were not even aware that social networking can provide them any business growth/development opportunities. Those that have set up a page/community to promote their business on various networking platforms are also relatively few (17 percent). At 65 percent of respondents using it, Orkut has been ranked as the most popular social networking website. This is followed by Facebook (54 percent). Both sites initially had mostly teenagers connecting with their friends but today are used by several enterprises to develop business opportunities. Twenty six percent of respondents ranked LinkedIn as a good medium to connect with the corporate world. Many partners have even expressed that they have used LinkedIn to hire people or to get work outsourced. For one, Paresh Shah, director of Mumbaibased PH Teknow, says, “Through LinkedIn, I got in touch with a website developer. She has developed our website from scratch and we have not even met! This indicates how powerful LinkedIn or most networking websites can be for business.” Shah further says that the company is in the process of building its own web page/profile on Facebook. Microblogging sites such as Twitter are also getting increasingly popular with individuals and businesses alike.

Tapping into the network Considering social media as a growing medium to get in touch with customers, channel players have

cover story Social Networking started to create websites, profiles, pages and anything else that can help them get closer to buyers as well as vendors and suppliers. “Social media can provide the possibility of finding not only customers but also the best deals with suppliers,” explains Shah. He further adds that social networking can be used for getting valuable feedback, for creating a customer/partner feedback repository and also for brand promotion. “Social networks have served to be very good ways for us to promote genuine product promotion. I have got in touch with a lot of new people through social media and get regular updates of activities of all on my network. Social networks enable one to communicate and hunt for information from total strangers without any problem. We got at least three new customers in the last quarter because of reference from the network,” he says. Sharing similar experiences, Sampath K Iyengar, CEO of Mumbai-based Sam7 Computers & Networks says that he spends four to six hours a day checking posts and trawling the Web for information. “I first used social media to create visibility to reach out to an existing offline networking group, BNI (Business Network International), which is a referral-based organisation where the sole purpose is to give each other business. Once this was done, I started connecting with other people who were their friends and got third-party advocacy, which increased my credibility online. This, coupled with offline real meetings, started bearing fruit and the company currently has an active friend list of 1,700 plus people who are in regular touch with me on Facebook.” The company has also started a blog on independent testing of new IT products but has not created any fan page yet because Iyengar believes in the fact that people buy ‘you’ and not your product or service. “I managed to sell my products to a person who was a PR guru for Bollywood and he came to speak to me through social media. In the end, he picked up quite a few products and has now appointed me as his technical consultant,” adds Iyengar.

At the workplace It is no longer possible to ignore social networking at the workplace and one should accept it as part of the business culture. However, there are many companies that certainly do want to keep social media sites off their employees’ computer screens. This is something that many industry execs disapprove of. According to Abhinav Karnal, product manager for the Asia Pacific region at Trend Micro, “By blocking access to these websites, you might be ignoring the biggest transformation since the Internet.” He further shares that the most common

DIGIT CHANNEL CONNECT

March 2010

Q: On an average, how much time do you spend on social networking websites?

1.25%

More than one hour

8.75%

n Helps connect with friends and family Half an hour to one hour

90%

Key advantages of social media

Less than half an hour

Q: Are you aware that Social Networking websites can provide you as well as your business enormous growth/development opportunities?

33.75%

66.25%

Yes

Q: Have you set up a page/community to promote your business in any of the networking platforms?

n Product promotion avenue n A great medium for enterprises to interact with customers n Serves as a marketing tool n Helps people find job opportunities n Provides an active community to share highquality content n Helps attain genuine customer feedback n Helps understand consumer behaviour and emerging trends n Can even lead to product innovation

reason why companies block employee access to these sites is to avoid the additional bandwidth expense caused by accessing these websites. Another the other reasons are loss of productivity and threat of viruses through these social websites. “But what most employers forget is the benefits associated with social media. Social networking can help a company market its products. And by accessing these websites, employees can also help decode what the customers need,” says Mousumi Thakurta Nag, CEO of Aryan IT Solutions.

Guidelines

16.25%

Yes

83.75%

Q: Have you currently advertised on social networking websites or have future plans to do so?

32.5% 67.5%

Yes

A starter’s guide is always helpful when you experiment with anything new. Before using social media as a marketing tool, it is advisable to listen and understand what peers in the network have to say about it. “First-hand information is always helpful in such cases and one should always focus on developing two-way communication,” says Shah of PH Teknow. Another way to succeed with the social networking phenomenon is to be active on multiple networks that target your industry or your prospective customers. Some partners warn others to take care not to sell directly through social sites. “Social networking can serve as a medium or a great platform to target customers, but it is not advisable to sell directly as it lacks the personalised touch,” says Thakurta. Shah has another caveat: “From a brand perspective, it is not a platform just to get your message out; social media is about hearing what others have to say. In addition, using social media one should ensure that the strategy of the business is in line with its objectives.” One can also find a lot of articles and websites that attempt to teach companies

cover story Social Networking Q: Which networking websites do you currently use?

ous privacy settings, access permissions and numerous activity notifications, they are given a sense of control over what happens within their network. â&#x20AC;&#x153;These features are made to give the users the ability to build their own circle of trust. But at the same time, social networks are ripe venues for stealing personally identifiable information,â&#x20AC;? warns Karnal. However, all this can be tackled if people realise the significance of the kind of information they are putting out on the Web.

Q: For which reasons do you use social networking sites?

65%

53.7%

77.5%

80 70 60

46.2%

40 30

17.5%

The road ahead

37.5%

26.2% 12.5%

3.7%

k boo

Face

ut Ork

Hi5

edIn Link

s ther

Keeping in touch with family/friends

Note: Multiple responses were allowed.

looking to learn about how to incorporate social media in their organisations. One can also learn a lot about how social media can help them grow by referring to numerous case

Looking up people for business

Professional networking

Others

Note: Multiple responses were allowed.

studies available online today. Users routinely share videos, pictures, stories and concepts with people they may or may not know in the real world. But through vari-

Industry watchers believe that over the next couple of years, social media will be more infotainment-centric, with more visual content rather than textual. Also, it is expected that more focus will be on user participation through comments. So, what will social networking hold for channel partners? Some analysts suggest that the best way is to focus on one specific aspect of social media and master it. Also, people are getting smarter and do check at several places before taking buying decisions. For the channels, the challenge will be to ensure how to harness the benefits of social networks without jeopardising their existing offline contacts.n charu.khera@9dot9.in

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DIGIT CHANNEL CONNECT

March 2010

cover story Social Networking

Twitter for your Business

You cannot afford to take Twitter as just another passing fad in cyberspace ADITYA MADANAPALLE

DIGIT CHANNEL CONNECT

March 2010

ILLUSTRATION: SANTOSH KUSHWAHA

witter.com is a free social networking service that began operations in 2006. The service allows users to post short (140 character) updates. Once you sign up, you get a customisable page. You can post to this page from your mobile phone, the Internet, or any one of the myriad tools available for the purpose. You can “follow” other people who use Twitter, and have their posts show up on your page too, which is called a “stream”. Twitter encourages you to post “What are you doing now?”, which gives an element of immediate,and real-time updates about people. Twitter can be seen as a social networking site at heart, but its users have transcended the roots of the service. It is the most used social networking site for business purposes, far ahead of the closest competitors, Facebook and Myspace. Twitter has gained an identity for itself, and can be compared on many counts, to the phenomenon of blogging; in fact it is called micro-blogging by some. A Twitter post is called a tweet, Twitter users are tweeple, and the sum of all tweeple and tweets make up the tweetosphere. Twitter faces much of the same criticism as blogs did when they first came into being. There are a whole bunch of dead or orphaned blogs, and the same is already true for Twitter. Respectable people refused to take blogs seriously for the first few years they were around. However, a new class of people, and a strong community emerged from the blogging phenomenon. The same can be said about Twitter too. Although the service may appear bland, meandering, and foolish in the eyes of many, rest assured that there will be

cover story Social Networking those that will use it for their benefit. Twitter, like blogger, is a new space, and a new medium. Many businesses are finding it a powerful platform to interact with their customers.

The business connection If you have a business, chances are that you have customers that are talking about your product, your brand, or your business on Twitter. A search on Twitter for your business should turn up a number of opinions, insights, and issues that your customers have with your business. We headed out to http:// search.twitter.com/ and searched for one of our magazines. We came across reports like when our forums were down, of what kind of content we carry in our magazine, and how users could not use certain kinds of content on our DVD. All of this was legitimate and valuable feedback. Twitter lets you know in real-time, what people are talking about your business. Follow those who talk about your business, or your costumers, and you get to gauge the mood of your audience, what is occupying them, and what they need. Next, you can look at what people are talking about your competition. Check out their faults, their weak-

Twitter tools There are a whole range of tools to help your business use Twitter better. Tweetdeck is a great tool for those who want to tap into Twitter to listen to the chatter. It allows you to follow a range of updates across social networking sites, including Facebook to have a look at what people are talking about you or your business. Just head over to http:// www.tweetdeck.com and create a new account. Arrange the columns, sit back, and watch in real-time all the buzz your company is creating. TweetLater (www.tweetlater. com) is a great tool for those who have a plan for their Twitter accounts. You can key in Twitter updates with a time-delay. This also lets you stay active 24x7, giving the illusion that your business is always on. In case you have tight schedules, or leaving somewhere for a holiday, TweetLater is a great way to keep your account active. The best thing about TweetLater is that your use of it is in stealth, there is no way people will come to know if you are using it or not.

DIGIT CHANNEL CONNECT

nesses, and what needs they are not fulfilling. Not only do these searches show you what to capitalise on, you get a deeper understanding about your market. Twitter starts becoming really useful, when a company actively gets into the tweetosphere instead of passively reading it. Giving something back to the community, entering into the spirit of the endeavour, and participating in the tweetosphere can have a number of benefits for a business, as many CEOs have already found. Twitter has a sizable number of users to direct traffic to the company’s web site. It gives the company a face and a personality, making the company itself a tangible entity that customers can interact with. If you are unsure of which direction to take your business in, or how your customers will react to a certain approach, Twitter is a great place to get that feedback. Twitter can be used to seed thoughts and ideas, generate buzz about events, and stay tuned to the pulse of your market, or your audience. If this impressive list does not convince you to get your business on Twitter, perhaps this will — chances are that your competition is thinking of, or is already active, on Twitter.

Setting up a Twitter account To set up a twitter page for your business, sign up for a handle at www. twitter.com. A handle is akin to a username, but can be used in a variety of ways. If it is a small company, the name of the company will do fine as the handle. If it is a large company, it is customary to use the first-nameatcompany format — adityaat9dot9,for example. A number of employees dealing with different processes in the company can sign in this way. Twitter by default gives you a set of followers. Disable all of these, as they are not relevant to your business. You can follow people later, as you figure out accounts you are interested in, customers, employees or other accounts that make business sense.

Tweeting for your business Before you start tweeting, you have to understand the medium. This is not a place for harsh or brutal marketing practices. If say, you are an online store, it is a good idea to tweet links to products and offers, but you should offer something more. A Twitter feed that has only promotions is not differ-

March 2010

Jargon Buster Twitter is adding business centric features. The first of these will be called ‘Contributions’. This enables businesses manage multiple users on their account. It appends the contributor’s username to the tweet byline. A Twitter feed that has only promotions is not different from spam, and such accounts are disabled sooner or later. You have to get close and personal with your readers and customers. You have to add some sort of value to your feed

Twitter Social networking service that started in 2006. It allows users to post 140 character updates that are encouraged to answer the question ‘What are you doing now?’ Tweet A single posting on Twitter. Tweeple The people who use Twitter. Follow You ‘follow’ other people to know what they are posting on Twitter. Stream The list posts of the users you are following. RT@username Or re-tweet is used as prefix to a message that was originally posted by the username mentioned.

ent from spam, and such accounts are disabled sooner or later. You have to get close and personal with your readers and customers. You have to add some sort of value to your feed — doing it all in 140 characters or less might seem a little daunting, but it has been done before. Tweet about the behind-the-scenes activity of the company, the immediate steps that the business is taking, and do it regularly. Discuss the general market scenario, the general direction of the market, and your opinions on a range of subjects. Keep in mind that the Twitter page is a brand-building exercise, not a tool for increasing sales. Imagine the organisation to be a person, or a single entity, who needs to update his friends about what he is up to — then proceed with the tweeting. If you are delegating the work of maintaining the Twitter account to an employee lay out a clear set of rules and guidelines. SMBs are in a great position to exploit the real-time feedback that Twitter offers. This feedback is direct from the target market, and is not filtered in any way. n editor@digitchannelconnect.com

vendor speak Lenovo

“In 2010, our focus will be on core channel development”

—Yathindra Nath, Director – SMB and Consumer Sales, Lenovo India

Nath shares with Charu Khera the details as well as reactions of the partners towards their newly launched partner programme for the Indian region DCC: As per IDC, Lenovo faced a tough time in the Indian market in 2009, with just five percent market share. To address this challenge, Lenovo India has plans to adopt the partner model of China. What has been the progress on that front?

In China, Lenovo has a six-tier structure; whereas in India, the company has instituted a three-tier model. Lenovo currently holds 19.7 percent of the market share in China, establishing itself as the leading vendor in the region. According to a 2010 IDC report, “Lenovo remained the top vendor in the Singapore and Hong Kong region in 4Q09, especially as momentum in China continued.” The Indian and Chinese markets are similar in several ways – customers prefer to experience the products more intimately. Both markets have similar purchase behaviour and common entrylevel products. In China, our business practices are carried out meticulously through a network of 6,000 outlets across the nation. The structure is tightened to be cost-efficient along with providing good quality of service to customers before and after sales. The focus is on enhancing and building on the existing base of channel partners to provide flawless service rather than simply growing the network. When Lenovo experienced a downslide in 2009 in India, we decided to put our shoulders to the wheel immediately. We streamlined our operations greatly as we did in China. As per the revamped strategy in India, we follow a 3-tier model - four National Distributors serve exclusive outlets, retail chains and Regional

DIGIT CHANNEL CONNECT

Distributors at tier-2 level. We now plan to apply the Chinese integrated operations model in India. In this model, all functions from product development to marketing, sales, supply chain and services are closely linked for speed and efficiency. The growth expected as a result of our revamped strategy would be encouraging for partners. In the long run, our focus will be on core channel development and strengthening our engagement with RDs. DCC: In the wake of competition, how confident is Lenovo about this new distribution strategy in India?

Our channel strategy has borne excellent results in markets like China – Lenovo recently posted its best result in the past six quarters. As per IDC, the company has also outperformed bigger rivals such as HP, Dell and Acer in January 2010. We believe it is a manifestation of a strong distribution strategy that we have had in place. Also, we feel it is only a matter of time before an emerging market like India will show similar results. Lenovo is confident about its approach of reaching out to its business partners and empathetically addressing their concerns. In fact we have identified 25 large retailers, and have begun engaging them in discussions during the nascent stages of campaigns. This concept has been welcomed with a great response and we plan to ingrain it into the way we do business with our channel partners. DCC: With this new set up, how will you ensure profitability of your partners

March 2010

When Lenovo experienced a downslide in 2009 in India, we decided to put our shoulders to the wheel immediately. Wasting no time, we streamlined our operations greatly as we did in China. Lenovo encourages each RD to purchase from one ND only. This is not only an efficient way of keeping a close track of sales and inventory but also a means by which the RDs can remain profitable.

in B- and C-class cities?

We enable our growing base of tier-3 partners through RDs. Currently, we reach out to our 2,400 partners in B and C-class cities through rebates and sell-through programs offered from RDs. We are happy to see a good level of profitability with this approach. DCC: Lenovo is appreciated as well as criticised for its regional distribution model. How do you ensure that partners do not indulge in price undercutting?

From the perspective of the end user, we will try to ensure that our prices are well-managed, which means that end customers do not find significant variations in pricing when they purchase our products from channels. From the perspective of tier-3 partners, Lenovo encourages each RD to purchase from one ND only. This is not only an efficient way of keeping a close track of sales and inventory but also a means by which the RDs can remain profitable. As a result, our partners are happy to deal with us and rarely buy products from other sources, thus alleviating the chances of price undercutting. DCC: What percentage of business is through traditional players versus LFRs?

A major chunk of our business is carried out through traditional players. However, the share of business we have done through LFRs has increased two-fold since Q3 of 2009 and now we are focusing on maintaining the same momentum through future growth. n charu.khera@9dot9.in

best of biz Business Performance

People, Profits and the Planet

With a growing focus on “green” initiatives, it’s a good time for CFOs to expand the scope of their responsibilities. Gary Cokins

tion after wrong decisions have been made. At a minimum, the CSR movement will involve external reporting that falls within the normal role of the chief financial officer. Through a series of questions and answers, the following attempts to discover how CFOs might be affected.

How do green movements affect a CFO’s responsibilities?

ver the past century, freemarket capitalism has done much to raise the economic prosperity of citizens in developed nations. Now, capitalism appears to be accepting an advanced mission—to help and possibly save the planet. Indeed, the focus on corporate social responsibility (CSR) and environmental management is no longer just an afterthought in an annual report or a public relations message. Terms like “sustainability” and “going green” have become fixtures in the business media. These terms embrace environmental and climate change responsibility, as well as corporate social interests in consumer safety, health and poverty reduction. And, sustainability is a way of thinking and acting when making decisions, not just a reac-

DIGIT CHANNEL CONNECT

March 2010

The issues of oil, greenhouse gas emissions, global warming and pover ty af fect every organisation’s social and environmental performance, as well as its financial health. This rather recent occurrence has led to variations of the term “triple” bottom line reporting to encompass profit, people and planet. The CFO’s organisation traditionally has been responsible for collecting, validating and reporting data as information. The sustainability and green movement will extend this fundamental role to non-financial and non-operational information as the business community redefines the term “resource.” For example, the economic dimension of sustainability deals with the organisation’s impact on both economic conditions for its stakeholders and on economic systems at the local, national and global levels. Therefore, an extended financial performance aspect involves sustainability measures that take reporting beyond the traditional measures of performance and quality. In addition, greenhouse gas and energy reporting to satisfy the triple bottom line will introduce new data sources and data collection procedures, but reporting methods used by accountants will be similar to those already used.

What key issues and challenges face the CFO’s organisation? A key challenge will be to balance new and unfa-

best of biz Business Performance miliar compliance reporting activities while assisting the organisation in making sound decisions regarding improvement efforts. With accounting, CFOs balance external financial reporting for investors and regulatory stakeholders (mainly for economic valuation) with internal managerial accounting that is valuable to the organisation for internal decision-making. If CFOs focus their energy on compliance reporting, then managers and employees alike are denied the managerial information needed to improve the organisation’s performance. Too much emphasis on compliance reporting can also have a negative impact on social and environmental reporting efforts. As a result, only minimal contributions are made toward finding ways for management to reduce the organisation’s carbon footprint. Therefore, weighting the indicators that affect the triple bottom line reporting will become an important issue when optimising organisational performance in the context of sustainability. In short, CFOs will need to encourage their organisations to formulate sustainability and green strategies at the same time they are supporting enterprise performance management initiatives. There is an emerging connection between

Unmanaged Switches

adopting sustainability and green practices and successful, longterm economic growth.

and organisational risks and their influence on economic performance.

What do sustainability and greening portend for the future role of the CFO?

What skills do CFOs need? The monitoring of greenhouse gases, water and power usage will require accounting practices quite similar to monetary currencies such as expense reporting and product and customercost reporting. That’s the good news. Obviously, CFOs must become competent in the accounting methods used for noneconomic resources, such as carbon footprint calculations. A challenge for the finance chiefs will be to shift their thinking from debit and credit issues to modeling. For example, activity-based costing (ABC) is widely accepted as consistent with the cause-andeffect accounting principle to transform resource expense spending into calculated costs of outputs, such as a product cost, that consume resources. Costing is basically modeling. Advanced organisations have already demonstrated that their ABC modeling software can substitute carbon dioxide equivalents for money and quantify how much and where their energy inputs convert to outputs, such as buildings or products. Carbon footprint modeling provides organisations with visibility and transparency

The CFO role has evolved from history reporter to strategic adviser; finance chiefs have become valuable members of the executive team. The sustainability and green movements provide an opportunity for the CFO’s organisation to focus on more than just reporting; it can also provide the analysis needed to identify, in economic terms, how to better manage the organisation’s consumption of natural resources, such as carbon dioxide and power. Many organisations have little experience with such analysis. CFOs are now gaining competencies with performance measurement scorecards and operational dashboards. They are recognising that leading indicators measured during a time period have causal and correlated relationships with lagging indicators, such as the financial results, reported at the end of a time period. Environmental reporting will result in the emergence of CSR and green scorecards, including measurements of key success areas, shortcomings, operational

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DIGIT CHANNEL CONNECT

March 2010

best of biz Business Performance for the carbon footprint quantities of their products and services back to the sources. Other CSR methods include lifecycle assessment and design for environment, used for performance and process evaluation. CFOs will need to adopt these types of progressive methods, or else their managers and teams will have to guess where the best trade-offs lie.

Are CFOs “embracing” the sustainability movement? The answer depends on the interpretation of the term “embrace.” Most CFOs are personally cognisant of the new era. But truly embracing sustainability and greening will likely require regulations, standard reporting and cap-and-trade market forces to bring traction. There is a price that can be placed on carbon dioxide and other environmental factors. This needs to be done and put in a market context. The current climate-energypollution situation is an opportunity disguised as a problem. These methods are in their infancy. In the U.S., by press time, the House had passed its version of the American Clean Energy and Security Act and climate change legislation was making its way through the Senate.

What advice is offered for CFOs dealing with the growing sustainability and green landscape? CFOs need to accept that this movement is here to stay. Their challenge is to start thinking of the organisation’s social and environmental responsiveness as an asset and opportunity, not as a liability and extra cost. Implementing CSR must take the important step from a cost focus to a value-creation focus, where life-cycle assessment, energy/ carbon management and design for environment become strategic tools for managing the bridge from cost to value. This will be a strategic process challenging CFOs to support their organisations in making new types of decisions based on new information. Not all of this information will be conventional numbers that can be consolidated easily. Therefore, the CFO should help build a knowledge management organisation that can calculate company performance, including unstructured environmental, climate and social parameters.

What resources are available to get up to speed? An Internet search will produce a

Top priorities, challenges

or the CFO, a key challenge will be to balance new and unfamiliar compliance reporting activities while assisting the organisation in making sound decisions regarding improvement efforts. With accounting, CFOs balance external financial reporting for investors and regulatory stakeholders with internal managerial accounting that is valuable to the organisation for internal decision-making. If CFOs primarily focus their energy on compliance reporting, then managers and employees alike are denied the managerial information needed to improve the organisation’s performance. Too much emphasis on compliance reporting can also have a negative impact on social and environmental reporting efforts. As a result, only minimal contributions are made toward finding ways for management to reduce the organisation’s carbon footprint. Therefore, weighting the indicators that affect the triple bottom line reporting will become an important issue when optimising organisational performance in the context of sustainability. In short, CFOs will need to encourage their organisations to formulate sustainability and green strategies at the same time they are supporting enterprise performance management initiatives.

DIGIT CHANNEL CONNECT

March 2010

The challenge will be to balance new and unfamiliar compliance reporting activities while assisting a company in making sound decisions. Environmental reporting will result in the emergence of CSR and green scorecards, including measurements of success areas and shortcomings.

landslide of information. For starters, to understand sustainability reporting,check out the guide-lines of the Global Reporting Initiative, which are said to be voluntarily followed by more than 1,000 organisations in 60 countries. GRI is a nonprofit network-based organisation (based in The Netherlands) that produces one of the world’s most prevalent standards for sustainability reporting — also known as “ecological footprint”—guidelines and aims to make sustainability reporting by all organisations as routine as and comparable to financial reporting. Value reporting (as noted on GRI’s web site) is where organisations publicly communicate their economic, environmental and social performance. Among past suppor ter s listed on GRI’s site are: European Commission, UN Foundation, World Bank, Bill and Melinda Gates Foundation, Rockef eller Brother s Fund, the S o r o s Fo u n d at i o n a n d gove r n mental bodies from the United Kingdom, Sweden, Germany and Australia. Another good source is the book, Green to Gold: How Smart C o m p a n i e s U s e E nv i r o n m e n t a l Strategy to Innovate, Create Value, and Build Competitive Advantage, by Daniel Esty and Andrew Winston.

Sustainability can be profitable Organisations face the perceived paradox of simultaneously trying to manage social performance for the “betterment of the planet,” while maintaining financial performance for shareholders. This creates challenges to develop information systems to identify opportunities and support decisions. Through innovative thinking, they can develop new methods that both increase revenues and reduce costs. And higher profits provide executives discretion to divert some of the increase in retained earnings to more environmental investments. Understanding the cost-ver sus-benef it ratio of sustainability initiatives will involve analytics similar to those used in performance management. The better an organisation understands the ratio, the better its financial performance. n Gary Cokins is a product marketing manager for Worldwide Performance Management Solutions at SAS.

guest expression

The Business Value of Information Security A primary concern of IT managers is how to establish RoI for securing their information assets Avijit Gupta

s Agarwal, the Information Technology Manager at Bluechip Ltd, is a very concerned person these days. Her company has recently launched a new range of products and services and is exploring various channels to position and market them. Ms Agarwal recently learnt from Mr Reddy, VP – Marketing, that one option they are almost certain to go for is revamping the existing “not so known” company website into an active business portal, where customers would not only have the option to view the product range, but also package them as per their choice and place orders directly! And ever since the moment she learnt that, she has been wondering that given the new business requirements, not only will she have to come out with a strategy to upgrade or integrate the existing

DIGIT CHANNEL CONNECT

March 2010

business applications, but also develop a plan which will consider risks relating to data security. But that’s not what she is concerned about. Ms Agarwal knows that as IT Manager, her real challenge would be to convince the management to approve the budget for IT security. Many of today’s IT Managers, Chief Information Security officers (CISO) or anyone who is responsible for information security and data privacy, find themselves in similar situations. They understand the realities of conducting business today in an environment where information technology components are often not integrated. With increasing sophistication and proliferation of attacks and ever shifting focus of the threats to the next weakest link, that is people and applications, the rise of financially rewarding attacks will continue. Technical environments will continue to become more complex, as

we have seen in the example above, and proliferation of the new and extended enterprise applications will raise new security and data privacy concerns. These challenges are predominantly organizational and cultural. Most enterprises have invested in and developed security programs, often as one time exercise after a major information technology solution implementation. However, such initiatives over a period of time have not kept pace with the growing business requirements. Reasons of failure could be many: lack of business or executive buy in, disconnect between enterprise and business Unit goals, low prioritization of security as compared to business initiatives, lack of appreciation for the importance of security, mostly technically led, IT-based security projects... one can go on and on. However, one most important reason which perhaps leads to many of the above causes is the inability to establish the business value or ROI of information security, and that’s where Ms. Agarwal’s real concern is. Having said that, it is also true that “buy in” for information technology is not easy. Business value could relate to

guest expression different set of priorities. For instance, is it protecting reputation and brand, reducing cost of regulatory compliance, protection of existing revenue streams and help generate new ones, ensuring business functions even during adverse conditions and so on and so forth. According to Gartner, about 60% of organizations primarily value information security as cost of doing business, about 40% see it as an insurance policy against hacks, breeches or regulatory fines and only about 12% consider it as ROI. Information security is generally viewed as somewhat effective in meeting the needs and expectations of an organization across all industries. Ms. Agarwal knows that she will need to justify security spending with solid business justifications and demonstrable business value. The need is for a business approach to information security. How does Ms. Agarwal do that? Investments in information technology security investments require both “buy in from top”, the executive management and “buy-in from below”, that is, support from business decision-makers and users -- for maximum business benefit. But who are the most effective advocates at getting support necessary for successful IT investments and deployments? It is very important to understand that eventually it is the enterprise asset at stake, not the information technology security assets. The executive management will need to make the decisions and the facts and figures based on which such decisions are going to be made, should be presented as a strong business case.

Multiple ways There could be many possible ways to approach this. Ms. Agarwal may start by identifying the primary drivers for implementing security controls in the organization. For example, is it just a particular regulation that mandates a security control? Or, is it due to new business requirements resulting in integration of new systems, as we noted in the example above. Developing a roadmap to an effective information security strategy could help derive business value. The strategy could start with defining management expectations for example, security sponsorship, risk tolerance, level of required investments etc. An initial plan to implement a security program could then be set up which is linked with business strategy driven governance. For example, if customers

With increasing sophistication and proliferation of attacks and ever shifting focus of the threats to the next weakest link, that is people and applications, the rise of financially rewarding attacks will continue. Investments in information technology security require both “buy in from top”, the executive management and “buy-in from below”, that is, support from business decisionmakers and users _ for maximum business benefit.

would make online payments through the website and if this function is going to be outsourced to third parties, this means that the third parties will have access to customer’s confidential information. Customers are hesitant to do business with organizations that are seen as not secure. The plan should clearly establish the required level of investments, the resources and skill that would be required, how relevant security policies and standards are going to be developed, how assets and resources are going to be protected, what user trainings will be required and so on. The risk of not having a strategic roadmap to address the information security requirements should be expressed in monetary terms as much as possible. Inadequately protected information assets are most likely to have an impact on organizations profitability, which is a concern for the senior management. Remember, even your business partners have their own needs and demands. They are expected to meet certain level of service and require seamless integration with the business. They are expected to respect the organization’s customers and employee confidentiality, integrity and expect the same from your organization. A sustainable and ongoing risk management program to monitor risk in a dynamic business environment is therefore very necessary. S e n i o r m a n a ge m e n t ex p e c t s their information security teams to provide appropriate asset protection at minimum cost and at the same time, maintain compliance with applicable laws and regulations. CISO’s and IT managers will need to articulate the business value effectively to the management and in a way, which is clearly understood. Understanding of business environment in which the organization operates is therefore very critical for CISO’s and IT managers. Ms. Agarwal is now convinced that presenting a case to CEO which notes that automated and controlled data interfaces with third parties will result in X amount of saving of staff cost over a period of time, as opposed to implementing a perhaps cheaper manual and reconciliation dependent process, has a better chance of success! n Avijit Gupta is Director Enterprise Risk Services with Deloitte Haskins & Sells. Views expressed in this article are his own.

DIGIT CHANNEL CONNECT

March 2010

focus Budget 2010-11

DIGIT CHANNEL CONNECT

March 2010

focus Budget 2010-11 Govind Rammurthy

Rajan Sharma

CEO & MD, eScan

Sales & Marketing MB BU, Gigabyte India

here is a clear indication in the Budget 2010 that GST is going to be a reality from 2011 onwards. The question as to whether the 2011 roll out of GST is practical or not is subjective, especially in a country like India, involving so many state governments, with different value base, political outlooks and regional interests. The government has already placed the draft GST document open to public scrutiny and comments for quite some time now. Further, CMs/finance ministers of all different states have held at least seven meetings so far, to debate, highlight & sort out each state’s issues/ concerns on rolling out the GST as soon as possible. Despite all these, some of the States are still at a disagreement mode with the Centre on some ground or the other, giving a clear signal that implementing GST with a consensus from all the state participants are practically impossible, at least in the near future. In this scenario however, from the language used in his Budget speech, it appears that the FM is determined to bulldoze and get thru on the subject in the committed one year time period again. n

iven that the industry is still in a recover y mode the tax incentive should have been extended. The rolling back of excise duties may affect sales. There has been no proposal to abolish Special Additional Duty (SAD) across products which is discouraging. We are glad that the roadmap for GST has been finally unveiled, which is very critical for creating a single-India market. We hope for better involvement and engagement of the Government with the industry as the finer details of the GST is worked out. n

A Mixed Bag A wide-angle perspective on how some key executives in the Information and Communication Technology industry in India decipher the Union Budget Rostow Ravanan

Sandeep Menon

CFO, Mindtree

Country Head, Novell India

t is a positive budget. Positive - because there’s nothing in it to feel concern about. Some of the welcome announcements for the IT sector are: n Allocation of Rs 1,900 crore towards the implementation of the UID project. n Setting up of a committee to oversee investment in IT infrastructure in the government sector. These steps will not only provide the necessary boost to the domestic IT Services industry but also provide benefits to the common citizen with increased efficiency in delivery. n It’s also good to note that the government has reiterated its commitment to SEZs. Anomaly in taxation for SEZ has been corrected with retrospective effect. This has been a long-pending demand of the industry and we are happy that it has been accepted. We expected that the taxation of ESOP would be changed from the date of exercise to the date of sale. This has not been done. n

DIGIT CHANNEL CONNECT

March 2010

t a broad level, I think this budget reflects the government’s confidence in the Indian economy. I am particularly pleased to note that there has been no knee jerk reaction to withdrawing the fiscal stimulus, as I don’t think the time is right yet. The increased outlays to Urban development, RRBs and Clean energy are steps in the right direction. A fiscal deficit target of 5.5% is not too bad. All in all, I would call it a pragmatic budget. From a packaged software industry perspective, it would have been good to see a move towards rationalization of levies and taxes. But we’ll perhaps need to wait and watch how the GST rollout progresses, for that issue to be addressed.” n

focus Budget 2010-11 S Mahalingam

Ajai Chowdhry

n c r e a s e d t h r u s t i n key areas like primary education, health, infrastructure, r u r a l d e ve l o p m e n t , a n d f inancial inclusion would fuel broad-based growth and development. Enhanced focus on SEZs to drive growth and employment and clarity on the tax regime is welcome. This would aid recovery for the IT industry. Social transformation and technology enabled governance will gain momentum and this is good news for the country. n

udget 2010 is the first budget after the global crisis. Overall the budget was well balanced and responsible. Various projects and schemes announced by the government will see increased role of Information Technology as an enabler towards more inclusive growth. The Union Finance Minister has also given us a clear direction on the roadmap for GST with a definite date for implementation i.e. April, 2011. I am sure that the various measures announced today will go a long way to ensure proper focus on taking core sectors like education, healthcare, social security, rural development, national security and banking to the grass root levels. Further to this, deduction on In-House R&D has been increased to 200 from 150 percent, which will definitely help put back focus on R&D. n

Rufina Fernandes

Rajiv Bhalla

Chairman and CEO, HCL Infosystems

CFO, TCS

CEO, NASSCOM Foundation

Country Head – Sales & Marketing, NEC India

ASSCOM Foundation applauds and supports the Government’s intent and measures taken to support inclusive growth. The Government’s decision to support and deliver services to the economically backward sections is really encouraging & we would be happy to assist the Government in any way we can. We have been implementing a couple of advanced IT skills and capacity building programs for NGOs and government officials as our small contribution to supporting the development process. We are happy that a skill development programme is to be launched for the textile and garment sector employees. Considering the gap in jobs available and suitable skill sets lacking for those jobs across other categories too, it would have helped if the same were organized for other sectors too. The Food Security Bill is also a positive step. n

Ajay Kogta

t has overall been a good budget which will lead to fur ther growth. It is a budget which envisages growth for its people and the nation. Steps like easing the process of defining exports and services will stimulate growth and fortify Indian IT industry’s strength to remain competitive among its global peers. The setting up of a Technology Advisory Group and the initiatives towards automation of IT projects is reflective of the Government’s focus on technology adoption and its thrust towards institutional innovations. We are happy to see, that this time there is a firm acknowledgement of the role of technology in the government’s agenda. n

VP Sajeevan

Country Manager, India Sub-continent, Strontium Technology

Director - CSP, Canon India

he Union Budget 2010-11 is largely positive and continues to focus on growth. Taking GDP to double digit can be felt throughout the budget proposals. The continued thrust on agriculture, infrastructure and rural development will unlock much of the economic growth potential in the medium-term. Along with maintaining the focus on broad based growth, the budget has also addressed concerns on the fiscal deficit front. Allocation of 1900 crores for UID program is going to create huge opportunity image creation and archiving. On the personal front the tax relief is going to make huge saving for those are below 8 lakh annual income. As you know we have large number of people who are in this category in India and it’s going to open up more buying for CE and IT products for Home. Here I am seeing only then positive sides even though some negative impacts also were there in the budget. But the size positive impact is great and it will nullify the negative. n

ith increased limit in income tax, savings of individuals will increase and ultimately leads to more consumption of goods; it is good for overall economy. But Indirect t a xe s n e e d s t o b e further simplified, a 4-5 percent duty is reasonably good for memory products. Higher duties will only create unhealthy competition in the market. n

DIGIT CHANNEL CONNECT

March 2010

focus Budget 2010-11 Sanjay Kapoor

CEO - India & South Asia, Bharti Airtel

must congratulate the Finance Minister and the government for a pragmatic, broad based and inclusive budget. The disposable income benefits to the “aam aadmi” - both in urban and rural India - should stimulate demand for service sectors like telecom which in turn contribute handsomely towards the economic growth of this country. n

Naresh Wadhwa

President and Country Manager – Cisco India and SAARC

Alok Bharadwaj Senior Vice President, Canon India

or the IT industry, the best news has been special additional dutieswhere companies were first paying and then claimingthe process is now scrapped. In the packaged software area, earlier we used to have double taxation, now only a one-time tax will be charged which is a welcome move. Surcharge has been reduced from for 10 pc to 7.5 pc which means rate of direct tax will come down and this will give companies resilience to absorb some of the not so good aspects of the budget. This includes Countervailing duties and fuel prices which have been increased, thus, forcing freight cost to surge but the drop in surcharge will give companies some cushion without passing on the burden to consumers. n

Padmaja Krishnan

Director, Sales and Marketing, CSC India

here is good focus on the Banking sector as more banks will be encouraged. The budget is also a step in strengthening the Manufacturing sector. Both banking and auto stocks have led the rally as the stock market gave a thumbsup to the Union Budget 2010-2011. The allocation for the power sector has also increased by more than double. The National clear energy fund for funding research and innovative projects in clean energy technologies is a good initiative too. Overall, to me, the budget looks good and I hope all this focus in these sectors will also mean a share in the IT pie. n

Amar Babu

he budget this year would have a broad appeal in India, with a significant focus on inclusive growth and development at all strata. The emphasis on infrastructure development – both urban and rural - is both highly visible and highly welcome. It is heartening to see the significant rise in the allocation towards social welfare. The ‘National Clean Energy Fund’ will position India as a leading force in finding ways to combat the imminent energy crisis. It will also simultaneously encourage research and technology projects in the clean energy space. The proposed provision to simplify the FDI (Foreign Direct investment) model followed in India is also a welcome measure. With the noble intention of spurring R&D across sectors, this budget paves the way for tax reforms on in-house R&D expenses, and also on contributions made towards scientific research to associations, colleges, universities and other institutions. While research and development gets a leg-up, higher education and corporate tax reform waits for its turn. The UIDA took the lead among e-infrastructure initiatives, and broadband roll-out and major e-governance projects still needs to be addressed. n

Managing Director, Lenovo India

he Government’s Union Budget 2010 underscores the focus on development, especially on infrastructure, rural development, urbanization and social welfare, aiding India’s development and further stimulating the vital industrial sectors. The attention on e-governance with the UID project and the Technology Advisory Group indicates the Gover nment’s continued move to leverage Information Technology in critical projects. It is also setting an example by generating thrust in the renewable energy sector. Spends allocation in the SME sector is welcomed, as that will allow for the sector to invest in IT for productivity and competency. Assigning GST will help clarify pricing norms and duty structures across the board. The budget concentrates on the sustained growth and momentum in the industry, and is welcomed. n

DIGIT CHANNEL CONNECT

March 2010

focus Budget 2010-11 Partha Iyengar

Rajeev Gupta

Head of Research, Gartner India

President, Fujitsu Consulting India

verall this is a fairly positive and balanced budget from a broader Indian economy perspective as well as from the narrower IT industry focus...From an IT industry perspective, my summary reaction and ‘scorecard’ is as follows: Major positives - Increase in infrastructure outlays, Allocation of Rs 1,900 crore for UID Project, Setting up an IT Innovation cell under the leadership of Nandan Nilekani, FDI process streamlined, Incentives for personal funds being allocated towards infrastructure support vehicles, Allocation of funds and target to reduce legal backlog from 15 years to 3 years, Increase in R&D credits should provide a boost to innovative activities; Average/Minor Positives - Minor (compared to the need!) increase in education outlay, Exemption of additional duty on mobile accessories manufacture in India to boost local manufacturing; Major negatives - No big bang allocation/steps taken to fundamentally revamp the primary and secondary education process in India. n

Vivekanand Venugopal Vice President & GM, Hitachi Data Systems

O ve r a l l a p o s i t ive budget. Growth schemes in Banking, Investments in e-Governance and Infrastructure will drive investments in IT. The revision in Income Tax slabs and investments in Rural Sector Development is encouraging. n

he increase in the tax slabs comes out as a positive move for a salaried employee. This conveys the readiness of the Government to move towards the Direct Tax Code to be implemented from 2011. However from the industry stand point, the increase in the MAT from 15 to 18 percent negates

the impact of the reduction in surcharge. There is no reduction in the corporate tax rate as was expected in line with the proposed changes in the Direct Tax Code. From the Service Industry point of view, non-increase in the Service Tax Rate has come as a big relief. This along with the simplification in the Refund Process for Accumulated Credit will help the industry in improving its cash flow. There has been no mention of the extension of the STPI tax holiday and the industry will have to keep its fingers crossed for the next budget when the holiday ends. n

Rajesh Janey

President, Sales, India & SAARC, NetApp

Andrew Horne

Managing Director, Xerox India

he Union Budget for 2010-2011 is a budget in the positive direction. The impressive growth of the manufacturing sector in the third quarter of current year has reinforced that the economy is reviving but we need to move ahead with caution. With the continued support from Government on stimulating the economic recovery, the industry will be able to strengthen itself further. The Technology Advisory Group for Unique Projects (TAGUP) is a recommendable initiative of the Government and a step closer towards e-governance. In addition, for MNC’s, simplifying the FDI policy would help to improve the overall investment environment. For the common man, the reduction of customs duty, central excise duty and special additional duty in certain goods and commodities critical to SME’s and SMBs’ will be beneficial for the Indian household. The tax slab for the personal income and investment will also give a boost to the average mid level income group. n

DIGIT CHANNEL CONNECT

March 2010

his year’s budget was mostly a calm budget for the IT industry. The good part is that it reflects strong flavour of social inclusion signalled by the focus on development fund and allocation for the education segment. This is a welcome move and bodes well for uniform social growth. The attention to infrastructure development is a continued note in the budget bouquet, and one that has shown results already. n

guest expression

Five

Emerging

Security Trends The potential of emerging technologies marks a sea change in how organizations should approach security challenges GAURAV AGARWAL

n an era of globalization, traditional boundaries continue to disappear, melting before the relentless pace of 24/7 communications and trade. In this new global reality, â&#x20AC;&#x153;open for businessâ&#x20AC;? can mean pooling resources and sharing sensitive information among organizations. The line between participation and isolation can also mark the line between opportunity and risk. Now more than ever, organizations rely upon business systems and automated policies to guard that line: to root out the threats, to safeguard intellectual property, to protect brand image and privacy. With the emergence of each new technology, the line can shift just a bit. As enterprises rush to exploit the opportunities, determined insiders and outsiders may exploit vulnerabilities. Consequently, the potential of emerging technologies marks a fundamental change in how organizations should approach accompanying security challenges. To gain a perspective on the security challenges organizations will face in the next several years, the following questions should be considered: what fundamental tech-

DIGIT CHANNEL CONNECT

MARCH 2010

guest expression

nology trends are expected to impact organizations in the next two to five years? Which strategic drivers should serve as catalysts for change? And how can organizations position themselves to profit from the myriad opportunities while managing the risk that inevitably accompanies them? In the next two to five years, emerging technological and social trends will have farreaching implications for enterprise security. These include five trends: securing virtualized identities, alternative ways to deliver security, information security in a Web 2.0 world, Voice over Internet Protocol (VoIP), and the security of mobile devices. By focusing on these and other emerging technologies, organizations can quickly respond to security challenges.

Securing virtual environments For the past two decades, organizations have raced to keep up with changing technology requirements by substantially building out data centres. With operational centres already stretching the upper limits of power, space and staff resources, soaring capital costs and exponential growth in power costs are forcing organizations to examine ways to deliver a more energy-efficient infrastructure. Unprecedented levels of scalability and responsiveness should also be in place to

DIGIT CHANNEL CONNECT

MARCH 2010

support the dramatic growth of shared applications, and the natural ebb and flow of service demands on resources. Based on a shared infrastructure in which large virtualized resource pools are linked to provide organizations with a simple, quick and deviceagnostic path to services, cloud computing delivers the potential to radically change the economics of running a data centre. Through the ability to define and standardize collections of resources, cloud computing offers simplification on a grand scale, providing an opportunity to streamline and standardize the security approach and configurations throughout the organization. In turn, the simplification positively feeds upon itself -- since resources can be managed in a similar fashion, a larger number of virtual resources become manageable.

Other ways to deliver security The economics of managing and operating complex, specialized IT security services is driving new forms of packaging and delivering security services. There are two key factors that influence this increased diversity. First, an IT organization should decide how much control it wants to maintain. Is it comfortable with the idea of another company providing its security services or does it

want to manage security itself ? Second, the complexity of an IT environment can heavily influence how an IT organization chooses to obtain security capabilities. Some companies have relatively simple, self-contained IT needs. On the other hand, some companies have highly dynamic environments that have the ability to quickly adapt their IT services to new business needs. In addition to traditional software offerings, managed services and outsourcing arrangements, there are a few trends in the delivery of security capabilities: Appliances. In the past, IT appliances meant “one host dedicated to one specialized function.” Today’s appliances are becoming platforms in their own right, evolving to a single deliverable that contains all of the operating system, middleware and applications preinstalled and preconfigured to perform multiple functions targeted to a single domain of operation. Appliances are also moving to increasingly modular physical form factors as well as virtual form factors. Software-as-a-Ser vice (SaaS). While managed services typically have dedicated infrastructure for each customer, SaaS platforms deliver “one-to-many” service in which a single platform provides a type of service to multiple customers simultaneously. These

guest expression shared infrastructure systems can provide standardized services with little need for customization. Cloud computing. Virtualized platforms and cloud computing environments support highly dynamic environments with elastic scalability needs. These dynamic environments can be used to create “cookie-cutter” definitions of resource pools to standardize application deployment and other IT services that can be deployed in massive numbers in very short times, leading to a “utility” approach to consuming security services.

Security in a Web 2.0 world Today, an ever-expanding volume of information continually and freely circulates across and beyond enterprises, governments and social networks, aided through the proliferation of open, collaborative environments, Web 2.0 mashup technologies and intelligent data streams. A boon to online communities, the information explosion has nevertheless created a nightmare for organizations with the proliferation of databases and a corresponding increase in data leakage that raises the potential for data breaches and the chance of inappropriate disclosure or use of intellectual capital. Already a boardroom issue, organizations can expect a continued push to minimize the risks of data breaches. As a result, there should be a new focus on privacy management tools with the capability to mask data, particularly in nonproduction environments such as application development where protection of data continues to be less stringent. This focus can reinforce the need for cryptography, and subsequent

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demand to simplify the complexity of the key-based algorithms and management of keys throughout the lifecycle. There is expected to be more internal pressure to link trust in data with decision making. Collectively, security practices -- including data steward assignments, data monitoring, policybased data classification and security requirements records -- should provide the metrics that calculate and reflect the protections for a repository. These metrics can be used in formulating “trust indexes” that can guide decisions about the use of a data repository -- a repository with a high trust index association can be used for high-risk decisions; conversely, a repository with a low trust index association should be used only for low-risk activities. These data protection capabilities provide a trustworthy foundation to use enterprise information assets for business optimization in a way that reflects the value of information and protects individuals’ privacy.

The evolving network The need to accommodate bandwidthintensive applications such as VoIP, streaming video and online gaming has created a race within organizations to meet growing demands for speed and bandwidth. With speeds now reaching 10G and beyond, and traffic loads hitting unprecedented levels, service providers have less and less visibility and knowledge of the traffic going through their networks. As IT policies force more network encryption and virtualization creates new networks inside the server infrastructure, visibility is expected to become even more opaque.

MARCH 2010

IT organization should decide how much control it wants to maintain. Is it comfortable with the idea of another company providing its security services?

As a consequence, network security should become more elusive, even as new types of attacks emerge. Virtualized environments create the possibility for guest hosts to launch network-based attacks against other hosts. Other attacks likely will target session initiation protocol (SIP) proxy servers, domain name system (DNS) servers and the upper layers of the open system interconnect (OSI) stack. Combating these attacks likely will require more than traditional intrusion prevention systems (IPS) and firewall technologies. Addressing these evolving threat requirements should require a total defence-in-depth strategy based on a highly scalable, collaborating security platform with unified and coordinated network, server and end-point protection technologies.

Securing mobile devices

As IT policies force more network encryption and virtualization creates new networks inside the server infrastructure, visibility is expected to become even more opaque. Consquently, network security should become more elusive.

Of all the technologies available, the mobile device represents perhaps the greatest intersection between opportunity and risk. While mobile devices are becoming the prevalent channel for conducting business and primary means for authentication, mobile phones are increasingly subject to the same types of security attacks, but are even less mature at deflecting them. Improvements are needed in two key areas: mobile platform security and telecommunications network protection. With mobile platforms becoming more open, the mobile application development environment, deployment processes and run-time environment should be auth o r i z e d , s e c u r e a n d f r e e o f corruption. And as mobile phones are increasingly vulnerable to malware and other types of attacks, telecommunications service providers should augment their network security by monitoring their network traffic for security threats while maintaining optimal service levels. In summary, these are five trends that will gain increasing prominence in the next two to five years. If organizations recognize and respond to these trends, they can turn risk into opportunity. After all, it’s how risk is managed that determines how an organization thrives -- or fails -- in the ever-changing face of emerging technologies. n Gaurav Agarwal is Country Manager – Tivoli Software, IBM India/South Asia.