NETWORK INTEGRATORS: Will He Deliver These?

One positive development for the NI market in 2002 was the downward trend in

the prices of satellite equipment. Prices have dropped by almost one-third to

half, with speeds growing three to four times. Even on the terrestrial front, on

a single router/box vendors integrated more and more needs like data and ISDN.

This made the setting-up of networks more affordable, giving a spurt to the NI

market in India.

Buying

Tips

n Pan-India

Infrastructure: It is important for the integrator to have support offices

in multiple locations across the country. In many cases, there are only sales

offices, and there is often a problem in case of emergency if the user is in the

south while the integrator is located in the north.

n Multiple

Platform Experience: The integrator should have experience on multiple

platforms for networking and computing technologies. These days, it is no more

possible for an integrator to be working only on mainframes or only on Uix. A

typical implementation today is extremely heterogeneous on platforms.

n Open

Architecture Support: The integrator should support open architecture

implementation of products from multiple vendors for seamless integration. A

standard network may have boxes from Sun, HP, routers from Cisco and IBM

mainframes. A typical NI should be able to support all this.

n Deliverables:

The integrator should possess capabilities like network management, SLAs,

installation and maintenance, troubleshooting and process documentation.

n Skilled

Manpower: Both the onsite as well as offsite support staff should be skilled

enough to manage the entire network infrastructure.

n Experience: The

integrator should have enough experience in designing large mission-critical

networks and in reducing the TCO. Besides, the integrator should have knowledge

on applications like SCM, CRM, storage as well as security.

n Software

Integration Capability: The integrator must have software integration

capability.

Technology Options/Trends

n Fast

Ethernet: Fast Ethernet continued to rule the market, as far as technology

deployment is concerned. Very few customers have actually implemented gigabit as

an option for the desktop and this trend is expected to continue for a while

since there is still a tremendous difference in costs.

n Wireless: Wireless

(802.11b and a) as a technology was in the limelight in 2002. Apart from

traditional segments, wireless MANs and VSATs were considered to be the most

happening technology segments for the integration business.

n Switch-oriented

WAN: WAN is gradually becoming more switch-oriented, as the space occupied

by it is currently overlapping with the implementation of fiber.

n Bandwidth

Management Tools: Use of network enhancement tools like bandwidth management

tools (which manage bandwidth for all products) is on the increase.

n Design and

Consultancy: The year witnessed a distinct shift by the different vendors

towards consultancy, design and implementation services mainly with an eye on

improving margins. Most of the integrators worked towards realizing better

margins for the services they offered. No network integrator can today ignore

the services factor; it’s one segment that’s driving the integration

business.

n Falling

Equipment Prices: One positive development for the NI market in 2002 was the

downward trend in the prices of satellite equipment. Prices have dropped by

almost one-third to half, with speeds growing three to four times. Even on the

terrestrial front, on a single router/box vendors integrated more and more needs

like data and ISDN. This made the setting-up of networks more affordable, giving

a spurt to the NI market in India.

n Storage and

Security: 9/11 too seemed to be a boon for network integrators in 2002, as

more and more companies went for storage and security solutions. This led to

most of the vendors forming alliances with key players in the NAS and SAN space

to provide an ‘all-in-one-basket’ solution. In fact, this was the key driver

behind the growing trend of integrators providing third-party equipment and

solutions and themselves engaging more on the consultancy part.

Market Information

The NI market ®was not able to repeat its spectacular 64 percent growth as

in the previous year, but it still witnessed a steady 14 percent growth this

year with revenues touching Rs 1,096 crore. One more important lesson was that

all enterprise users would need networks of one scale or another to cut costs.

Top 10 Network Integrators
Vendor	Sales in 2001-02 (Rs crore)	Percentage growth over last fiscal
Wipro Infotech	245	-9
HCL Comnet	189	44
Datacraft India	174	18.37
HECL	143	2.14
HCL Infosystems	103	11.96
Network Solutions	98	17
Global Telesystems	93	102.17
Tulip IT Services	73	82.5
Comsat Max	70	6.06
Ramco	61	-1.61

The challenge for most integrators would be to try and bring in a convergence

of hardware and software solutions. For users in the telecom industry and to

some extent in the BPO segment, it would be absolutely necessary to look at

those integrators who can come up with these transport technologies.

With new standards emerging and technology becoming cheaper, companies looked

at extending their networks to other geographies which had not been covered

earlier. Also, because of the recession, customers were increasingly looking at

means and tools to lower inventory levels and this led them to go in for more

connectivity. They started interconnecting their various offices, branches to

enhance efficiencies and derive more benefits and this automatically led to the

need for integrating them into existing networks. For all enterprise users

interconnecting multiple branches across geographies, it is necessary to have

integrators active in all these geographies.

Wipro Infotech, HCL Comnet, Hughes Escorts Communications, HCL Infosystems

emerged as some of the prominent players in 2002. Though Wipro Infotech had a

setback in terms of a 9.26 percent negative growth, at Rs 245 crore it still

continued to be the leader in this segment. The economic slowdown was primarily

responsible for the company’s slow growth in the integration business. As the

company continued positioning itself at the core of network platform-centric

development, and as a one-shop-stop for all solutions, NI formed the majority of

the business. The company has a strong place in segments like manufacturing,

banking, finance, telecom, IT and the government. In the recent past the company

has also forayed into foreign markets.

HCL Comnet experienced a positive growth of 44.25 percent in the last fiscal,

much bigger than the average industry growth.

This

could be attributed to the fact that it bagged some major orders from the

government and manufacturing segments. The year saw HCL Comnet moving in a

position to provide end-to-end solutions across verticals and shrugging off its

tag as only a satellite service provider. Like Wipro, HCL Comnet too forayed

into the international segment. Since the company’s business is spread across

different segments and technology areas, it was not really affected by the

recession.

HECL provides an entire portfolio of end-to-end services, including WAN

connectivity, designing and integration of networks, managing of networks, and

provision of data centres and ASP services. HECL integrates both satellite and

terrestrial equipment into the network as part of its NI services which touched

Rs 143 crore this year. While open to all verticals, the company is specifically

looking at the financial, FMCG and retail segments to drive growth. Today, the

company is positioning its NI offerings as a logical extension of its

connectivity services and an important part of its services value chain,

comprising management of networks, data centres and ASP services.

HCL Infosystems’ turnover in 2001-2002 from network marketing in the

domestic market, including the LAN, WAN and the security market space was Rs

102.5 crore with major contracts for facilities management from customers in

Malaysia. The main markets targeted by HCL Infosystems included the

manufacturing sector, the banking & finance sector, the telecom and ISP

sector, the IT sector, the government, defense, transport & utility,

corporates and call centers (BPOs). It set up its first Wireless Campus network

this year. It spearheaded convergence to the advantage of the enterprise and the

service provider market. This included rolling out a VoIP solution for a media

house and for a leading bank in the North. It also rolled out our own VoIP

network over the VPN.

EXPERTS PANEL

Ajai Chaudhary, CEO, HCL Infosystems

Shailendra Badani, head (support services), Datacraft India

Sudipto Sen, CEO, Comsat Max