India's market for networking hardware continues to grow, driven by factors such as higher PC penetration and adoption of IT by the Indian Government, telecom penetration. India is the fastest-growing IT networking products market in the Asia-Pacific region.
Companies in India continue to dedicate a significant portion of their IT budgets on the networking equipments. According to a new report released by Springboard Research, the enterprise networking equipment market in India will grow at a five-year compound annual growth rate (CAGR) of 15 per cent, from US$1 billion in 2008 to US$1.7 billion in 2012.The banking, financial services and insurance (BFSI) industry, together with the public sector, are the main drivers for enterprise networking expenditure, cornering over 37 per cent of the total market in 2008. “e-Governance and telecom are booming verticals and would continue to be for the next few years,” says Subhashini Prabhakar, Chief Technology Manager, Dax Networks. According to Subhodeep Bhattacharya, Country Manager, HP ProCurve, India and South Asia, the sectors that will drive the networking market, are basically Government, followed by banking and finance. Zyxel says, “It will be the Telco, ISP and end-customer who will drive the networking market to new dimensions.”
The study says that global recession will have a moderate impact on the market in India, but growing demand for integrated, high-end solution, managed network services and network security will carry the momentum forward. “There is a tremendous potential for the growth of enterprise networking in India, given the current low standard of telecom infrastructure in the country, government focus on increasing broadband penetration and lack of basic infrastructure in many areas,” said Nupur Singh Andley, Senior Research Analyst – Connectivity, Springboard Research. The report noted that Indian enterprises were most concerned with network performance, reliability or availability of networks and applications and security.Beating the slowdown Though the effect of recession started showing up towards the end of first Q 2008 worldwide, Indian networking industry only observed prominently the same last Q 2008 when almost all the projects and procurements were completely on halt. But at the same time, it was PSUs and government projects which made this industry survive in those bad times, improvement started showing up since third Q 2009 and further it is expected to improve in future. “The foremost activity we did to our users is to give the products at par price levels despite rupee depreciation and recession, provide all partners the level-playing field and show the same profitability in the business,” says Atul Jain, Country Manager, India & SAARC, Netgear.
In today's constantly changing markets, companies feel the only way to maintain and grow sales is by selling at competitive prices. Products have become commoditized over time as alternative products become available or the number of suppliers offering the same product increases. “We at Dax believe that, to trounce this scenario, a solution- based approach focussing on better product usability and high return on investment is a must for companies to survive in the long run," says Subhashini Prabhakar. “Dax has the advantage of being in the market for a very longer period of time. This has helped us to get our roots deep into specific verticals like e-governance and telecom. Today, these two are booming verticals and would continue to be for the next few years.”
The market has seen some slowdown in the past, but is definitely recovering now. Despite the slowdown, ProCurve has continued to grow its business. It managed to move from a slot of eight to number three in the industry and we are well poised to move into No 2.”We have been fortunate in getting a strong acceptance from partners and customers and consequently grown rapidly. Our vision is to provide our partners and customers, reliability and value. As a result, the core values of HP ProCurve revolve around open standards technology and industry leading lifetime warranty,” says Subhodeep.
“Financial markets globally have rallied strongly over the past few months and the markets are showing signs of recovery. The impact of the economic downturn has been felt across sectors and companies are now being prudent about their IT investments. This requires us to align our solutions with their current business priorities, yet ensure IT continues to be viewed as a strategic asset and is aligned to long-term business goals,” says Varghese Thomas, Head – Public Relations, Cisco – India & SAARC.The SME Factor SMB is one of the fastest-growing markets. SMBs are considered to be the growth drivers for many IT companies. “Dax Prime focus is to tap the SMB market with our end-to-end networking solutions. We also address the networking needs of large enterprises,” says Subhashini Prabhakar. ZyXEL strength was always SMBs, SMEs and Enterprises due to our strong products in Wi-Max, IPDSLAM, PON, VDSL, G.SHDSL, Metro Switching and Security etc. “We are positioning our Brand in three segments, SoHo Consumer, SMB/SME (Vertical Biz) and Telco, ZyXEL as a brand have very high regard who know and understand the technology with innovative ideas to solve and propose the solution and application to the customer. So, it is basically off-the-shelf products for certain key customers, where you will not find any competition. Due tothis, we are strong in Telco as well as vertical business, though we have strong products for retail and distribution channel like Wi-Fi products, Security, Switching and VoIP. “The SMB market continues to be a significant focus area, and we are approaching this market with a consolidated presence and series of products specifically designed with this segment in mind,” says Varghese Thomas.
“We are working with our eco-partners to widen our footprint in smaller towns and cities by adding Select Certified partners so that we reach out to the SMB segment across the nation in a more targeted manner,” says Varghese Thomas.
NETGEAR has three growth segments: Home, SOHO and SMB. The current focus of Netgear is largely on SMBs.
“We have a clear focus on both the segment with a differentiated product and channel strategy. We have partners focussed on SMBs with appropriate products. We also have large SI partners/large VAR community focussed on the Enterprise Infrastructure business. As of now, these business are equally balance,” says Subhodeep.Channel’s Role Channel Partners are central to Cisco’s go-to-market strategy. And with every step towards Cisco’s growth, they only become more vital. There is a need to build strong business relationships and motivate them to increase their investment in Cisco. Motivation goes beyond monetary incentives. Partners must also be convinced of the value of partnering with Cisco. This means investing in them to enhance their quality and commitment to Cisco.
Future is of Solution providers only as the end-customer had become very wise and mature and looks for partners whom he can count on and depend for solution, design and support. ZyXEL already has an education programme to benefit and educate partners and engineers. For partner engineers, we have a free online certification called ZCNP for which they can register for free and give exam and get their certification. This certification ensures strong networking basics to start with.
Netgear has been able to maintain the same POS through its channel partners even during the tough time of recession. “We have a training programme to bring up the competence level of partners. This programme is being run by HP Education. We are imparting technical training to our partners through the AEF, ASE and MASE courses,” says Subhodeep.
“We focus on enabling partner skill set and depending on the skills competency we categorize them into the four classifications, namely, Master, Expert, Professional and Select. We prefer to have one partner per opportunity,” says Subhodeep. “We have a large and distributed channel network and have approximately 100+ SIs and VARs. We do not to plan to increase this community too aggressively as we want to ensure channel profitability,” adds Subhodeep.Broadband stimulus “The current scenario for Internet and broadband penetration in India is dismal. India had 12.85 million Internet subscribers at the end of 2008 which is equivalent to just 1.1% of the country’s population. And Internet penetration in rural India is abysmally low,” says Varghese Thomas.
While India is the recognized global leader in mobile Internet additions, its broadband growth has been questioned on many occasions. There are concerns that India will fall short of its goal to reach 20 million broadband subscribers by 2010. UTStarcom is, however, confident that India will reach – and even surpass – the “Herculean” target. The success of broadband in India will not solely be based on sociological trend, but on the co-creation of an entire conducive ecosystem. Some of the recent consumer drivers of broadband buying decisions have been rapid technology evolution, intense competition, and interactivity and personalization. Broadband is increasingly becoming synonymous with basic connectivity – as a commodity – in many parts of India. The mantra is to offer enhanced communication to consumers and businesses to ensure they fully understand the features and benefits. As the leaders in IPTV and broadband, UTStarcom continues to be very optimistic about consumer adoption and the burgeoning opportunities in India. “ZyXEL is already strong in the broadband segment as we have many unique products which make the job easy for Telco customers. We have products like IPDSLAMS, PON, Metro Switches, etc. which are high performing, very stable and support almost every type of services needed at the Telco level installation,” says ZyXEL.
Future Trends India's market for networking hardware continues to grow, driven by factors such as higher PC penetration and adoption of IT by the Indian Government. India is the fastest-growing IT networking products market in the Asia-Pacific Region. Most of the prominent global as well as local vendors are operating in the competitive Indian market. This is perceived to be the greatest opportunity for the future by the hardware vendor community. Additionally, the Indian software and BPO industry is also creating a great potential for employment. “All of these make India one of the most exciting markets for IT hardware vendors. As more and more international companies set up office in India, the demand for hardware will increase,” says Subhashini Prabhakar.
“In future, wireless market will grow to a massive scale. At the same time, security would be the major concern in future too and will grow with time as all your operations and day- to-day communication and work will be dependent on your laptop or PC,” says ZyXE.
“Home users are becoming more IT savvy and looking for faster access over Internet, Security and Shared Storage Space,” says Atul Jain. “SOHO / SMB users are looking at more cost-effective solutions which are easy to install and maintain, scalable so that their investment is protected and NETGEAR is the only company which can take care of all these aspects of the users,” adds Atul Jain.
According to Varghese Thomas, the network and communications market will propel the growth of the router and switching market in India. While banking, financial services and insurance (BFSI) and telecom service providers will remain the key adopters in the market, the Government is also likely to emerge as a big spender due to various e-governance and SWAN initiatives.
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India's market for networking hardware continues to grow, driven by factors such as higher PC penetration and adoption of IT by the Indian Government, telecom penetration. India is the fastest-growing IT networking products market in the Asia-Pacific region.
