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Structured Cabling: India On A Live Wire

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VoicenData Bureau
Updated On
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India is fast turning into a 'dream destination' for most multinational

companies across a wide gamut of industries: IT services, BPOs, telecom, banking

and finance, manufacturing, automobile and retail verticals. And to help them

spin threads of success are present the vital backbone partners-the structured

cabling vendors.

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"India

has always been an early adopter of technology"




-Dr Ispran Kandaswamy VP & MD of Asia Pacific, Systimax Solutions

In FY 2005-06, the structured cabling industry revenues jumped to Rs 574

crore*, a whopping 76% growth in last two fiscals. (Structured cabling market

revenue in India was Rs 325.5 crore  in FY 2003-04 and Rs 416 crore in FY 2004-05*).

As connectivity boom is unleashing in India, the structured cabling vendors

have upped the ante in the fiercely competitive market. The warpath is open for

the vendors where newer technologies are being introduced to woo customers; each

offering unique value proposition, driving forward to consolidate current

position. 

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Barring a few glitches owing to international copper price hike, the industry

is keenly tracking the movements of MNC giants in India and the emergence of

plenty money-raking business opportunities.

Striking on Hot Iron



The technology scenario in India has caught the attention of companies and

investors at a time when analysts believe India is ready to leapfrog to the next

stage of technology revolution rather than follow the natural evolution pathway.

The platter of emerging technologies is simmering hot in India. And there are

enough reasons for it.

VoIP:

A Growth Pill for The Market

"We are

glad to note that customers are keen on quality and not necessarily going

for cheaper products"




-Gaurav Ahluwalia, country manager, R&M

According to

FTM Consulting forecasts, VoIP applications are expected to account for

66.5% of total horizontal cabling systems globally by 2010, exceeding LAN

networking applications for the first time. Its also estimated that by

2011, the VoIP market will further increase and account for 88.9% of the

total market.
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Structured

Cable Market Potential
  • The industry

    revenues stood at Rs 574 crore* in FY 2005-06 in India

  • The global data

    center cabling market is poised to grow from $680.9 mn in 2006, at an

    average growth rate of 26.8%, to $2,235.1 mn by 2011

  • In FY 2005-06, 65%

    of total deployments done on Cat6, 32% on Cat5e and 3% belong to Cat6A

  • Potential market

    for Cat6A to grow by 5% in India this year, after ratification of

    standard

  • Emerging markets in

    tier 2 and 3 cities

  • Focus on emerging

    verticals-manufacturing, retail, real estate, health and hospitality

    sectors

  • New technologies

    like Intelligent Cabling, PoE, and Cat7 find more takers

 

 

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“India has always been an early adopter of technology,” remarks Dr Ispran

Kandaswamy, VP and managing director of Asia Pacific, Systimax Solutions.

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 VoIP tops the list of technology

boom waiting in the wings. The evidence is on ground as both PC LAN networking

and VoIP are being installed simultaneously, in most new cabling installations.

Past issues of quality, security, etc. have been resolved. Cable for VoIP

applications is predicted to account for the major UTP cable market in next five

years. Besides this, there is a growing trend towards interoperability and

providing higher security to the user as well.

India is extremely bandwidth hungry. KK Shetty, director, Sales, India &

SAARC, Tyco Electronics feels the time is ripe to introduce emerging

technologies and latest products in India that spur the high bandwidth demand.

“In a matter of 3-4 years, we shall see more of integrated SCS networks where

PoE, intelligent cabling and normal cabling standards will all converge to

provide a real intelligent system,” he states optimistically.

Melting Pot of Opportunities



Here's some food for thought —

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  • India is the second fastest growing economy in the world
  • Over the next five years, more than $150 bn will be invested in

    infrastructure
  • The BPO sector has been growing at 60-70% annually and is projected to

    reach $12.3 bn by 2006, and by 2008 it is expected to reach $21-24 bn (NASSCOM

    estimates)
Easy

Steps to Implement Structured Cabling

Step

1


Scalability: Choose a

cabling standard that ensures upscaling easily. Identify bandwidth

requirements; ask what applications will you use on the network, now and

in future.

Step

2


Planning: The range and

layout of your network should be chalked out in advance so that you can

plan optimal cable layouts.



Step

3
 Flexibility:

Assess the flexibility of your network in terms of adding or changing

network nodes. 



Step

4
 Cost:

Cabling will be a one-time investment and probably 7-8% of your total

infrastructure budget. So don't skimp on cabling costs just because you

have spent heavily on other aspects of infrastructure (like storage,

servers or switches). 



Step

5
 Vendor

Choice:
Go for a vendor that preferably has manufacturing expertise

and stable R&D roadmap. Choose a certified system integrator who will

adhere to standards strictly.

More such statistics are testament of the rising mercury of opportunities in

India. K Surendar, country manager, Dax Networks comments, “As BPO sector in

India is booming, we are seeing the number of nodes in an average network site

going up to 7,000, from just 100-800 nodes last year. This spells good business

for infrastructure providers.”

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Milind Tamhane, VP, Manufacturing, D-Link India is excited to see the spurred

infrastructure growth. “We are witnessing the huge expansion of

infrastructure, more correctly so, planned infrastructure growth in commercial

as well as residential domains; both are direct indicatives of SCS Industry

growth,” he adds.

Spelling out the dominating trends seen in India, Peter Karlsson, senior VP,

Enterprise Solutions, CommScope believes there are three main trends affecting

structured cabling business today. “Firstly, the fact that India is the

fastest growing market in the world today for every business vertical. Secondly,

globalization is bringing several MNCs, to India and likewise many Indian

companies are expanding outside. And lastly, it is the consolidation of

businesses that is leading to decentralization. As a result, many data centers

are mushrooming. All this augurs well for structured cabling market in India.”

Data Center At The Epicenter



The industry witnessed stagnation in the historic growth of LAN data

communications market for structured cabling systems. However, one prolific area

where structured cabling is expanding horizontally is the data center. This new

niche market is fast developing and can provide renewed growth for structured

cabling system suppliers.

According to a new study from FTM Consulting, data center cabling is a new

developing growth market for both the fiber and the copper SCS suppliers

worldwide. The global data center cabling market is poised to grow from $680.9

mn in 2006, at an average growth rate of 26.8%, to $2,235.1 mn by 2011.

Banking, financial services and insurance (BFSI) sector, BPOs and telecom

companies are sharply focusing on wiring up all their branches and manage data

centers. Dileep Kumar, enterprise product manager, ADC Krone opines, “Many

data centers driven companies are leaving no shortfalls in getting their

networks up to global standards and implementing the best infrastructure

solutions. As a result, more and more cabling vendors are offering unique

end-to-end solutions tailor made for data centers.”

Cat5e and Cat6 are still the dominating

cabling standards in India

Cabling Choices Galore!



Compared to 2003, the portfolio of cabling vendors in India has grown

multifold. Customers are looking beyond Cat5e and replacing traditional choices

with the more mature Cat6 and Cat6A. A few bold customers are going for Cat7 and

fiber solutions especially in the BFSI and ITeS verticals.

Trends show a surge in demand for CAT6 and CAT6A as 10Gigabit Ethernet (10GE)

cabling products swell in demand, slow but steadily. Power over Ethernet (PoE)

and Intelligent Cabling are the 'new kids on the block' that have enthused

the cabling industry in India.

For now Cat5e and Cat6 are still selling like hot cakes, and it will take 3-4

years before Cat6A and intelligent cabling will rub the sheen off Cat5e in

India. Kumar Natarajan, regional director, India, Panduit notes that the

dominance of Cat5e will not fade away soon. “Most of the market requirements

will be met by CAT5e and CAT6 in India. Very few customers face the demand for

high-speed bandwidths and so the volume for CAT6A will be very low to start with

this year,” he says.

Initial deployments of 10GE over UTP were seen in data centers especially in

IT/ITeS, BFSI; storage area networks and for building robust backbones. Dileep

notes a change in that trend with the standards ratification. “Now one can

expect 10G Base-T UTP cabling system finding a place in emerging areas like

enterprise campuses, health, manufacturing and government institutions where

width and depth of the network is crucial and have to be future-proof ready,”

he notes.

"SCS

consumption within a network is 7-8% of the outlay. So the effective

impact of copper price hike is minimal"




-Milind Tamhane, VP, Manufacturing, D-Link India

  



Over the next five years,
the key growth drivers for data centers, and for cabling, will be

increased centralization of databases and computing resources

"In a

matter of 3-4 years, we shall have more integrated SCS networks where PoE,

intelligent cabling and normal cabling standards will all converge"




-K K Shetty, director, Sales, India & SAARC, Tyco Electronics

“Power-over-Ethernet (PoE) is gaining momentum, as there is an increase in

wireless access points and deployment of VoIP in the country,” notes Rajesh

Kumar, country manager, Siemon. Small vendors like BNA Technology Consulting

have also made headway in implementing installations with PoE readiness. Kashi

Vishweshran, director, BNA Technology Consulting adds, “The demand is likely

to pick up significantly in the near future, especially with expected

introduction of IP based premises services by some large ISPs.”

"Power-over-Ethernet

is gaining momentum, as there is an increase in wireless access points and

deployment of VoIP in the country"



-Rajesh Kumar, country manager,

Siemon

But with so many choices to make, how would the customers make a prudent

choice? Rajesh Shenoy, key account manager, India, Belden CDT offers this

advice, “A lot of time vendors go blindly by the TIA standard. They must

understand that a standard is only a minimum acceptable criterion. It only gives

direction. One must go for solutions with higher headroom.”

Money Not a Factor



Traditionally, the customers for cabling solutions had been approaching the

vendors on price point. But this has changed in recent past. Customers are

realizing the importance of investment in infrastructure.

Dr Kandaswamy of Systimax notes, “Businesses don't usually appreciate how

important infrastructure is although it is the backbone of your establishment.

But now new global customers have set the trend of choosing infrastructure over

IT investment.”

Vendor

Speak On Future Plans in India

KK

Shetty
,

director,

Sales, India & SAARC, Tyco Electronics



We want to introduce optical fiber and copper hi-density products for

large data centers and telecom players. We will also launch end-to-end PoE

product line to serve future-ready businesses. Our R&D focus is on

building integrated cable system, one that will comprise of intelligent

cabling, PoE components, and normal cabling standard. Retail,

manufacturing, refinery and real estate are hot and happening new markets.

We are also heavily investing in training and expansion of offices across

the country. As of now we don't have any manufacturing plans. However,

we feel it will be the right time to look at manufacturing here when the

demand reaches a critical mass like 100,000 boxes per month.

Dr Ispran

Kandaswamy
, VP & MD, Asia

Pacific, Systimax Solutions



We have recently opened the executive briefing center (EBC) in India,

which is our way to show our commitment to the Indian market, our

customers here and to our business partners. The market is growing at the

pace of over 25% in India, and India is the fastest growing market for us.

We are growing faster than the market growth in India. The EBC is a unique

one-stop gallery of all our products where potential customers can touch

and feel technology before investing on a long-term infrastructure.

Systimax has a pretty

good track record of R&D and has over 600 patents in this space. The

roadmap for innovation in cabling entails adding intelligence to the

infrastructure, and we are pushing the envelope on getting 40 gigabits

over fiber or even100 gbs on fiber. There's a lot of work also going on

for PoE.

Dileep

Kumar,
enterprise product manager, ADC Krone




As our fiscal year is November-October, we are now planning for our FY
2007 business year. Or main focus in FY 2007 will be channel development.

Our focus on verticals like Govt, BFSI, ITeS will continue to grow,

however our major focus will be on providing solutions.

We also have some very

interesting products to launch for the enterprise market as well as data

center solutions. We have many products like cable management, fiber

guides, fiber management systems etc apart from the cabling that go into a

typical data center. We are ready with our second generation of 10G Base-T

UTP products. We launched Midspan PoE products last year and have made

significant installations already.

SA

Mohan
, sales director, India & ASEAN Region, Molex




Molex has set up the headquarters of ASEAN region in India. This is a
proof of Molex's huge commitment to the Indian market. Earlier, the

operations were looked after from the Australia office. We are aiming to

be number 1 in the Indian market in next three years time. As part of our

expansion plans, we are looking at opening new branch offices. We set up

an R&D center in Bangalore only for structured cabling last year. The

focus is to enable faster time to market and products that will be a

value-add to our existing portfolio.

Milind

Tamhane
, VP, Manufacturing, D-Link India




Our Enterprise Business Unit as well as the Channel sales is determined to
reach the magic figure of Rs 100 crore this year. We have some very

prestigious government, public sector and private industry SCS projects on

the anvil and expect a very aggressive performance this year.

You can expect good

consolidation of our strengths in active networking product designing

capabilities. We have plans to introduce products in PoE, FTTH and

intelligent cabling areas in recent future.

 

Kumar

Natarajan
, regional director, India, Panduit



Panduit India will continue to

focus on the Premium market segment-top software companies, ITeS, global

accounts and MNC banks and corporations. We are looking at sustained and

consistent business. Panduit is keen on making a significant investment in

India. We are beefing up our office infrastructure, resources, investments

in marketing activities and strengthening the SI and distribution system

to gain market share.

Rajesh

Shenoy
, key account manager, India, Belden CDT




Belden is planning for some major initiatives in the region, including
developing region specific products, R&D, and expansion of the team.

There are a slew of new product launches planned for the next six months.

In the last few months, we have launched some new products: new VoIP patch

cord with a different boot for both the end, a patented Bonded-pair patch

cord and an angular, 0U wire manager.

Currently, Belden is

working on projects worth over $3.2 mn in India. Some of them will be

completed by the end of the year. These projects include some high-end IT

companies, financial services companies, and entertainment sector. In

terms of technology, there are some projects on intelligent cabling

management, Plenum cables (cables made of Teflon for fire protection), and

Cat6a.

Rajesh

Kumar
, country manager, Siemon




For the fiscal year 2006-07, our prime focus will be on financial sector,
data centers and ITeS. As part of our expansion plan, we are looking for

appropriate partners and major system integrators across India. We are

planning lots of vertical seminars; road shows and educational programs

for our certified installers to enhance their skills/update them on the

recently launched TERA 10G, fully shielded end-to-end cabling solution.

IEC has also recognized the interface based upon Siemon's TERA connector

as the standard interface for a new high-performance class of cabling and

this strengthens our position here. We are also working within IEEE to

ensure that our cabling is compatible with the new PoE Plus standard.

One of the prestigious

orders bagged is from BLB, one of the largest stockbrokers in India, for

Cat6 solutions in their Delhi and Mumbai centers. Apart from this, we have

also successfully executed some major contracts for Punjab National Bank,

ABB, SSIT, Bagalkot Engineering College, Future Info solutions etc.

K

Surendar
, country manager, Dax Networks




For the next fiscal, our target revenue is Rs 10-15 crore as we see new
markets. We are trying to move into SMB segment, beyond the traditional

tender driven market into corporate driven market. We are investing

heavily in training and channel partner programs. Our focus is on

aesthetic improving products and PatchSee Intelligent Patch cord is in

that line of product. We hope will pick up good business in India.

Gaurav

Ahluwalia
, country manager, Reichle & De-Massari (R&M)




We are officially launching the R&M office in India by this year-end
in Bangalore. In our first year of operations, we have done $5m in India.

We see a huge potential market in India. We will focus on enterprise

market and plan to launch carrier products next year for telecom

companies. The global vision of the company is to be No. 1 in next five

years.

Kashi

Vishweshran
, director, BNA Technology Consulting




BNA has made a decision to move up the value chain through its design
consultancy and project management division, while at the same time taken

a new initiative called bnaITmart.com to reach out to tier-2 or even

tier-3 cities with quality IT infrastructure services, over the web at

very competitive price levels. We are currently working on a few

innovative implementations of VoIP based solutions over fiber that would

deliver significant cost reduction in certain situations.

The Indian customers are prudent while choosing technology and vendor for a

long-term investment on infrastructure. Dileep Kumar of ADC Krone says,

“Typically a networking gear consisting of computers, switches etc., will have

a maximum useful life of 3-5 years whereas structured cabling has a maximum

useful life of 10-15 years (3 X networking gear). That means the cabling you

install today should support three generations of networking gear.”

Although the market faced an onslaught of high price rise in international

copper prices, the vendors fared well for themselves. “Customers need not

worry too much about copper price hike as SCS consumption within an average

network is 7-8% of the outlay, so the effective impact on total cost will be

minimal,” notes Milind Tamhane of D-Link.

R&M, a new entrant in India, studied the market in India for the last one

year and concludes that the customers here are looking for quality. Gaurav

Ahluwalia, country manager, R&M says, “We see a huge potential in India

and glad to note that customers are keen on quality and not necessarily going

for cheaper products. This is a good sign of the mindset of Indian customers for

structured cabling.”

"Most

of the market requirements will be met by CAT5e and CAT6 in India. Volume

for CAT6a will be low to start with this year"



-Kumar Natarajan, regional

director, India, Panduit

Expansion Mode



The cabling vendors are literally tracking the technology footprint across

India. As IT/ITeS companies are penetrating the tier-2 and -3 cities, the

cabling companies are also making their way. As a result, all cabling vendors

have chalked out elaborate strategies to push distributors and channel partners

in emerging markets.

Traditionally, the tier-1 cities have been the high-revenue earners for the

vendors, but now newer opportunities are being offered in the mid-market segment

from cities like Coimbatore, Cochin, Kolkata, Chandigarh, Bhopal, Pondicherry

and Mysore, to name a few.

Kumar Natarajan, regional director, India, Panduit affirms, ” We sense

growing opportunity in the mid-size market as the Indian corporate segment, PSUs,

government and Indian banks are pushing the IT button although this is a bit

more price sensitive segment.”

    
Data centers demanding 10GE

need to be future-proof

KK Shetty of Tyco says, he has enough reason to be upbeat for next 20 years.

“Telecom players are growing five times every year. BPOs and KPOs are touted

to create over 8 mn jobs in next 2-5 years. This means over 24 mn nodes,” he

says. Shetty is also eyeing a new potential market-the retail industry. “We

are all aware of the plans by Reliance Industries to open pan-India network of

retail outlets. This is going to open the floodgates for cabling market and we

expect it to impact our business remarkably.”

Kumar Natarajan of Panduit sees real estate as another potential market.

“The builder market will be a very big segment for the cabling vendors.

Bangalore has set the trend for the same and other cities will follow suit very

soon. Leading corporates and residential markets are keen on building

ready-to-use infrastructure buildings. However, the challenge in this market is

to be price competitive,” he adds.

There is a new way of thinking emerging for smaller players. It is no longer

about boxes but about ports and software. Players are looking more and more at

providing customized end-to-end cabling solution. With 10G over UTP, PoE and

Intelligent cabling technologies gaining acceptance, cabling installations are

becoming more skill based than before. Following the right installation

practices and adherence to standards is very important when it comes to new

applications that require higher data rate transfer.

"We

hope to see accelerated growth of intelligent cabling in India as it has a

definite utility value that customers can benefit from"



-SA Mohan, sales director, India

& ASEAN Region, Molex

In order to stay ahead in the race, the industry has given priority to staff

retention and training. With numerous orders on hand, the installers are gearing

up for training personnel and technicians. Understandably, they would love to

see better supply and adequate staff to strike a balance.

The contest is on to drive emerging markets with zeal and perfection. So as

India is tipped to be the 14th highest IT spender by 2008, its business as usual

for the structured cabling market.

Malovika Rao



malovikar@cybermedia.co.in

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