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acquisition of Smartlink Network System's
business by
Schneider Electric is being seen as one significant development in
the IT industry. In fact, this very announcement created ripples in
the structured cabling market. It seems that Schneider is on an
acquisition spree and these developments clearly indicate that the
company is looking at increasing its share in the enterprise data
center market. The company already offers solutions for electrical
distribution, low and medium voltage, UPS and cooling systems (with
the acquisition APC) and rack systems (with the acquisition of APW
President). It is also in the security business, as it acquired video
surveillance provider Pelco in 2007. The acquisition of DIGILINK
brings together DIGILINK's depth in structured cabling and
Schneider Electric's breadth in voice data, image, and energy
management. This combined strength will help the company provide
greater value to customers in India and many other parts of the world
through innovative and best-in-class products, solutions, and
services.
with the coming of the DIGILINK brand under Schneider Electric's
umbrella, the company is well positioned to capture opportunities in
the network connectivity market not only in India but also in other
geographies, particularly in Asia Pacific and Middle East.
Elucidating further on the opportunities, Pramod Vyas, director,
sales and marketing, network connectivity business, lifespace,
Schneider Electric said, “This acquisition fits well with our
mission of helping enterprises make the most of energy and also
leverage on DIGILINK's channel in exports to the Asia Pacific
region. The excellent reach of DIGILINK with its 3000 plus retail
outlets will not only help expand the scope of selling Schneider
products but also make these available for DIGILINK's distributors.
With network connectivity (structured cabling), Schneider portfolio
is complete to compete in the data center market in India.”
“DIGILINK retains the strength in verticals like government,
financial institutes, education and control networking, whereas
Actassi is a strong brand in hospitality, BFSI, data centers and ITeS
segments. Post DIGILINK and Schneider Electric merger, and DIGILINK
with Actassi brand coming together, we are now geared to go for
IT/ITeS, BFSI, telecom, hospitality, and manufacturing sectors along
with government/PSU, and retail,” added Vyas. Moreover, Schneider
is also looking at leveraging DIGILINK's well-established distri
bution network in the retail sector, which complements its presence
in the enter prise segment, to generate significant cross-selling
opportunities for Schneider's energy management and IT products in
the Indian market. Apparently, by combining the strengths of the 2
companies, Schneider is creating a leadership position in the
fast-growing network connectivity market in India. DIGILINK's
distribution will help Schneider Electric products to be distributed
and DIGILINK's products will also be made available in the
international market. Besides, DIGILINK not only gives Schneider a
very strong presence in retail where other Schneider Electric
products could be distributed, but also in SOHO and education
segments which is strongly complemented with the enterprise presence
of Schneider Electric.
“
Electric is committed to support through DIGILINK's team, and
ensures that the continued performance of ongoing contracts will
support existing relationships and business understandings and will
end ea vor to keep bringing high level of satisfaction. The company
will continue to carry DIGILINK branding for this range of products
as it has excellent traction with the customer base in India,” said
Vyas. Meanwhile, Schneider has no plans to make any amendment in the
distribution system active at DIGI LINK. The company believes that
this whole association with Schneider Electric will provide an
excellent opportunity for exis ting channel partners and system
integrators of DIGILINK. The foreign brand name will not only back
the products but will also help them to easily approach MNCs and
large enterprises present in the Indian market. The market reports
also suggest that this acquisition stands for a lot more
opportunities for channel partners because DIGILINK has been
consistently growing at a rate of 15- 20% per year and this figure
can reach up to 20%, with Schneider's partnership. Also, the
transaction is mutually beneficial as it unlocks significant value
for the existing shareholders of Smartlink while Schneider gets
access to a robust brand and distribution infrastructure to further
enhance its presence in the network connectivity business.
FOCUS FOR
SMARTLINK
the financial and operational strength, post this business transfer
agreement (BTA), allows Smartlink to accelerate its growth in the
other businesses and also explore other business opportunities
synergistic to the company. While the company is well established to
further enhance its position in other existing businesses, one of the
primary areas of focus will be on building the DIGISOL brand and its
post-sales service (DIGICARE) in India. Each of these businesses
provide a robust platform for future growth. According to Smartlink,
in the last 2 years, it has focused more on active products.
DIGISOL business grew quickly in 1 year and the company is now #2 in
this space with more than 100 (active networking) products. It will
continue to focus strongly on the DIGISOL and DIGICARE businesses.
Debraj Dam, sales head, strategic accounts, DIGISOL, further
asserted, “Now, DIGISOL active networking brand will be a focused
business for Smartlink. We will be very aggressively marketing this
brand. The primary focus of DIGISOL is to introduce an entire gamut
of networking products. Our intent is to reach out to all our target
audiences across the country. We are also focusing on quality and
value-added features of our products which will give us an edge over
our competitors.” Now with the sale of DIGILINK business, it is
believed that DIGISOL will have to face tough competition in the
market, especially with D-Link in the active networking space.
Earlier, the active range of products from DIGISOL, which were
initially supplied to D-Link, faced resistance from distributors due
to issues related to branding. This move brought DIGISOL in direct
competition to D-Link's line of business. Now, we see the company's
efforts are in building the DIGISOL brand in India. “We have
experience of more than 2 decades in manufacturing, marketing and
servicing of active networking products in India. With all these
elements in place, such as a good product range, robust distribution
network, marketing strategy backed by nationwide service and support
network, we are confident that we will grow better than our
competition,” said Dam. Adding further, Dam stated, “Already the
reception that DIGISOL range of products have received in India is
very encouraging, which is further indicated by the number of awards
we are getting for our DIGISOL brand. In a short span of time we are
visible and available across the country and are able to capture a
good mind and marketshare.” However, this BTA did not invite any
major internal restructuring at Smartlink as such. DIGISOL brand will
continue to be spearheaded by KR Naik, who is a veteran of the
networking industry in India. And the company's experienced sales
teams across the country will continue to further strengthen the
DIGISOL brand. The company also do not have any plans to realign the
channel structure, as it already has a very well set-up distribution
network which consists of 22 territory distributors, more than 400
dealers and around 4,000 resellers across the country.
“
DIGILINK and DIGISOL would continue with the same successful
exclusive channel. The regional distribution model would continue for
both DIGILINK and DIGISOL with absolutely no change in the partner
network. The channel was one ofthe key strengths for which the
DIGILINK business was acquired by Schneider,” pointed out Dam.
Contrary to the market reports, there is no transfer of distribution
network. And since both Schneider's DIGILINK business and
Smartlink's DIGISOL business don't compete with each other, they
will both use the same distribution network. “We will adopt a 360
degree approach to address all types of channels, across markets,
covering global, regional and small SIs and resellers. We will
introduce different incentive schemes for our channel partners. We
will support our partners with strong advertisement campaigns and
publicity material. Apart from this, we will also be conducting
technical trainings, seminars, roadshows, and trade shows to keep
them abreast with the latest technological trends and markets,”
highlighted Dam.
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