Networking: Ready to Play the Game!

With growing demand comes growing opportunities to fill this vacuum of need. The chicken and egg situation works no different in an enterprise market in India as well. The need of enterprise equipment and solutions are scaling high with huge demand by enterprises and SMEs in India.

Based on its research during the Q3 of 2011, IDC forecasts 8.7% growth in enterprise network equipment spending in 2012, a substantial increase from the 3.8% growth the firm saw in the market last year. VOICE&DATA estimated the total enterprise equipment market to be `24,023 crore in FY11, with growth of around 0.87%.

Last fiscal, it was a flat year for the Indian enterprise equipment market. But things are warming up this year. Networking market in India has seen a good growth rate recently owing to infrastructure development in the country.

According to IDC, enterprise networking market in India is rapidly evolving and it is stated to reach $3 bn by 2015 in India alone. With the advent of the next-generation technologies many new services are expected to be rolled out. Hence market will expectedly further flourish.

“Based on the increase of technologies like in use of IP telephony and cloud services by both large enterprises and SMEs, the networking equipment market is bound to grow further in the coming years,” informs Hemant Joshi, partner, Deloitte Haskins & Sells.

Many CIOs are evaluating the various aspects of IT, looking ahead for the new technologies that can help them drive business growth in the years ahead.

Scope

Sectors such as government, power, infrastructure, and defense are driving growth for equipment market. The verticals like banking, financial services, insurance (BFSI), telecom service providers, and the government are the major clients.

“Networking technologies in the area of security is more in demand in BFSI, e-gov projects, and SWAN deployments in government vertical and technologies required in scaling the network is in demand by telecom vertical,” informs Mahesh Gupta, VP, borderless networks, Cisco India & Saarc. Key to success lies in the ability to offer both active and passive products to the enterprises.

Simultaneously, if we notice, the entry of new players (Chinese players like ZTE, Huawei, etc) in the Indian market will give a big boost to the enterprise market. These players are planning to offer a complete bouquet of services catering to all types of customers-large, medium, and small.

The network is becoming all-pervasive and is poised to transform as one of the primary utilities of the 21st century. An increasing awareness on the transformational role that network connectivity can play has set the tone for the growth of the networking market in India.

Increasing PC penetration along with the boom in the ITeS and BPO markets has also contributed to this growth. Going forward, growth in the networking market in India is expected to come from both the private and the public sectors. The government is likely to remain a big spender in 2012.

Boosters

With new technologies, network is becoming more intelligent and evolving to become a platform, not just for data traffic but also for all forms of media. In the future, we will see more investments in building intelligent networks. “Enterprises are taking a fresh look at ways to design a network in the backdrop of technological changes including virtualization, cloud computing, security, and mobility. Also, business relationships with partners and end-consumers are undergoing change with collaboration technologies like UC straining the networks,” says Ashish Dhawan, country lead, enterprise business, Juniper Networks India.

There is tremendous scope for vendors in enterprise segment, since the demand for IT infrastructure product is also on a rise. “We are very optimistic about the networking market in India in the coming years. In fact, we are already seeing increased demand for networking products owing to the new trends in the Indian market,” says Gupta.

Few areas which are generating huge demands and scope for networking market to grow includes phenomena which are becoming core to today's enterprises and SME's businesses. According to Deloitte's recent report, mobility, social, analytics, cloud, and cyber are technology forces impacting business today. The intersection of these represents an opportunity for new business technology value and innovation.

Mobile Broadband: A growing requirement by enterprises for use of broadband technologies for their businesses is increasing day by day. Also, faster connection speed has given rise to a range of electronics goods that offer broadband data transfer, from mobile handsets to laptops to consumer electronics.

Year over year increase in subscribers in both voice and data communication is another major growth driver. Technology shift from 2G to 3G in mobile communication and from analog/digital to VoIP in business communication is crucial for the market today. The emergence of HSPA+ and LTE in India has already spurred the growth of networking products to facilitate enterprises and SMEs.

“By the end of 2011, 49 LTE networks have been launched around the world, and a further 346 are planned to launch before end-2016,” says Sethumadhavan Srinivasan, director, strategy & marketing, Huawei.

Lately, Indian government's focus on mobile broadband has further added spur to this technology and opened gates for immense scope for networking equipment market.

Mobile broadband coupled with cloud computing and M2M are the key technologies in play.

Ryan Pereira, country head, global field organization, Ciena India says,”We see great opportunities due to the fact that demand for the next-generation mobile broadband service continues to grow. We are also seeing increased demands on networks due to cloud computing, virtualization and advanced voice, video and data services.”

Mobility: With a growing demand of real-time business information, employees are allowed to use their own devices like smartphones, tablets, notebooks, and ultra-portable PCs at the workplace for use and connectivity, which has driven the concept of Bring Your Own Device (BYOD).

This will accommodate this revolutionary trend of being connected anywhere and anytime and on any device the enterprises will have to look at upgrading their network. Enterprises need to invest in considerable technology investment in creating a virtualized environment and network infrastructure for BYOD which again requires network equipment players support.

M2M: In the last 2 to 3 years, Machine2Machine (M2M) has emerged as a potential game-changer for the mobile industry and will be another driver of the connected world. Though M2M is not a very new phenomenon, but it is just being recognized by the industry as a significant revenue opportunity for enterprises and in turn for networking players.

Primarily, M2M uses a device (such as a sensor or meter) to capture an event (such as temperature, inventory level, etc), which is relayed through a network (wireless, wired, or hybrid) to an application (software program), which translates the captured event into meaningful information.

Fixedline Technologies: Some underlying technologies are also gaining immense prominence in today's 'hyperconnected world'. These include core technologies in packet-optical transport, packet-optical switching, and carrier Ethernet service delivery products used individually or as part of an integrated solution in networks operated by communications service providers, cable operators, governments, and enterprises.

Many government projects like 'National Broadband Plan' to connect 160 mn Indian households with high-speed internet connections by 2014 of about `60,000 crore from USO fund will be a huge entity to tap by vendors for deploying fixedline equipments.

Many such initiatives by the government bodies like that of Delhi Police to implement intelligent traffic signalling (ITS) system for city surveillance through the use of closed-circuit television cameras (CCTV), are already generating scope for this market in providing back end infrastructure and equipment requirements.

“Broadband DSLAM/FTTx, mobile, IPTV, ATM, video monitoring, government and enterprise private line services are transmitted in different ways, such as SDH paths, fibers, and traditional WDM channels,” says Srinivasan. Optical Transport Network (OTN) not only in the core transport but also in the MAN networks are getting increase in traction. The varied types of transmission not only waste massive bandwidth and fiber resources, but also complicate network operation and maintenance (O&M). To address this issue, OTN pipes capable of transmitting all kinds of services on MAN networks have seen growing momentum.

Continued evolution in the Radio Access Network (RAN) and in traditional network bottleneck areas such as backhaul are accompanied by a number of technical innovations that will help mobile operators to further enhance network performance, coverage, and quality, with innovations including small low-cost radio cells, Self-Organizing Networks (SONs) and Cloud RAN.

Video: Video is becoming a key requirement for an effective collaboration, as increasing globalization drives a desire for more personal contact across geographic and cultural boundaries.Today, enterprises are using video to transform key business processes to create competitive advantage, lower costs, and to reduce environmental impact, particularly by avoiding the need for travel. However video's massive bandwidth consumption can disrupt network traffic and hog infrastructure resources, therefore the growth in video would require large upgrades to network.

Collaboration Technologies

As the value of information technology moves from the edge of the network into the core, industry is seeing corresponding transition from transactional communications like phone calls and email to continuous collaborative experiences, similar to today's social networking. This has resulted in high demand for collaboration technologies (unified communications, videoconferencing, TelePresence, Web 2.0 applications) and mobility solutions (solutions that enable a user to access the network irrespective of his/her location, solutions for mobile workforces).

“Overall we can see transformation on 4 fronts-from voice to data, from connectivity to information, from people to machines, and from CT to ICT & Cloud,” explains Srinivasan.

To embrace these over powering technologies, enterprises as well as network players need to pull up their socks and fine tune the traditional and conventional practices for better productivity.

In order to meet the evolving challenges of today's global business economy, networking comes as a business transforming solution for enterprises as they look at scaling up their performances. In order to do that, Indian players still need to address few critical issues.

Growth Blocks

• Manageability: CIOs often face the challenge of working on dissimilar systems while trying to integrate the backend requirements of the IT infrastructure. Manageability across systems becomes critical in integrating the network resources for delivery of optimized results.
• Security: While working on an integrated network it becomes crucial that the security concerns of applications and systems are taken into consideration. IT infrastructure requires multi-level security in order to manage smooth operation within the organization.
• Total Cost of Ownership: Compiling multiple networks to form a unified system reduces complexity of the IT infrastructure and service management. Hence pricing becomes a critical issue when looking at network integration. CIOs are very sensitive of investment in a heavy budget IT implementation.

Buckle Up!

Enterprises these days demand products that offer maximum RoI hence this has become a crucial factor for networking players to beat the game. The key role of a networking player is to bring innovation both in technology as well as in go-to-market strategies to enable the telcos achieve business success.

“Now moving forward, network players need to energize & re-engage with their existing system integrators and at the same time also identify & recruit new partners. We plan to categorize system integrators based on business vertical & product line they specialize in,” Sanjay Sehgal, AVP, enterprise & project business, D-Link India.

New and newer technologies are getting imbibed in the market and this will change the game for Indian networking players. To support the connected world, technologies will have to be multi-purpose, multi-standard, and inclusive.