SMBs are becoming a major force in the deployment of wireless technologies.
Earlier, it was the wired network that was being deployed, but with faster and
more secure wireless solutions already available and WiMax deployment speeding
up in India, SMBs are moving from traditional wired networks to wireless
solutions, at least for last mile solutions.
Vendors are also quite serious about the opportunity that lies with SMBs.
Their seriousness can be judged from the fact that Nortel has developed an
unlicensed band WiMax product, specially designed for SMBs for their last mile
broadband needs. The device is really small and weighs just around 2 kg, making
it possible to deploy it even in a small office environment. Nortel is bringing
VoIP, wireless LAN, security, and converged voice and data to the SMB
market-just as it has been successfully done for large enterprises across Asia
and the world. Cisco, too, has introduced a complete range of wireless
solutions, including routers, switches and wireless phones. “SMB products are
the fastest growing segment for us; we are seeing more than 100% growth in this
segment,” says Amit Malik, head, SMB, Cisco India and SAARC.
As the SMB segment is in an expansion phase and in need of money, most
vendors like IBM and Cisco have come up with various finance schemes. “We
recently unveiled a multi-pronged strategic SMB roadmap, which includes
customized products/solutions, SMB focused partner network, increased awareness
among SMBs, and financing schemes like the recently launched Easy Lease
program,” says Soum Mukherjee, head, SME Business Unit, Avaya Global Connect.
Avaya Global Connect is another vendor that has a sizable presence and is
very keen to grow in this segment. “We have a three-pronged approach for this
market: First, to introduce customized and new products for end-to-end solution
for this segment; second, to expand beyond the traditional metro markets; and
third, to make decision-making easier for our customers. We have tie-ups with
financial institutions to offer finance,” says Soum Mukherjee.
Improving Productivity
Wireless is fast emerging as a tool to improve productivity. The biggest
segment for wireless takers in the SMB segment is education-most education
institutes are now providing wireless campuses. The trend is most prominent in
technical and management institutes, where students are given laptops and Wi-Fi
connectivity. Apart from the traditional IT and ITeS sector, another key sector
is manufacturing, which is deploying wireless in a big way. The manufacturing
sector is generally deploying wireless solution to manage manufacturing from
remotely located head offices and also because it has become important for
supervisors to be on call and at the same time be in the factory.
Retail is another segment that is deploying wireless solutions. The
hospitality and healthcare sector is also emerging as a big segment. The
infrastructure segment, which is growing at a tremendous pace, is another big
spender on the wireless front. In this segment, wireless housing complex is
becoming very popular. Similarly, new industrial centers are developed with
ready wireless access. It is the higher end of the SMB segment that is going for
wireless solution in a big way.
Expanding Geography
India is growing fast, both in metros and in smaller towns and cities.
Unlike large enterprises which are based in and around big cities, the SMB
segment is thriving in class-2 and 3 cities. This is the reason why most vendors
are targeting cities like Kochi, Indore, Bhubaneswar, Ahmedabad, Chandigarh and
similar cities across India. Theses cities are fast growing.
Western India offers one of the largest markets in terms of volumes. States
like Maharashtra and Gujarat are growing at a very fast pace. Cities like
Ahmedabad, Nagpur, Surat, Nashik, and Vadodara have emerged as big SMB hubs.
Southern India has also experienced similar growth, and cities like Mysore,
Kochi, and Puducherry have also emerged, as big cities in terms of ICT
expenditure. North is also catching on with the trend and Chandigarh, Jaipur,
Lucknow, Kanpur are the cities that are emerging on the ICT map. East, however,
is one region that has so far lagged behind, but the industry looks at it as a
big window of opportunity, and is betting heavily on it.
Trends
With approximately 50-60% of IT spend in the country expected to come from
the flourishing SMB segment by 2008 (source: Nasscom), it is clear that there is
a huge market waiting to be tapped.
Traditionally, in the SMB space, companies with unique regulatory
requirements and quality of service (QoS) needs had been the early adopters of
networking technology. Today, the emerging industry verticals are showing
increasing rates of technology adoption. For Cisco, education, manufacturing,
retail, automotive, and IT-enabled services are the key focus verticals.
As networks become more complex, advanced technologies will play a much
larger role in the entire network. With nearly 80% of the market share in core
technologies, Cisco has identified unified communications, network security,
wireless, and storage as advanced technologies, and is in a leading position in
many of these areas.
In the wireless space, the growth is expected from increased spending by
education, large enterprises, SMBs, and the government, which is exploring large
wireless projects to improve broadband connectivity. India is one of the fastest
growing markets for unified communications. Advanced technologies such as
security, unified communications, and wireless offer great potential in the
Indian market.
Networking and Connectivity
SMBs in India will invest close to $500 mn on servers and networking hardware
this year, with two-thirds of the spending going toward network-related hardware
purchases alone. SMBs see investments in servers and connectivity as critical in
the competitive Indian market, and only 14% of PC-owning SMBs currently deploy a
local area network (LAN). This points to a significant untapped connectivity
opportunity among SMBs. Small businesses (SBs) account for a relatively smaller
portion of the total networking expenditure. SB contribution to the overall SMB
spend is set to rise in the future as Indian SBs try to catch up with their
larger counterparts.
Server usage is much lower among SBs compared with MBs, where servers are
widely deployed. Of the total SMB server spending in India, approximately
two-thirds come from MBs. In a recent AMI survey, more than one out of ten
businesses indicated that they plan to buy new servers in the next twelve
months.
As for networking, routers and hubs/LAN switches made up a large majority of
the Indian SMB annual spending on networking hardware in 2006. Wireless LAN and
other networking hardware like networking interface cards, cabling, etc, are
following closely. SMB Wireless LAN spending is expected to more than double in
the next twelve months though the current figure in absolute terms is relatively
less. Wireless LAN access is also growing due to easy availability of wireless
LAN connectivity at many public hotspots.
More and more businesses are embracing the benefits of high-speed Internet
connectivity. Cellular phone penetration is also nearing saturation. Thus,
networking capability is almost a 'must-have' for every tech-savvy enterprise in
the country for sustaining their increasing communication needs. The SMB segment
is witnessing an overwhelming growth. This growth has created a need for better
connectivity and communication. Improved communications has opened new growth
opportunities, transcending market boundaries, reducing costs, and providing
access to a vast untapped resource pool.
Internationally, bandwidth-intensive enterprise applications have been widely
available, but growth in adoption comes mostly when access speeds and usability
through devices have improved. The initial movement toward high-speed links
among businesses is already visible in India as the primary access methods move
from narrowband to broadband. Leased Line and DSL are increasing its market
share whereas dial-up use is almost finished.
However, the reach of fixed networks to remote locations and even to large
urban/semi-urban areas for effective access to applications remains a challenge.
Therefore, enterprises are moving to solutions that are not location dependent,
and offer flexibility and connectivity “on the move”. This trend is clearly
visible in the way enterprises are moving increasingly from desktops to more
portable devices like laptops. As the requirement for connectivity on the move
grows, so will the adoption of applications like wireless email, access to core
business applications (like SCM, CRM, ERP), and unified communications. This
will further demand a seamless integration of wired and wireless infrastructure.
IDC, in its analysis of worldwide mobile populations in 2005, had projected
that by 2009 there would be more than 878 mn mobile workers worldwide. This is
driven in part by mobility becoming a mainstream phenomenon across enterprise
segments, and mobile workers representing increasing portions of a company's
overall staff.
As mobility gains momentum, enterprises are discovering that it is a
challenge to build and deploy applications for the wide variety of devices in
use. While a large number of applications are available to customers, their
major hurdle is ease of use and accessibility “on the move”. Some of the major
business drivers for enterprise mobility are reduction in operational costs,
shorter turnaround time, and reduced missed revenue opportunities. Both mobile
workforce and collaborative technologies feature in the four top priorities for
CIOs.
Advances in technology have also been instrumental in driving adoption. The
changing trends demonstrate that once initial challenges have been overcome,
applications will seamlessly extend to the mobile environment, making access to
reliable mobile wireless connectivity expected universally.
Nilabh Jha
nilabhj@cybermedia.co.in