/dqc/media/agency_attachments/3bO5lX4bneNNijz3HbB7.jpg)
Follow UsIf you are not into these areas already, diversify after acquiring necessary skill-sets to earn those elusive margins.
Telecom was the blue-eyed boy of the IT industry last year. One good move for this segment was the abolition of 16 % countervailing duty (CVD) on mobile phones. Additionally, telecom tariffs came crashing down. Ergo, cellphones are now accessible to the man on the street, with the entry-level models costing just over Rs 2,000.
With a user base of more than 12 million today, according to the Cellular Organizations Association of India (COAI), and growing at a rate of 6,00,000 every month, one expects India’s mobile phones to match the installed base of 40 million land lines in the next couple of years. Worldwide, 423 million phones were sold in 2002 and 112 million in the first quarter of 2003.
During the first half of 2003, cellular subscribers in India grew by 46.7 lakh, according to COAI statistics. Currently the total number of cell phone users in the country stands at 1.6
crore.
All these numbers glaringly highlight one fact: mobile telephony market is booming. There is good demand for handsets, and their service and repair. Not surprisingly, the opportunistic IT channel too got into this act. Tech Pacific signed up with Siemens as their national distributor and HCL did likewise with Nokia. Ingram Micro, too, is distributing Samsung mobile phones. Says K Jaishankar, CEO, Tech Pacific, “This is a high-growth area for the next year, and we are already getting our channel strategy for Siemens in place.”
Margins are pretty high in this business, hovering around 5 to 8%, more so for the high-end camera phones, which are priced at over Rs 20,000. This should come as good news for partners who have had to subsist on meager 1-2% margins in hardware sales.
Another good business opportunity in this space, is the service and repairs of mobile phones. Tech Pac is gearing up a service
channel with authorized support centers. “These outlets will cater to all the service needs of the user and can be a good revenue generator, given the small number of players specializing in it,” adds K
Jaishankar.
SECURE IN SECURITY
The Internet now resembles a war zone with security breaches and viruses flying thick and fast. But these incidents had one positive outcome, especially for partners. Security products and solutions were much sought after. The future belongs to increased and comprehensive network security.
According to estimates by Voice&Data, the market for network security products in India grew from around Rs 150 crore in 2001-02 to Rs 165 crore in 2002-03. Of this, anti-virus and firewall solutions were the highest contributors, accounting for 88% of sales at Rs 145 crore. The remaining share came from intrusion detection system, authentication, encryption and public key infrastructure solutions.
According to Datacraft India's CEO, Dilip Kumar, customers no longer ask for security solutions. “They simply expect it to be part of the entire solutions package that a systems integrator provides,” he quips. Voice&Data estimates that the network security services market stood at Rs 33.5 crore in 2002-03, with Datacraft at the forefront with Rs 14 crore in revenues.
According to Garry Sexton, Symantec's VP for APac Operations, “Companies that do business on the Net have to look at security more seriously because the moment you are on the Net you are prone to attacks.”
While firewalls drove the growth of the network security market in the past, industry analysts predict that VPN and intrusion detection systems will drive future growth, especially in mature markets.
At the recently held DQCI-Computer Associates channel event, panelists were of the opinion that verticals like banking, BPO and telecom are the key target segments for security solutions. However, they stressed that SME is the segment, which should now be watched as opportunities to offer these solutions are immense in this space.
According to Microclinic's MD Tarun Seth, security players need to first educate the price-sensitive SME segment about security threats. “Next they should make an attempt to understand the needs of the sector and only then customize solutions for them,” says he. Another interesting trend is that now partners do not need to impress SME buyers about the importance of security. There are instances where these companies themselves call up to ask about security solutions, which bodes well for partners.
LOG ON TO STORAGE
Increasing data accumulation has made it imperative that his information is stored in a secure environment. Undoubtedly, this business saw a boost in 2002-03 and this good run is likely to continue. Quoting sources, Pravir Arora, Head-Channels, India and SAARC, CA says, “The five-year CAGR growth of storage ending 2005 is expected to be 76%.”
According to Dataquest, as Indian enterprises came to grips with the intricacies of NAS and SAN, adoption rates increased, eating into the share of direct-attached storage.
Storage implementation was most evident in telecom, banking and BPO, especially the latter. Says Dilip Kumar, “Data storage is no longer limited to text, especially in BPO. There is a need to store audio, video and complete web shots as well.”
This explains the need for virtualization of storage as well.
Dataquest defines storage virtualization as abstraction of storage from a physical level to a logical level using specialized virtualization software and hardware like intelligent routers and servers. In layman terms this means that storage is no longer limited to the local network. It can be placed on a virtual site and then be used or retrieved from anywhere in the world.
As with security, SMEs will be a good market for storage solutions as well. But the most important factor is that these solutions have to be legacy scalable, simple and cost-effective. Says Shiv Deviah, Manager-Storage Solutions, Network Solutions, "End-users work on reduced operational costs and data is key to any organization. It is very important for solution providers to educate buyers about storage benefits," points out another panelist. He suggested that partners should have a
holistic approach towards storage and security solutions.
Adds Dushyant Mehta of Mediaman Group, “Storage will be good playing field for channel partners, but only those who are focused in this area and not those who are offering it as a fringe benefit with other solutions.” According to him, soon there will be an emergence of storage specialists who will offer predominantly storage solutions.