'Our ‘co-operative fund scheme’ helps distributors in promotions and training.'

An Electrical Engineer from Bangalore University, Krishna Kumar Shetty

started his career with Kothari Electronics. After four years he moved to

Amphenol Limited and then joined AMP India (now Tyco Electronics Corporation) in

1994, as Country Manager - NETCONNECT Solutions Division. His experience of

over 17 years in planning, operations, sales and  marketing has helped him

spearhead Tyco Electronics’ successful business in India. In a chat with

DQCI, Shetty outlines the role that he wants channel partners to play in Tyco’s

growth in India.

What kind of distribution model do you follow in India?



We have three country distributors namely, Tech Pacific, Compuage Electronics
and Ramco Systems, who form the first layer of our distribution channel. We

also have a layer of stockists which is spread across the country. We

address the middle segment of the market through Tyco’s authorized systems

integrators. Currently, we have around 80 authorized systems integrators

spread across the country. 

We also have strategic alliances with several OEMs to address the upper

segment of the market. However, we have a direct selling relationship with

Compaq, Wipro and HCL. 

What is the percentage revenue contributed by channels today?



Tyco’s business model in India is 100 percent through channel

partners. They have given Tyco the ability to offer best-of-breed

networking solutions to customers. We believe that our channel partners

have played an important role in Tyco’s growth in India. Our approach is

to create the brand recall for Tyco products and position the same in the

country.

What all steps have you taken to ensure a better relationship with

partners?



We help our channel partners to meet customer requirements by hand-holding

them to address both technical and support- related issues. Besides, we are

one among the very few companies in the structured cabling market to offer a 25

years warranty on our product range.

In addition to this, we have also introduced a special scheme for network and

systems integrators. On achieving their annual targets, systems integrators can

participate in our annual channel meet.  We also identify top

performers in the systems integrators and installers segments and offer them

free training in areas such as installation, connectorization and

certification. These programs are conducted by trained professions and

would cost Rs 25,000, which is offered free to our top systems integrators and

installers.

With the introduction of these schemes and specific programs, we plan to

cover the entire market segment, also harmonically boosting the sales of both

the company and channel partners.  These schemes, which are open to our

channel partners in different layers will give them ample opportunity to earn

extra incentives, rebates and fabulous rewards.

Also, the ‘co-operative fund scheme’ for distributors gives them options

to spend their share of funds, which is provided by Tyco in promotional and

training programs for other channel partners who come under them. Apart from

this, distributors can avail rebates on their purchases on achieving their

quarterly targets under the ‘quarterly incentive scheme’.

What kind of training do you provide to channels?



In the recent past, we have rolled out UTOP program, which trains channels

partners the basics of installing a Local Area Network (LAN). This

program helps them to design and plan out the network architecture to meet the

needs of SOHO, SME, and other segments. For our authorized systems integrators

we have a world-class training facility in Bangalore. We offer three

different kinds of training programs, which are specifically designed for

systems integrators. Here we train them to install optical fiber, copper

cabling system, certify and trouble shoot the network. We also offer

specific training for OEMs to help them position and differentiate our products

against competition. 

Can you throw light on your partnerships with various companies? What

would be your business approach?



We have been selected by Reliance Infocom to provide optic fiber

accessories. According to the agreement, Reliance will buy from Tyco the

range of optic fiber accessories for its broadband project in the country.

The component market is emerging as a result of the broadband market which is

estimated to be around Rs 40 Crore market. We are upbeat about this and we are

gearing up to meet the needs of this segment which will definitely open up

opportunities in the next two to three years.

Besides this Tyco has also partnered with Wipro Technologies, HCL

Technologies and Compaq as Value Added Resellers. Tyco will work with these

companies jointly in promoting its products by making presentations, offering

logistics support and training to its customers. We are confident that the new

tie-ups and our business plans will help us become market leaders in the

structured cabling segment. We are expecting to increase our market share

to 40 percent from the current 34 percent in the next one year.

We have been focusing on the user segment at the corporate level in the last

two to three years and this year our main focus is on strengthening our

channel. Tyco has been pushing its products through national distributors

and at the same time we are also looking at regional level distribution to

promote our products more aggressively. This decision has been taken to meet the

needs of SOHO, which we identify as a potential segment to attain both brand

recall and market share. 

We see that SOHO forms about 30 percent of the total market and is expected

to grow to 50 to 55 percent in the next two years. We want our product to

be available off the shelf so that we can meet the needs of this segments.

What are the segments Tyco has identified for revenue growth?



The waiving off of US sanctions will also contribute to an increase in our

revenue as the defense sector will open up. Tyco is a familiar brand in this

sector and we are confident that we will be able to gain a 50 percent of the

share in this segment come to us.

We are also eyeing the growing call center, government sector, banking and

finance sectors for revenue growth. 

What are your short and long-term plans?



When we entered the structured cabling space in India our main focus was the

middle segment of the market. We later scaled up to concentrate on the

upper market segment and today we are having a strong presence in both.  We

will be focusing on the stockist and the reseller market and have a win-win

relationship with them. 

Sunila Paul in Bangalore