Network Integration: Adaptability Test

The trick last year in Network Integration (NI) was to adapt to market

movements. It was this important aspect that separated the market share gainers

from the losers. By the end of a very turbulent market such as the one in

2000-01, it was not clear which segment of the market was going to give out

chunky deployments of network in the current year. Many companies burned their

fingers while going after the new economy operations. A greater number of

companies were left scarred by over-indulgence on the service provider segment.

In such a situation, it was the companies, which had distributed focus and the

ability to quickly address new opportunities, that were the big gainers.

There was a major focus among the tier-1 integrators to improve their

earnings from pure integration services revenue. And, in that sense, last year

was a good beginning for the companies that tried to do this, as many projects

were implemented in which the products were sourced directly from the vendors or

their distributors, and integrators were contracted to provide the integration

services. This flowering of the integration and services parts meant that

integrators enjoyed a better margin during the last fiscal.

A trend that was seen in the market was the entry of telecom turnkey

providers into this space. The most prominent names being ITI, ARM, Global

Telesystems, Supreme Telecom and HFCL. It was mainly the ISP segment and the

call center segments that these companies were gunning for.

Another trend was that of network integrators exploring the export market for

network integration services. Though multinational integrators have been

sourcing expertise in certain technology areas from India for the projects

especially in South East Asia and East Asia, last year even saw Indian companies

dip their finger into these promising waters. This, being a high investment-high

return game, only top-rung players like Wipro were involved.

The New Network Opportunity

Exceptions notwithstanding, traditional network integrators have been

operating on a low-investment high-returns mode–mostly providing network

integration services to enterprises. It is only in the last two years, that

these companies have suddenly looked towards carrier opportunity, with the

opening up of the ISP infrastructure market. These integrators, though they have

a good understanding of packet technologies, have no extensive experience as far

as large-scale service provider networks are concerned.

On the other hand, the telecom turnkey service providers have basically been

involved in establishing circuit switched exchanges, laying OFC/JFTC for

backbone as well as local loop, putting up microwave radios for transmission as

well as access, and, to some extent, integrating a few datacom boxes as well.

There is clearly a lack of hands-on packet technology expertise among these

players. Also, when it comes to providing the backend OSS and BSS, including the

NMS, the telecom service providers have been again depending on the Systems

Integrators (SIs)–in India many of these have NI divisions as well. There

exists, between these approaches, a big gap to be filled.

In a sense, this gap appears to be even bigger with there being no precedent

as far as setting up a new network is concerned. Whoever fills this gap fast is

likely to be a big gainer in the current year’s carrier build-outs. Though the

vendors are promising to bring with them their own service people to establish

the networks–this model may not work in the new scenario and in a

cost-conscious country such as India. An independent network integrator may

likely be the missing puzzle piece.