MANUFACTURING: Ready to Play Ball

Though D-Link has been into manufacturing in India for quite some time, it is

only now that it is trying to join the elite club of biggies like Cisco and

Nortel. Despite its Taiwanese linkage, D-Link has managed to brand itself as a

pioneer in domestic manufacturing. To further enhance its position in the Indian

market, it has also formed strategic alliances–while the one with Foundry

Networks has recently been in the news, last year it also allied with Corning in

the structured cable space.

D-Link’s strategy to enhance its brand equity to compete with the likes of

Cisco and Nortel has been well planned. First, it stopped selling Cisco’s

high-end layer 3 switches and enterprise-class routers and instead came to

market with its own high-end networking products. As part of its high-end

offerings, it has entered into a co-branding exercise with Foundry Networks.

D-Link expects that the Foundry alliance would enable it to reach the lucrative

high-end networking market hitherto untapped by it primarily due to lack of

suitable products.

In the domain of enterprise switches Cisco and Enterasys currently dominate

the market with 39.4 and 34 percent share respectively. Though currently D-Link

slightly trails Nortel in market share, it hopes to soon pole vault into the

third position considering that Nortel’s share has been dropping steadily, and

that it is now restricted to the call center vertical. Also, the Foundry

alliance is expected to further shore-up D-Link’s position in the market with

its plethora of high-end switches.

Foundry’s product suite includes the FastIron family of layer 2/3

enterprise switches, the BigIron family of layer 3 backbone switches, the

EdgeIron family of layer 2 wiring closet switches, the NetIron family of metro

routers, and the ServeIron Layer 4—7 traffic management switches. This entire

range of products is now available in India under the Foundry-D-Link co-brand.

D-link particularly gains from Foundry’s expertise in the areas of

high-performance enterprise and service provider switching, routing, and Web

traffic management solutions. While ISPs like Tata Internet Services were

already D-Link clients, the Foundry alliance could add more ISPs to its client

roster besides meeting the telecom requirements of various defense units too.

On the enterprise router front too, D-Link expects to upstage Nortel from its

no. 2 player status, in part because Cisco is currently way ahead with 86

percent market share. D-link’s blue-chip customers include a wide spectrum of

names like the AP Government for the National Games held at Hyderabad, Mumbai

Port Trust, AP Commercial Tax Department, Tata Internet Services, and MS Ramaiah

Medical College and Hospital in Karnataka.

Structured cabling is another telecom-related equipment D-Link is hedging its

bet on currently. At Rs 31 crore it has over 10 percent of the structured cable

market share and while it may not overtake the leader Avaya in the short term,

it believes it has the potential to overtake the no. 2 player Tyco Electronics.

Just like it hopes to leverage the Foundry association to gain mindshare in the

switches category, even in structured cabling it is trying to piggyback on

Corning to increase its foothold. D-Link is using Corning optical fiber as part

of its OpenLink Connect structured-cabling products. When one considers that all

this manufacturing work for D-Link is done in India, it assumes greater

significance. Even more significant is that D-Link has already developed its own

version of the Cat 6 cable. The market for structured cabling is huge and since

Cat 6 is just catching up even globally, D-Link

D-Link hopes to soon overtake Tyco Electronics and Nortel in structured cabling and enterprise routers

India could have a real winner on its hands. The company is already exporting

its line of products to West Asia.

Again, WLAN products might prove to be a hot area for D-Link too. With

licensing issues sorted out and prices of wireless equipment falling, D-Link is

expecting large-scale adoption of wireless by Indian enterprises. As part of its

strategy, the company is looking at tapping educational institutions like the

IITs, who have huge campuses, for deploying wireless networks. Having been

involved in building Ethernet-based campus networks for educational

institutions, the company stands a good chance of converting or enhancing the

Ethernet-based networks to wireless networks.

Other than these pure play telecom-related products, another success story

from the D-Link stable has been its successful collaboration with Taiwan-based

Gigabyte Technology for motherboards. D-Link India now has close to 15 percent

market share in the motherboard market with a manufacturing capacity of 20,000

motherboards per month. Besides giving D-Link India a key advantage in terms of

technology, it also means full utilization of D-Link’s three manufacturing

facilities in Goa. While other Indian hardware players have always been whining

about doing away with duties as a precursor to kick-start hardware manufacturing

in India, D-Link’s strategy to tie up with other brands, to market and

manufacture their products in India, has not only been realistic but has turned

out to be a successful strategy.

Rajneesh De