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Follow UsOpportunities in global markets have
been always there for the domestic mid-sized solution providers
(SPs), however, in the last couple of years, these companies have
begun to tap it. The fact is that most of these solution providers
have taken up the challenge to venture into international markets
that are more mature and require specialized solutions, backed by
strong technical expertise. These companies are putting in the
efforts to develop and deploy efficient business solutions for their
clients.
When asked, the solution providers
highlighted a number of factors driving their expansion plans, which
includes demand from existing customers, newer lucrative prospects,
better margins, etc. The need to have international presence is
definitely driven by a need to grow and compete with large system
integrators like Wipro, TCS, Infosys, HCL, etc. The strategies that
solution providers use to expand their presence overseas vary
greatly, as do their expected benefits, and impediments. However, one
key strain that connects all is the scope of opportunities available
to tap and capitalize which is significant.
GOING GLOBAL
The concept of establishing itself in
multiple countries is now synonymous with many major solution
providers from the country. One of the largest solution providers in
the country, Sai Infosystems, had launched its
operations in UAE, and along with its local partners, executed a
couple of projects in that region. Progressive Infotech expanded its
geographical footprint not only in UAE but also in Singapore, which
enabled it to offer services to the MENA and ASEAN markets.
Progressive has forayed into South-East Asia and is now planning to
enter the African market this year. Besides, it is also actively
seeking partnership with managed services players in the US and
Europe. Targus Technologies grew extensively in terms of expanding
global and national footprint, as it has recently opened an office in
Dubai to add to the global footprint. With this, Targus now has
offices in India, Singapore, Canada, and the Middle East. Its
Singapore office generated $1mn business. Targus is stepping-up its
footprints in markets across globe and is now targeting Australia,
Japan, and Africa.
Team Computers had good business coming
from the US as it expanded its operations and had bagged deals from
over 10 customers including Bloomberg, Symantec, and Cisco. Omnitech
InfoSolutions now has direct presence in countries like UK, Belgium,
Netherlands, and Germany as part of its Europe strategy. In addition,
Omnitech laid its foundation in Hong Kong where it set up a
subsidiary. Also, the company is pursuing inorganic path and has
acquired companies not only in India but also in Europe and Far East
Asia. Mumbai based Orient Technologies has recently expanded its
footprint in Singapore by opening a new office named Orient IT
Services, which will take care of the consultancies and services on
the technology based projects including computing, networking,
server, and many more. Gemini Communications now has offices in the
US and UK.
Last year, it acquired Southern African
ISP as part of its global expansion plans. Allied Digital has a
strong presence in the USA, UK, and Australia. A major portion of its
revenue is generated from these regions. Now it is venturing into Far
East markets like Malaysia, Philippines, and Singapore. Another
solution provider to watch out for is Aditi Technologies, which is
all geared up to expand into different geographies. Most of its
customers have a global presence and as a holistic partner, the
company wants to be everywhere where its clients are. The expanded
geographic reach will give the solution provider an opportunity to
address the needs of newer markets. Then there are business firms
like Taksheel Solutions, an Indian company, but its revenues come
from international market. In this case, US is the key market and now
it has plans to expand into South Asian countries.
STRATEGIES DEPLOYED
Solution providers that are going
global have been around, for the last 5-10 years in the business. The
companies have realized that there is a larger pie out there to be
eaten and following this along with India, the companies began to
focus on the international market. Earlier, these companies were able
to offer IT solutions as well as re-selling but they chose to rise up
to the occasion and build the required skill-sets and cater to the
needs of the overseas customers. From being part of a larger brand or
enterprise, today, these solution providers are carving out a niche
for themselves by creating their own solutions and offering support
and services to the global clientele. The mid-sized solution
providers are adapting both organic and inorganic growth
methodologies. Their approach is both reactive and proactive when
they foray into newer geographies. As of today, these companies are
constantly evaluating the available opportunities across the globe
and once they are able to identify and associate with a particular
geography, there is no looking back. Companies are leveraging their
relationships and networks with OEMS and ISVs to get into these
markets.
Khurana, CEO, QuantM Net Technologies says, “We
aspire to create a strong presence in the global market. For the
same, we intend to leverage our relationship with OEMs globally,
which will enable us to execute with excellence across a flexible,
scalable global system that will help in delivering superior
operational performance and optimal results for customers.”
The key strategies include using
value-added distributors, partnering with local solution providers,
dedicating personnel to develop international business, acquiring
businesses and opening offices in target countries. Talking about
acquisitions, many solution providers indicated that acquisitions
provide them with capacity building as it gives them direct access to
existing clients and local presence. Also, it offers an opportunity
to cross-sell and generate cost efficiency through economies of scale
and better taxation practices. Moreover, there is convenience of
preexisting relationships with suppliers and customers, and the
expertise of existing personnel.
Pavan Kumar Kuchana, chief managing
director, Taksheel Solution, says, “Earlier in this year, we opened
a branch in Singapore. Now, we are looking at acquiring a mid-sized
IT firm in the USA and expand our presence in South Asian markets.”
Above all, the quality of solutions and services determine the
strength of an organization. It is very important to follow the
current market trends and upgrade skills-sets accordingly. Solutions
have to evolve with the advancements in technology. In addition,
services is an area wherein one has to provide endto- end solutions
to the clients. “Best respect, premium, and satisfaction comes from
deploying leading edge solutions,” says Devendra Taneja of PC
Solutions.
CHALLENGES FACED
Whenever a company ventures into
foreign territory, there are bound to be challenges. The challenges
are unique in the sense that they are region specific and their
implications vary from geography to geography. Taneja says,
“Challenges encountered are lack of familiarity with the local
laws, living conditions, food, medical facilities, local language,
visa, travel logistics, currency factor, business cultural diversity,
communications and data connectivity, etc, over and above the
technical ones which we routinely handle. Frankly speaking, technical
ones are the least troublesome of all.” Many solution providers are
of the opinion that it takes a great deal of patience, investment,
and a good understanding of international commerce laws to be truly
successful. In addition, regulations and tax policies of the targeted
countries is another impediment to growing overseas. Another hurdle
faced by many is insufficient investment funds. Apart from these,
cultural differences, language barriers, and vendor contracts also
pose as a challenge when companies explore the opportunities in the
overseas market.
Nitin Shah of Allied Digital explains,
“There are typical processes to be followed when you get into other
countries. Also, understanding legalities and compliance becomes a
herculean task. Service delivery models and deployment techniques and
also time duration becomes very critical. In these markets, quality
of solutions and services have to be avant-garde to be able to gain
market share. Finally, contract formulation is another aspect to be
understood and executed with fine precision.”
Another challenging aspect is that of
customizing and addressing the local needs. Bimal Shah of Allied
Digital says, “One has to invest in time and resources to
understand these markets. The contracts have to pan out meticulously.
Also, being in newer regions, one has to identify various scenarios
and be prepared to tackle it at any given time.” He further adds,
“Customization for each customer gives mileage and this is where we
strive hard to fulfill the requirements.” “Setting up offices
globally is like holding an angry bull with two hands. Initially
there is a lot of travel required for a lot of people to spread the
culture/processes in the international offices.” says Gagandeep
Singh, manager, corporate communications, Targus Technologies. With
all these pain points, many solution providers recognize the
complexity of getting started but still go forward, because they
expect a substantial return on their investments.
SCOPE OF OPPORTUNITIES
Today solution providers see tremendous
opportunities in the US, Europe, South America, Far East, Middle
East, and African markets wherein the scope lies in system and
network integration market. Taneja says, “So far PC Solutions had
implemented projects in more than 40 countries. These are in setting
up data center, desktop virtualization, and unified communications
which are mostly in latest technologies in IT infrastructure space,
our core competency. Going forward, it will extend to cloud space as
well.” Sai Infosystems sees a number of opportunities in emerging
economies, and it is pulling all strings to leverage on these
advantages and make its presence felt. Sunil Kakkad, CEO, Sai
Infosystems says, “We have formed a 100% subsidiary in UAE for
taking care of our overseas business. From these regions, we have
received software development contracts.” Adding to this, Kirit
Joshi, senior VP, Sai Infosystems describing its future business
strategies explains, “As an organization, we are expanding our
operations globally and are targeting presence in at least 10-15
countries in the near future.” While, Bimal Shah says, “We
already have presence in the USA, Australia, and UK. Now, we are
exploring our option in the Far East markets. Also, we are setting up
an office in UK which will engage local customers and will also be
the base for our European operations.”
Another aspiring company, Targus
Technologies is very aggressive in its global expansion drives. To
boost its business opportunities outside India, Targus has
established an International Business Group (IBG). Col (retd)
Balwinder Singh, director, Targus Technologies, says, “Envisioning
our future plans, we recently chose Singapore to operate in South
East Asia and opened an office there, as Singapore offers a strategic
location. Also, we are focusing on Australia, Japan, and Africa.
There is a significant scope of business arising from the
consultancies and services on technology based projects including
computing, networking, and server. Ajay Sawant, MD, Orient
Technologies says, “Utilizing our base in Singapore, we intend to
focus our business strategy on the ASEAN nations, concentrating on
SEZ and STPI projects. The new office deals with various major brands
including Citrix, Cisco, IBM, HP, etc.” On the other hand, QuantM
Net Technologies is focusing on global organizations looking to set
up offices in India, as it has seen success in offering them ITaaS
model to deliver the IT infrastructure in a painless and expandable
model, saving them from large upfront investments. The company also
offers business continuity and operations recovery (BCORP) services
outside India for Indian clients and in India for global clients.
Kuchana said, As of today, we generate 100% revenue from US market
wherein 50% comes from wealth management solutions.”
On similar lines, Atul Hemani of
Omnitech InfoSolutions says, “Infrastructure management and
application management solutions compiled with performance management
services is another opportunity in the Europe and the US markets.”
THE ROAD AHEAD
The mid-sized solution providers are no
more to be taken lightly. These companies are focused and determined
to achieve their target with aspirations to establish a strong
foothold in the international market. Most of the solution providers
indicated that they are adapting and understanding the needs of each
and every market although the process is time consuming and capital
intensive- they believe to grow these investments as a
prerequisite. These companies are developing expertise in niche areas
and are deploying customized solutions for their clientele. Although
bogged down by hurdles at intervals, this community is meticulously
and diligently overcoming these hurdles and proving their mettle. In
years to come, these providers would be the leading stalwarts of the
IT solutions provider community from India. No second thoughts about
it!