Channelworld Magazine April 2013 Issue by Sreekanth Sastry

FOCAL POINT: Read about the increasing number of emerging and proposed standard protocols for network virtualization. PAGE 51

ChannelWorld STRATEGIC INSIGHTS FOR SOLUTION PROVIDERS | COVER PRICE Rs.50

FROM TOP: A.L. Srinath, Shell Networks; R.S. Shanbag, Valuepoint Systems; Vishal Bindra, ACPL Systems; Rajesh Bhatia, CCS Computers; V. Anantha Narayanan, SBA Info Solutions; Jayesh Shah, Orient Technologies, and many others tell you what to keep your eyes open for.

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n EDITOR’S NOTE

Vijay Ramachandran

The Hire Truth “The reason I can work so hard at my writing is that it’s not work for me.” —John Irving (novelist)

USINESS OWNERS and senior executives alike tell

me that their biggest problem isn’t business-IT alignment or managing change or looking for growth amidst a downturn. It’s people—the recruiting, rousing, retaining bit. And, then there’s the need to do more—a whole lot more; a whole lot different, with a whole lot less. So, who are the kind of people you hire? Let me guess, you like fast learners; people you can vibe with; those who will blend in with the rest of the team and get along with colleagues; who

are in sync with the organization’s culture; people whom you can trust to do the right thing. These people will conform to the norm, but in doing so will they dare to think and act differently? Prof. Robert Sutton of Stanford University puts forward an interesting thought on how to foster innovation in your team. In his book, Weird Ideas That Work, the good professor observes that practices that support innovative work are nearly the exact opposite of what most managers believe is good management. He suggests that the way out is to hire people you dislike, who make you uncomfortable, who’re rude, defy authority, and undermine the prevailing culture. He states unequivocally that more innovation occurs when more people don’t know the ‘organiza-

tional code’. And why is that? Because he feels that when people don’t know the code, they draw on past individual experience or invent new methods. Thus, hiring more people who are slow to learn the ‘code’ will increase the range of ideas. If that wasn’t disruptive enough, Prof. Sutton believes that employees generate more ideas when team leaders devote less attention to them and allow them to act without getting permission first. He, in fact, recommends a reward for creative insub-

n The key to

success with persons who do not always conform and are creative is to allow them to experiment, fail, and sometimes succeed.

ordination. For instance, in the 60s, many HP managers, including David Packard, told Charles House to stop working on the oscilloscope project. He didn’t. The product became such a big success that House was awarded a medal by Packard for ‘extraordinary contempt and defiance beyond the normal call of engineering’. Assuming you do decide to take the plunge and pick staffers who are non-conformists. What next? How do you tap into their creative energies? Dr. Tomas ChamorroPremuzic, an international authority in personality profiling and psychometric testing, believes that the key to success with persons who do not always conform and are creative is to allow them to experiment, fail, and sometimes succeed. He

believes that the cost of failing is lower than the cost of not innovating. “Creativity is usually enhanced by giving people more freedom and flexibility at work,” he adds. Dr. ChamorroPremuzic advice: “Don’t constrain your creative employees; don’t force them to follow processes or structures.” I’ve been discussing Prof. Sutton’s thoughts with a cross-section of senior executives and business owners and all came back with the similar responses: How can anyone hire someone one doesn’t like? And, how can anyone not hire like someone who is like them? It is unlikely that people who are visibly rude or insubordinate will be hired easily by any organization, considering the process of selection typically aims to discover those who will fit in rather than those who will not. Interestingly, an overwhelming number of executives observed that the only thing that matters is “attitude”. A CEO told me that “leaders always find people who can take the path less trodden, while managers hire people who are subservient and less prone to question the status quo”. What do you think? n Vijay Ramachandran is the Editor-in-Chief of ChannelWorld. Contact him at vijay_ramachandran@idgindia.com

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Inside INDIAN CHANNELWORLD ■ APRIL 2013

■ NEWS DIGEST 07 Oracle Takes Aim at Salesforce | The launch of Oracle’s

■ THE GRILL

19 Ashar Aziz, Founder and CTO,

FireEye, shares why his company’s

social relationship management product reflects the growing competition with Salesforce in the emerging field of customer engagement. 08 Worldwide Server Shipments Fall | In the fourth quarter of 2012, worldwide server shipments declined 0.2 percent yearon-year, while revenue increased 5.1 percent from the fourth quarter of 2011. 08 Behind Closed Doors | Dell

has announced that it has signed a confidentiality agreement with investor Carl Icahn, who has vocally opposed the company’s proposed plan to be acquired.

■ NEWS ANALYSIS 10 Look East: PCs Have a New Home | Asian PC makers are

growing and thriving as questions surround HP’s and Dell’s slumping PC business.

■ OPINION 02 Editorial: Vijay Ramachandran

believes that its important to ensure that your creative employees are neither constrained nor forced to follow processes or structures.

37 Preston Gralla: In a world where hardware is increasingly becoming less important, who are the winners? Don’t bet on Apple or Microsoft. Cover Design by UNNIKRISHNAN A.V

19 offerings are disruptive and have no real competitors.

■ FEATURE

40 Is it Ready for Primetime? Mobile commerce is fast-rising in popularity. But does it still have few more rounds of maturation to undergo before it assumes the ‘most favored’ tag? Find out.

■ FAST TRACK

■ COVER STORY

Director and Chairman, Dev IT, says that a focus on e-governance has helped clock big numbers.

22 Six Opportunities and Threats Coming Your Way

18 Pranav Pandya, Founder

As channel partners enter another new and demanding fiscal year, they need to have a fair idea of what is good and bad for their businesses. In this anniversary issue, ChannelWorld throws light on what opportunities solution providers should look to capitalize on, and what threats they should be wary of. These 12 vital markers will help channel partners consolidate business in the times ahead.

■ CASE STUDY

38 Back From the Brink

How Bangalore-based New Wave Computing beat back the competition and successfully rolled out a robust VDI solution for an old customer, Span Infotech.

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Inside

CHANNELWORLD

Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027, India

CHANNELWORLD.IN Publisher, President & CEO Louis D’Mello Associate Publishers Rupesh Sreedharan, Sudhir Argula

INDIAN CHANNELWORLD ■ APRIL 2013

■ EDITORIAL

42 Sunil Gupta,

Director–Business Development, F1 Infotech, says that fortifying existing vendor alliances is a priority. The company has forged new vendor alliances which have improved revenues.

■ ON RECORD

14 Kaushal Veluri, Director, Channels and

Alliances, India Subcontinent, Citrix Systems,

51 are aimed at the creation of multiple virtual ethernet networks.

54 What’s Up With VMware? VIRTUALIZATION: VMware’s revenues missed forecasts pontificated by financial analysts, causing the company’s stock to plummet. It layed off nearly 900 employees, and to top it all, its chief

talks about why—and how—partners should drive BYOD with their customers.

■ FACE OFF

enterprise applications, who has a more holistic approach: Sage Software or Zoho?

51 Pointing True North VIRTUALIZATION: Read about the

increasing number of emerging and proposed standard protocols focused on optimizing the support that datacenter ethernet LANs provide for server virtualization. Several of these protocols

■ SALES

& MARKETING

President Sales & Marketing: Sudhir Kamath VP Sales Parul Singh GM Marketing Siddharth Singh Manager Key Accounts Jaideep M., Runjhun Kulshrestha, Sakshee Bagri Senior Manager Projects Ajay Chakravarthy Manager-Sales Support Nadira Hyder Assistant Manager Products Dinesh P. Senior Marketing Associate Dilip Gopinathan Marketing Associates Anuradha Iyer, Benjamin Jeevanraj, Lavneetha Kunjappa Project Co-ordinator Rima Biswas, Saurabh Patil Lead Designers Jitesh C.C., Pradeep Gulur Designer Lalita Ramakrishna ■ EVENTS & AUDIENCE

56 Integration App-eal: When it comes to

■ FOCAL POINT

Editor-in-Chief Vijay Ramachandran Executive Editors Gunjan Trivedi, T.M. Arun Kumar Associate Editor Yogesh Gupta Deputy Editor Sunil Shah Assistant Editor Online Varsha Chidambaram Special Correspondents Radhika Nallayam, Shantheri Mallaya Principal Correspondent Gopal Kishore Senior Correspondents Anup Varier, Sneha Jha Correspondents Aritra Sarkhel, Debarati Roy, Eric Ernest, Ershad Kaleebullah, Shweta Rao, Shubhra Rishi Chief Copy Editor Shardha Subramanian Senior Copy Editor Shreehari Paliath Copy Editor Vinay Kumaar Lead Designers Jinan K.V., Suresh Nair, Vikas Kapoor Senior Designer Unnikrishnan A.V. Designers Amrita C. Roy, Sabrina Naresh

technology officer announced he’s leaving VMware to pursue a venture capitalist career, less than six months after the company had a shakeup in the CEO role. Once the pre-eminent hypervisor company in a market it practically invented, analysts say a series of moves during the past 18 months have reset the dynamics of the market.

ADVERTISERS’ INDEX Boston Limited(India) . . . . . . . . . . . . . . . . . . . . . . . .5

HP IPG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC

Dell India Pvt. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .IBC

Juniper Networks India Pvt.Ltd. . . . . . . . . . . 16 & 17

D-Link India Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Schneider Electric IT Business India Pvt Ltd. . . . .3

EMC IT Solutions India Pvt Ltd . . . . . . . . . . . . . . . . 1

Trend Micro India Pvt. Ltd . . . . . . . . . . . . . . . . . . . 13

Emerson Network Power India Pvt. Ltd . . . . . . . BC This index is provided as an additional service. The publisher does not assume any liability for errors or omissions.

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News

WHAT’S WITHIN

PAGE 08: Worldwide Server Shipments Fall PAGE 08: Behind Closed Doors PAGE 09: ODCA Welcomes a New, Illustrous Member PAGE 10: Look East: PCs Have a New Home

F I N D M O R E A R T I C L E S AT CHANNELWORLD.IN

SOFTWARE

Oracle Takes Aim at Salesforce

RACLE FIRST announced its social relationship management product family several months ago at OpenWorld, but has now taken steps to actually integrate the components of the product set, which it gained through a number of acquisitions over the past year. Oracle’s social relationship management product ties together Oracle’s software for running ad campaigns on social media channels with its social listening and monitoring tools. The first capabilities were gained through Oracle’s acquisitions

of Involver and Vitrue, while the latter came from the purchase of Collective Intellect. “We are on the road to integration,” said Erika Brookes, vice president of product management, Social Platform, at Oracle. In addition, the combined product has been connected with Oracle business applications, including its Fusion and Siebel CRM software and RightNow customer service product. While customers can still buy each service separately, Oracle believes it will deliver the most value and beat out the competition with the

power provided by a fully integrated suite, Brookes said. The announcement reflects Oracle’s growing competition with Salesforce. com in the emerging field of “customer engagement,” the idea of a company building a much richer relationship with customers than in the past, from the initial sales cycle through customer support. Salesforce.com, however, won’t give up the fight lightly. It recently switched up its central marketing theme from “social enterprises” to “customer companies.” The differences between what Oracle and Salesforce.com say they want to accomplish with their strategies may come down largely to word choice. The particulars of a given vendor’s technology are less important than the overall goal of customer engagement, believes an observer. “It’s not about social or mobile,” said analyst Ray Wang, CEO of Constellation Research. “The business outcomes customers seek are better customer experiences, improved engagement, and greater revenue.” Meanwhile, Oracle has also developed a product called Oracle Social Network, which will offer businesses ways to collaborate internally.

APRIL 2013

—Chris Kanaracus INDIAN CHANNELWORLD

HARDWARE

A Tough Balancing Act A struggling HP has taken several steps this year to assure users and investors that it’s working to put past distractions behind it while bolstering its full product line. In an earnings call last month, CEO Meg Whitman dismissed persistent rumors of plans to sell off parts of the company. “We have no plans to break up,” she said. She argued that PCs and other desktop devices are still key pieces of enterprise computing, HP’s strength, and

contended that it’s important for the company to maintain its expertise. Whitman acknowledged that “it’s going to take time to get back on track,” but touted new HP hardware technology and its “multiple operating systems” designed for enterprise use. HP has reported declining profits and revenue for six quarters. —James Niccolai and Agam Shah

SERVERS

Worldwide Server Shipments Fall In the fourth quarter of growth rates were shown 2012, worldwide server by North America (5.5 pershipments declined 0.2 cent), Asia Pacific (3.4 perpercent year-on-year, cent), and Latin America while revenue increased (0.2 percent) in terms of 5.1 percent from the fourth unit shipments. These were quarter of 2011, according the only regions to experito Gartner. ence an increase in ship“Last year [2012] definitely ments. These three regions saw budgetary constraints grew at a rate of 16.3, 15.5, which resulted and 6 percent rein delays in x86spectively. based server IBM extended is the decline observed replacements its lead in the in Oracle’s revenue in enterprise worldwide server during the last year. It was the worst and mid-sized market, based on performer among the datacenters,” revenue in the big five server vendors. said Jeffrey fourth quarter Source: Gartner Hewitt, research of 2012. IBM’s vice president at Gartner. server revenue reached $5.1 “Application-as-a-business billion (about Rs 28,000 datacenters such as Baidu, crore) in the fourth quarter Facebook, and Google were of 2012 to increase its globthe real drivers of significant al market share to 34.9 pervolume growth for the year.” cent. This was up from 33.7 “Relatively weak mainpercent market share in the frame and RISC/Itanium fourth quarter in 2011. Unix platform market perThree of the top five formance kept overall global server vendors exrevenue growth in check,” perienced revenue growth Hewitt said. in the fourth quarter of From a geographic per2012, with IBM showing spective, the three highest the strongest growth rate

18%

of 8.9 percent, while Oracle had the steepest revenue decline of 18 percent. In server shipments, HP remained the worldwide leader for the fourth quarter of 2012, as it accounted for 26.5 percent of the market. However, HP’s shipments declined 5.9 percent. Of the top five vendors in server shipments worldwide, Cisco was the only vendor to experience an increase in shipments in the fourth quarter of 2012. Cisco’s worldwide server shipments increased 40.9 percent in the quarter. The results for the quarter were centered around x86 server demand, which increased in shipments by 0.2 percent and revenue by 6.6 percent for the fourth quarter of 2011. Last year demonstrated server revenue growth in spite of relative softness in some regions—most notably Western Europe. The outlook for 2013 suggests that modest growth will continue. This increase continues to be buffered by the use of x86 server virtualization to consolidate physical machines as they are replaced.

Behind Closed Doors

provided on what information would be reviewed, but it is likely that Icahn will get a look at Dell’s accounting books. Icahn had proposed that Dell pursue a leveraged recapitalization and a special dividend of $9 per share if the buyout deal was rejected by shareholders. Dell had announced that it was being purchased by founder Michael Dell and

INDIAN CHANNELWORLD APR IL 2013

Avaya announced that Hrishi Parthasarathy has been appointed as Director, Channels and Strategic Partners, India and SAARC.Parthasarathy joins Avaya from Microsoft, where he held a variety of roles, including distribution, running partner programs and strategy, sales operations, and leading its SMB business in India. iYogi a global provider of tech support launched its service for both SMBs and consumers in India. iYogi’s Business NonStop service is aimed at the SMB market, which according to AMI Partners is estimated at Rs 10,000 crore across more than four million businesses in India. McAfee announced the launch of ‘The Stack Challenge’, for its enterprise, commercial, and SMB partners in India. This channel incentive program is based on an online Tetris-style game which blends the fun quotient with high rewards and benefits.

—Channelworld Bureau

M&A

Dell said that it had signed a confidentiality agreement with investor Carl Icahn, who has vocally opposed the company’s proposed plan to be acquired for $24.4 billion (about Rs 1.3 lakh crore) in a leveraged buyout. In a brief statement, Icahn Enterprises said it “looks forward to commencing its review of Dell’s confidential information.” Further details were not

Short Takes

HUSHED TONES: Dell hopes to arrive at a deal with Carl Icahn.

equity investor Silver Lake. Dell’s Board of Directors has said that the proposed all-cash transaction is in the best interests of stockholders.

But there are signs that the deal could be at risk as many top Dell shareholders are against the proposed buyout. Icahn and some of Dell’s major shareholders, including Yacktman Asset Management and Southeastern Asset Management have voiced their opinions against the proposed deal, saying that the company is being undervalued. The stockholders are preparing to fight a proxy battle and will vote against a proposed deal. —Agam Shah

ALLIANCE

ODCA Welcomes an Illustrious New Member

ICROSOFT HAS

joined the Open Data Center Alliance (ODCA), a user-led organization that aims to simplify the purchasing of datacenter and cloud services by promoting interoperability and common standards. The alliance has gathered over 300 members in its two-and-a-half years of existence. Most of them are users of datacenter and cloud services: Banks and telcos dominate, but others include a US university, a French car manufacturer, and the Dutch national police agency. Vendors are welcome to join too, either as solution provider members or, like Microsoft, as contributor members, a status that allows them to see early drafts of the organization’s publications and to contribute to the technical workgroups that write them. Those publications include “usage models” defining standard terminology to aid in the writing of requests for proposals. The usage models cover areas including service orchestration, secure federation, long-distance workload migration, and interoperability across clouds. Mario Mueller, ODCA Chairman and also vice president of IT infrastructure at BMW, welcomed Microsoft’s move. “Microsoft has a lot of experience in the cloud environment, especially in open standards and interoperability,” Mueller said. “In the ODCA, we collaborate on

the development of interoperability standards.” For Microsoft, membership of the ODCA will open up another forum where it can connect with users of its Azure cloud platform and services, said Colin Nurse, the company’s CTO for global accounts. “Listening to customers is always a good thing for the industry to do,” he said. That’s a sentiment echoed by Laurent Lachal, senior analyst for cloud computing research at Ovum. “A lot of the large accounts that Microsoft has are in the ODCA, and it needs to follow them,” he said.

Nurse said the alliance’s emphasis on interoperability is important too. “We’re pretty proud of the interoperability of our Azure services,” he said, It’s not just about interoperability between applications running in the cloud, though: It’s also about the interoperability

Around

TheWorld Gartner: The Year of Big Data

This year will be the year of larger scale adoption of big data technologies, according to Gartner. A global survey of firms found that 42 percent of respondents had invested in big data technology, or were planning to do so within a year. In anticipation of big data opportunities, said Gartner, organizations across industries are provisionally collecting and storing a burgeoning amount of operational, public, commercial, and social data. Gartner predicts that by APRIL 2013

2015, 20 percent of Global 1000 organisations will have established a strategic focus on “information infrastructure” equal to that of application management. —Antony Savvas

Telerik Acquires EQATEC

Telerik announced that it has acquired EQATEC, creators of the cross-platform application analytics solution, EQATEC Analytics. It enables software development teams to improve decision-making based on real-time usage and application health data. “The integration of our two companies aligns perfectly with our vision of the future and long-term strategy for success, ” said Svetozar Georgiev, CEO, Telerik. —Channelworld Bureau INDIAN CHANNELWORLD

of the underlying infrastructure, and the ability to move workloads around. Other cloud vendors have already joined the ODCA, including Capgemini, Rackspace, Savvis and Verizon Terremark, but two big players are absent: Amazon Web Services and Google. —Peter Sayer

Sony Chairman and Ex-CEO to Quit

Sony Chairman and Former CEO Howard Stringer, who has been at the company since 1997, will be leaving the company in June. Stringer led Sony for seven years, facing harsh criticism as losses mounted before he was replaced last year. Stringer joined Sony in 1997. He slashed numerous product companies, while also selling off company assets to raise cash and closing factories. —Jay Alabaster

n NEWS ANALYSIS

Look East: PCs Have a New Home

Asian PC makers are growing as questions surround HP’s and Dell’s slumping PC business. By Agam Shah

fast becoming the epicenter of the PC market as Chinese and Taiwanese companies challenge the turf occupied for more than a decade by prominent US PC makers HP and Dell, whose laptop and desktop shipments are stumbling. Lenovo, Asus, and Samsung are increasing PC shipments at the expense of US companies even as the demand for laptops and desktops slows. Asian companies have taken advantage of low-cost manufacturing capabilities as well as proximity to the component supply chain and burgeoning markets like China to grow faster than their US counterparts, industry observers says. Demand for PCs has dropped with the emer-

INDIAN CHANNELWORLD APR IL 2013

SIA IS

gence of tablets and smartphones, a lack of innovation, and flagging economies. The PC business at HP and Dell—in first and third place, respectively, for global PC shipments—are struggling as the companies focus on high-margin enterprise offerings. This puts Asian firms, which are developing innovative consumer products, in a better position to lead the volume PC market. IDC is projecting annual worldwide PC shipment growth of just 2.8 percent year-over-year for 2013, and single-digit growth once again in 2014. This comes after a rough 2012 in which PC shipments fell by 3.2 percent compared to 2011. PC shipments fell for HP and Dell, which were hurt by the weak economies in the US and Europe. Lenovo, Asus,

and Samsung bucked the trend by increasing worldwide PC shipments last year, even in the US market. Meanwhile, there are questions about the future of HP and Dell in the PC business as they try to morph into mini-IBMs with a growing enterprise product portfolio, says Jay Chou, senior research analyst at IDC. The uncertainty could cause HP and Dell customers to move to Lenovo and Asus, who are committed to consumers and PCs, says Chou. HP in 2011 mulled getting rid of its PC business, and Lenovo is inching closer to become the world’s top PC maker. Dell is already deemphasizing the PC business, and announced that it would go private, leaving customers with questions about the company’s continued interest in desktops and laptops. In the fourth quarter of 2012, three of the top 10 PC makers—HP, Dell, and Apple—were based in the US, while the rest had headquarters in China, Taiwan, Korea, and Japan. In the fourth quarter a decade ago, the top three PC makers were HP, Dell and IBM, but since then the industry has contracted with Taiwanese and Chinese companies involved in key transactions. Lenovo acquired IBM’s PC business in 2004, and also Japanbased NEC, which was one of the top five PC vendors in 2002. Acer bought out US vendor Gateway and European vendor Packard Bell. Asus, which made PCs for companies like HP in the past, spun off its assembly business into a firm called Pegatron, and created its own brand of PCs. There’s a big difference between the enterprise

and consumer sectors with respect to products and business models, says John Ciacchella, principal at Deloitte Consulting. To play in the consumer market, where companies like Lenovo are strong, manufacturers need to move volumes of product, while they need to offer services and value to appeal to enterprises, says Ciacchella. “Lenovo has played economies of scale, they’ve globalized. They’ve played the market better than an HP or Dell has,” says Ciacchella. Lenovo also has the natural advantage of proximity to their suppliers as well as to growing markets. Taiwan, Korea, Japan, and China are hubs for PC assembly and manufacturing of components like memory and motherboards. “In the case of Lenovo they’ve got an indigenous market that’s huge,” says Ciacchella. “It’s still nowhere near saturation.” Asian PC makers, especially Lenovo and Asus, are aggressively investing in the consumer market, either through acquisitions or through research and development, says Tracy Tsai, an analyst at Gartner. The Asian companies are devoted to creating a variety of consumer-oriented product lines, including tablets and smartphones, Tsai says. HP and Dell were slow in adapting to the mobile device business, and research and development is focused more on enterprise products for the long-term, instead of consumer products that fulfill short-term demand. Innovations from US PC makers IBM, HP, Compaq, Apple, and Dell drove early PC growth. But PCs have

Profits Continue to Shy Away from Dell

ELL has reported another quarter of declining revenue and profits as the company’s CEO continues his battle to take the PC maker private. It was the fifth consecutive quarter in which Dell’s profits shrank, and the fourth in which it reported declining revenue. The company has been hit by a downturn in the PC market. Revenue for its fourth fiscal quarter, declined 11 percent to $14.3 billion (about Rs 77,000 crore), Dell said. Revenue from desktop and laptop PCs, which account for about half Dell’s business, declined 20 percent in the quarter. The only business unit to see growth was Dell’s server and networking business, where sales were up 18 percent, Dell said. It has been trying to reduce its dependence on PCs and re-fashion itself as a complete “solutions” company, one that sells higher-margin software and services as well as PCs and servers. But the transformation has been taking longer than investors would like. Earlier, Michael Dell announced a plan to team up with Silver Lake and take his company private in a $24.4 (about Rs 1 lakh crore) billion deal. The move could allow the company founder to focus on longer-term investments, away from the constant scrutiny of Wall Street. —James Niccolai become commodity products and the level of innovation in laptops and desktops has not matched that of tablets. Innovation in PCs is now primarily being driven by chip maker Intel, which hopes to fuel the market with ultrabooks, a new category of thin-and-light laptops with tablet features. But expensive ultrabooks and a weak user response to Windows 8 have failed to boost the PC market. Microsoft has developed Surface tablets, which the software maker intends to be a starting point for PC makers to develop a new generation of Windows PCs. Early reception to the device, however, raises questions about its future success. One big exception to the general trend in the US is Apple, which created the tablet market and has committed customers willing to pay a premium for Macs. Apple is bringing back manufacturing jobs to the US. In addition, Lenovo will

start making tablets and computers in the US. There are also some exceptions to the generally positive trend in Asia—Japanese PC vendors like Sony and Fujitsu continue to struggle, while Taiwanese PC maker Acer is floundering after putting too much stock on netbooks and not anticipating the arrival of tablets. But it’s hard to compete with Asian PC makers on margins, says Kelt Reeves, CEO of Falcon Northwest, which makes laptops and desktops for a specialized audience including gamers. Mass-market products from Asia are cheaper and with numerous factories available to enable lowcost manufacturing and assembly, Asian companies can make low-margin PCs better than anyone else, says Reeves. Falcon Northwest’s desktops and laptops use high-end components and are typically priced at thousands of US dollars. The

company sources motherboards from Asus at a price of $200 to $400 (about Rs 11,000 to Rs 22,000), and gets specialized chassis from Taiwan. The company prefers PC assembly and customer support in the US. “We prefer it US-based, but that keeps the cost a little higher,” says Reeves. Analysts noted that HP and Dell won’t leave the PC market in the short term and will continue to drive revenue and volumes of shipments. But the companies are dependent on Taiwanese manufacturers like Pegatron, Compal, and Wistron to build and design products, which indicates that the PC epicenter in some ways has already moved to Asia. Asia is more competitive at making commodity PCs, but the US is skilled in manufacturing highend technologies like microprocessors, says Deloitte’s Ciacchella. In addition, the US could have a fighting chance to retain some PC competency if it becomes increasingly cost-competitive to do business in some parts of the country as companies like Apple and Lenovo bring PC and tablet manufacturing jobs to the country. A lot of the competitiveness in the US may also depend on Dell retaining its PC unit under the proposed private ownership, which will allow it to execute on its product strategy without having to show the sort of steady quarter to quarter rise in profit that Wall Street demands. “It’s going to be an interesting situation to monitor,” says Ciacchella. (Michael Kan contributed

APRIL 2013

to this story.) INDIAN CHANNELWORLD

n NEWS ANALYSIS

Tricky Switch Oracle has to spark the adoption of its Fusion Applications without riling customers on older releases.

RACLE SPENT

years developing its next-generation Fusion Applications and finally put them into general availability nearly a year-and-a-half ago, but some new evidence suggests that it’s been less than successful at enticing customers to move up. Two-thirds of 139 Oracle applications customers surveyed by Forrester Research said they had no plans to implement Fusion Applications, while another 24 percent said they didn’t know whether they would, according to a new report. “If Oracle Fusion Applications are the future for Oracle, most Oracle users haven’t gotten the memo,” the report states. All told, Oracle may be facing a “strategic dilemma” with Fusion, in

Forrester’s view. Oracle has a large installed base on older applications such as E-Business Suite and PeopleSoft that provides plenty of lucrative maintenance revenue while not requiring the vendor to spend as much on sales activity as it would have to for new products. In addition, some time ago, Oracle made longterm commitments to those products through its Applications Unlimited program; any sudden move to phase them out in favor of Fusion would surely provoke customer revolt. And it has chosen to market Fusion Applications largely as a “co-existence” proposition, with customers adding modules over time to their current environment. For added flexibility, Fusion Applications are available as cloud services

INDIAN CHANNELWORLD APR IL 2013

as well as in on-premises form; some two-thirds of initial Fusion customers have gone the SaaS route, according to Oracle. This is a losing strategy, according to Forrester. “The current middle path of talking about Fusion while providing no disincentives against clients staying on existing apps will lead to mediocre growth,” the report states. “Our bet is that Oracle will push Oracle Fusion Applications.” An Oracle spokeswoman couldn’t immediately comment on Forrester’s report. “I believe the uptake [of Fusion] is still guarded but [customers are] excited,” said Margaret Wright, president of the Oracle Applications Users Group, in an interview. A number of OAUG members are going down the co-existence path with Fusion, but many others “have a lot invested” in E-Business Suite Release 12, with some having just made the upgrade, Wright added. Still, “the functionality [in Fusion] will entice people,” Wright said. “It’s not so much technology for the sake of technology, but usability. We’re hearing a lot about the user experience.” It may be a mistake to view Fusion Applications as some kind of inevitable endpoint, however, according to Wright. “The customer base for Oracle is so huge, it’s not a onesize-fits-all scenario.” Oracle has said some 400 customers are now running Fusion Applications. While that represents a tiny percentage of its overall user base, Oracle has also said tens of thousands of customers are using its Fusion Middleware stack, which

forms the foundation for Fusion Applications, meaning many customers may be well-positioned to adopt the new software when they are ready. In addition, Oracle is beginning to step up its efforts to form an ecosystem around Fusion Applications. Last month, it announced the availability of the first Accelerate rapid deployment offerings from partners for Fusion. Oracle has also created a Fusion Applications Developer Relations team. It’s also likely that Oracle will begin more aggressively marketing Fusion, such as through “attractive module bundling price points” and other incentives, as well as “some disincentives to clients staying on existing apps, such as longer and more modest enhancement releases,” Forrester said in its report. Still, Oracle is reportedly not all that anxious about ramping up Fusion Applications sales as quickly as possible. “You may not believe this, we’re not focused on publicity, but rather we want to ensure customer success,” says Steve Miranda, executive vice president of application development, in a recent interview with analyst Ray Wang of Constellation Research. “Each go-live is very important to us. In our first set of golives, we have 10,000 customers who want to talk to the first 10 go lives. We also don’t want to overwhelm our initial customers.” “I’m not worried about speed,” Miranda added in the interview. “I’m worried about moving in the right direction.”  —Chris Kanaracus

ON RECORD n

Kaushal Veluri,

Director, Channels and Alliances, India Subcontinent, Citrix Systems, talks about why—and how— partners should drive BYOD with their customers. By Radhika Nallayam

INDIAN CHANNELWORLD APR IL 2013

A number of Indian CIOs have shut the door on BYOD. Is this really the right time for Citrix— and its partners—to cash in on the concept? VELURI: Today, IT may be saying ‘no’ to allowing employees to have multiple devices as organizations are trying to standardize devices. But users are demanding device diversity, so BYOD will eventually become a way of life. Today, users want to bring devices they are comfortable with and operate them in the workplace. But BYOD introduces new challenges around security, control, and data delivery. So there is no better time than now to talk about BYOD and enterprise mobility. Does the acquisition of Zenprise give Citrix a far more compelling enterprise mobility story?

VELURI: Initially, when we spoke to customers about BYOD, it was more about bringing-your-owncomputer, because customers were concerned about device management. If employees bring any device they want, controlling and managing these devices becomes an issue. That got us to the realization that we have to offer a complete management suite. That’s how the acquisition of Zenprise happened. We already have cloud access gateway as a product line, which gives application access control. With Zenprise, we now have an endto-end enterprise mobility stack. Enterprise mobility typically starts off with the device and then spreads across different areas like application delivery on mobile devices, access control, and network control (which includes features like geo fencing). Citrix addresses all these aspects through a comprehensive enterprise mobility stack. This allows users to have containerized e-mail, Web, and other applications. It even allows the development of new apps. Users can now have a seamless experience across devices and IT can provide a control mechanism, which so far was the biggest concern.

Won’t this kind of a holistic enterprise mobility stack be a new concept for your partners as well? VELURI: Mobility is definitely one of the strong pieces that we can take to the market. But you’re right; the mobility story has to be explained to the customer in an effective manner by the partner. It’s a fairly new concept for our partners and customers; maybe as

KAUSHAL VELURI | ON RECORD n new as desktop virtualization was about two years ago. Today, our partners have the maturity to drive a VDI conversation effectively, and I think the learning curve for mobility will be much shorter. Why will mobility’s learning curve be less steep ? VELURI: Partners can clearly see that most of their customers are using some sort of mobility solution. So the first question that a partner can ask his customer is: What is your organization’s mobility strategy? Suddenly, our partners are able to open up a new facet and a new way of thinking for that particular customer. Some customers are already thinking about the BYOD

46%

Of Indian organizations say they currently provide mobile workstyles for employees—and will continue to expand it. SOURCE: Citrix Workplace of the Future Report 2012

We combined that with a demo and explained why they should look at BYOD. This must have helped you gauge their interest levels… VELURI: We know that not all partners are going to take the plunge right away. But some partners, those who already have an understand-

ity, considering it requires a deeper understanding? VELURI: We are planning joint sales calls with our partners for the initial few customers, during which Citrix representatives explain the concept to customers. I don’t think that any partner can suddenly start selling mobility after seeing our demo or presentation. It has to be onthe-job training. We can’t do PPT-based trainings and then expect partners to sell. As the next step, we are also organizing sales and technical boot camps for our partners so that they are ready to spread the message. Globally, Citrix is talking about ‘triangulation opportunities’ for partners, mainly

Earlier, that corner used to be desktop virtualization; going forward it will become mobility. We have almost productized the mobility solution for our partners. Today, Zenprise and the cloud gateway are two different products, but six months down the line, we are planning to integrate them into a single product category. Do you currently have customer wins in India? VELURI: We have already started talking to our existing customers, though we haven’t had any wins as yet. But there are a handful of promising leads. There have been global wins, and in India we have Zenprise/ MDM customers.

BYOD will eventually become a way of life. But it introduces new challenges around security, control, and data delivery. There’s no better time than now to talk about BYOD and enterprise mobility. scenario whereas some others are clueless. Partners today have the ability to bring in a new perspective and clarity. Our mobility stack provides end-to-end solutions that include device management and management of applications, data, and productivity tools. For partners, it suddenly creates a new avenue to gain access organizations. What does the learning curve for partners look like? VELURI: Our approach is to stage this bit by bit. To start with, we engaged with our top regional partners who have understood and experimented with the concept of mobility. We did a mobility roundtable for all our partners in Mumbai, Bangalore, and New Delhi.

ing of mobility, are currently showing a lot of interest. We already have a few partners who are engaging with us strategically. We’ve had dedicated sessions for their sales teams. This will give us the first round of partners, who are very excited about mobility and already have the requisite knowledge. However, we are also planning to look at the other set of partners who currently do not have a great understanding about the concept. We are talking to them at a more fundamental level. We believe that mobility is a great way to reach out to customers. Mobility, all said and done, still has a lot of ambiguities. How do your partners start a discussion around mobil-

around cloud, virtualization, and mobility. Are you driving a similar message among your partners in India? VELURI: We are encouraging and guiding our partners to think along such a ‘triangle’, with mobility, cloud , and desktop virtualization on three different sides. A partner might currently be focusing only on one vertex, or corner, of that triangle. But we see more and more partners evaluating the option of taking the whole triangle to the customers. Those who have this triangulation story are viewed more seriously by their customers and are becoming strategic partners to them. Partners can begin with one corner of the triangle and gradually expand to other areas.

Most of our tier-1 partners had already thought about mobility and were evaluating various MDM platforms even before we acquired Zenprise. So, the Zenprise acquisition helped us fill that MDM gap. Mobility is not as complex an implementation as desktop virtualization. But the services opportunity is very significant for all kinds of partners. What differentiates your offering from similar solutions like VMware Horizon? VELURI: Some industry experts observe that though Horizon claims it can do a lot, it does not deliver all of those presently. But at Citrix, we are in position to deliver everything that we claim we can, right away. n

APRIL 2013

INDIAN CHANNELWORLD

HOTLINE VIEW FROM THE TOP

2013’s Winning Strategy

Juniper Networks’ game plan for 2013 is to focus on the large enterprise segment and create market leadership in key areas.

Ravi Chauhan, MD, India & SAARC, Juniper Networks

What are Juniper Networks’ focus areas for the Indian market in 2013? The large enterprise segment will be one of our key focus areas this year. We have been actively working with our partner system integrators and service providers across the country, and will further strengthen our position in this space. In the networking market, we would like to capitalize on SDN and security. These are the focus areas for us and we engaged in many strategic security conversations with enterprise CSOs. Mykonos, our thought-leadership intrusion deception technology, has garnered both signifi-

cant interest and new sales from the enterprise. With the advent of 3G and 4G technologies, data consumption has emerged as a key growthdriver. Other factors like cloud computing and mobility will be the stepping stones for our business to evolve. What are the challenges in networking software and how does SDN address them? Networking software has been a drag on innovation across our industry because each network device must be configured individually and manually. Networks can’t keep pace with the on-the-fly changes required by mod-

ern cloud systems. Virtualization and the cloud have revolutionized computing and storage, but the network has lagged behind. In the service provider world, carriers struggle to configure and manage their networks. Service providers are looking to networking vendors to introduce new capabilities that enable new business opportunities. Here again, networking software is failing the industry; it is developed as a monolithic, embedded system and there is no concept of an application. Every new capability requires an update of the entire software stack. Enterprise and service providers are seeking solutions to their networking challenges. They want their networks to adjust and respond dynamically, based on business policies. They want those policies to be automated so that they can reduce manual work and personnel cost. They want to quickly deploy and run new applications within—and on top of—their networks so that they can deliver business results. And they want to do this in a way that allows them to introduce new capabilities without disrupting their business. This is a tall order, but SDN promises to deliver, which is why it’s creating a buzz in the networking world.

The philosophy behind SDN is simple: Leverage the power of software to give businesses more dynamic, fine-grained control over the performance and behavior of their networking hardware. What is Juniper Networks’ SDN strategy for 2013? Juniper Networks is the only networking provider with a SDN strategy that addresses key customer challenges, and also provides a clear set of steps that allows customers to leverage SDNenabled network in 2013 and beyond. We broadly apply SDN principles to all networking and network services including security— from the datacenter and enterprise campus to the mobile and wireline networks used by service providers. At the annual Global Partner Conference in January 2013, we introduced the most comprehensive vision in the industry: To transition enterprises and service providers from traditional network infrastructures to software-defined networks and outlined a strategy to lead the SDN market. Juniper Networks’ SDN strategy will enable companies to accelerate the design and delivery of new services, lower the cost of network operations, and provide a clear path to implementation.

CUSTOM SOLUTIONS GROUP

PRODUCT SHOWCASE

MYKONOS WEB SECURITY

EVENTS

Global Partner Conference in Las Vegas At the second annual Global Partner Conference in Las Vegas, Juniper Networks delivered several announcements that will drive the company’s business forward in 2013. These included: Juniper Networks’ SDN vision and strategy, offering a comprehensive approach to transitioning enterprises and service providers to SDN. The expansion of the Juniper Networks’ Partner Advantage program to include services and cloud solutions, offering incremental revenue opportunities for partners. The Juniper Networks Partner Advantage Services program will now enable partners to go-to-market with a range of value-added services across the entire infrastructure that help drive improved

Mykonos Web Security is the first Web Intrusion Deception System that detects, tracks, profiles and prevents hackers in real-time. Traditional Web application firewalls are flawed because they rely on a library of signatures to detect attacks, making them susceptible to zero day Web attacks.

Intrusion Deception: Mykonos

Inspira Enterprise India was awarded Enterprise Partner of the Year.

efficiency and incremental revenue, and build customer loyalty, while bringing valuable, high-performance cloud-ready solutions to market. Juniper Networks’ Partner Award winners for 2012, honoring partners for excellence in innovation and customer service. The Partner Award

program recognizes the outstanding achievements and commitment from the company’s top channel partners in the areas of sales, customer service excellence, technology expertise and service specializations. From India, Inspira Enterprise India was awarded Enterprise Partner of the Year.

NEWS UPDATE

Juniper Networks’ Long-term SDN Drive Juniper Networks is dedicated to accelerating key capabilities and technologies that will be critical for SDNs to realize their full potential over the long term. These include simplifying networks to optimize SDNs, initiating and accelerating SDNs, fusing innovation in network software and network hardware, extending SDN standards to enable interplay between applications and the network, and combining the

power of Junos and SDN to advance networking. A key capability of Junos software is the ability for customers to look down into their network hardware to optimize how their networks run. Junos also provides a Junos Software Development Kit (SDK) to customers so that they can build custom applications that run on top of Junos. This programmability is a direct complement to the programmability of an SDN.

Recently, Juniper Networks further expanded network programmability and accelerated the momentum behind SDNs by delivering OpenFlow in our SDK. By making the source code for our OpenFlow client available to all Junos SDK partners and customers, we are expanding the available toolset for customers who want to expand on the reference implementation.

uses intrusion deception to address this problem. Unlike signature-based approaches Mykonos Web Security inserts random, variable detection points, or tar traps, into the code of outbound Web application traffic to proactively identify attackers before they can do damage—without false positives.

Detect Using Deception: Mykonos Web Security inserts detection points into Web application code including URLs, forms and server files to create a variable minefield. These traps detect hackers when they manipulate the detection points during the reconnaissance phase of the attack. Track Attackers Beyond the IP Address: Mykonos captures an

attacker’s IP address as one data point for tracking. But many legitimate users could also be accessing the site from the same IP address. For this reason, Mykonos Web Security goes beyond the IP address and tracks attackers more granularly. Attackers using a browser are tracked by injecting a persistent token into their client. Attackers using scripts and tools are tracked using a fingerprinting technique to identify the machine delivering the script.

Understand Attackers and Record Their Attack: The tracking techniques allow us to profile the attacker and record an attack. Every attacker is assigned a name and each incident is recorded with a threat level-based on their intent and skill.

Authorized Distributor

n FAST TRACK

REVENUE GROWTH

DEV IT

Rs 50Rscr11 cr Rs 9 Cr Rs 35 cr

Rs 24 cr

2010-11

2011-12

2012-13* *Expected

P H O T O b y V I S A K A VA R D H A N

SOURCE: DEV IT

Snapshot

Founded: 1997

Headquarters: Ahmedabad

Employees: 500

founding in 1997, Ahmedabad-based DEV IT has matured into an IT managed services company. The company is predominantly focused on e-governance projects.“We started when the Gujarat government introduced its IT policy. The timing was perfect. The experience has helped us understand e-governance projects and needs better,” says Pranav Pandya, founder director and chairman, DEV IT. But working in this vertical has not been easy. Initially, when it set out to implement related projects, a crunch in technically skilled staff was an impediment. Pandya and his team worked around the issue by developing an in-house skill-set incubation center. “We studied the shortcomings of rookies and encouraged them to INCE ITS

Revenue 2010-11: Rs 24 crore Revenue 2011-12: Rs 35 crore Revenue 2012-13(Expected): Rs 50 crore Branches: Mumbai, Jaipur, Mississauga, New Jersey Key Executives: Jaimin Shah, Managing Director; Vishal Vasu, Director and CTO Key Business Activities: ERP, EPM, CRM, FMS, RIMS, e-governance Key Principals: Microsoft, Oracle, Adobe, Symantec Website: www.devitpl.com train at our technology up-gradation incubation centre,” says Pandya. Ever since, the SI has implemented many e-governance projects in partnership

with bigwigs like Adobe, Oracle, and Microsoft to address customers issues across India and overseas. The Gujarat government’s initiative to ensure that all departments are IT-enabled has helped e-governance focused integrators like DEV IT flourish, claims Pandya. Its implementations include infrastructure managed services such as remote infrastructure managed services (RIMS) and facility managed services (FMS). The company has extended these implementation to the Rajasthan government too. “National e-governance plan (NeGP) has a lot of projects and services meant for the public sector that require handholding, implementation, and modification of the IT infrastructure. We provide the IT services required in all those projects,” says Pandya. Software-based IT implementations in the two states have helped it clock Rs 35 crore in revenue in the previous fiscal, and is expected to garner Rs 50 crore in 2012-13. In the future, the company intends to achieve a better balance between its local and international revenues. “We are focused on expanding operations in North America, and also intend to introduce cloud-based solutions that focus on RIMS implementation,” says Pandya. n —Aritra Sarkhel

An e-governance focused approach has helped clock big numbers, says Pranav Pandya, Founder Director, DEV IT. 18

INDIAN CHANNELWORLD APR IL 2013

P h o t o s b y : S R I V AT S A S H A N D I LYA

n THE GRILL

Ashar Aziz

Founder and CTO, FireEye, shares why his company’s offerings have no real competitors. You’re founder, CTO, chief strategy officer, and vice chairman of the Board. Isn’t that a lot of roles? Yes. I have a lot on my plate. But the reality is that I always juggled different roles. During FireEye’s initial days, I was also CEO and VP [of sales and marketing]. All start-ups require that kind of effort and multi-tasking capabilities. Technology innovation interests me the most as I am an innovator at heart. The last few quarters have been powerpacked with David DeWalt joining as CEO, Enrique Salem [former CEO of Symantec] joining the board, and $50 million [about

Rs 272 crore] in funding. Is an IPO on the cards too? If an IPO happens, then it will be a financing step for the progress of the company, not an outcome we necessarily seek. Our immediate aim is the standardization of a new security architecture across all enterprise applications. We believe that its time to bring next-generation architecture to the security market. The threats have proven the ineffectiveness of incumbent offerings. The market is ripe for a next-generation security company. We have introduced many products which are fully integrated.

Dossier Name: Ashar Aziz Designation : Founder, Vice Chairman of the Board, CTO, and Chief Strategy Officer Company : FireEye Present Role: Since founding FireEye in 2004, he has served as CEO and has led its technical and business strategies. As the inventor of the FireEye malware protection system, his work has led to the filing of over 18 patents across various technologies. Career Graph: Before FireEye, Ashar founded Terraspring, a company focused on datacenter automation and virtualization. Before that, he spent twelve years at Sun as an engineer focused on networking and network security.

n THE GRILL | ASHAR AZIZ Palo Alto’s has an anti-malware cloudbased technology called WildFire, and McAfee through ValidEdge sandboxing technology is developing an on-premise product line. Do these developments threaten FireEye? They create noise in the market but they do not really have comparable technology. We address security issues through a multi-vector, onpremise appliance which resides inside the enterprise architecture covering Web, e-mail, file, and mobile. Our competitors have only scratched the surface of what we do through virtual execution architecture. They are copying our marketing message. There is a big difference in talking like we have been talking and delivering products that we do today.

We are disrupting many existing players in the market because they have not, quite frankly, innovated for a long time.

You speak of tackling next-generation security challenges like zero-day threats and APTs. Do you sometimes feel ahead of the times? It depends on the understanding of different buyers in their respective markets. In the APAC region, the threat of cyber-attacks are at an all time high. There is a diverse and complex threat landscape out there which is occasionally disclosed when a big corporation is attacked. The good news is that awareness has improved dramatically in APAC in last few years. 20

INDIAN CHANNELWORLD APR IL 2013

So, FireEye has no competitors. I believe that in terms of a full portfolio we have no real, direct competitor. There are marketing competitors. But if you look at our solutions for Internet and Web gateways, e-mail architecture, file, and mobile, they probably do compete in bits and pieces. They do not have a full e-mail or file solution. They claim to have the entire story, but it isn’t really true. Is sandboxing the miracle cure for all kinds of security threats that modern organizations have been looking for? I don’t use sandboxing, as the technology has a number of limitations. I prefer to use the phrase ‘dynamic analysis and virtual execution.’ Those are potent weapons when compared to simple bit-pattern matching like in the AV or IPS industry. Our dynamic analysis and virtual execution platform is much more powerful. It brings a whole new dimension of analysis capability into the enterprise network. Our multi-vector virtual execution (MVX) engine is a unique, core platform. Sandboxing is misnomer. Multi-vector execution is the right term. FireEye is the only company delivering protection against multiple vectors of attack on file, Web, e-mail, and mobile. You collaborate with McAfee and RSA for some of your solutions. Isn’t it tough to maintain coopetition in such a landscape? We have a joint GTM with many technology partners. Our technology is integrated with dozens of security

vendors for end-point analysis, log analysis, etcetra. We want to empower the ecosystem, be it MSPs, on-premise, or product companies. We are open to partnerships as we believe that nextgeneration architecture will truly be integrated with threat intelligence by a technology like the MVX engine. Security is a prime breeding ground for M&As—there’s McAfee-Intel, Sonicwall-Dell, Astaro–Sophos. Does that pose a challenge? The fact that it is a dynamic market is good for us. Not because so many players are involved, but because the threat landscape is dynamic. That is an opportunity for FireEye as we have delivered innovative solutions in spite of bigger players in the market. We are a wellaccepted company purely because the market reacted to true innovation, innovation that solves hard problems and delivers value addition. We are disrupting many existing players in the market because they have not, quite frankly, innovated for a long time. Appliances will cease to exist, as many security companies believe that software— on-premise or virtual—will be sufficient to secure an enterprise. What are your thoughts? It is not a question of form factor but the relevance of functionality. Providing on-premise function is important as we have been working with intelligence agencies, banks, stock exchanges, etcetera, who want security analysis inside their network. How you make that happen, either through an appliance or via software, is secondary. A large portion of the market wants security analysis on-premise. The virtual analysis happens in our appliance which is inside the enterprise’s network. What are the opportunities and roadblocks for FireEye and its channel partners in India? We are actively working with distributors, channel partners, systems integrators, and MSSPs. We are handpicking a limited number of channel partners as we want to engage with the right set to target potential customers. The only obstacle is understanding the complicated area of cyber-attacks and there we can assist partners through training programs.  —Yogesh Gupta

For more information Call : 1800 425 8970 email : marketing_in@trendmicro.com http://affinitypartner.trendmicro.com

Delhi : 91-11-42699000 Mumbai : 91-22-28395776 Bangalore : 91-80-40965068 www.trendmicro.co.in

SIX

WAYS UP

Here are the six opportunities that solution providers should consider to grow business and stay profitable. By Team ChannelWorld The ladder of success is best climbed by stepping on the rungs of opportunity. â&#x20AC;&#x201D;Ayn Rand PPORTUNITIES ARE what we constantly seek. But, often, to access them we need to know where to look. For many partners, the budgetary restrictions of a slothful economy have proved detrimental to growth. But this new fiscal is not one for brooding. It is one that can offer big rewards. There are huge opportunities available for those who have a nose for success. Government initiatives, the insatiable appetite of mobile consumers, and under-served markets, are all in readiness to incorporate and nurture the next big money spinning venture of small and big channel partners alike. It is for solution providers to surmount the challenges of

O 22

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COVER STORY n

I l l u s t r a t i o n by U N N I K R I S H N A N A .V

APRIL 2013

INDIAN CHANNELWORLD

n COVER STORY the present and keep pace with the opportunities before them. So, before you strategize about your next move for the new fiscal, take a look at these six exciting avenues where you can find better opportunities to invest and build a robust business.

The Government Gold Mine

The Opportunities: Gov-

ernment continues to be a big buyer of technology in India. With an estimated 11 percent increase in IT spend by the government for the next year, channel partners—across the country—will get a chance to capitalize on the opportunities, and consolidate their positions. THE GOVERNMENT of India will spend a colossal Rs 368 billion on IT products and services in 2013; an increase of 10.5 percent over its 2012 spends. The government has also allocated substantial funds for e-governance and computerization of various departments: A move that should provide enough opportunities for partners to capitalize. Some channel partners like CCS Computers are already smacking their lips at the rich prospects. “With the government sector contributing nearly 65 percent to our revenues, we expect to make Rs 120 crore from this sector this fiscal,” says Rajesh Bhatia, MD, CCS Computers. This Delhi-based solution provider has already cornered revenues upwards of Rs 100 crore in 2012-13 from the government sector [including defence and PSU] alone. The Union budget has also offered some wriggle room for partners to maneuver in this sector. “The Budget has provided a plethora of new opportunities for partners. There will be demand for datacenters as new mini-economic zones are being set up. Therefore, boxpushers can look forward to a beneficial stint in the government sector,” says Sanchit Gogia, principal analyst, IDC India. Initiatives by various ministries and state governments have thrown open more avenues for solution providers. Hyderabad-based Shell Networks anticipates that the government sector will provide opportunities around

INDIAN CHANNELWORLD APR IL 2013

State datacenters, IPV6, cloud, and BYOD, among others. Across the state, demand for datacenters and migration to the IPV6 platform have increased. “We have identified service revenue in this space. State governments have rolled out requests for proposals (RFPs) for their e-Panchayat initiatives which require IT infrastructure,” says A.L. Srinath, CEO, Shell Networks. The technology upgradation fund scheme (TUFS), an initiative of the Ministry of Textiles which aims at making funds available to the domestic textile industry for technology upgradation is also expected to see some fresh IT investments especially in southern and eastern regions of India. Another big opportunity in this sector is the Central government’s proposal to implement mass rapid transit systems (rail) in cities with populations of 20 lakh and above. Projects of such magnitude require huge IT infrastructure which will necessitate the backing of solution providers like Delhi-based Emarson Computers. The main thrust of Emarson’s business is city-based infrastructure projects. “We are bullish about government and PPP infrastructure projects this fiscal,” says Sumeet Prakash, CEO, Emarson Computers. Emarson has a specialized team for a up-and-coming vertical like transportation. Last fiscal (201213), the company garnered 20 percent of its revenues from the government/ PSU sector. This year it hopes to double that number.

Government Bonus The Union Government’s IT spends will see a 11 percent rise in 2013-14.

2012

Rs 33,300 crore

2013

Rs 36,800 crore Source: GARTNER

But, there are some restrictions when it comes to the kind of adoption the government sector is open to. Virtualization, BI, and the cloud may not happen immediately, believe partners. “Channel partners should not be pitching the cloud, or big data solutions, etcetera. They should stick to catering to the basic technology needs of various departments,” says Gogia. Catering to a large set up like the government will require partners to build and expand their employee capacity to deliver quality service. CCS Computers has already factored this in. It has employed 45 people in sales—pan-India—which includes 35 focused on the government sector in Delhi alone. “We recruited 10 last fiscal and will add nearly 15 more in sales to help us cover more ground,” says Bhatia. Further, CCS has expanded operations to different locations across India to address government and defence sectors. Additionally, CCS has also added a new service called information security solution which has been registered with the Department of IT, Government of India, to extend information security services to various departments, according to Bhatia. For smaller solution providers, PPPs are a conduit to growth. They can look towards the substantial IT needs of the government sector to elevate the scale of their business. “We would like to be part of the consortium of tech players executing PPP projects, which is presently dominated by large tier-1 SIs,” says Prakash from Emarson. “Government sector is a continuous process as the sales and payments are aligned across projects,” he says. With many government initiatives going online in the future to improve transparency, solution providers can bet on making it big in this sector.

Mobile Madness The Opportunities:

The mobile workforce is estimated to reach 1.3 billion in 2015. That’s 37 percent of the workforce and a cash cow for partners. ENTERPRISE MOBILITY has delivered solution providers with

an abundance of new opportunities in areas like device management, the application layer, and back-end infrastructure. Many partners were, previously, unable to excel in these domains. But that is set to change. Lucknow-based Acme Digitek Solutions was content with its growing SI business. That was until the mobile boom took over. This changed its focus. The company has now pinned its hope on enterprise mobile applications. Ajit Mittal, its managing director, has taken the big risk of investing significantly to bring in an additional focus on application development. He hasn’t done this without having a fair idea of the outcome. “This is the year of mobility. Our focus is to cash in on the mobile workforce trend, which calls for remote access of corporate data in a secure way. Within this, the application story is quite strong. That alone is a huge opportunity for us,” he says. The idea and benefits of using mobility has struck a chord with large enterprises. According to a recent study by Zinnov, almost 50 percent of CIOs say enterprise mobility is one of the top five priorities for them in 2013. “This year is going to be a turning point for enterprise mobility. Until now, we have not seen too many large deployments among enterprises. CIOs were just experimenting with horizontal deployments around e-mail and other smaller apps. However, this year, we can expect to see more maturity and better policies around mobility,” says Praveen Bhadada, director, market expansion, Zinnov. Sachin S. Rao, CEO of Bangalorebased Archon Consulting is planning to make the most of this development. He is focusing on building his access device business (laptops, tablets, etcetera) for enterprises in a big way. He believes that with mobility becoming prevalent among enterprises, the access device business is no more a volume game; rather, it’s more of an “intelligence game”. “Though there is no consistent approach among our customers in terms of what kind of mobility solution they are looking for, we can see interest building up. They are

looking at various types of services around mobility,” he says. Mobile device management (MDM) is another opportunity area for solution providers. Vilakshan Jakhu, managing director, Will Information Technologies, believed the opportunity was so significant that he quit his job as a CIO to start his own company. Within the first 100 days of forming Will Information, Jakhu says he came across at least 30 leads for enterprise mobility. While he doesn’t expect to win all of them, he says it speaks volumes about how receptive enterprises are to the idea of mobility and BYOD. But, there is a growing perception that BYOD needs to be addressed in a holistic manner to make it more effective. “A point solution will not address all the problems,” Jakhu says. “In the last couple of years, there have been plenty of discussions around mobility and BYOD. There

With the government sector contributing nearly 65 percent to our revenues, we expect to make Rs 120 crore from this sector this fiscal.” RAJESH BHATIA, MANAGING DIRECTOR, CCS COMPUTERS

are early adopters, but at the same time some of them are facing issues with scalability. Our approach is to offer an end-to-end integrated solution that addresses concerns around BYOD, security, and data integrity.” Some of the early adopters of mobility solutions are verticals like banking and finance, education, government, retail, travel and logistics. There is increasing signs of maturity among Indian enterprises when it APRIL 2013

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n COVER STORY comes to mobility policies and IT policies around mobility. With devices getting cheaper, and vendors focusing more on B2B devices, mobility is an opportunity partners cannot bypass.

In Focus: SMBs

The Opportunities:

Partners targeting SMBs can expect a 49 millionstrong market, representing a Rs 27,000 crore opportunity by 2017. Plus, SMBs make decisions quicker compared to large customers. A CYCLE manufacturer in Ludhiana, a textile unit in Madhya Pradesh, and a chain of hotels in Kerala—all examples of the nearly 49 million SMBs present in India. According to a Zinnov report titled Indian SMB Sector 2013, this number is all set to rise at a CAGR of 4.5 percent. According to another report by AMI-Partners, the IT and communication spending for Indian SMBs is expected to grow at a healthy CAGR of nearly 16 percent to $49 billion (about Rs 27,000 crore) by 2017. Much of that will be made up of products and solutions that can help SMBs overcome nagging business challenges. “Basic computing and networking hardware dominates the IT spending portfolio of Indian SMBs. This is especially true for the small business segment which is gradually enhancing their ICT backbone serving as a platform for future adoption of higher-end technology solutions,” says Dev Chakravarty, research manager, AMI–India. SMBs are a relatively untapped vertical and are therefore a massive opportunity for solution providers, especially for those who rely on a

Rs 27,000 cr The amount Indian SMBs will spend on ICT by 2017.

Source: GARTNER

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volume model. One such partner is BB Professionals. “Our business makes a profit only when we do volume sales every quarter. The SMB sector makes this possible,” says Ashim Bhasin, director, BB Professionals. This solution provider derives 80 percent of its business from the SMB sector with a focus on cloud-based ERP. BB Professionals focuses on up country markets where SMBs are pre-dominantly concentrated. Some solution providers working in this sector believe that SMBs offer better opportunities compared to larger enterprises. Among the many reasons is an SMB’s ability to make decisions fast, compared to the bureaucratic internal processes of large enterprises. That shrinks a partner’s sale cycle and boosts cash flow. “Large enterprises are fussy and their internal procedures take a lot of time. Why should I spend so

Our business makes a profit only when we do volume sales every quarter. The SMB sector makes this possible.” ASHIM BHASIN, DIRECTOR, BB PROFESSIONALS

much time on approvals for a single project?” asks Bhasin. Also, with SMBs, most of whom don’t have an internal IT team, the solution provider has the freedom to present a complete swathe of solutions, thereby increasing its chances of up-selling. That’s much harder to do with top-tiered establishments who have their own IT teams. That said, it’s important to listen carefully to SMB customers and make

sure you offer business-oriented, hard-RoI solutions. “The solution provider needs to talk more in terms of the benefits to the customer. They need to understand the core business processes of SMBs and then tell them about the right choice of solutions,” says Vishal Bindra, CEO of Delhibased ACPL Systems. Kolkata-based Parth Technocomm concurs with the need for a focused approach. With nearly 65 percent of its clients coming from the SMB sector, Parth is focusing on storage and networking solutions. “We plan to put a datacenter up by end of June this year. This should help address a larger SMB audience than we used to,” says Tejas Mehta, director, Parth Technocomm. BB Professionals is planning to take a mix of cloud and on-premise hardware solutions to the market soon. These solutions present a profitable business opportunity for partners. Most SMBs currently require only basic IT infrastructure. But, the future will see a marked change. How well the solution providers deliver to SMBs now will define how well they can leverage larger opportunities tomorrow.

The Cloud Unlimited

The Opportunities:

If you believe that the momentum around cloud has run its course, then you are wrong. Smaller, under-served markets and advanced technologies offer big opportunities.

CLOUD OPPORTUNITIES beckon the solution provider fraternity in 2013. Partners are slowly, but surely moving out of the wait-andwatch mode and trying to grab a slice of the pie. In India, a quick look suggests that the mid-market is still nascent, but ready to go cloud in a big way. Cloud computing is entering the next phase of its evolution, one in which businesses move beyond relatively simple SaaS applications and hybrid hosted infrastructure. Enterprises will soon call on solution providers to select, deploy, provision, and

45%

Of Indian CIOs plan to invest in cloud computing this year. Source: CIO RESEARCH

move applications around different cloud hosting providers. As confidence in the cloud grows, so does a customer’s appetite for more advanced services and applications. This trend will also be driven by more companies switching to opex models. Businesses will no longer be satisfied with hosted e-mail or cloud-based backup—they will want high-end supply chain management, business analytics, and CRM in the cloud. In order to make the best of this opportunity, the majority of the solution providers who are currently cloud amateurs themselves, will need to plan the outlines their structure, operations, value proposition, and goals. In the present cloud-era, in which IP is still very fluid, Indian solution providers who invest into product development and marketing will fare well. They will need to develop organizations with independent engineering, research, product development, and consultative sales competencies. It’s not wrong to say that management will become the focal point by which transformation happens and succeeds. “In the cloud-era, solution providers will have to focus on business plans to ensure they remain focused on business expansion and value delivery,” says Thirtankar Sen, senior analyst-Partners and Ecosystems, Forrester Research.

Dynacons Solutions is adding value by sensitizing customers about the longand short-term fallouts of the cloud, and what will be the right fit and mix for them. “A strong ROI case has to be established for cloud to succeed,” says Dharmesh Anjaria, director, Dynacons Solutions. “While the cloud is a fantastic opportunity, we are still encouraging customers to do their virtualization bit thoroughly before they march aggressively into the cloud space.” In smaller, upcoming markets like Vizag, there are players like CA&S Solutions that have already gone ahead and boldly explored an opex model through the cloud. “We are trying to leverage the cloud boom in this market. We will make a big move this year,” says Surendra Chikkala, MD of CA&S. The company is one of the cloud’s early movers, selling ION solutions to Vizag’s educational institutions. What Chikkala hopes to achieve is a very realistic target of tapping as many schools and colleges as his bandwidth permits. For now, both Dynacons and CA&S hope to see growth in the range of 10 and 20 percent in toplines from cloud offerings in the coming year. OEMs and vendors have also expressed that they would be more than happy to work with partners who have got their funds in place and have figured out how to offer opex models. A vendor spokesperson admitted that pushing capex models is the challenge; it is too huge a burden for customers. This virtualization vendor shortlisted three partners who are taking its initiatives through the opex model successfully to the market. While large, tier-1 partners and the upper crust of the second tier have moved to the next level in setting up cloud business practices, smaller partners, are still dealing with the

We are trying to leverage the cloud boom in this market [Vizag]. We will make a big move this year.” SURENDRA CHIKKALA, MANAGING DIRECTOR, CA&S

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n COVER STORY

hype-cycle and their relative ignorance around the cloud. “Indian partners sense the opportunity, but the word is still shrouded in mystery,” says Sen, However, the coming year is likely to see more and more players trying to get their cloud act right.

Explore New Geographies

KEYUR K. JATHAL, EXECUTIVE DIRECTOR, ISHAN INFOTECH

The Opportunities:

With active support from vendors and state governments, channel partners can ingress into industrial belts and upcoming SIRs and SEZs to improve business opportunities, increase revenue, and get a foothold in small, unexplored markets. CATERING TO new geographies to gain a first-mover advantage has been a priority for most solution providers. While IT demand continues to grow

New locations need basic IT infrastructure including server, storage, and surveillance. That is a huge opportunity for us.”

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in metros, partners are exploring opportunities with enterprise customers and SMBs in tier-2 and tier-3 cities. Some of these cities house a number of special investment regions (SIRs) and special economic zones (SEZs) which are big business avenues for solutions providers. These zones provide opportunities for channel partners. “It is a good ‘foot in the door’ opportunity for partners,” says Sanchit Gogia,

principal analyst, IDC India. SEZs in tier-2 and tier-3 cities are a large focus area for New Delhi-based CCS Computers. “Infrastructure limitations and a scarcity of land in metros have led to an expansion to new locations,” says Pradeep Johri, vice president, CCS Computers. Presently, CCS Computers is focusing on SEZs in and around New Delhi. The company plans to open branches in Dehradun, Chandigarh, and Jaipur by the end of April. “Apart from creating a presence in new areas, this expansion provides a point of contact to enterprises across other verticals in that region,” says Rajesh Bhatia, MD, CCS Computers. For some partners, expanding operations has been made easy due to the initiatives of their respective state governments. “The next growth opportunity for us will come from the seven or eight SIRs or SEZs which have been notified or are operational in Gujarat,” says Keyur K. Jathal, executive director, Ishan Infotech. Gujarat is one of the most venture- and industry-philic states in India. According to Industries Commisionerate, Government of Gujarat, the state is expecting an investment of about Rs 31,500 crore in SEZs from developers. “All these new locations need internet connectivity, basic IT infrastructure including servers, storage and, surveillance,” says Jathal. “That is a huge opportunity for us.” Pune-based Sunfire Technologies has strategized to bring its expansion plans to fruition. It visualizes three sources for growth: First-time buyers, which include new customers in greenfield projects. Cross and upselling to its existing customers. And value growth or a demand for upgrading existing products. Sunfire is also arranging seminars, events, and customer meets to demonstrate technologies and create better opportunities. “As a go-to-market strategy, we have divided industrial areas into different geographic regions and assigned them to field executives. This has helped expand our reach,” says Bhaskar, director-Technology Services, Sunfire Technologies. Ishan Infotech is also expanding

its reach to untapped geographies which have the potential to consume and drive IT infrastructure. “With branches across major cities in Gujarat, we expect to have a first-mover advantage. We have been working on this approach for nearly two quarters now as we see benefits in investing in manpower and support infrastructure,” says Jathal. Often, proximity and access to new areas is a big advantage for partners. Quick response is important to address the urgency in IT. On the flip-side, distance could be an impediment, especially when an SEZ is located outside the state. But this is a problem partners are willing to overlook. Some partners coordinate with, and travel to respective customer offices to demonstrate their value proposition at the start of a project. Another benefit for partners is that they are not required to go solo. They have active support from vendors who are quite forthcoming in aligning with them to seize a firstmover advantage. “Vendor companies are supportive as they too want to enter these unexplored geographies,” says Jathal. Importantly, as the country’s economy expands, solution providers will find opportunities to fill voids in less developed regions. Partners will get to increase value and volume of their business in new locations.

Sell Deep, Sell Wide

The Opportunities:

The single-point-ofcontact approach or a 360-degree IT approach, as partners prefer to call it, allows for increased cross- and deep-selling. IN A time when customer acquisition and bagging new projects are challenges for solution providers, holding onto existing customers and ensuring good customer retention rate is high on a solution provider’s list of priorities. This becomes crucial in light of the growing concern amongst customers that their partners are not engaging with them effectively. This fiscal has witnessed partners pulling out

Sales has been enabled to ensure that they can sell anything. The new approach has not only helped us improve on level of engagement with existing customers, it has also accelerated the multiplication factor.” RAUNAQ SINGH, DIRECTOR, TARGUS TECHNOLOGIES

all the stops in their attempt to close the growing chasm between the two parties. For starters, discussions with CIOs have revealed that many of them look at their partners as long-term allies and want them to act as a single point of contact. This trend can be broken into several aspects, two of which are cross-selling and deep-selling. The idea of diving deep into existing clientele is not new, but the idea seems to have caught the fancy of solution providers. “Customers are looking at consolidating infrastructure with tremendous scope for scalability. They want a partner whom they can liaise with in a personalized manner across the board for end-to-end IT infrastructure,” says Vipul Datta, MD, Futuresoft Solutions. Cross-selling and deep-selling involve several tactical changes in an organization; one of the most important and fundamental being crosstraining the sales force. Raunaq Singh, director, Targus Technologies, says, “Sensitizing the sales force is the first step in crossselling.” What Targus has done is internally restructure and channelize its entire sales personnel to go to customers and present products across portfolios, as against its earlier approach where it had specific sales managers for specific lines of products and solutions. This homogenous approach has ensured that existing customers are updated on Targus’ new offerings. “Sales has been enabled to ensure that they can sell anything. The new approach has not only helped us improve on level of engagement with existing customers, it has also accelerated the multiplication factor,” says Singh.

Another big driver for crossselling is that costs are escalating on all counts—both at the customer-end as well as the partner’s. Internal realignment of costs by solution providers becomes critical. “A thorough cost overhaul in order to achieve goals of optimization helps us understand what we have and what we have to achieve. These learnings are incorporated diligently into the business plan,” says Datta. A process of mapping costs has helped Futuresoft to understand that customers have to be mapped more efficiently. This has helped the company understand key accounts and offer a bouquet of relevant offerings like cloud, remote support, and a host of other optimization services that can help the company establish ROI for the customer in the short-term. The company intends to keep this sharp focus as a strategy or opportunity point for the coming fiscal. “The 360-degree IT approach of cost optimization and deep-selling will keep us steady in the coming fiscal,” says Datta. The big advantage that this solution provider has over others is its comparatively lower attrition rate (less than the industry average of 8 percent). “This makes work cohesive and helps realize objectives faster,” he adds. The journey to cross and deepselling includes making certain allowances like doling out discounts, offering POCs, free consultancy, and dealing with post-implementation teething troubles to customers. So, will cross-selling be seen as an aggressive pitch? No. Trust is what counts, they say. The trade-off makes the deal worthwhile. n APRIL 2013

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n COVER STORY

theory, the flutter of a butterfly’s wings in Brazil can create ripples that result in a storm in Mumbai. In the last few months, the banking system that started years ago, has been generating strange new storms on our shores, blowing the plans of Indian enterprise channel partners off course. A sluggish economy combined with long-existing issues in the channel have come together and created challenges that are surprising in their reach. It has, for example, not just squeezed the budgets of customers and channel players but also of vendors. As a result more principals are now cannibalizing their own channels. Some of these ripples can hit channel partners harder than others. For example, the combined forces of a weak capital market, a hesitant investment environment, and hard-to-tame inflation have spawned cash flow challenges that are forcing some solution providers to curb expansion plans—and others to shut down existing branches. The slowing economy is also hastening the evolution of old trends. It is, for instance, forcing tier-1 channel players to invade the markets of their tier-2 peers, as their own markets dry up, creating a clash within the partner community itself. Enterprise channel partners, however, aren’t taking these events lying down. They are finding new ways to work around the challenges thrown at them. In the spirit of forewarned is forearmed, here are the six large threats your peers are telling you to watch out for.

SIX

BARRIERS

I l l u s t r a t i o n by U N N I K R I S H N A N A .V

TO BEAT 1 A weak economy is combining with a number of long-dormant issues to form a set of challenges partners needs to watch out for. By Team ChannelWorld

CCORDING TO the chaos

The Operating Cost Quagmire The Threat: Higher-than-

expected expenses stemming from the rising costs of rentals, office infrastructure, staff compensation, and logistics, among others, are forcing solutions provider to rein in expansion plans and close down branches. MORE OFTEN than not, the enemy of the new is the old. For an enterprise channel partner, little demonstrates that better than the way operating costs have

COVER STORY n gotten in the way of new expansion plans. Ask the folks at Albion InfoTel. Until recently the New Delhi-based solution provider had plans to expand its operations to the US, the UK, Canada, and other Asia Pacific markets. Then the mounting costs of its existing operations caught up with it. “The increased cost of operations leaves us with fewer resources to enter new markets. Plus, our sales depend on daily marketing expenditure, and any cost reduction there, will have an adverse impact on our sales,” says Sanjeev Gupta, managing director, Albion InfoTel. For most channel partners, operating costs include a host of variables including employee salaries, rentals, conveyance, logistics, and advertising and marketing expenses, among others. Rampant inflation and new standards of living have raised the cost of most of those line items, which in turn, affect the way a business is planned. “If operating costs increase more than we expect, our overall budget is affected,” says Gujarat-based Ishan Infotech’s Executive Director Keyur K. Jathal. The start of a new fiscal has put the rising cost attached to staff pay center stage. “Employees come to you in the month of April and demand a raise that’s in line with industry standards. The average increase in salaries is about 15 percent; it’s been growing at the rate of 10 percent more than to our revenues,” says Jathal. Parallel to that are the costs associated with a higher number of employees and the infrastructure needed to support them. At Kolkata-based Parth Technocomm, Director Tejas Mehta says the company’s IT expenses have risen by 8 to 12 percent. Some of that stems from increased storage requirements, says Mehta. “That’s an added cost I don’t really want to invest in, but I can’t do without. The fact is I need to provide adequate IT support to my employees,” he says. Then there are rentals. “The cost of infrastructure has gone up by 20 percent in Bangalore in the last year and the value of property in prime locations keeps increasing year-on-year,” says R.S. Shanbhag, CMD of Bangalorebased Valuepoint Systems. “We have to shell out a bomb for a prime location in the city. That extra cost affects my

overall budgetary allocations.” Jathal from Ishan Infotech adds that the price of logistics has also swelled thanks to the higher cost of fuel. “In Gujarat, the price of CNG has increased from Rs 50.20 per kilo to Rs 56.90 just in the last couple of months. That adversely affected our transport costs,” he says. Like Gupta from Albion InfoTel, the combined effect of these rising costs have affected Jathal’s expansion plans. He says that he hasn’t been able to set up new branch offices in the last quarter primarily due to escalating operating costs. “We have distribution set-ups only in limited places and do not have the option of branching out everywhere in the country as of now,” he says. In Bangalore, Valuepoint Systems has been hit harder. “The increased cost of operations has eroded the company’s profit margins by 15 percent. That’s a big impact,” says Shanbhag. In order to lower its costs, Valuepoint

The increased cost of operations has eroded our profit margins by 15 percent. We’ve had to close down branches at multiple locations to save operating costs.” R.S. SHANBHAG, CMD, VALUEPOINT SYSTEMS

Systems has been forced to take some harsh measures. “We’ve had to close down branches at multiple locations like Kolkata, Calicut, Kochi, and Trivandrum to save operating costs,” says Shanbhag. Channel partners, however, are finding ways to strike back. At Parth Technocomm, Mehta has centralized storage to lower individual storage costs. The company has also begun to APRIL 2013

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n COVER STORY use video conferencing to negate the expenses associated with employee travel. “We are trying to reach out to clients and prospective customers via video. We’ve done this to reduce our travel budgets,” says Mehta. Shanbag at Valuepoint Systems has introduced performance-based increments for employees, ensuring that he isn’t giving the entire organization a raise in their salaries. “If an employee contributes to the company’s profitability, then we give them extra payouts. All targets have become profit-defined,” says Shanbhag.

Collection Conundrum The Threat: A weak

economy is forcing more customers to pay their partners late, which affects a solution provider’s cash flow, its ability to make payments to distributors, its investment plans, and its margins. IF THE global meltdown taught businesses anything it’s this: Cash is king. But a growing number of channel partners have begun to report that cash flow has become a challenge—and will continue to be one in 2013—as more of their customers pay late. “These are difficult market conditions and recovering payments on time is becoming a huge concern for partner companies,” say Jayesh Shah, director of Mumbai-based Orient Technologies. Truth be told, getting paid on time is a challenge—difficult market conditions or not. But not being able to collect on time in a tough economy has deadlier ramifications for a channel partner given how difficult it’s also gotten to come across new business. Combine that with the fact that many channel players have high operating costs and you get a nasty picture. One of the ways late payments affect channel partners is its impact on their ability to pay distributors and suppliers. For 3in Solutions, a two-year-old solution provider based in Bangalore, late payments can easily have a long-term impact on its reputation among distributors, a large problem for the young and upcoming company. “For a start up like ours, credibility with distributors is important,” says Arun SG, founder and di-

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rector, 3in Solutions. “Delayed payments often hamper the continued support we get from distributors.” For a handful of solution providers late payments have gotten so bad with some customers that they’re evaluating taking extreme measures. “We are thinking about filing a court case against a customer for dishonoring their checks. Regular follow ups (for payments) have yielded zilch and the payment is as good as lost,” says a securityfocused solution provider in Mumbai. The impact of one late payment doesn’t stop with one account, it also has a drag effect on the rest of the company. Solution providers report that following up on payments consumes too much of their bandwidth forcing them to be less focused on winning new deals. Neither are solution providers getting any help from their principals. “Payment from some customers maybe a challenge as they want long credit periods. If this is not supported in parallel by vendor com-

Most large SIs are used to doubledigit growth; nothing less than 15 percent. But the slowdown is getting in the way of that kind of growth. So they’re falling back on the SMB market.” AJIT MITAL, MD, ACME DIGITEK SOLUTIONS

panies then the partner stands to suffer,” says V. Anantha Narayanan, founder and MD, SBA Info Solutions. In the meanwhile, businesses still have to run. With money only dribbling in and distributors knocking on the door, partners need to jumpstart their cash flows, which usually means an injection of capital. But that’s got it’s own problems too. “The cost of finance eats in to the wafer thin mar-

gins that our industry operates on,” says Narayanan. All of this is forcing solution providers to change the way they approach and engage customers. There’s a lot for more focus today, for example, on ensuring they work with customers that can pay up, says Narayanan. For some companies, that’s actually meant turning down business, a tough call in this economy. At 3in Solutions, Arun says, they have some customers who only paid up after about six months—almost thrice the credit term offered by the company. “When they came back with a repeat order, we simply refused them. It is better to let go business than get embroiled in a delayed payment cycle,” he says. “Today, recovering payments on time is more important than executing orders.” Late payments have also forced 3in Solutions to relook its sales approach. Today, it’s willing to sacrifice big deals on the altar of on-time payments. “We would rather invest in smaller deals with SMB customers than block a big chunk of money with large enterprises. This ensures that we are not dependent on few big payments to make our commitments to distributors,” says Arun, who adds that 3in Solutions now has a team dedicated to payment collections. He also ensures that customers have skin in the game. “We work on a 50 percent advance, and the balance in the form of post-dated checks. The advance assures some payment fulfillment and post-dated checks come handy if promises are dishonored,” he says. Others like Shah from Orient Technologies have also been fine-tuning their bad-customer radars. Shah says that there are some large companies, like one of India’s largest data connectivity service providers, which need to be avoided. He also says that an added level of due diligence is required to ensure that “we don’t end up conducting bad sales where payments are stuck for years and recoveries are difficult.” “On-time collections from customers helps a partner’s cash reserves swell, which they can then use for other activities. So we check our customer’s credentials—special-

ly the new ones—looking specifically at their track record, and how sustainable their business model is,” says Narayanan.

Your vendor: Friend or Foe? The Threat: Vendors

are short-circuiting their own channels, introducing multiple partners to a single account, and setting unrealistic targets. AN UNDERSTANDING principal can be a partner’s rock of Gibraltar; someone they can depend on for advice and to be a stepping stone to growth. But, of late, a rising number of solution providers say that their principals have started to feel more like ballast. They say more vendors are short-circuiting their channels, or are introducing multiple partners to a single account, or are

with a customer. And that affects future sales opportunities. Partners say that this trend of bypass the channel is worse when billing happens in US dollars. In such accounts, OEMs can lure customers with greater discounts and can therefore wrest control of an account more easily. “They very conveniently refuse to give ORC (over-riding commission) to the partner who brought in the deal. As a result, an OEM can offer a better deal to the customer as there is no commission involved,” says Narayanan. While it’s a win-win for the principal and the customer, it leaves the partner with nothing for the effort it’s put in nurturing a relationship. Alarmingly, vendors aren’t circumventing their channel only for large projects; Narayanan says he’s observed this trend picking up even among smaller accounts. Another growing concern for partners, says Vishal Bindra, CEO of Delhi-

It is better to let go of business than get embroiled in a delayed payment cycle. Today, recovering payments on time is more important than executing orders.” ARUN S.G., FOUNDER AND DIRECTOR, 3IN SOLUTIONS

setting unrealistic targets, all of which weigh down a partner’s bottom line. A vendor who sells directly to customers, cannibalizing its own channel, can be a partner’s biggest nightmare. What makes it such a danger is that partners don’t expect the competition and haven’t, therefore, prepared for it. It blindsides them and before they know it, they’ve lost a potential deal. That’s what happened to Chennaibased SBA Info Solutions. “Some big brands are now trying to get into large accounts directly, circumventing partners who have built relationships with these customers. It isn’t a widespread occurrence, but we have lost couple of our accounts to vendors,” says Narayanan. For those who believe that all is fair in a competitive market, the truth is that there’s more at stake than a single sale. When vendors bypass their own channel, they not only steal a sales opportunity, but also burn a relationship it’s taken years for a partner to build

based ACPL Systems, is the increasing interference from OEMs during the execution of a deal. “We are more than happy when vendors have joint sales calls with us and help us promote specific technologies or solutions. However, we don’t want vendors dictating all the terms. Some of them go so far as deciding the price and the margins to be made from a deal. When they quote a lower price in order to bag a deal, they’re completely ignoring the post-sales effort that’s required for an implementation,” says Bindra. Vendors are also banding together partners to execute a project, without paying enough attention to level of skills these partners have. “Some vendors refuse to acknowledge the fact that a good product sold by an incompetent partner is a bigger problem. They bring in multiple partners to execute a deal without even checking whether those partners have the required competencies,” he says. APRIL 2013

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n COVER STORY Over time, Bindra has built a counterstrategy: He tends to work less with vendors who operate like that and focuses on those who consistently ensure that they don’t award deals to unknown partners. Like Bindra Bangalore-based Archon Consulting, too, limits the number of vendors it works with. But, CEO Sachin S. Rao has another problem: Vendors who aggressively push technologies and solutions without really understanding what the customer wants. “Every customer goes through a certain adoption cycle. It’s the solution provider—who has done the due diligence and understands a customer’s requirements well—who is in the best place to create the right solution. While we encourage joint sales calls with vendors, they are sometimes excessively eager to sell certain technologies. They need to see what customers can use,” says Rao.

The Tier-1 Torment The Threat: More tier-1

players are muscling into tier-2 dominated areas as their markets dry up. Tier-1 SIs leverage their larger brands, slicker marketing, and their ability to offer bigger discounts to lure SMB customers away. FOR THE longest time, few tier-1 players bothered with the further-fromhome, SMB markets that tier-2 partners controlled—and few tier-2 partners had the gumption to poach accounts on tier-1 hunting grounds. A tougher economy is beginning to change that. In the last six months, more tier-2 partners have found their turf being invaded by tier-I players looking for new watering holes as their own dry up. “Many large accounts are now deferring purchase decisions. Many of the domestic counterparts of global accounts are also not very active, of late. As a result, tier-1 players are now crowding the SMB space because it’s still one of the fast-growing markets in the country,” says A.L Srinath, CEO of Hyderabad based Shell Networks. His tier-2 peers agree with him. Ajit Mital, managing director of Lucknowbased Acme Digitek Solutions says, “Most large SIs are used to doubledigit, year-on-year growth; nothing 34

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less than 15 percent. The slowdown is getting in the way of that kind of growth. So they’re falling back on the SMB market to achieve their growth targets,” he says. Sandip Sarkar, director-sales, Sterling Infoways, believes that tier-1 expansion isn’t caused by a rundown economy. “The large enterprise segment is gradually getting saturated and they [tier-1 players] see the SMB space as a promising market,” he says pointing to a longer-term trend. Whatever the reason for their invasion, tier-2 partners agree on one thing: Tier-1 SIs are bringing big guns with them. Srinath from Shell Networks reports that he’s recently lost a couple of prospective customers to tier-1 players. And those that haven’t been snatched are in danger of being lured away by tier-1 players, who use their deeper pockets to trigger a price war. “Tier-1 players are able to lure customers with deeper discounts. Though we are in

Some big brands are now trying to get into large accounts directly, circumventing partners who have built relationships with these customers.” V. ANANTHA NARAYANAN, MD, SBA INFO SOLUTIONS

a position to give similar discounts to our customers, it affects our margins. For smaller players than us, it means losing a customer,” says Sarkar. To make matters worse, some of Shell’s existing customers—who were once comfortable working with tier2 SIs—now want a taste of working with bigger brands. “When somebody comes in three-piece suit and talks big, the customer is naturally impressed and sees great value for his money.

That’s exactly what the tier-1 players are doing,” says Srinath. Tier-1 SIs also have no qualms leveraging their relationships with vendors to enforce their strategy of using deep discounts to grab deals away from smaller players. “Tier-1 players have a better control over their OEMs and have a better understanding of the price points at which they can seal a deal,” says Mital, who says he’s been facing competition from tier-1 players for sometime in the Lucknow market. On the bright side, at least for tier-2 players, Srinath says he’s come across a number of customers who have come to regret their decision of moving to a tier-1 partner. “No one takes accountability in account; their sales guys talk big and bag a deal. But the work they do is pretty unimpressive, that’s what we have come to understand,” he says. In the meanwhile, many partners have begun circling their wagons around their customers. More often than not, holding on to a customer requires a serious dialogue, they say. If they can prove that they are as good-or better—than a tier-1 player when it comes to deployment and service delivery, customers will stay loyal. Take the example of Shell Networks. The company realized that many tier-1 players in markets like Bangalore and Hyderabad were walking away with deals because they made a lot of promises and they marketed themselves well. “We realized we needed to position ourselves in the market and showcase our capabilities. We hired a highly-experienced person who used to work for one of our principals and he started talking to our key customers. We have started seeing a huge difference already. We are now able to develop our own brand equity in the market,” says Srinath.

The Long Sales Cycle The Threat: A sluggish

economy, a weak capital market, and a partner’s inconsistent ability to pitch the right solutions to the right person result in longer sales cycles and poorer cash flow. IN 2011, Adit Microsys, a solution provider based in Ahmedabad, initiated

a deal to sell a storage solution to one of its enterprise clients. To managing director Brien Shah, it was a straightforward project and he saw no reason why it couldn’t be wrapped up in a few months—and be billed well before the end of the 2011-12 financial year. But that’s not how things panned out. The deal, he says, met months of delays. “We only closed it in the last quarter of 2012-13,” says Shah. “In spite of demanding a proof-of-concept and showing enormous interest initially, the customer delayed the final signoff.” Adit Microsys’ case is not an isolated incident. About 1,500 kilometres in Bangalore, Valuepoint Systems, too, faced a similar situation with an end-to-end logistics company. Only in this time the project never closed—and the company lost the Rs 23 lakh it had invested to procure equipment for the implementation. According to Shanbhag, the logistics company delayed the project because of budgetary constraints. “The customer stated problems with capital and, in the end, didn’t even complete the deal. Everything went for a toss,” he says.

gloomy economic scenario, customers backtrack on payments for certain projects due to a lack of capital,” says Shah. For channel partners this trend can bite hard. As more customers find it difficult to come up with money come pay date, channel partners, who have bills to pay, find their sales cycles lengthening and their operations gasping for cash. “Elongated sales cycles adversely affect an organization’s top lines as investments have to be made upfront,” says Shah. A longer sales cycle also hurts a solution provider’s bottom line. “We end up losing a lot of cash during that [waiting] period,” says Bhaskar, director-technology services, Sunfire Technologies. What’s worse is that the longer a sales cycle stretches, the greater the chances a project will wither and die on the vine, as was the case with Valuepoint Systems. “Because of that, effort is wasted. We end up losing many prospective customers and are unable to meet numbers,” says Bindra of ACPL Systems.

In spite of demanding a proof-of-concept and showing enormous interest initially, the customer delayed the final signoff. Elongated sales cycles adversely affect an organization’s top lines.” BRIEN SHAH, MANAGING DIRECTOR, ADIT MICROSYS

Adit Microsys and Value Point Systems are just two of a number of enterprise channel partners complaining of customer projects that stretch beyond their target window, lengthening sales cycles, and creating a host of challenges for channel partners. To those who have spent time in the channel space, the truth is that this challenge is not new. But it’s grown more acute thanks to a sluggish economic climate, and a more cautious RBI. The combined effect of these two trends has made it harder for enterprises to find affordable capital to fund projects. “There are always issues of upfront capital investments. Market conditions directly impact the amount customers can spend on IT. In a

Some of these cash-flow woes can solved by offering customers opex models. “By shifting to an opex model, solution providers can offer the same kind of products and solutions, and not force customers to shell out large chunks of capital upfront,” says Shah. To be fair, the blame for longer sales cycle doesn’t rest solely with customers. Most management gurus say that the length of a sales cycle is defined by the quality of a salesperson. Presenting a solution to a customer who doesn’t need it immediately, or making a pitch to the wrong person, will lead to delayed decision-making and a stretched sales cycle. “There should be an effort from the solutions provider’s side to wrap a particular solution and present it to the APRIL 2013

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n COVER STORY right person on the customer side. The key is talking to a person who understands IT and not just hardcore sales,” says Shanbhag. But that requires good salespeople and that’s hard to find and retain.

Manpower Blues The Threat: The

poor quality of students being churned out by educational institutes. Employee poaching by solutions providers and vendors. And the inability of solution providers to ensure staff compensation keeps pace with rising cost of living. ASK A partner for his deepest concern for the coming fiscal, and you won’t have to wait long for an answer: A talent and manpower crunch. While these are, perhaps, age-old problems, they threaten to have greater ramifications for an already hard-pressed solution provider community. Though there are no studies to quantify how acute the problem is within the channel space, the average attrition rate in the industry is estimated at around 8 percent. The source of the problem, say some providers, start with the educational institutes. “The quality of talent graduating from technical and management institutes has been declining steadily over the last few years. Earlier, the learning curve was around six months. Today, it’s nothing less than a year,” says Sumeet Prakash, director at Emarson Computers, which is based in New Delhi. Once trained, these youngsters quickly become fodder for poaching by client companies and vendors. “Vendor poaching is a reality. So is peer poaching. We can’t shy away from accepting that,” says Raunaq Singh, director, Targus, adding that he doesn’t see the cycle of pain ending any time soon. Those who have tried to confront the poachers haven’t really gotten anywhere. “Vendor poaching is quite relentless. Even if we attempt to take it up with them, it’s a futile exercise,” says Prakash. “Vendors either deny the whole thing or plead helplessness. We have to just accept these developments as an occupational hazard.” Prakash says that vendor poaching is more rampant among sales and mar36

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keting staffers and less among technical personnel—a consolation given the significant amounts of money spent on training and certification. The fall out of this talent crunch and attrition are far-reaching. Many solution providers say they are unable to pull-off large, high-risk projects effectively because they don’t have the talent. Then engagements suffer continuity issues when skilled personnel quit halfway through a project, leaving both solution providers and their customers high and dry. A Forrester report also points out that solution providers cannot factor in these exigencies into the total cost of a project. Key to retaining employees is compensation. “Retaining good talent at an affordable cost is always a challenge as the cost of living is going up, and we can’t pass all of those costs to the end customer,” says Shah from Orient Technologies. The company is a fast-growing solution provider based in Mumbai with a number of initia-

The quality of talent graduating from institutes has been declining steadily. The learning curve used to be around six months. Today it’s nothing less than a year.” SUMEET PRAKASH, DIRECTOR, EMARSON COMPUTERS

tives lined up. The biggest spoke in its wheel, says Shah, is the lack of talent. Other approaches to arresting the attrition problem—like demanding staffers sign bonds or luring them with onsite opportunities—are now outdated. Giving incentives works-but in a very limited manner. “We have been trying to devise fresh ideas. Incentives will definitely be part of employee retention, but we have to wait and watch as things evolve,” says Prakash. n

n OPINION

PRESTON GRALLA

Hardware Overhaul In a world where hardware is increasingly becoming less important, who are the winners? Don’t bet on Apple or Microsoft.

Preston Gralla is a Computerworld.com contributing editor and the author of more than 35 books, including How the Internet Works.

HERE WAS a time when the launch of a new gen-

eration of PCs was a major event in the tech world. Home users could barely wait to put the new hardware through its paces, and enterprises planned their architecture and budgets around the new gear. Those days are long gone. Today, hardware is often an afterthought in the enterprise and likely to be driven as much by employees’ preferences as by centralized IT planning. Expensive,

high-powered machines feel as outdated as V-8 muscle cars. In a world where computing is often done in the cloud, or else in short, data-intensive bursts on mobile devices, hardware simply doesn’t matter much. This has significant implications not just for hardware makers, but for Microsoft, Google, Apple and Amazon as well. In the days of muscle machines, Microsoft had an operating system monopoly. Today, tablets and smartphones are often used for tasks that PCs once performed, and when you take those devices into account, Microsoft has become an also-ran. A Goldman Sachs report says that if you combine traditional computers, tablets, and smartphones, Microsoft has a 20 percent operating system market share, with Google at 42 percent and Apple at 24 percent. A Gartner report recently concluded that tablets will soon be people’s main computing devices, with PCs used only secondarily. That’s backed up by a report by DisplaySearch, which says that this year, tablets will outsell notebooks by a wide margin—more than 240 million tablets versus 207 million notebooks. Who are the winners and losers? Google is the biggest winner today, and will be even more so tomorrow. It makes money from ads, served up not just during searches, but also in Google services such as Gmail and Google Maps. Android is likely to continue to outsell the competi-

tion, which means more users, more market share, and more revenue. There are signs that Google may also expand in the notebook market with its Chromebooks. Acer President Jim Wong, who described the Windows 8 launch as “not successful,” touts his company’s Chromebooks. He says they account for 5 to 10 percent of Acer’s US sales, and he’s considering selling them in other developed markets. Chromebooks aren’t powerful pieces of hardware—they’re stripped down and basic. But for anyone who has embraced Internet-based computing, they’re a steal at $199 ( about Rs 11,000). Microsoft is clearly the biggest loser. Its plunging market share and inability to break into mobile in a serious way could lead to a low-growth future dependent on big-ticket corporate sales with little or no traction in the lucrative consumer market. Apple is a potential big loser as well. All but its staunchest fans may grow weary of paying a premium for a Mac when they can buy a cheap Chromebook that will do whatever they need in an always-connected world. Apple’s revenue is largely based on hardware sales. If those decline, the company will be in jeopardy. So get ready for a sleek new world, devoid of hardware screamers and less and less dominated by Microsoft and Apple. n APRIL 2013

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n CASE STUDY

Back from the How New Wave Computing beat back the competition and successfully rolled out a robust VDI solution for an old customer, Span Infotech.

By Radhika Nallayam

OU’D THINK that customer relationships that have been built over time ensure loyalty. Think again. The truth is that, given the amount of choice customers have today, a long relationship doesn’t ensure anything more than a foot in the door. For Bangalore-based New Wave Computing, a VDI implementation for a 13-year-old customer, Span Infotech, was going to bring that lesson home.

Vasudevan Subramanian (seated), MD, New Wave Computing, offered a water-tight solution to Krishnama Raju, CTO, Span Infotech.

P H O T O B Y S R I V A T S A S H A N D I LY A

THE ROAD LESS TRAVELLED Span Infotech is a growing software services firm with offices in Bangalore and across the US. It currently has 1,300 employees in India and expects to double its employee-strength over the next couple of years. One of the biggest challenges for the IT team at Span was provisioning, monitoring, and managing its end-user computing environment. “We are distributed across different locations in Bangalore and have a lot of short-term projects. So, employees have to be shuffled between projects and offices. This became a challenge for us. We had also started recruiting a lot of people. Giving all of them desktops was not going to work well for us because we had to keep re-assigning new machines to them,” says Krishnama Raju, CTO, Span Infotech. A traditional desktop infrastructure approach would not address the dy-

Brink namic requirements of Span. “Desktop procurement normally takes four to five weeks. This leads to a big delay. For a dynamic environment where developers work on varying platforms, managing infrastructure centrally was critical,” says Vasudevan Subramanian, managing director, New Wave Computing. To get around this challenge, Span was renting desktops. But this was proving to be a substantial investment with no returns. Neither did renting really get around the problem of reducing the time it took to provision new desktops for projects. At the same time Span also had plans to enable a workfrom-home culture that adhered to the company’s strict security and compliance standards. Given these multiple needs, virtual desktop infrastructure, it seemed, was an ideal solution for Span, and that’s what Span’s long-standing partner, New Wave, suggested to the company. For over a decade, New Wave has been providing infrastructure, datacenter, and computing solutions to Span. But the question was: Would Span give New Wave the project?

COSTING AND COMPETITION New Wave comprehensively studied the current and future requirements of Span and proposed a VMware VDI solution using existing IBM server and storage infrastructure with Samsung thin clients as the end-point. The customer, however, wanted to evaluate other options. It approached Citrix along with Dell as its hardware partner for a similar VDI solution. Citrix, being a strong player in the VDI space, seemed to have an equal chance at winning the deal. What could tilt the deal in Citrix’s favor was that the parent company of Span was already using a Citrix solution.

New Wave had its work cut out. Wave’s solution also offered signifiClearly, the task of usurping the cant savings on licensing. The upfront Citrix-Dell combination wasn’t going cost of buying Samsung thin clients to be easy. was also lower in comparison. For a The SI designed a solution after company that had huge recruitment analyzing the business’ challenges. It plans, this meant long-term savings. proposed a POC at Span’s office. As Ease of deployment and management expected, the competition too was were two other parameters that went ready to run one. “Setting up a POC in New Wave’s favour. was a significant investment for us. The objective was to deliver an onSTABILIZATION premise experience for Span,” says Initial hiccups are common in any VDI Praveen Kumar M., solution specialist implementation. Span faced a few isat New Wave Computing. sues, specially around application virAnother challenge was Citrix’s tualization. But New Wave and a team reputation. “When it comes to VDI, from VMware quickly stepped in to reCitrix has a strong recall value,” says solve it. “Like any other VDI implemenHarish Rayadurg, manager, key actation, this one also had a stabilization counts, New Wave Computing. period. But we had already set expectaThe POC was deployed in two days. tions with the customer about this and It ran quite smoothly for seven days in worked closely with them during the a live environment, and that gave the initial days post-deployment to resolve customer immense confidence that all issues,” says Kumar. It helped that the solution proposed by New Wave the SI’s technical team had experience is superior to the one proposed by its in setting up many critical VDI projcompetitors in terms of performance. ects and POCs. As a result, New Wave New Wave’s solution also offered successfully rolled out the project in 21 additional cost advantages. New Wave business days—much faster than any promised the solution would work pertraditional desktop implementation. fectly on Span’s existing hardware in“Even if we had asked the customer frastructure, while the competition into buy a few desktops, the deal would sisted on hardware have still come to replacements. us because we are “One of the criteria an existing partner. was to use existing But, that’s not what hardware to build a we wanted. Our aim VDI infrastructure. was to provide the Key parties: Span Infotech, Dell and Citrix right value through New Wave Computing insisted on using our solution for a Location: Bangalore their hardware and customer who had Implementation time: 21 days told us that optisuch challenging mum performance environments Cost of the project: about Rs 32 lakh was possible only to maintain,” Key people involved: Harish on Dell’s hardware. says Kumar. Rayadurg, manager, key accounts, But New Wave’s The project is Praveen Kumar M., solution specialist, POC proved that just the beginning Harish Nair, solution architect, New the VMware soluof a long journey. Wave Computing; and Krishnama Raju, tion worked just as The first phase of CTO, Span Infotech well on our existing the implementaKey Technologies: VMware desktop IBM platform. This tion is for 100 virtualization and application virtualization helped us save a lot end-points. Going solutions, Samsung thin clients, and IBM on infrastructure forward, Span has blade servers and storage cost,” says Raju. aggressive expanBesides, for a sion plans owing Post Implementation ROI: Centralized management of end-user desktop images, dynamic envito their recruitflexibility for users to access desktops ronment such as ment plans. The from anywhere, improved security, huge Span’s, where the VDI infrastructure Opex saving and power saving number of users will definitely kept varying, New scale up. n

Snapshot

APRIL 2013

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n FEATURE | M-COMMERCE

IMAGING BY UNNIKRISHNAN A.V

Is It Ready for PRIMETIME?

Mobile commerce is fast-rising in popularity. But does it still have few more rounds of maturation to undergo before it assumes the ‘most favored’ tag? Find out.

By Jeff Vance

OBILE COMMERCE has tons of potential, but like so many high-upside technology trends (smartphones, tablets, cloud computing, social media), paradigms don’t change overnight. Today, the m-commerce success story is Asia. In many Asian countries, people have skipped right over the PCera to the smartphone and tablet one. Thus, any sort of e-commerce in Asia is by definition m-commerce. Even in Asia, though, m-commerce success looks more like what we’re all used to than anything revolutionary. Mainly, you can order things out of vending machines from your smartphone, or you can shop from your phone or tablet instead of from your PC. Research by Neilson commissioned by PayPal found that both Singapore and Hong Kong are experiencing spikes in m-commerce, but when you drill into the details, m-commerce in Asia looks a heck of a lot like e-commerce in the US. Which points to one of the reasons m-commerce is failing to deliver on its lofty promise: M-commerce is tracking too closely to its e-commerce ancestors. “When retailers built their e-commerce sites, they did so without talking to customers,” says Eric Feinberg, senior 40

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director, Mobile, Media and Entertainment for ForeSee, a marketing analytics firm. “As a result, mobile wasn’t a factor when they built those sites out, which was a big mistake.” According to Feinberg, only a small percentage of e-commerce sites—or any Websites at all for that matter—are optimized for mobile. As a result, when consumers visit a site and find it to be, say, a Flash-heavy pig, they’ll bail before the page is even finished loading. “Transactions over mobile can take longer than over broadband Internet,” says Dave Berg, senior director of product management for Shunra Software, an application performance monitoring company. “Slow or under-performing apps, even if they do not slow the entire system down, will result in reduced sales and unhappy customers.” According to Berg, a performance delay of 250 milliseconds is perceptible to a consumer and a delay of less than half a second will cause a consumer to select one m-commerce site over another. After three seconds, 40 percent of users will abandon a mobile site if it has not loaded. After 10 seconds, 60 percent of mobile users will not only abandon that site or app, but also never return to it again.

“One bad performance experience and the mobile user has left your business for the competition,” Berg says.

PROVIDING A BRIDGE Those who believe that m-commerce is indeed living up to expectations will point to things like Square and payvia. These solutions allow small businesses to turn their smartphones or tablets into mobile point-of-sale (POS) solutions, giving Mom-and-Pop stores the ability to accept credit card payments without investing in expensive hardware and service agreements. Obviously, this means that the transaction, other than the actual credit card processing, still happens the oldfashioned way, by physically visiting a store or calling in an order. This isn’t a knock against Square, payvia and the like, rather it points out that there are new opportunities for mcommerce that aren’t being realized. “If a brand fails to establish a reason for a consumer to engage at the point of sale, and doesn’t make the actual transaction so simple they don’t even notice it’s happening (think Starbucks’ plans for Square), the technology infrastructure to support mobile transactions is null and void,” says Gene Signorini,

vice president, Mobile Insights at Mobiquity, a professional services firm that focuses on enterprise mobility.

IMAGING BY UNNIKRISHNAN A.V

WHO PAYS AND ASSUMES RISK? Traditional payment methods—credit and debit cards and cash—have well-established infrastructures and risk models attached to them. If you want your transaction to be quick (and in some cases hard to trace), you pay in cash. Even though you’re paying with what is essentially worthless paper, the paper gets its value from the Federal Reserve and the strength of the US economy. If you’re buying something online and are worried about fraud, then you pay with a credit card. If anything goes wrong, the credit card provider steps in, and assuming you reported the problem in a timely fashion, you’re only liable for $50 (Rs 2,700). “If the payment mechanism, mobileor Web-funded, such as a pre-paid gift card, accepts any of the major credit cards, the same protections exist for the consumer,” says Dan Dufault, executive vice president, Sales and Marketing at Merchant Warehouse, a provider of credit card processing and mobile payment solutions. What if the m-payment, though, shows up on a cellular phone bill instead of a credit card bill? Dufault, for one, doesn’t believe this will happen. “[Ultimately], the charges will appear on the credit card associated with that account and, as such, the same credit card protections will apply.” Dufault’s point of view is probably the safe bet, but it’s not a sure thing. M-commerce doesn’t necessarily have to evolve so that traditional card networks are in the middle of everything. “Competing initiatives and objectives between emerging payment players (such as Google, Square, and PayPal) and traditional constituents (banks, card networks, and merchants) has slowed down advancement of mobile transactions,” Signorini says. “Much posturing and saber-rattling is occurring, since much is at stake financially for all of these different market players.” According to Signorini, it’s not just obvious players, like carriers, who could infringe on the turf of banks and credit card companies, but also major online companies and retailers as well.

“Large merchants, such as Wal-Mart, 7-Eleven, and Target, have formed their own initiative (Merchant Exchange), in an effort to at least influence how the market evolves and ensure that their market heft is recognized by these other players,” Signorini says. The other thing that Square, PayPal, and Google Wallet could do is drive down the processing fees that merchants pay. But that doesn’t mean they’ll end up making any money doing so. “The processing of payments is a loss for Google Wallet. The company has said that they are not interested in becoming a bank,” Dufault said. “Rather, Wallet is a great conduit for informa-

way we can justify the psychic pain is by walking out with some gadget we must absolutely have right this minute. According to Andrew Schrage, cofounder of Money Crashers, a personal finance Website, Amazon continues to outperform m-commerce partially because it has done a better job of engaging customers. Whereas most mcommerce retailers are overly focused on price and rely too much on display ads, which typically aren’t very userfriendly, Amazon offers up recommendations specific to you. “Setting an affordable price is not the sole factor to drive sales and increase revenues—providing a more streamlined experience for the con-

In order to succeed, mobile commerce should focus not on transactions, per se, but on customer engagement. tion and provides Google with a way to better deliver their ads to consumers.” Which points to the main theme often heard in m-commerce cirlces: In order to succeed, m-commerce should focus not on transactions, per se, but on customer engagement.

THE SECRET SAUCE Try this some afternoon. Walk in to a Best Buy (or any electronics and applicance) store, scrutinize some high-ticket item, such as a gigantic flat-screen TV, and then see what the nearby sales associates do. Chances are their already surly attitudes will become more so. Why? Because Best Buy—and, to be fair, many retailers—are worried about something they call “showrooming,” or consumers using their stores as a showroom floors to investigate products and then walking right back out to find a better price online. The phenomena stems more from paranoia than anything. If the buyers are making the purchase online anyway, why on earth would they subject themselves to the torture of entering a Big Box store? If they don’t like what arrives in the mail, they’ll ship it back (on Amazon’s dime) and try again. If we do enter a Big Box store, the only

sumer is equally important. Businesses that can do this will be the ones at the forefront to overtake Amazon and other Web-based retailers,” Schrage says. We should pause here to observe that not every Big Box retailer is succumbing to showrooming fears. Lowe’s, for instance, is bullish on mobile. “Lowe’s built its mobile success from the inside out,” says ForeSee’s Feinberg. “They started using mobile devices to help sales associates become more knowledgeable, and they then moved forward to use mobile apps to make their customers more knowledgeable too.” In other words, the mobile channel can serve as an extension of the physical location. Perhaps, people do research first on their mobile phone, or they do research in the store itself, but if you engage customers while they are on their mobile devices, instead of ignoring or discouraging them, they will indeed be your customers and not someone else’s. “[At Lowe’s] when someone without a lot of home improvement experience walks into the store, they feel like they’re on equal footing with the sales staff,” Feinberg says. “This is why Best Buy will continue to fail. Instead of worrying about showrooming, they should worry about the customer experience.” n APRIL 2013

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n FAST TRACK

VERTICAL SPLIT

F1 InfoTech

20%

Manufacturing

20% IT/ITES

25%

Government

35%

Telecom, BFSI, and Education

P H O T O b y S R I V AT S A S H A N D I LYA

SOURCE: F1 INFO TECH

Snapshot Founded: 2003 Headquarters: New Delhi Employees: 30 Revenue 2010-11: Rs 3 crore Revenue 2011-12: Rs 6 crore Revenue 2012-13 (Expected): Rs 13 crore

HEN THE times

are tough, companies are often pushed to take a hard look at their business strategy. That’s exactly what New Delhi-based F1 InfoTech did and went after new vendor relationships, tying up with EMC and Riverbed. In very little time, the former has contributed to about 25 percent of the company’s overall revenues. F1 InfoTech also strengthened its alliance with Fortinet and CA Technologies.

Key Executives: Manish Manocha, Director-Technology; Sunil Gupta, Director-Business Development; Surjit Singh Sachdeva, Executive Director Key Principals: EMC, Riverbed, CA, Fortinet, IBM, Check Point, Symantec, McAfee, Websense Key Technologies: Security, storage, BCP and DR, WAN optimization, process automation (using RFID and bar code) Website: www.f1infotech.com The company also restructured the way it approached sales. Today, the company’s top 20 accounts are overseen by F1 InfoTech’s core

management team. The next 50 accounts are looked into by another team. And a third team monitors the new accounts acquired during the fiscal. Apart from its core competency— e-Security—F1’s foray into storage and WAN optimization also has brought significant gains during the past year. Sunil Gupta, directorbusiness development, F1 InfoTech, says, “We believe that keeping existing customers in our kitty is critical to our run-rate, and that is precisely what we set out to achieve.” The mood within the company is upbeat with plans to launch backup-as-a-service. Plans are afoot to set the new service in place by April 2013.“We will focus on datacenter services, which form the back bone for the service provider community,” says Gupta. F1 intends to keep its customer acquisition rate growing steadily at 20 percent. The company has been pitching its wares at all CIO and CTO forums, and is making sure it is aware of all the pain-points customers have and the critical security challenges that customers face. This, the company claims, helps it address CIOs issues in a holistic manner. In order to increase its foothold in other cities, it hopes to forge strategic tie-ups with other tier-2 players in Mumbai and Bangalore. F1 InfoTech is expecting to clock Rs 18 crore in 2014. n —Shantheri Mallaya

Fortifying existing vendor alliances is a priority for Sunil Gupta, Director–Business Development, F1 InfoTech. 42

INDIAN CHANNELWORLD APR IL 2013

SPECIAL AWARDS’ PARTNERS

SYMPOSIUM PARTNERS

MAY 3, 2013 HYATT REGENCY, MUMBAI

ASSOCIATE PARTNERS

“…Two roads diverged in a wood, and I, I took the one less traveled by, And that has made all the difference.” — ‘The Road Not Taken’ by Robert Frost

The ChannelWorld Premier100 Award 2013 is essentially a quest. A quest for excellence. A search for the extraordinary. A pursuit of the different. This year’s award theme is the Bold 100, which recognizes organizations who were willing to undertake bold moves for the sake of great reward. The Bold 100, thus, are organizations that took the risk associated with championing new ideas and practiced new ways of looking at their business and industry; organizations that set new benchmarks and differentiated themselves from the rest; organizations that explored new boundaries and profited from it. To be selected, applicants need to show not only that they have executed their strategy well, but that they have done so in uncommon, innovative ways. And they must demonstrate clear business value that was derived from the bold move—for their clients and themselves. What we are looking for is to recognize and honor the output of legion of men and women whose work is profoundly reshaping the Indian enterprise IT landscape—solution providers who take the ‘road less travelled’ and without any regrets. The ChannelWorld Premier100 Symposium reflects the changing realities of the game. As before we are setting out to present thought leaders and industry experts to prepare channel business leaders for the year ahead with the innovative approaches that will keep you ahead (do bear in mind that only those who win the Premier100 Award qualify to attend the Symposium). Here’s looking forward to welcoming you to this year’s ChannelWorld Premier 100 Symposium & Awards.

Vijay Ramachandran Editor-in-chie

KEYNOTE SESSION

8 STEPS TO INNOVATION An awardwinning academician and thought leader, Rishikesha Krishnan is revered as one of the leading voices on strategy and innovation. Hear him at the 5th Premier 100 Symposium & Awards ceremony.

here does innovation begin? When we think of innovation, the first thing that comes to mind is creativity. In fact, the two terms are used interchangeably. It is as though they are inextricably linked, as many innovation programs begin and end with creativity exercises, where everyone goes home thinking, ‘I innovated today.’ We believe this is a very limited view of ‘innovation’. Innovation happens only when an idea is implemented to create an impact. In today’s hypercompetitive world, relying on just one dimension of innovation is often inadequate for commercial success. In fact, some of the most successful innovations—in market

terms—incorporate multiple dimensions of innovation. Moreover, when innovation happens in organizations only through ad hoc means t seems more like jugaad. We can call it ‘ad hoc creative improvisation’ as well. On the other hand, when an organization has a disciplined way of generating, selecting and implementing ideas we call it ‘systematic innovation’. Join Rishikesha T.Krishnan, Professor of Corporate Strategy & Policy, IIM-Bangalore, at the fifth Premier 100 Symposium & Awards Ceremony, to know more about his insights on ‘innovation’. In 2010, he received the ‘Dewang Mehta Award’ for having been the ‘Best Teacher in Strategic Management’.

Grab your author-signed copy at Premier 100 2013! He has served on various committees set up by the Government of India, NASSCOM and CII. He writes extensively, and is credited with more than 140 publications including refereed journals, case studies and two books: ‘From Jugaad to Innovation’ (2010) and the recent ‘8 Steps to Innovation – Going from Jugaad to Excellence’.

SPECIAL AWARDS | CLOUD CHAMPIONS

PRESENTED BY

These awards identify those who have played a pivotal role in bringing the cloud down to earth They recognize partnersâ&#x20AC;&#x2122; ability to provide a solid foundation and work with their customers to succeed in the cloud.

f cloud computing is a disruptive force within the enterprise, just imagine what the cloud is doing to the vendor landscape. The sheer number of cloud players - or companies that claim to be cloud players is staggering. Given the hype, anticipated exponential growth, and ambiguous definitions, many technology companies are claiming to be cloudcomputing providers. A large number of channel partners appear bullish

about the opportunities in cloud computing, however only a select few have distilled the hype from the benefits. The Cloud Champions Special Awards honor those partners who are at the forefront when it comes to adopting new opportunities, understanding new technologies, and tackling the myriad challenges that arise in the cloud computing space. What sets the best cloud solution providers apart

is their ability to provide a solid foundation for any solution that they implement for their customers. Whether their customers are taking an evolutionary approach through virtualization or a more revolutionary approach by building an infrastructure from scratch, these partners bring the cloud down to earth for them and provide support from conception to implementation and beyond.

Winners 2012

SUDARSAN RANGANATHAN CHIEF EXECUTIVE OFFICER VEERAS INFOTEK EDWARD JEEVAN DIRECTOR BINARY SYSTEMS SANJEEV GUPTA MANAGING DIRECTOR ALBION INFOTEL DEEPAK JADHAV DIRECTOR VDA INFOSOLUTIONS SANDEEP VAHI DIRECTOR COMPTON COMPUTERS

SPECIAL AWARDS | DATACENTER

PRESENTED BY

These awards recognize the architects of the most resilient and responsive datacenters It honors those that ensure that their customers run datacenters which adapt to accommodate higher expectations for growth.

he environment in which the modern datacenter operates is fast changing. â&#x20AC;&#x2DC;Doing more with lessâ&#x20AC;&#x2122; has become a mantra for our times and the channel community has risen to the occasion in an extraordinary manner. They have helped their customers to embrace new trends and broadened their IT capabilities by improving security, boosting operational efficiency, and delivering customer-centric services

to meet the overall project objectives, while not compromising the uptime and availability of mission-critical applications. Customer needs are varied and it takes a thorough understanding of the client business to service the client efficiently. No doubt, partners need to be abreast of the latest datacenter-related technologies. Behind every great implementation, solution or service is a great idea

and these awards are about recognizing the ideas and thinking that shape the best datacenter solutions. They celebrate the success of those who have managed to balance their responsibilities in providing a resilient and responsive facility and making the operations energy efficient, thus showing their concern for the environment. The partners have been relentless in their endeavor to grow the datacenter business.

Winners 2012

RAJIV JAIN MANAGING DIRECTOR HTP SYSTEMS RAHUL MEHER MANAGING DIRECTOR LEON COMPUTERS V. ANANTHA NARAYANAN DIRECTOR SBA INFO SOLUTIONS PRADEEP JOHRI VP-SALES & MARKETING CCS COMPUTERS DIPESH MANGLA DIRECTOR COMPUTERS NETWORK & TELECOM

SPECIAL AWARDS | SECURITY

PRESENTED BY

These awards honor partners for their unconventional approach towards security They recognize those who excel at planning and implementing security programs that improve their customerâ&#x20AC;&#x2122;s security posture.

he need of the hour is to empower organizations to more effectively manage risk, protect critical infrastructure and maintain regulatory compliance. And while they are at it, they need to reduce complexity, manage costs and not compromise on application performance. No wonder then, that this is a momentous challenge for the channel community, and a huge responsibility on them to help ease the worries of their clients with regard to information risk

management and allow them to concentrate on their core operations. They need to provide the best-in-class technology to help customers get the most from their IT investments. This award recognizes those in the channel community who are redefining the benchmark of excellence by planning, implementing and managing security programs that significantly improve their customerâ&#x20AC;&#x2122;s security posture. They are the leaders in their field and the dedication

and expertise they exhibit in serving their clients and addressing specific security requirements is unparalleled. By comprehensively addressing security vulnerabilities, these channel partners help their customers to explore new models of revenue, enable collaboration inside and outside of their organizations, and create a growth strategy, knowing that this will help clients be tuned with the changing threat landscape.

Winners 2012

JAYANTH GOJER CHIEF OPERATING OFFICER VITAGE SYSTEMS NITYANAND SHETTY MANAGING DIRECTOR ESSEN VISION SOFTWARE D.K. BAJAJ DIRECTOR D M SYSTEMS JITEN MEHTA DIRECTOR MAGNAMIOUS SYSTEMS N.K. MEHTA CEO & MANAGING DIRECTOR SECURE NETWORK SYSTEMS

SPECIAL AWARDS | STORAGE

PRESENTED BY

These Awards identify pioneers in delivering innovative storage solutions More data means more storage, and more complications. This award honors best storage solutions by partners, for their customers.

loud storage, virtual machine (VM) backup, big data and vendor consolidation have caused a significant change in todayâ&#x20AC;&#x2122;s storage market environment. As organizations understand the importance of data management and increase their investments in implementing storage solutions, channel partners have an important role to play in educating their customers on innovative storage technology and providing them with a

proven, high quality and cost-efficient solution. The award-winning partners also maintain strategic relationships with the IT industry leaders which ultimately allows them to deliver best-in-class solutions with a significant competitive advantage. These awards honor channel partners who have delivered exemplary solutions for their customers during the past year and have accomplished extraordinary business

challenges. These select few have chosen to keep their focus on helping companies connect disparate pools of storage, use disk capacity more efficiently and harness storage resources into a leaner machine â&#x20AC;&#x201D; all of which have translated into greater efficiencies for the client. They are the storage integrators, and they are passing on the benefits from the intense competition brewing among storage vendors to their customers.

Winners 2012

HARESH GADA DIRECTOR NETWORK TECHLAB S.T. MUNEER AHAMED MANAGING DIRECTOR DIGITAL TRACK SOTTLUTIONS PRAVEEN DWARKANATH DIRECTOR MN WORLD ENTERPRISE PRARTHANA GUPTA CHIEF EXECUTIVE OFFICER CACHE DIGITECH ANUJ GUPTA DIRECTOR-SALES MIEL E-SECURITY

SPECIAL AWARDS | HALL OF FAME

These awards showcase those partners who have reached the highest levels of excellence The ‘Hall of Fame’ winners have consistently proved that they are the ones who push themselves to transform rather than merely improve.

hen success repeats itself it reflects the highest level of achievement. The ChannelWorld Premier 100, now in its fifth year, is proud to present the Premier 100 ‘Hall of Fame’. ‘Hall of Fame’ honors the partners, whose work has made a profound difference to their customers. Solving complex IT challenges can be complicated, and it requires innovative solutions and unparalleled experience. Whether their

customers are looking for ways to streamline and modernize their IT infrastructure or want to understand how mainstream IT technologies and solutions can be used to support their ever changing business requirements, the winners have helped their customers improve infrastructure and application performance, while helping to control costs, enhance productivity, and improve constituent services. They

have worked to achieve two basic objectives: to come up with the strategies or solutions needed to overcome their customers’ businessIT challenges and to implement those solutions efficiently and effectively. They push themselves to transform rather than merely improve. They recognize and run with opportunities fraught with risk, but ultimately worth the reward. And this, they have done it consistently, year after year.

Honorees 2012

ALLIANCE PROSYS RAVI PUTTA ACCEL FRONTLINE MAQBOOL HASSAN ORIENT TECHNOLOGIES JAYESH SHAH QUADSEL SYSTEMS GIRISH MADHAVAN QUANTM NET TECHNOLOGIES PAWAN KHURANA TEAM COMPUTERS RANJAN CHOPRA FRONTIER BUSINESS SYSTEMS RAVI VERDES ALLIED DIGITAL NEHAL SHAH TARGUS TECHNOLOGIES COL. BALWINDER SINGH CHOICE SOLUTIONS K.V. JAGANNATH

Focal Point EVERYTHING ABOUT VIRTUALIZATION

Pointing True North

Hereâ&#x20AC;&#x2122;s a complete guide to network virtualization. By Jim Metzler

HERE ARE a number of emerging and proposed standard protocols focused on optimizing the support that datacenter ethernet LANs provide for server virtualization. Several of these protocols are aimed at network virtualization via the creation of multiple virtual ethernet networks

that can share a common physical infrastructure in a manner that is somewhat analogous to multiple virtual machines sharing a common physical server. Most protocols for network virtualization are based on creating virtual network overlays using techniques based on encapsulation and tunneling. The

most commonly discussed protocols include VXLAN, NVGRE, STT, and SPB MAC-in-MAC. SPB is already an IEEE standard, while it is likely that only one of the other proposals will achieve IETF standard status, most likely VXLAN.

TRADITIONAL METHOD The one-to-many virtualization of network entities is not a new concept. The most common examples are VLANs and Virtual Routing and Forwarding (VRF) instances. VLANs partition the network into as many as 4,094 broadcast domains, as designated by a 12-bit VLAN ID tag in the ethernet header. VLANs have been a convenient means of isolating different types of traffic that share the same switched LAN infrastructure. In datacenters that make extensive use of server virtualization, the limited number of VLANs can present problems, especially when large number of tenants need to be supported, each requiring multiple VLANs. Extending VLANs across the datacenter via 802.1Q trunks to support VM mobility adds operational cost and complexity. In datacenters based on Layer 2 server-to-server connectivity, large numbers of VMs, each with its own media access control address, can also place a burden on the forwarding tables capacities of Layer 2 switches. VRF is a form of Layer 3 network virtualization in which a physical router supports multiple virtual router instances, each running its own routing protocol instance and maintaining its own forwarding table. Unlike VLANs, VRF does not use a tag in the

packet header to designate the specific VRF to which a packet belongs. The appropriate VRF is derived at each hop based both on the incoming interface and on information in the frame. An additional requirement is that each intermediate router on the end-to-end path followed by a packet needs to be configured with a VRF instance that can forward that packet.

USING OVERLAYS Due to the shortcomings of the traditional VLAN or VRF models, a number of new techniques for creating virtual networks have recently emerged. Most are based on the use of encapsulation and tunneling to construct multiple virtual network topologies overlaid on a common physical network. A virtual network can be a Layer 2 network or a Layer 3 network, while the physical network can be Layer 2, Layer 3 or a combination depending on the overlay technology. With overlays, the outer (encapsulating) header includes a field that is generally 24 bits wide that carries a virtual network instance ID (VNID) that specifies the virtual network designated to forward the packet Virtual network overlays can provide a wide range of benefits, including: n Support for essentially unlimited numbers of virtual networks; for example the 24-bit header enables the creation of up to 16 million virtual networks. n Decoupling of the virtual network topology, service category (L2 or L3) and addressing from those of the physical network. The decoupling avoids issues such as MAC table size in physical switches.

APRIL 2013

INDIAN CHANNELWORLD

n FOCAL POINT | VIRTUALIZATION n Support for virtual ma-

VXLAN Virtual eXtensible LAN (VXLAN) virtualizes the network by creating a Layer 2 overlay on a Layer 3 network via MAC-in-UDP encapsulation. The VXLAN segment is a Layer 3 construct that replaces the VLAN as the mechanism that segments the datacenter LAN for VMs. Therefore, a VM can only communicate or migrate within a VXLAN segment. The VXLAN segment has a 24-bit VXLAN Network identifier. VXLAN is transparent to the VM, which still communicates using MAC addresses. The VXLAN encapsulation is performed through a function known as the VXLAN Tunnel End Point (VTEP), typically provided by a hypervisor switch or a possibly a physical access switch. The encapsulation allows Layer 2 communications with any end points that 52

supported by IBM. Prestandard implementations in hypervisor vSwitches and physical switches are beginning to emerge.

NETWORK VIRTUALIZATION Any Application

Decoupled

Virtual Machine

COMPUTE VIRTUALIZATION

Pool of Physical Compute Capacity (any x86 hardware)

Virtual Network

Decoupled

chine mobility independent of the physical network. If a VM changes location, even to a new subnet, the switches at the edge of the overlay simply update their mapping tables to reflect the new location of the VM. The network for a new VM can be provisioned entirely at the edge of the network. n Ability to manage overlapping IP addresses between multiple tenants. n Support for multi-path forwarding within virtual networks The main difference between the various overlay protocols lies in their encapsulation formats and the control plane functionality that allows ingress (encapsulating) devices to map a frame to the appropriate egress (decapsulating) device.

Virtual Network

NETWORK VIRTUALIZATION

Pool of Physical Network Capacity (any network hardware) Any Application Source: VMware

are within the same VXLAN segment, even if these end points are in a different IP subnet. This allows live migrations of VMs to transcend Layer 3 boundaries. Since MAC frames are encapsulated within IP packets, there is no need for the individual Layer 2 switches to learn MAC addresses. This alleviates MAC table hardware capacity issues on these switches. Overlapping IP and MAC addresses are handled by the VXLAN ID, which acts as a qualifier or identifier for the specific VXLAN segment within which those addresses are valid. The VXLAN control solution uses flooding based on Any Source Multicast (ASM) to disseminate end system location information. As noted, VXLAN uses a MAC-in-UDP encapsulation. One of the reasons for this is that modern Layer 3 devices parse the 5-tuple (including Layer 4 source

INDIAN CHANNELWORLD APR IL 2013

and destination ports). While VXLAN uses a wellknown destination UDP port, the source UDP port can be any value. As a result, a VTEP can spread all the flows from a single VM across many UDP source ports. This allows the intermediate Layer 3 switches to make efficient use of multi-pathing even in the case of multiple flows between only two VMs. Where VXLAN nodes on a VXLAN overlay network need to communicate with nodes on a legacy (i.e., VLAN) portion of the network, a VXLAN gateway can be used to perform the required tunnel termination functions including encapsulation or decapsulation. The gateway functionality could be implemented in either hardware or software. VXLAN is the subject of a IETF draft supported by VMware, Cisco, Arista Networks, Broadcom, Red Hat, and Citrix. VXLAN is also

NVGRE Network Virtualization using Generic Router Encapsulation (NVGRE) uses the GRE tunneling protocol defined by RFC 2784 and RFC 2890. NVGRE is similar in most respects to VXLAN with two major exceptions. While GRE encapsulation is not new, most network devices do not parse GRE headers in hardware, which may lead to performance issues and issues with 5-tuple hashes for traffic distribution in multi-path datacenter LANs. The other exception is that the current IETF NVGRE draft does not specify a solution for the control plane functionality described earlier in general description of network overlays, leaving that for a future draft or possibly as something to be addressed by SDN (software defined networking) controllers. Some of the sponsors of NVGRE (i.e., Microsoft and Emulex) expect that some of the performance issues can be addressed by intelligent network interface cards (NIC) that offload NVGRE endpoint processing from the hypervisor vSwitch. The intelligent NICs would also have APIs for integration with overlay controllers and hypervisor management systems. Emulex has also demonstrated intelligent NICs that offload VXLAN processing from the VMware distributed switches.

STT Stateless Transport Tunneling (STT) is a third overlay technology for

creating Layer 2 virtual networks over a Layer 2 or Layer 3 physical network within the datacenter. Conceptually, there are a number of similarities between VXLAN and STT. The tunnel endpoints are typically provided by hypervisor vSwitches, the VNID is 24 bits wide, and the transport source header is manipulated to take advantage of multi-pathing. STT encapsulation differs from NVGRE and VXLAN in two ways. First, it uses a stateless TCP-like header inside the IP header that allows tunnel endpoints within end systems to take advantage of TCP segmentation offload (TSO) capabilities of existing TCP offload engines (TOE) that

facilitates management of virtual networks.

SPBM IEEE 802.1aq SPBM (Shortest Path Bridging MAC-inMAC) uses IEEE 802.1ah MAC-in-MAC encapsulation and the IS-IS routing protocol to provide Layer 2 network virtualization via VLAN extension in addition to the loop-free equal cost multi-path Layer 2 forwarding functionality normally associated with SPB. VLAN extension is enabled by the 24-bit Virtual Service Network (VSN) Instance Service IDs (I-SID) that are part of the outer MAC encapsulation. Unlike other network virtualization solutions, no changes are required in the hypervi-

VLAN-extension VSNs and VRF-extension VSNs can run in parallel on the same SPB network to provide isolation of both Layer 2 and Layer 3 traffic for multitenant environments. With SPBM, all the core switches starting at the access or aggregation switches that define the SPBM boundary need to be SPBM-capable. SPBM hardware switches are currently available from Avaya and Alcatel-Lucent.

OTHER ALTERNATIVES A discussion of network virtualization would not be complete without at least a mention of two Cisco protocols: Overlay Transport Virtualization (OTV) and Locator/ID Separation Protocol (LISP).

created by mapping VRFs to LISP instance-IDs. In addition, future versions of the OpenFlow protocol will undoubtedly support some standards-based overlay functionality. In the interim, OpenFlow can potentially provide another type of network virtualization by isolating network traffic based on segregating flows. One very simple way to do this is to isolate sets of MAC addresses without relying on VLANs by adding a filtering layer to the OpenFlow controller. This type of functionality is available in v0.85 of the Big Switch Networks Floodlight controller. In multi-tenant environments there is also the potential for the OpenFlow controller to support a

The main difference between the various overlay protocols lies in their encapsulation formats and the control plane functionality that allows ingress devices to map a frame to the appropriate egress device. reside on server NICs. The benefits to the host include lower CPU utilization and higher utilization of 10 Gigabit Ethernet access links. STT also allocates more header space to the per-packet metadata, which provides added flexibility for the virtual network control plane. With these features, STT is optimized for hypervisor vSwitches as the encapsulation or decapsulation tunnel endpoints. The STT IETF draft sponsored by Nicira does not specify a control plane solution. However, the Nicira network virtualization solution includes OpenFlowlike hypervisor vSwitches and a control plane based on a centralized network virtualization controller that

sor vSwitches or NICs and switching hardware already exists that supports IEEE 802.1ah MAC-in-MAC encapsulation. For SPBM, the control plane is provided by the IS-IS routing protocol. SPBM can also be extended to support Layer 3 forwarding and Layer 3 virtualization as described in the IP/SPB IETF draft using IP encapsulated within the outer SPBM MAC. This draft specifies how SPBM nodes can perform InterISID or inter-VLAN routing. In addition, IP/SPB also provides for Layer 3 VSNs by extending Virtual Routing and Forwarding (VRF) instances at the edge of the network across the SPBM network without requiring that the core switches also support VRF instances.

OTV is optimized for inter-datacenter VLAN extension over the WAN or Internet using MAC-in-IP encapsulation. It prevents flooding of unknown destinations across the WAN by advertising MAC address reachability using IS-IS routing protocol extensions. LISP is an encapsulating IP-in-IP technology that allows end systems to keep their IP address (ID) even as they move to a different subnet within the network (Location). By using LISP VM-Mobility, IP endpoints such as VMs can be relocated anywhere regardless of their IP addresses while maintaining direct path routing of client traffic. LISP also supports multitenant environments with Layer 3 virtual networks

separate controller instance for each tenant. The IT industry is in a state of dramatic flux. One of the primary technology drivers of this flux is the ongoing adoption of virtualization that started with server virtualization and is just now impacting the network. There are many technologies and techniques that IT organizations can use to implement network virtualization. This includes two Cisco protocols: Overlay Transport Virtualization and the Locator/ID Separation Protocol. It also includes a number of emerging technologies based on encapsulation and tunneling; e.g., VXLAN. Network virtualization is one of the primary use cases that are associated with SDN. n

APRIL JANUARY 2013 1, 2009 INDIAN CHANNELWORLD

n FOCAL POINT | VIRTUALIZATION

Illustration by UNNIKRISHNAN A.V

What’s Up With VMware? VMware is laying off employees and exiting business units. Should customers worry? By Brandon Butler

N SOME people’s eyes, VMware has had a tough time lately. In the last week of January, the company revealed through a financial filing its plans to lay off 900 employees and exit some business units. The same day, the company’s revenues missed forecasts pontificated by financial analysts, causing the company’s stock to plummet. To top it all off, the tech company’s chief technology officer announced he’s leaving VMware to pursue a venture capitalist career, less than

six months after the company had a shakeup in the CEO role. So, what’s going on with VMware? Once the pre-eminent hypervisor company in a market it practically invented, analysts say a series of moves during the past 18 months have reset the dynamics of the market. VMware—which storage giant EMC owns a majority stake of—still holds a leading position, but Microsoft’s HyperV hypervisor is quickly gaining momentum. “There really isn’t any reason to fear that some-

thing drastic is going to happen to VMware,” says Stuart Miniman, who tracks the virtualization market for the Wikibon Project. “At the same time, it’s not a bad time for customers to reevaluate their choices, given the increasing maturity of other products on the market. vSphere is still a solid choice, but there are other options to consider, and some may be a more attractive price-point.” If Zeus Kerravala, an independent industry analyst with ZK Research, had to point to one singular event that turned the hypervisor market into being a hypercompetitive one, it was what he and other pundits call the vTax flop. Two years ago, VMware changed the pricing model for its popular vSphere 5 management platform, charging customers based on the amount of virtual memory (vRAM) the system manages, instead of a per-CPU pricing.

Mergers and acquisitions seem to be VMware’s recent method of choice to expand its portfolio, but in doing so, the company has created new tensions with some of its oldest partners. 54

INDIAN CHANNELWORLD APR IL1, 2013 CHANNELWORLD JANUARY 2009

In reality, the pricing changes resulted in some customers saving money and others paying slightly more, but a small yet vocal tangent of customers almost immediately cried foul, leading to the term “vTax” to be dubbed. A year later at VMworld 2012 the company’s new CEO Pat Gelsinger reversed the pricing change and reverted to the original pricing model. But the damage had been done, Kerravala says, and the situation “opened the door” for users to look at other hypervisors. Microsoft took advantage. In the past 18 months Microsoft has not only been improving the functionality of its VMware-competing hypervisor, but it is also making a big marketing push to get the software into enterprise datacenters where VMware has dominated. The third generation of Microsoft Hyper-V is included with a Windows Server 12 license, and the company has worked to beef it up. Microsoft doubled the RAM capacity per VM to 1TB, added live migration and upped the ability to manage nodes per cluster from 32 to 64. “Hyper-V is now at feature parity for a large percentage of enterprise workloads,” says Forrester virtualization analyst David Bartoletti. “It’s definitely ‘good enough’” for many workloads. Kerravala’s research backs this up, too. A recent survey found 20 percent of respondents reporting they have deployed Microsoft Hyper-V in production datacenters, with another 20 percent exploring it. The most surprising aspect of the survey: The respondents were all VMware users. “Microsoft is having a bigger impact than

VMware to Cut 900 Jobs in ‘Realignment’ as Growth Slows

MWARE announced that it will cut 900 jobs in a move to focus more on high potential businesses, as profits remained strong but growth slowed. The company said the job cuts, revealed as part of its earnings release for last year, will come in areas such as SlideRocket, its online presentation software. VMware emphasized that it was still expanding, and said it planned to add a net 1,000 jobs in 2013. CEO Pat Gelsinger called the move a “realignment of resources” on an earnings call. VMware has added about 6,700 workers over the last three years, and will focus on software-defined datacenters and hybrid cloud services, he said. “This includes shifting talent to new roles that support our growth opportunities as well as some targeted head count reductions,” he said. VMware currently has about 13,800 workers. The company said it had a strong fourth quarter, a lot of people believe,” Kerravala says. The rise and maturation of Microsoft’s “good enough” Hyper-V is only part of the new dynamics in the virtualization market, though. The bigger issue is that hypervisors are becoming commoditized and VMware needs to look beyond just hypervisors for its growth moving forward, Bartoletti says. Mergers and acquisitions seem to be VMware’s recent method of choice to expand its portfolio, but in

booking a net profit of $206 million (about Rs 1,100 crore), up from $200 million a year earlier. Revenue rose 22 percent to $1.29 billion. VMware, which claims its software is used by all of the Fortune 100 companies and 96 percent of the Fortune 1000, added the business environment in the US has been difficult, and it faced a decline in contracts from the federal government in 2012. The company faces increasing challenges from companies like Microsoft, which is moving into virtualization as part of the current shift toward “cloud-based” computing. VMware will also come up against allies like Cisco as it moves into software-defined networking through moves like the acquisition of Nicira. For 2012, the company booked a net profit of $746 million (about Rs 4,000 crore), up 3 percent from the previous year, even as revenue rose 22 percent. In the current year, VMware said it targets a revdoing so, the company has created new tensions with some of its oldest partners. VMware’s biggest splash in the M&A market was to drop $1.26 billion (about Rs 6,500 crore) to buy Nicira, the virtual networking startup headed by the creator of the SDN protocol OpenFlow. While propelling VMware into the heart of the debate about nextgeneration networking, the acquisition also put strain on VMware and parentcompany EMC’s relationship with networking giant

enue increase of between 14 and 16 percent. Gelsinger said the company would continue to pursue mergers and acquisitions, as well as strategic alliances. VMware plans to exit some businesses and close some of its facilities as part of its realignment. Total costs of those moves are expected to cost the company up to $110 million (about Rs 600 crore) In 2012, VMware acquired Nicira, a startup working to simplify the creation of virtual networks and services that operate separately from physical hardware. VMware paid a total of $1.2 billion in the deal, announced in July. Earlier, VMware lost its longtime Chief Technology Officer Steve Herrod, who left to become a managing director at the venture capital firm General Catalyst. Herrod joined VMware in December 2001, shortly after the company released its first product. —Jay Alabaster Cisco. In response, Cisco has hinted at moves to distance itself from EMC and VMware, including recently cozying up with EMC competitor NetApp. The M&A strategy could be related to the layoffs VMware has recently announced. While company officials declined to provide additional information about which sections of the business will be cut back, Kerravala says it’s only natural after M&A that efficiencies can be created by eliminating duplicate positions. Hav-

ing CTO Steve Herrod leave less than six months after his former boss, Paul Maritz, left the top job at VMware, means a fresh shot of new ideas for the company, Kerravala says. Customers don’t seem to be hugely worried or swayed by the recent goings with the company. In fact, Kerravala says all in all, increased competition between VMware and Microsoft, as well as Citrix with Xen Server and Red Hat with the Kernel-based Virtual Machine (KVM), is a good thing for customers, he says. Chris Harney is founder and president of the New England VMware User Group, which recently changed its name to the Virtualization Technology User Group to reflect the rise of non-VMware hypervisors used in the market. Harney says customers are choosing their virtualization technology based on their skills sets, pricing, and availability. “If you’re really good with Citrix, then Xen is probably a good away to go,” he says. VMware has the advantage, he says, because the company’s been around longer, but he says there’s a “perfect storm” of other hypervisors maturing, like Microsoft HyperV, while customers are looking for other options on the market. “I don’t sense a lot of concern by users about problems VMware may be having,” he says. As long as it doesn’t impact the product, users likely will not care. “I don’t expect to see people jumping ship, but it is interesting to see that there are other viable options out there on the market now for virtualization.” n

APRIL JANUARY 2013 1, 2009 INDIAN CHANNELWORLD

n FACE OFF

Sage Software Vs. Zoho

RAJU VEGESNA,

VISHAL KANAL,

Chief Evangelist, Zoho

Country Manager-India, Sage Software India

Integration App-eal

When it comes to enterprise applications, who has a more holistic approach?

S sized businesses in the ERP and CRM space and re-

AGE IS focused on serving the needs of small and mid-

mains dedicated to providing business software to support these customers. Sage recognizes that not all businesses are the same. The Sage CRM product portfolio offers customers a choice of deployment—on premise, SaaS or cloud deployed—and offers a CRM feature set including sales, marketing, customer service, channel, and operations to support deeper customer insight, improve relationship lifecycle management, and enhance service delivery. Regardless of the deployment option, Sage CRM offers low TCO and makes subscription pricing available. Integration of Sage CRM and Sage ERP brings together isolated information, creating a single, customer-centric view of the entire business. This results in faster resolution of customer queries, interactions, and issues with a precise view of customer information across sales, marketing, customer service, and financial data. The Sage CRM mobile solution delivers a rich user experience and provides customer-facing teams with the ability to work effectively regardless of their location. Sage CRM is available on commonly used platforms like Google Android, Apple iPhone, Windows 8, etcetera, and is crossbrowser compatible. Sage CRM integrates with key social media applications such as Facebook, Twitter, LinkedIn, etcetera. This enables users to engage with customers in a collaborative manner in order to generate leads, foster loyalty, build customer retention, and increase revenue. Moreover, Sage E-marketing for Sage CRM enables marketing teams to acquire new customers and get closer to existing customers.

INDIAN CHANNELWORLD APR IL 2013

Z working harmoniously to provide value to the OHO IS an

orchestra of multiple software systems

customer. Businesses don’t run on a single piece of software. They need multiple pieces to manage their customers, to support them, to manage finances, and provide collaboration, productivity, and mobile applications needed to run a business. It is important for these disparate software systems to talk to each other and work synchronously. In most organizations, particularly, the mid-level ones, this doesn’t happen. That is where Zoho comes in. We offer a broad suite of pre-integrated business, collaboration, and productivity software for companies that allow business owners to focus on their business and let Zoho take care of the IT bit. Our CRM system, for example, provides a 360-degree view of the customer, pulling information from various systems like e-mails, documents shared with the customer, recent payments and support requests, ongoing projects, recent discussions etcetera. Just maintaining contact information in a CRM won’t cut it. This means multiple software systems need to work in harmony to provide a well integrated view of a customer in the CRM. In Zoho, such integrations are not restricted to a CRM system. No matter what software you use, related information follows you and is available where you need it instead of the user having to go and hunt for the information. With over 25 business, collaboration, and productivity applications, Zoho offers the broadest suite of hosted applications for organizations which are mid-level or smaller in size. —As told to Shantheri Mallaya

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