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6 Opportunities For Enterprise Channels in 2013

Opportunities are what we constantly seek. But, often, to access them we need to know where to look. For many partners, the budgetary restrictions of a slothful economy have proved detrimental to growth. But this new fiscal is not one for brooding. It is one that can offer big rewards. There are huge opportunities available for those who have a nose for success. Government initiatives, the insatiable appetite of mobile consumers, and under-served markets, are all in readiness to incorporate and nurture the next big money spinning venture of small and big channel partners alike. It is for solution providers to surmount the challenges of the present and keep pace with the opportunities before them. So, before you strategize about your next move for the new fiscal, take a look at these six exciting avenues where you can find better opportunities to invest and build a robust business.

The Government Gold Mine

The Opportunities: Government continues to be a big buyer of technology in India. With an estimated 11 percent increase in IT spend by the government for the next year, channel partners--across the country--will get a chance to capitalize on the opportunities, and consolidate their positions.

The Government of India will spend a colossal Rs 368 billion on IT products and services in 2013; an increase of 10.5 percent over its 2012 spends. The government has also allocated substantial funds for e-governance and computerization of various departments: A move that should provide enough opportunities for partners to capitalize.

Some channel partners like CCS Computers are already smacking their lips at the rich prospects. "With the government sector contributing nearly 65 percent to our revenues, we expect to make Rs 120 crore from this sector this fiscal," says Rajesh Bhatia, MD, CCS Computers. This Delhi-based solution provider has already cornered revenues upwards of Rs 100 crore in 2012-13 from the government sector [including defence and PSU] alone.

The Union budget has also offered some wriggle room for partners to maneuver in this sector. "The Budget has provided a plethora of new opportunities for partners. There will be demand for datacenters as new mini-economic zones are being set up. Therefore, boxpushers can look forward to a beneficial stint in the government sector," says Sanchit Gogia, principal analyst, IDC India.

Initiatives by various ministries and state governments have thrown open more avenues for solution providers. Hyderabad-based Shell Networks anticipates that the government sector will provide opportunities around State datacenters, IPV6, cloud, and BYOD, among others. Across the state, demand for datacenters and migration to the IPV6 platform have increased. "We have identified service revenue in this space. State governments have rolled out requests for proposals (RFPs) for their e-Panchayat initiatives which require IT infrastructure," says A.L. Srinath, CEO, Shell Networks.

The technology upgradation fund scheme (TUFS), an initiative of the Ministry of Textiles which aims at making funds available to the domestic textile industry for technology upgradation is also expected to see some fresh IT investments especially in southern and eastern regions of India.

Another big opportunity in this sector is the Central government's proposal to implement mass rapid transit systems (rail) in cities with populations of 20 lakh and above. Projects of such magnitude require huge IT infrastructure which will necessitate the backing of solution providers like Delhi-based Emarson Computers. The main thrust of Emarson's business is city-based infrastructure projects. "We are bullish about government and PPP infrastructure projects this fiscal," says Sumeet Prakash, CEO, Emarson Computers. Emarson has a specialized team for a up-and-coming vertical like transportation. Last fiscal (2012-13), the company garnered 20 percent of its revenues from the government/PSU sector. This year it hopes to double that number.

But, there are some restrictions when it comes to the kind of adoption the government sector is open to. Virtualization, BI, and the cloud may not happen immediately, believe partners. "Channel partners should not be pitching the cloud, or big data solutions, etcetera. They should stick to catering to the basic technology needs of various departments," says Gogia.

Catering to a large set up like the government will require partners to build and expand their employee capacity to deliver quality service. CCS Computers has already factored this in. It has employed 45 people in sales--pan-India--which includes 35 focused on the government sector in Delhi alone. "We recruited 10 last fiscal and will add nearly 15 more in sales to help us cover more ground," says Bhatia. Further, CCS has expanded operations to different locations across India to address government and defence sectors.

Additionally, CCS has also added a new service called information security solution which has been registered with the Department of IT, Government of India, to extend information security services to various departments, according to Bhatia.

For smaller solution providers, PPPs are a conduit to growth. They can look towards the substantial IT needs of the government sector to elevate the scale of their business. "We would like to be part of the consortium of tech players executing PPP projects, which is presently dominated by large tier-1 SIs," says Prakash from Emarson. "Government sector is a continuous process as the sales and payments are aligned across projects," he says. With many government initiatives going online in the future to improve transparency, solution providers can bet on making it big in this sector.

Mobile Madness

The Opportunities: The mobile workforce is estimated to reach 1.3 billion in 2015. That's 37 percent of the workforce and a cash cow for partners.

Enterprise mobility has delivered solution providers with an abundance of new opportunities in areas like device management, the application layer, and back-end infrastructure. Many partners were, previously, unable to excel in these domains. But that is set to change.

Lucknow-based Acme Digitek Solutions was content with its growing SI business. That was until the mobile boom took over. This changed its focus. The company has now pinned its hope on enterprise mobile applications. Ajit Mittal, its managing director, has taken the big risk of investing significantly to bring in an additional focus on application development. He hasn't done this without having a fair idea of the outcome. "This is the year of mobility. Our focus is to cash in on the mobile workforce trend, which calls for remote access of corporate data in a secure way. Within this, the application story is quite strong. That alone is a huge opportunity for us," he says.

The idea and benefits of using mobility has struck a chord with large enterprises. According to a recent study by Zinnov, almost 50 percent of CIOs say enterprise mobility is one of the top five priorities for them in 2013.

"This year is going to be a turning point for enterprise mobility. Until now, we have not seen too many large deployments among enterprises. CIOs were just experimenting with horizontal deployments around e-mail and other smaller apps. However, this year, we can expect to see more maturity and better policies around mobility," says Praveen Bhadada, director, market expansion, Zinnov.

Sachin S. Rao, CEO of Bangalore-based Archon Consulting is planning to make the most of this development. He is focusing on building his access device business (laptops, tablets, etcetera) for enterprises in a big way. He believes that with mobility becoming prevalent among enterprises, the access device business is no more a volume game; rather, it's more of an "intelligence game".

"Though there is no consistent approach among our customers in terms of what kind of mobility solution they are looking for, we can see interest building up. They are looking at various types of services around mobility," he says.

Mobile device management (MDM) is another opportunity area for solution providers. Vilakshan Jakhu, managing director, Will Information Technologies, believed the opportunity was so significant that he quit his job as a CIO to start his own company. Within the first 100 days of forming Will Information, Jakhu says he came across at least 30 leads for enterprise mobility. While he doesn't expect to win all of them, he says it speaks volumes about how receptive enterprises are to the idea of mobility and BYOD.

But, there is a growing perception that BYOD needs to be addressed in a holistic manner to make it more effective. "A point solution will not address all the problems," Jakhu says. "In the last couple of years, there have been plenty of discussions around mobility and BYOD. There are early adopters, but at the same time some of them are facing issues with scalability. Our approach is to offer an end-to-end integrated solution that addresses concerns around BYOD, security, and data integrity." Some of the early adopters of mobility solutions are verticals like banking and finance, education, government, retail, travel and logistics.

There is increasing signs of maturity among Indian enterprises when it comes to mobility policies and IT policies around mobility. With devices getting cheaper, and vendors focusing more on B2B devices, mobility is an opportunity partners cannot bypass.

In Focus: SMBs

The Opportunities: Partners targeting SMBs can expect a 49 million-strong market, representing a Rs 27,000 crore opportunity by 2017. Plus, SMBs make decisions quicker compared to large customers.

A cycle manufacturer in Ludhiana, a textile unit in Madhya Pradesh, and a chain of hotels in Kerala--all examples of the nearly 49 million SMBs present in India. According to a Zinnov report titled Indian SMB Sector 2013, this number is all set to rise at a CAGR of 4.5 percent.

According to another report by AMI-Partners, the IT and communication spending for Indian SMBs is expected to grow at a healthy CAGR of nearly 16 percent to $49 billion (about Rs 27,000 crore) by 2017.

Much of that will be made up of products and solutions that can help SMBs overcome nagging business challenges.

"Basic computing and networking hardware dominates the IT spending portfolio of Indian SMBs. This is especially true for the small business segment which is gradually enhancing their ICT backbone serving as a platform for future adoption of higher-end technology solutions," says Dev Chakravarty, research manager, AMI--India.

SMBs are a relatively untapped vertical and are therefore a massive opportunity for solution providers, especially for those who rely on a volume model. One such partner is BB Professionals.

"Our business makes a profit only when we do volume sales every quarter. The SMB sector makes this possible," says Ashim Bhasin, director, BB Professionals. This solution provider derives 80 percent of its business from the SMB sector with a focus on cloud-based ERP. BB Professionals focuses on up country markets where SMBs are pre-dominantly concentrated.

Some solution providers working in this sector believe that SMBs offer better opportunities compared to larger enterprises. Among the many reasons is an SMB's ability to make decisions fast, compared to the bureaucratic internal processes of large enterprises. That shrinks a partner's sale cycle and boosts cash flow. "Large enterprises are fussy and their internal procedures take a lot of time. Why should I spend so much time on approvals for a single project?" asks Bhasin.

Also, with SMBs, most of whom don't have an internal IT team, the solution provider has the freedom to present a complete swathe of solutions, thereby increasing its chances of up-selling. That's much harder to do with top-tiered establishments who have their own IT teams.

That said, it's important to listen carefully to SMB customers and make sure you offer business-oriented, hard-RoI solutions. "The solution provider needs to talk more in terms of the benefits to the customer. They need to understand the core business processes of SMBs and then tell them about the right choice of solutions," says Vishal Bindra, CEO of Delhi-based ACPL Systems.

Kolkata-based Parth Technocomm concurs with the need for a focused approach. With nearly 65 percent of its clients coming from the SMB sector, Parth is focusing on storage and networking solutions.

"We plan to put a datacenter up by end of June this year. This should help address a larger SMB audience than we used to," says Tejas Mehta, director, Parth Technocomm.

BB Professionals is planning to take a mix of cloud and on-premise hardware solutions to the market soon. These solutions present a profitable business opportunity for partners. Most SMBs currently require only basic IT infrastructure. But, the future will see a marked change. How well the solution providers deliver to SMBs now will define how well they can leverage larger opportunities tomorrow.

The Cloud Unlimited

The Opportunities: If you believe that the momentum around cloud has run its course, then you are wrong. Smaller, under-served markets and advanced technologies offer big opportunities.

Cloud opportunities beckon the solution provider fraternity in 2013. Partners are slowly, but surely moving out of the wait-and-watch mode and trying to grab a slice of the pie.

In India, a quick look suggests that the mid-market is still nascent, but ready to go cloud in a big way. Cloud computing is entering the next phase of its evolution, one in which businesses move beyond relatively simple SaaS applications and hybrid hosted infrastructure. Enterprises will soon call on solution providers to select, deploy, provision, and move applications around different cloud hosting providers.

As confidence in the cloud grows, so does a customer's appetite for more advanced services and applications. This trend will also be driven by more companies switching to opex models. Businesses will no longer be satisfied with hosted e-mail or cloud-based backup--they will want high-end supply chain management, business analytics, and CRM in the cloud.

In order to make the best of this opportunity, the majority of the solution providers who are currently cloud amateurs themselves, will need to plan the outlines their structure, operations, value proposition, and goals. In the present cloud-era, in which IP is still very fluid, Indian solution providers who invest into product development and marketing will fare well. They will need to develop organizations with independent engineering, research, product development, and consultative sales competencies. It's not wrong to say that management will become the focal point by which transformation happens and succeeds.

"In the cloud-era, solution providers will have to focus on business plans to ensure they remain focused on business expansion and value delivery," says Tirthankar Sen, senior analyst-Partners and Ecosystems, Forrester Research.

Dynacons Solutions is adding value by sensitizing customers about the long- and short-term fallouts of the cloud, and what will be the right fit and mix for them. "A strong ROI case has to be established for cloud to succeed," says Dharmesh Anjaria, director, Dynacons Solutions. "While the cloud is a fantastic opportunity, we are still encouraging customers to do their virtualization bit thoroughly before they march aggressively into the cloud space."

In smaller, upcoming markets like Vizag, there are players like CA&S Solutions that have already gone ahead and boldly explored an opex model through the cloud. "We are trying to leverage the cloud boom in this market. We will make a big move this year," says Surendra Chikkala, MD of CA&S.

The company is one of the cloud's early movers, selling ION solutions to Vizag's educational institutions. What Chikkala hopes to achieve is a very realistic target of tapping as many schools and colleges as his bandwidth permits.

For now, both Dynacons and CA&S hope to see growth in the range of 10 and 20 percent in toplines from cloud offerings in the coming year.

OEMs and vendors have also expressed that they would be more than happy to work with partners who have got their funds in place and have figured out how to offer opex models. A vendor spokesperson admitted that pushing capex models is the challenge; it is too huge a burden for customers. This virtualization vendor shortlisted three partners who are taking its initiatives through the opex model successfully to the market.

While large, tier-1 partners and the upper crust of the second tier have moved to the next level in setting up cloud business practices, smaller partners, are still dealing with the hype-cycle and their relative ignorance around the cloud.

"Indian partners sense the opportunity, but the word is still shrouded in mystery," says Sen,

However, the coming year is likely to see more and more players trying to get their cloud act right.

Explore New Geographies

The Opportunities: With active support from vendors and state governments, channel partners can ingress into industrial belts and upcoming SIRs and SEZs to improve business opportunities, increase revenue, and get a foothold in small, unexplored markets.

Catering to new geographies to gain a first-mover advantage has been a priority for most solution providers. While IT demand continues to grow in metros, partners are exploring opportunities with enterprise customers and SMBs in tier-2 and tier-3 cities. Some of these cities house a number of special investment regions (SIRs) and special economic zones (SEZs) which are big business avenues for solutions providers.

These zones provide opportunities for channel partners. "It is a good 'foot in the door' opportunity for partners," says Sanchit Gogia, principal analyst, IDC India. SEZs in tier-2 and tier-3 cities are a large focus area for New Delhi-based CCS Computers. "Infrastructure limitations and a scarcity of land in metros have led to an expansion to new locations," says Pradeep Johri, vice president, CCS Computers.

Presently, CCS Computers is focusing on SEZs in and around New Delhi. The company plans to open branches in Dehradun, Chandigarh, and Jaipur by the end of April. "Apart from creating a presence in new areas, this expansion provides a point of contact to enterprises across other verticals in that region," says Rajesh Bhatia, MD, CCS Computers.

For some partners, expanding operations has been made easy due to the initiatives of their respective state governments. "The next growth opportunity for us will come from the seven or eight SIRs or SEZs which have been notified or are operational in Gujarat," says Keyur K. Jathal, executive director, Ishan Infotech.

Gujarat is one of the most venture- and industry-philic states in India. According to Industries Commisionerate, Government of Gujarat, the state is expecting an investment of about Rs 31,500 crore in SEZs from developers.

"All these new locations need internet connectivity, basic IT infrastructure including servers, storage and, surveillance," says Jathal. "That is a huge opportunity for us."

Pune-based Sunfire Technologies has strategized to bring its expansion plans to fruition. It visualizes three sources for growth: First-time buyers, which include new customers in greenfield projects. Cross and upselling to its existing customers. And value growth or a demand for upgrading existing products.

Sunfire is also arranging seminars, events, and customer meets to demonstrate technologies and create better opportunities. "As a go-to-market strategy, we have divided industrial areas into different geographic regions and assigned them to field executives. This has helped expand our reach," says Bhaskar, director-Technology Services, Sunfire Technologies.

Ishan Infotech is also expanding its reach to untapped geographies which have the potential to consume and drive IT infrastructure. "With branches across major cities in Gujarat, we expect to have a first-mover advantage. We have been working on this approach for nearly two quarters now as we see benefits in investing in manpower and support infrastructure," says Jathal.

Often, proximity and access to new areas is a big advantage for partners. Quick response is important to address the urgency in IT. On the flip-side, distance could be an impediment, especially when an SEZ is located outside the state. But this is a problem partners are willing to overlook. Some partners coordinate with, and travel to respective customer offices to demonstrate their value proposition at the start of a project.

Another benefit for partners is that they are not required to go solo. They have active support from vendors who are quite forthcoming in aligning with them to seize a first-mover advantage.

"Vendor companies are supportive as they too want to enter these unexplored geographies," says Jathal.

Importantly, as the country's economy expands, solution providers will find opportunities to fill voids in less developed regions. Partners will get to increase value and volume of their business in new locations.

Sell Deep, Sell Wide

The Opportunities: The single-point-of-contact approach or a 360-degree IT approach, as partners prefer to call it, allows for increased cross- and deep-selling.

In a time when customer acquisition and bagging new projects are challenges for solution providers, holding onto existing customers and ensuring good customer retention rate is high on a solution provider's list of priorities. This becomes crucial in light of the growing concern amongst customers that their partners are not engaging with them effectively. This fiscal has witnessed partners pulling out all the stops in their attempt to close the growing chasm between the two parties. For starters, discussions with CIOs have revealed that many of them look at their partners as long-term allies and want them to act as a single point of contact. This trend can be broken into several aspects, two of which are cross-selling and deep-selling.

The idea of diving deep into existing clientele is not new, but the idea seems to have caught the fancy of solution providers.

"Customers are looking at consolidating infrastructure with tremendous scope for scalability. They want a partner whom they can liaise with in a personalized manner across the board for end-to-end IT infrastructure," says Vipul Datta, MD, Futuresoft Solutions.

Cross-selling and deep-selling involve several tactical changes in an organization; one of the most important and fundamental being cross-training the sales force.

Raunaq Singh, director, Targus Technologies, says, "Sensitizing the sales force is the first step in cross-selling." What Targus has done is internally restructure and channelize its entire sales personnel to go to customers and present products across portfolios, as against its earlier approach where it had specific sales managers for specific lines of products and solutions.

This homogenous approach has ensured that existing customers are updated on Targus' new offerings. "Sales has been enabled to ensure that they can sell anything. The new approach has not only helped us improve on level of engagement with existing customers, it has also accelerated the multiplication factor," says Singh.

Another big driver for cross-selling is that costs are escalating on all counts--both at the customer-end as well as the partner's. Internal realignment of costs by solution providers becomes critical. "A thorough cost overhaul in order to achieve goals of optimization helps us understand what we have and what we have to achieve. These learnings are incorporated diligently into the business plan," says Datta.

A process of mapping costs has helped Futuresoft to understand that customers have to be mapped more efficiently. This has helped the company understand key accounts and offer a bouquet of relevant offerings like cloud, remote support, and a host of other optimization services that can help the company establish ROI for the customer in the short-term.

The company intends to keep this sharp focus as a strategy or opportunity point for the coming fiscal. "The 360-degree IT approach of cost optimization and deep-selling will keep us steady in the coming fiscal," says Datta. The big advantage that this solution provider has over others is its comparatively lower attrition rate (less than the industry average of 8 percent). "This makes work cohesive and helps realize objectives faster," he adds.

The journey to cross and deep-selling includes making certain allowances like doling out discounts, offering POCs, free consultancy, and dealing with post-implementation teething troubles to customers. So, will cross-selling be seen as an aggressive pitch? No. Trust is what counts, they say. The trade-off makes the deal worthwhile.


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