Network Integration

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face="Times New Roman" size="2">The Network Integration (NI) market in India for the

fiscal 1998-99 was valued at Rs 517.24 crore. It was an impressive year in which the

industry posted an 82 percent growth over Rs 284.72 crore in 1997-98.

Highlights

• It was a very busy year in which networking
  
  activities spread across industry and regions, and the integration business was an
  
  immediate benefactor.
• Network deployments percolated even further. A
  
  large number of SMEs went in for deployments and vertical segments like Internet services
  
  and software saw even tiny organizations going in for state-of-the-art networks.
• NI was the business to be in. There were many
  
  companies from the distribution business as well as cabling vendors, which tried to
  
  compete in this busy market. The margins in this line were seen to be better than the
  
  other two.
• Turnkey implementers were still few. The top
  
  companies were the ones who could be called, to some extent, turnkey players. Even in
  
  those cases, there were cases in which the implementer had to sub-contract a part of the
  
  projects. A majority of the companies in the NI business implemented networks in bits and
  
  pieces.
• The top network integrators were by their talent
  
  and status preferred partners of the prominent networking product vendors in India.
• The top network integration companies last year
  
  were Wirpo Infotech, Datacraft RPG, CMS Computers, Crompton Greaves, HCL Comnet, Compaq
  
  Computer Technologies (India) Ltd, Allied Digital, Network Solutions, Tata Infotech, and
  
  IBM Global Services. The top 10 companies held a market share of 65 percent of the total
  
  marketshare.
• Last year saw the slow emergence of NI as a
  
  specialized activity, getting out of the shadow of systems integration. This happened
  
  because of factors on the both the supply as well as demand side.
• On the supply side, rapid advancement in
  
  technology forced specialization while on the demand side faster upgradation of networks
  
  demanded core skills in networking.
• Hence, the year also witnessed the emergence of
  
  network administrator in user organisations as a job function, separate from systems
  
  administrator.
• There was a movement from the LAN environment to
  
  the WAN environment in a big way. This is seen in the 41 percent growth of the VSAT market
  
  last fiscal.
• Wipro’s width="214" height="213" alt="seg_integration.gif (9990 bytes)" align="right" hspace="4"
  
  vspace="4">core competence in large projects saw it
  
  consolidating itself as a leading network integrator. Datacraft RPG also reaped benefits
  
  because of its WAN expertise.
• Gigabit Ethernet also made its debut, giving new
  
  opportunity to network integrators. Quite a few corporates deployed gigabit
  
  infrastructure, giving new business to the network integrators.
• A lot of corporates in the metros shifted to
  
  satellite towns. In Delhi alone, an estimated 60 large and medium companies moved to new
  
  premises in Gurgaon. These corporates gave network integrators new opportunity.
• The Central Vigilance Commission’s directive
  
  for the Banking sector to computerize its operations completely saw a lot of buying by the
  
  PSU banks in the last two quarters of 1998-99. This will continue for the next two years
  
  at least, much to the glee of the integrators.
• There was a heavy drop in leased line prices by
  
  the DoT last year, which will push deployment of WANs in the current year. This is
  
  expected to create a major demand for WAN integration. Vendors like HCL Comnet, Datacraft
  
  RPG will benefit from this.
• There is a genuine need for Managed Data Networks
  
  (MDN) by carriers such as private cellular operators. However, presence of just one
  
  serious player, Tellabs, in this segment will somehow restrict its deployment.
• With the opening up of the ISP sector, a lot of
  
  integration business happened in JFM ’99. This is further snowballing in the current
  
  year.
• Large campus-based network implementations in the
  
  education sector also happened last year. The IIT Delhi and the University of Roorkee are
  
  major examples.
• Government buying shot through the roof with most
  
  of the state governments going in for computerization and networking of their offices. The
  
  Andhra Pradesh Government leads the way in this direction, with their state-wide area
  
  network–APSWAN–and Hyderabad City Network. These networks were primarily taken
  
  up as multi-services network to support services like Internet access, extranet, intranet,
  
  virtual EPABX connectivity, hot lines, video conferencing and LAN Interconnects.

contd.>>>>

What set the ball rolling was the

announcement of the ISP guidelines in end 1997, which was withdrawn because of a tussle

between the DoT and the TRAI. Though grossly inadequate, the policy draft set the motion

in the right direction, making the prospective players hopeful. From then onwards, it was

perceived as only a matter of time. The setting up of the National IT Task Force and its

subsequent recommendations were also great milestones. Then came the Prime Minister’s

Council On Trade and Industry. For the first time, its different subject groups were

headed by captains from the industry. And the subject group on infrastructure was headed

by none other than the CEO of India’s first name in business, the Tatas. The Ratan

Tata Committee made some radical recommendations. In telecom, the Group on

Telecommunications (GoT), which was set up with the specific task of formulating a telecom

policy that is in sync with the changing realities. For the first time, the DoT was not

calling the shots in a telecom-related issue. That, in itself, was a great morale booster.

The GoT actually came out with a forward-looking telecom policy. By that time, the ISP

policy had started moving, with hundreds of prospective ISPs raring to join the bandwagon.