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Limited Opportunities April 2010 Vol 2 Issue 10 | A 9.9 Media Publication Already pushed to a subsidiary status in the desktop market, assemblers now bank on a handful of drivers to keep the segment buoyant. But for how long, and how much. Why Software as a Service (SaaS) still gives channel partners the jitters The Service Play A look at Intel’s new Atom platform and its impact on the burgeoning netbook market Has Microsoft been able to reduce piracy after the launch of Windows 7? Powering Netbooks De-activating Piracy WHITE BOXES

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Page 1: White Boxes Limited Opportunities

LimitedOpportunities

April 2010Vol 2 Issue 10 | A 9.9 Media Publication

Already pushed to a subsidiary status in the desktop market, assemblers now bank on a handful of drivers to keep the segment buoyant. But for how long, and how much.

Why Software as a Service (SaaS) still gives channel partners the jitters

The Service PlayA look at Intel’s new Atom platform and its impact on the burgeoning netbook market

Has Microsoft been able to reduce piracy after the launch of Windows 7?

Powering NetbooksDe-activating Piracy

WhIte Boxes

Page 2: White Boxes Limited Opportunities

DIGIT CHANNEL CONNECT 2 AprIL 2010

editorial

The brands have their pull and

charm, but things without labels have their USPs too

T here has been a constant grievance among local assemblers of computers in India: that they are being squeezed out of the market by

branded players. While the share of assembled PCs in the overall desktop market stood at a respectable 50% in 2002, it has declined over the years and now languishes at a low 35%.

Sadly, it may further slide and settle somewhere around 25%, reflecting worldwide trends. As per Intel estimates, about 25-30% of its chips go into white boxes each quarter. Given that Intel is the dominant chip maker, this figure is de facto for the whole desktop industry.

The good thing is, as Vinnie Mehta, President of the Manufacturers’ Association for Information Technology (MAIT), points out in our cover story, the assembled PC segment will “continue to co-exist” with the branded one.

There’s no reason why it shouldn’t. After all, there are healthy unbranded segments that exist in almost all product categories: from clothes and cosmetics to mobiles and medicines.

The brands, of course, have their pull and charm on the mind of the consumer. But things that go unbranded have their own USPs too – advantages such as cost effectiveness, customised service and wider choice. Besides, existence of a thriving unbranded segment ensures that the market is not monopolised or cartelised by powerful labels.

One reason PC assemblers are a harassed lot is

Out of the White Box

[email protected]

Write to the EditorE-mail:[email protected]

Snail Mail: The Editor, Digit Channel Connect, B-118, Sector 2, Noida 201301

sounding boardsounding board

n Mohammad Yusuf, Proprietor, Excelsior Computer (Gorakhpur): “Customers these days do not purchase the system as a box. They want proper service to be delivered to them at their doorstep. And as a typical customer’s mentality, they expect service delivery from the person who is selling them the system.”

n Anand Kumar, Owner, AS Peripherals (Hyderabad): “Although I don’t expect much growth coming in the assembled PC segment, I expect that our serv-ice support delivery and the growth of SOHO segment will continue to give us business.”

n Shailendra, Proprietor, Creative Computers (Dehradun): “Considering today’s market trends, the cost factor is no more a differentiator be-tween the branded and the assembled PC. And due to the aggressive marketing strategies of branded PC vendors, I do not see great future in this business segment.”

SANJAY GUPTAEditorDigit Channel Connect

because there’s intense competition within brands to capture as much market share as possible – even at the cost of short-term profits. We all know that this busi-ness is highly commoditised, and most branded play-ers now rely on marketing gimmicks that ape FMCG tactics. Which explains why styling, colour and oomph feature prominently in ad campaigns for computers.

From the standpoint of maturity of the market, this commoditisation is not necessarily a bad thing. But it makes the proposition of buying a PC from a grubby reseller instead of a swanky mall unattractive.

What are the assemblers to do? For one, they need to reach out to advanced rather than novice users and give them bespoke systems the geeks can’t get from brands. Two, they should bundle more services and accessories to make their offerings stand out. And finally, take a leaf or two from the marketing rulebook of the big guys and put on a more polished face for their customers.

The unbranded must find their own voice amidst the clamour of brands.

LimitedOpportunities

April 2010Vol 2 Issue 10 | A 9.9 Media Publication

Already pushed to a subsidiary status in the desktop market, assemblers now bank on a handful of drivers to keep the segment buoyant. But for how long, and how much.

Why Software as a Service (SaaS) still gives channel partners the jitters

The Service PlayA look at Intel’s new Atom platform and its impact on the burgeoning netbook market

Has Microsoft been able to reduce piracy after the launch of Windows 7?

Powering NetbooksDe-activating Piracy

WHITE BOXES

Page 3: White Boxes Limited Opportunities

DIGIT CHANNEL CONNECT 4 AprIL 2010

contents

16

The Service Play

Why Software as a Service makes channel partners jittery.

26 SPECIAL REPORT

20

14

SPECIAL REPORT

FOCUS

Has Microsoft been able to reduce piracy levels after the launch of Windows 7?

already pushed to a subsidiary status in the desktop market, assemblers now bank on a handful of drivers to keep the segment buoyant. But for how long, and how much.

a d v e r t i s e r s i n d e xHP.................................. Cover On Cover, Inside False Cover

Digilink.......................................... ...... Inside Front Cover

Seagate........................................... ......Inside Back Cover

Fenda.............................................. ................Back Cover

Rashi..............................................................................1

Compuage....................................... ..............................3

I Ball................................................ ..............................5

Quick Heal...................................... ...............................7

Giga Byte........................................ ...............................9

Supertron....................................... ..............................11

SMC................................................. ............................17

I Ball …............................................. ..........................31

India Anti Virus................................... ..........................33

ediTorial ......................................................... 02TreNdS ............................................................. 06GUeST eXPreSSioN.... ...................................... 28

OThERS

cover design: prasanth t r

Managing Director: Dr Pramath Raj SinhaPrinter & Publisher: Kanak Ghosh

EditorialEditor: Sanjay GuptaSr. Correspondents: Charu Khera (Delhi),Soma Tah (Mumbai)Copy Editor: Akshay Kapoor dEsignSr. Creative Director: Jayan K NarayananArt Director: Binesh SreedharanAssociate Art Director: Anil VKManager Design: Chander ShekharSr. Visualisers: PC Anoop, Santosh KushwahaSr. Designers: Prasanth TR & Anil TChief Photographer: Subhojit PaulPhotographer: Jiten Gandhi

Brand CommuniCationProduct Manager: Ankur Agarwal

salEs & markEtingVP Sales & Marketing: Navin Chand SinghNational Manager - Events and Special Projects: Mahantesh Godi (09880436623)National Manager - Channels: Krishnadas Kurup (09322971866)Asst. Brand Manager: Arpita GanguliBangalore & Chennai: Vinodh K (09740714817)Delhi: Lalit Arun (09582262959)Kolkata: Jayanta Bhattacharya (09331829284)Mumbai: Sachin Mhashilkar (09920348755)

ProduCtion & logistiCsSr. GM Operations: Shivshankar M HiremathProduction Executive: Vilas MhatreLogistics: MP Singh, Mohd. Ansari, Shashi Shekhar Singh

ChannEl ChamPsSr Co-ordinator - Events: Rakesh SequeiraEvents Executives: Pramod Jadhav, Johnson Noronha, Suyog ThakurAudience Dev. Executive: Aparna Bobhate, Shilpa Surve

oFFiCE addrEss

Nine Dot Nine Interactive Pvt Ltd., KPT House, Plot 41/13, Sector 30, Vashi, Navi Mumbai - 400 703 Phone: 40789666 Fax: 022-40789540, 022-40789640

Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt Ltd.C/O KPT House, Plot 41/13, Sector 30, Vashi (Near Sanpada Railway Station), Navi Mumbai 400703

Editor: Anuradha Das MathurC/O KPT House, Plot 41/13, Sector 30, Vashi (Near Sanpada Railway Station), Navi Mumbai 400703

Printed at Silverpoint Press Pvt. Ltd, TTC Ind. Area, Plot No. : A - 403, MIDC,Mahape, Navi Mumbai - 400709

Vol 02 issue 10 | April 2010

LImITEdOPPORTUnITIES

de-activating Piracy

Powering Netbooks A look at Intel’s new Atom platform and its impact on the burgeoning netbook market.

“We are trying to commoditise crM”

InTERVIEW

ThOmAS AbRAhAm, MD, Sage Software InDIa

22

Page 4: White Boxes Limited Opportunities

trends

DIGIT CHANNEL CONNECT 6 AprIL 2010

trends

I DC India has predicted that the India data centre services market wil l touch nearly Rs10,000

crore by 2011 end, representing a Compounded Annual Growth Rate (CAGR) of 22.7% over the two-year period 2009-2011. The overall India data centre services market was esti-mated at Rs 6,300 crore in 2009.

The key ver ticals that contrib-uted nearly 80% of third-party data centre services revenue in 2009 were Manufacturing and IT/ITeS, with the third-party data centres constitut-ing about 18% of the total revenues. IDC expects this to go up to 22% by 2011 end.

Captive data centres (‘captives’) are forecast to grow at a CAGR of 19.9% during 2009-11, with manufactur-ing and banking, financial services and insurance (BFSI) showing high deployment. Demand from the govern-ment sector is expected to pick up in

2010 and beyond. Captives are being favoured in

sectors involving high degree of security, internal controls and tighter management.

With bandwidth costs having come down significantly, data centre host-ing in India is set to become cheaper. Heightened interest in implementation of technologies like cloud computing and grid computing in data centres will help the Indian market emerge as an important data centre hub of the world.

T h e f a s t e vo l v i n g e c o s y s t e m , compris ing high speed Inter net bandwidth service providers, data centre hosting players, power and cooling solution providers, hard-ware vendors and system integra-tors (SIs) will spur this growth over the next two years, according to IDC India report “Assessment of Business Opportunities in the India Data Centre Services Market” (January 2010).n

A t the recent VoiceCon event in Florida, USA, a panel of indus-try experts selected OpenScape

UC Server 2010 from Siemens Enterprise Communication Group (SEN Group) as the winner among seven finalists, including products from Cisco and Avaya.

According to the judges, the winner represents the product they believe has the most significant technical impact, and is helping to move enterprise communica-tions forward.

On receiving the news, Hamid Akhavan from SEN commented, “It is tremendous to get such a high profile endorsement of our technology leadership, especially since we had fierce competition from 40 other vendors, including Avaya and Cisco. OpenScape UC Server 2010 is an innova-tive software solution that epitomizes our Open Communications approach and I would like to congratulate everyone who has been involved in winning this presti-gious award, including the product devel-opment team.”

VoiceCon Prog ramme Co-Chair,

Industry analyst Eric Krapf, congratu-lated Siemens by saying, “We want to congratulate all participating companies and recognize each finalist for their contin-ued innovation in the enterprise commu-nications market. The Best of VoiceCon award truly represents a gold standard of achievement in the industry and Siemens proved to be at the forefront.” n

Siemens wins Best of VoiceCon award

India data centre services market may touch Rs 10,000 crore by 2011

K ingston Technology has appointed Aforeserve.com to manage the after-sales support and service programmes

for all its consumers in India. Aforeserve.com, which is offering warranty outsource with over 47 direct offices in India, will replace Accel Frontline as the firm responsible for manag-ing Kingston’s after-sales support.

Effective from April 1st 2010, the after-sales services provided by Aforeserve.com will include walk-in and call-in services.

All consumers can call Kingston service line (1-860-233-4515) to get parts registered before submitting defective parts to service hub. The service line is available from Monday through Saturday, 9:30 am to 5:30 pm and the service hub operation hour is from 10:00 am to 8:00 pm, Monday to Saturday.

According to Scott Chen, Vice-President, APAC Region, Kingston, “Aforeserve.com is a leading after-sales service provider to the IT Industry. I believe that partnering with Aforeserve.com will be able to continue to provide Kingston’s top-rated after-sales support to the local market. Since April 1st 2010, all consumers in India can enjoy the benefits of efficient and satisfied after-sales services.” n

Aforeserve.com to handle Kingston’s after-sales support

Page 5: White Boxes Limited Opportunities

trends

DIGIT CHANNEL CONNECT 8 AprIL 2010

V adodara-based Matrix Telecom, a telecom equipment manufacturer, recently diversified into making secu-

rity products. In order to communicate its focus on both communication and security, Matrix has now changed its name to Matrix Comsec Pvt Ltd (where Comsec stands for communica-tion and security).

With the new identity, Matrix has also changed its corporate logo, which like its new name, will exemplify the area of operations.

However, Matrix will continue to market its telecom and security products under the brand name of Matrix Telecom Solutions and Matrix Security Solutions, respectively. The name change reinforces the Matrix brand as an integrated corporation, which reflects the company’s long-term strategy to advance its

global presence, and more closely align and strengthen the identity of each of its operat-ing divisions — telecom and security.

Commenting on the name change, Ganesh Jivani, Managing Director, Matrix Comsec, said, “As a product company, we plan to research and design security products and solutions suitable for small, medium and large businesses. As a first step, we have already developed a range of all-integrated, compre-hensive Time-Attendance and Access Control solutions. As with all other Matrix products, we have designed this range from the ground up, with 100% indigenous development.”

Active in the telecom business for over 18 years, Matrix has offered a wide range of prod-ucts to meet the communications needs of its customers. n

A bacus Peripherals, brand owners of ZION memory modules, successfully concluded its nationwide “Abacus

Channel Meet” programme on March 27. The roadshows were organised by Abacus to educate and empower partners in tier-II and III cities.

The event kick started on March 8 from Dhanbad, reaching Patna on March 11, Mumbai and Hisar on March 13, Jalandhar on March 15, Dehradun & Vizag on March 17, Vijaywada & Sonepat on March 18, Surat on March 19, Mangalore on March 20, Pune on March 26 and finally ending at Raipur on March 27.

Through this exercise, Abacus Peripherals highlighted its innovative and upcoming brands in the market like ZION 4GB DDR2 and DDR3 RAM, Biostar TH 55 high-end motherboards; IQ Pro Pen drives and Micro SD Cards, as well as the

latest in the Nvidia Sparkle Graphic Card series.All the road shows witnessed more than 40

delegates representing a wide array of the channel community, including system integrators, office automation partners and retailers. n

Strontium launches new Apple memory modules

S trontium, a provider of high-performance computer and f lash memory products, has

launched its new Mac Memory made especially for Macbook, Macbook Pro and iMac.

The new Strontium Mac Memory modules are 667MHz and 1066MHz solutions, available as a 2GB single piece, a 4GB single piece, a 4GB (2 x 2 GB modules) kit or an 8GB (2 x 4 GB modules) kit.

S a ke e n a h S u , Vi c e P r e s i d e n t , Strontium Technology, said, “Apple systems are sure to run faster and help users become more productive with upgraded memory, especially when it is 100% Guaranteed Compatible Apple Memory module from Strontium.”

Util iz ing performance ICs from Hynix, Samsung and Micron, Mac Edition SODIMMs from Strontium help unleash the high performance potential of Apple platforms. These new memory modules are specifically designed for rock-solid stability in demanding digital media rich envi-ronments. It allows users to maximize memory capacity and throughput to increase system performance. n

Matrix Telecom is now Matrix Comsec

Abacus channel meet concludes successfully

Page 6: White Boxes Limited Opportunities

trends

DIGIT CHANNEL CONNECT 10 AprIL 2010

B elkin has announced the appoint-ment of Neoteric Infomatique and Iris Computers as national distributors for

its structured cabling business in India. With this move, Belkin will now offer its entire range of copper and fibre structured cabling solu-tions to customers in India.

The dual distributor strategy is designed to ensure rapid geographical coverage, multi-layered channel penetration, effective reach and aggressive sales conversions in both devel-oped and emerging markets.

While Iris Computer’s strong relationship with SI and PC Server reseller partners will help Belkin to gain entry and traction in the enterprise market, Neoteric’s strong footprint in PC component & assembler channel is expected to help the company gain rapid access into the PC component Channel.

According to Mohit Anand, Managing Director, Belkin India, “As Belkin enters the structured cabling market in India, it is important that we find the right channel partners who understand our business, can drive demand for our solutions, and scale with our growth.”

“Appointing Iris Computers and Neoteric Infomatique is our first step towards captur-ing a majority share in the Indian structured cabling solutions market,” he added. n

Belkin appoints Neoteric, Iris as national distributors

Lenovo opens its largest flagship store in India

Mohit Anand

C reative Technology has announced the launch of the ‘Summer

Hungama 2010’ Programme for its deal-ers across India, who would be rewarded with exciting gifts such as notebooks and LCD TVs. Applicable from 1 April 2010 till 30 June 2010, the programme is linked to the sale of a range of Creative products across India.

The highlight of the promotion is a trip to Thailand, along with a cash prize of Rs 32,150.

According to Ernest Sim, Regional Sales Manager for India and the Indian Subcontinent, Creative, “India is a significant market for us and our dealer network has been instrumental in enhancing Creative’s presence in this market. With this programme, we aim to create a profitable proposition for our partners as well as enable them to make available a vast range of Creative personal entertainment products to our consumers.” n

Creative launches summer hungama for partners

U niline Energy Systems has announced plans to expand its distribu-

tion structure in India. At a recent press meet, the company announced that it will be appointing new channel part-ners, distributors in each state, and dealers in every district across India. “We would like to appoint dealers who have capa-bility to sell, have sound technical background and infrastructure setup for providing after sales support to our customers,” said Sumant Guha, Marketing Manager, Uniline Energy Systems. Guha emphasised that channel partners can be profitable by associating with Uniline Energy Systems. “Some of the Uniline products mainly sold through channels are entry level UPS (such as 600VA & 1KVA) and online UPS up to 10 KVA. These are the items, which are generally sold along with computers. So, the challenge is product availability at the nearest location and at an attractive price, where channel partners can earn a handsome profit on every sale,” he said. According to Uniline, it is confident of achieving a turnover of Rs 100 crore through channel partners in the future. n

Uniline to appoint new channel partners in India

L e n o v o I n d i a h a s announced the inaugu-ration of its first flagship

store in Bangalore at Mantri Square, Malleswaram, which would be the company’s largest store in the country.

According to the company, the new store is the first of its kind in India and will house the entire range of Lenovo Think and Lenovo IdeaPad and IdeaCentre range of products for consumer and SMBs (small medium businesses).

The store has been designed to be a complete brand experience zone and a one-stop-shop for Lenovo customers.

“The store is a significant step to get closer to our customers and reflects our changing focus towards retail as a key business tool and integrates with our overall business strategy for India,” said Amar Babu, Managing Director, Lenovo India.

The new flagship store represents a key change in Lenovo’s retail strategy as it will have a significant focus on the retail SMB segment. Going forward, there will be a major focus on enhancing the retail penetration through exclusive stores by as much as 30%, especially in Tier-II and III markets. n

Page 7: White Boxes Limited Opportunities

trends

DIGIT CHANNEL CONNECT 12 AprIL 2010

D-Link partners rejoice in Hong Kong

O racle has announced the launch of CRM On Demand Release 17, the latest version of Oracle’s on-demand service that introduces

extensive forecasting and analytics capabilities to gain more actionable insight and increase productivity.

New forecasting capabilities in Oracle CRM On Demand Release 17 include flexible fiscal calendars for more productive business operations, the abil-ity to perform both revenue and product quantity forecasting, and real-time information comparisons against current and historical forecasts for proactive pipeline management.

To increase sales productivity, the new service introduces usability enhancements and a rede-signed user interface that enables sales teams to resize it to their preference, quick navigation to relevant information with the new Head-Up Display, better management of lists, and customizable field labels in Oracle Mobile Sales Assistant.

According to Oracle President Charles Phillips, “The new Oracle CRM On Demand Release 17 will help customers gain more actionable insight, increase sales productivity and achieve cost-savings, and showcases how Oracle solves organizations’ essential requirements to advance business oppor-tunities and results.” n

Oracle launches CRM On Demand Release 17

B l u e C o a t S y s t e m s has introduced the Blue Coat CacheFlow

Appliance 5000 Series solu-t i o n , wh i c h s p e c i f i c a l ly addresses escalating inter-national and mobile backhaul bandwidth consumption. It is targeted at service providers in regions of the world where bandwidth is expensive and limited.

Using advanced caching technology, this new appliance helps scale service d e l ive r y t o m e e t t h e b u r ge o n i n g subscriber demand for online videos, large f ile downloads and other Web 2.0 rich media content, while improv-ing subscriber experience. Available immediately, the CacheFlow 5000 appliance can signif icantly reduce bandwidth consumption, delivering a typical return on investment in six months, with f ive-year savings esti-mated in millions of dollars based on current bandwidth costs.

The CacheFlow 5000 appl iance f eatures 1 Gigabit and 10 Gigabit Ethernet interfaces for high-capacity throughput, and can scale to meet multi-gigabit demands through the use of a clustered caching farm. The appli-ances have been validated with indus-try-leading Layer 4-7 load balancing switches, including those from Brocade, Radware, A10 Networks and others.

“The CacheFlow 5000 appliance builds on our expertise in delivering web content and applications ef fec-tively and securely,” said Christopher Casey, Director of Ser vice Provider Business, Asia Pacific, Blue Coat. n

D -Link, an end-to-end networking solu-tions provider for consumers and businesses, flew its partners for a three-

night, four-day exclusive trip to Hong Kong. This was in appreciation of their support in making the D-Link Premier League (DPL) programme a huge success.

D-Link had rolled out the DPL nationwide chan-nel promotion scheme in September last year, with the intention of providing better business opportu-nities for channel partners. Under the programme, partners who qualified as Kings & Royals were entitled to the Hong Kong trip.

The trip was organized from 2-5 April 2010 and had over 34 partners across India qualifying for the scheme. All the partners were felicitated for their support. The trip also gave partners an opportunity to have a one-on-one interaction with the D-Link management team in a candid atmosphere, and also discuss D-Link’s roadmap. n

Blue Coat introduces carrier caching appliance

Page 8: White Boxes Limited Opportunities

focus Intel Atom

DIGIT CHANNEL CONNECT 14 AprIL 2010

A look at Intel's new Atom platform and its impact on the burgeoning netbook market.

Soma Tah

NetbooksPowering

T he story of netbooks essentially started with Asus launching its Eee PC in the latter half of 2007. Consumers really took to these lighter, cheaper versions of notebooks and a lot of

other vendors, including HP, Lenovo and Dell latched on to the netbook trend by launching different vari-ants. Ever since, around 44 million units of netbooks have been sold worldwide. The microprocessor platform predominantly used in netbooks has been Intel’s Atom, while AMD, VIA and ARM are also trying to cash in on this mini notebook boom.

What’s new?Intel is now looking to give an edge to the Atom by releasing its new PineTrail plat-form with the Atom N450/N470, which has the potential to further increase the sales of netbooks, both in India and world-wide. The current Atom(N270/N280) based netbooks have a separate main processor, a separate graphics chip, and separate control-ler chips managing RAM, hard drive and other components. “But the new Atom platform, which is based on Intel’s new Nehalem architecture, brings the processor, the graphics chip, and the memory control-ler on a single die,” says Rajesh Gupta, Director - Sales & Marketing, Intel India. This graphics and memory controller integration in the CPU will deliver improved performance through a significant reduction in power consumption (consumes 20 percent less power) and form factor (60 percent smaller than their predeces-sors), claims the chipmaker.

Though battery life depends on the usage and features, it has been seen that on an average, the battery life in N450 netbooks with a 6 cell battery can go up to 14

Page 9: White Boxes Limited Opportunities

DIGIT CHANNEL CONNECT 15 AprIL 2010

focus Intel Atom

hours, when compared to 8-9 hours of battery life in N270/280. The new N470 gives a slightly better speed of 1.83 GHz, while N450 runs at 1.66 GHz. N270 and N280 used to run on 1.60 GHz and 1.66 GHz respectively. However, when you want the abso-lute lowest power consumption in an x86 processor, it is not the N series, but in actuality the Z series, such as the Atom Z530.

Performance, design, pricingIntel has taken the performance expectation of Atom a notch higher with this new release. As Rajesh Goenka, VP – Sales & Marketing, Rashi Peripherals, puts it, “At pres-ent, netbooks come loaded with a suf f icient computing power and more than adequate battery life (can run 8 to 11 hrs). But gradually, users will demand more computing power, enhanced storage capac-ity and entertainment experience. So, in future, we are likely to see netbooks with increased CPU perfor-mance, HDD capacity and dedicated graphics support.”

I n i t i a l p r i c i n g o f t h e N 4 5 0 platform-based netbooks could be slightly higher than N270, depend-ing on the availability, “but down the line, we expect the prices to come down, and we will see greater vo l u m e s i n t h e n e w b r e e d o f netbooks,” expects Gupta.

Competition for atomWhile Atom continues to reign over the netbook market, AMD has repeatedly said it has no intention of competing in this segment. Though Gateway and Asus launched AMD based netbooks, there is no momen-tum; nor can the availability be seen in the Indian market. When we talked to AMD, we came to know that it has taken a wait and watch approach to understand how this market evolves. “The netbook does not provide a complete experience for mainstream users. We have iden-tified an opportunity between Atom-based netbooks and the expensive ultra portables and launched our first generation ultra-thin platform – Yukon (comprised of AMD Athlon Neo processor, ATI Radeon X1250 integrated graphics and optional ATI Mobi l i ty Radeon HD 3410 discrete GPU),” said Vamsi Krishna, Senior Technical Manager, AMD

India. AMD’s approach essentially is to deliver a full PC experience with ATI graphics chip technology within a slim form factor with a larger screen, typically of 13 inches.

But some serious competition is expected from ARM, which is going to be more competitive once the 3G and WiMax come to full play. The x86-based Atom netbooks have been already pitted against the ARM-based smartbooks (which is essentially a 3G/Wi-Fi/Bluetooth/WiMax enabled device with inte-g rated wire less modem) by TI , Freescale, Qualcomm, Nvidia, etc) that are lined up to be launched this year. In fact, ARM, the developer of 2 GHz multicore Cortex-A9 mobile processor, stokes the performance expectations further by claiming that gamers should see netbooks capable of running the latest PC games. Design variations will be more on ARM based devices, which will be available on either clamshell or tablet format.

“The competition is very natu-ral. But the unique advantage with Atom netbook is its X86 architec-ture and the compatibility with all PC applications, which makes it a natural continuation of existing PC segments,” said Rajesh Gupta.

Price-wise, many believe that ARM’s Cortex-A9 multicore proces-sor could be a serious challenger to the current Atom breed used in netbook, and a Cortex-A9 netbook w i t h a L i n u x - b a s e d o p e r a t i n g system could sell at a price point that no Intel/Windows netbook could match.

Channel’s takeThe true potential of netbooks has been limited mainly by the appli-cations that are not optimized for i ts mobil ity and smaller screen siz e. Recognizing that, Intel has announced the Atom Developer Program for creating useful and inventive applications on Atom. This will be a great opportunity for the independent software vendors (ISVs) and developers.

But despite the limitations, resell-ers see a better value for money for users in the N450-based netbook, with increased battery life it offers and a performance leap. From the pure price perspective, Atom-based netbooks are a good option for users who are looking for a basic compu-

tation device and for surfing - a reason that the demand is growing for netbooks. It also gives a good margin to resellers, which at times is better than notebooks. The margin on netbook generally varies from Rs. 500-1000, depending on how much the consumer can negotiate on MRP.

But there is one hitch; netbooks are still getting sold as the second computing option, and Atom is yet to find traction in the mainstream PC market. As Nitin Poddar from Netcom Computers, Indore, says, “Netbooks are generally bought by executives on the go, especially marketing professionals as a second portable PC which will suffice their basic surfing and computing needs and will not burn a hole in their pockets. We see the release of N450 as a great opportunity to address and add value to this specific user segment, along with a strong focus on women and student buyers.”

Intel also needs to understand the specific consumer requirements to consolidate this growth further. As Anil Tiwari of Om Sai Corporation, Mumbai, says, “The netbooks built on the new Atom platform will be able to fulfill the user expectation to some extent, by offering longer battery life. But I feel an upgrada-tion of RAM will def initely give a performance boost to the Atom based netbooks.”

Despite the continuously grow-i n g d e m a n d , t h e d e m a n d a n d supply ratio is still not very consis-tent for these Atom-based netbooks. Resellers often have to face supply cr unches of netbooks. Subrata Paul of S D Infotech, Guwahati, says, “The demand for netbooks is growing very rapidly, and the supply often falls short of the demand. The release of N450 reiterates the focus of Intel on Atom, and we hope it will also make the market more stable and the supply more regular.”

However, the developments in the netbook market depend a lot on how people use such devices. The optimi-zation of the netbook usage will also play a major role. With the addition of more functions and features, it seems that the netbook market will continue to grow substantially in the years to come – compeling chipmak-ers to increasingly invest and drive innovations into this segment. n

[email protected]

Though battery life depends on

the usage and features, it

has been seen that on an

average, the battery life in

N450 net-books with a 6 cell battery

can go up to 14 hours, compared

to 8-9 hours battery life

in N270/280. The new

N470 gives a slightly better speed of 1.83 GHz while

N450 runs at 1.66 GHz.

Price-wise, many believe that ARM’s Cortex-A9 multicore processor could be a

serious chal-lenger to the current Atom breed used in netbooks

and a Cortex-A9 netbook

with a Linux-based operat-

ing system could sell at a price point that no Intel/

Windows netbook

could match.

Page 10: White Boxes Limited Opportunities

cover story Assembled PCs

DIGIT CHANNEL CONNECT 16 AprIL 2010

LimitedOpportunitiesAlready pushed to a subsidiary status in the desktop market, assemblers now bank on a handful of drivers to keep the segment buoyant. But for how long, and how much.Faiz askari

White Boxes

Page 11: White Boxes Limited Opportunities

cover story Assembled PCs

DIGIT CHANNEL CONNECT 17 AprIL 2010

business? What could be the future plan for the smaller players who are doing business in the assembled market? These are some key points which could tell us about the future of this market segment.

Giving the overall perspective that can indicate the market shift towards branded PCs, Vinnie Mehta, president, MAIT, says, “Though it is quite true that the assembled PC market is not growing the way it was growing a few years back, it will continue to co-exist. That’s because of the fact that India is a vast coun-try geographically, and its entire length and breadth makes it really difficult for the MNCs or the branded PC vendors to penetrate deeper into all corners of the market.”

Similarly, it is always better to have the exact overview of the situation from the assembled PC resellers. The resellers, who are out there selling in the actual market and meet the customers on a daily basis in order to understand their demands, know

I n a scenario where adver-tising, product promotional schemes and huge marketing budgets impact the opinion

of a common computer buyer, it is getting very difficult for the assem-bled PC market to grow.

As per the MAIT-IMRB market quar terly industry performance review for the October-December (OND) quater o f f i scal 2009-10, the assembled desktops – includ-ing the lesser known regional b r a n d s a n d u n b r a n d e d systems – accounted for 35 percent of the total desk-top sales.

This is a far cry from the time when the share of assembled PCs in the overall market used to be as high as 60 or 70 percent. Over the past several years, assemblers are getting further and further squeezed by brands both national and international.

Gone are the days when the assem-bled PC market was considered to be

a big threat to the branded PCs and was enjoying a major propor-

tion of the total PC industry in India. Now, the branded PC has taken over the c o n s u m e r ’ s p r e f e r -ence by capturing his mindshare.

But what is i t that could still sustain this

While some assembled PC makers believe that service and support is

the future for their

business, others

are looking at evolving

into notebook resellers.

Page 12: White Boxes Limited Opportunities

cover story Assembled PCs

DIGIT CHANNEL CONNECT 18 AprIL 2010

the pulse of this segment better than anyone else.

According to resellers, one of the reasons for the shift from assem-bled to branded PCs is that custom-ers are inclined towards mobility. “Nowadays, customers are look-ing for mobility that is provided by notebooks. This is the main reason that the desktop market is shrinking overall and the notebook segment is emerging quickly,” says Amrish Bhargava, proprietor of Jaipur-based Computer Troubleshooter.

Consumer s who are buying assembled PC’s are mainly students, gamers and customers from the S O H O s e g m e n t . A c c o r d i n g t o Shailendra, owner of Dehradun-based Creative Computers, “Gamers are the ones who mostly buy an assembled PC as it of fers them a complete tailor-made system for their computing needs. Another reason why they opt for the assem-bled PC as compared to the branded PC is the fact that they often require easy upgrades.”

However, some vendors believe that the PC market, like any other form of retail business, is governed by the reseller’s goodwill in the market and his face value. Mohammad Yusuf of Gorakhpur-based Excelsior

Computers says, “Customers these days do not purchase the system as a box. They want proper service to be delivered to them at their doorstep. And as a typical customer’s mental-ity, they expect service delivery from the person who is selling them the system. So, in case of the assembled PC, we sell it along with the service support. In case of branded PCs, the customer is guided to the company service centre.”

The future of assemblers Among the reseller community of assembled PCs, there is a sort of mixed opinion about what the future holds for their business. The next few years are likely to see this market remain as it is. “We don’t see big growth coming from this segment. I expect that the assem-bled PC segment will remain as it is,” says Bhargava of Computer Troubleshooter.

Largely depending upon service support delivery for sustenance, Anand Kumar of Hyderabad based AS Peripherals says, “Although I don’t expect much growth coming in this segment, I expect that our service support delivery and the g r ow t h o f S O H O s e g m e n t w i l l continue to give us business.”

However, Yusuf from Gorakhpur believes that customers from remote areas will continue to boost his busi-ness. “We are getting good response from far-off places like rural areas. These are the kind of customers who are actively looking at buying an assembled PC.”

While some assembled PC makers believe that service support is some-thing which holds future for their business, some are even looking at further evolving into notebook resellers.

One such reseller from Dehradun is Creative Computers’ Shailendra, who believes that doing business in the assembled PC segment would not be a great revenue earner for him. “Considering today’s market trends, cost factor is no more a dif feren-tiator between the branded and assembled PC. And due to the aggres-sive marketing strategies of branded PC vendors, I do not see great future in this business segment. I am looking at nurturing my business into notebook and laptop reselling. The notebook is still an interesting area to watch out for.”

On the contrary, Vinnie Mehta believes that considering the poten-tial of the Indian market, we are far from saturation. “I don’t feel that the business is going to vanish. Since we have not yet reached a saturation level, huge computing uptake is going to come from rural parts of the country. There is still room for the smaller town resell-ers to sustain on their business approaches.”

Mehta fur ther says, “Another p r o s p e c t f o r t h e a s s e m b l e d P C reseller is to become an authorised reseller of some leading brand. This is something that has happened before and will continue to take p l a c e i n t h e f u t u r e. S i n c e t h e assembled PC reseller is someone who understands the local market closely, he could always be a helping hand for some leading PC brand to explore that regional market.”

Another aspect that could keep the assembled PC market alive is regarding the customer’s knowl-edge of what he exactly wants. Ultimately, it will be the customer who will decide whether there’s scope for the white box makers in the future.n

[email protected]

Though it is quite true that the assembled PC market is not growing

the way it was growing a few years back, it will continue to co-exist.

That’s because of the fact that India is a vast country geo-graphically. Vinnie Mehta, President, MAit

Gamers are the ones who mostly buy

an assembled PC as it offers them a com-plete tailor-

made system for their com-puting needs. They often require easy upgrades. Shailendra,

OWner, CreAtive COMPuters, dehrAdun

Drivers of the assembleD PC market

inhibitors of the assembleD PC market

• PC demand from the SOHO segment of rural areas

• Customer’s demand for a customized PC

• Assurance of service delivery from the reseller himself

• Strong advertising and product promo-tional scheme by branded PC vendors

• Market inclination towards notebooks

• Minimal price differential between branded and assembled PCs

Page 13: White Boxes Limited Opportunities

special report WindoWs 7

DIGIT CHANNEL CONNECT 20 AprIL 2010

W ith the launch of each version of its Windows operating system, Microsoft has been hoping to tame the menace of software piracy with a combination of

measures. These include increasing awareness about the benefits of genuine software, conducting anti-piracy raids and using technical hooks that make piracy difficult. Over the years, these initiatives have yielded some results – but the software giant hasn’t been able to wipe out illegal copying of its software.

When Windows 7 was launched about six months back, many experts and industry watchers believed that the new version would significantly bring down piracy levels in

Has Microsoft been able to reduce piracy levels in India after the launch of Windows 7? DCC tries to find out...

Charu Khera

PiracyDe-activating

Page 14: White Boxes Limited Opportunities

special report WindoWs 7

DIGIT CHANNEL CONNECT 21 AprIL 2010

India. DCC spoke to Microsoft and the reseller community to find out how Win7 is doing on that count.

Unfor tunately, the only avail-able data on software piracy in India, which is compiled jointly by Business Software Alliance (BSA, a consortium of software vendors) and research firm IDC, recounts the over-all story – without breaking down piracy figures by either vendors or specific products. As per the latest such report from BSA-IDC, the over-all software piracy in India dropped marginally – from 69 per cent in 2007 to 68 per cent in 2008. While the data for 2009 is yet to come in, it is believed that higher awareness among users and initiatives from vendors such as Microsoft and Adobe will continue to bring down piracy levels. Further, the launch of a major OS like Windows 7 can potentially change the piracy equation if users find it difficult to copy, and resellers are able to convince their customers to use genuine software.

But what is the real situation on the ground? According to Vipul Sant, Director – Original Software Initiative, Microsoft India, from August to September last year, the company conducted a 16-city road-show and reached out to over 1,800 channel partners to create awareness about its new OS prior (which was launched in October 2009). Another measure Microsoft took was to sign on as many large enterprises for upgrade as possible with the help of large system integrators and OEM partners. The result: over 5,000 enterprises in the country are now using Windows 7.

Stil l , it is the vast number of small businesses and an even larger universe of end users where piracy i s ra m p a n t . T h i s i s s o m e t h i n g Microsoft aims to tackle, to a large extent through advanced technology embedded into its software.

Prior to Windows 7, Microsoft had used a technology ter med WGA in the earlier versions of XP and Vista. Under this, the OS would automatically send information to Microsoft (through internet connec-tivity) about each new copy being installed. Based on this information, the user would get notif ications whether the copy of Windows they were using was genuine or not. The idea was to create a consumer pull for genuine software.

In Windows 7, the WGA technol-ogy appears in a modified avatar as Windows Activation Technology (WAT). The new technology is built on a platform called Software Protection Platform, which was introduced with Vista. Given that Vista never took off, it’s only now that one can see how WAT fares in tackling piracy.

Says Sant, “Windows 7 provides m o r e i n f o r m a t ive n o t i f i c a t i o n messages, and we’ve made it easier for customers to understand and respond to WAT notifications they receive.”

T h r ow i n g m o r e l i g h t o n t h e same, Chetan Shah, MD, Xpress Computers, Mumbai, says that with Windows Vista, if Windows was not activated during the login process, customers would periodically see a dialogue box that they still need to activate Windows and that they can choose to activate immediately or later. In Windows 7, this process has been modified: when customers choose to activate later, they will see an educational dialogue box high-lighting how activation helps them identify if their copy of Windows is genuine and also gives them links to Microsoft sites to learn more. “Customers have responded well to this new innovation and have come back to us if they think that their copy is not genuine,” says Shah.

Suresh Ramani, CEO of Mumbai-based Techgyan and also a Microsoft Online Services Partner Advisor, believes that WAT has been consid-erably improved with the launch of Windows 7 and can detect more than 70 known ways which are used to illegally copy Windows. He is of the opinion that what has worked is the positive buzz about Windows 7 in technical communities, blogs, etc. “The fact that it addresses all the concerns of Windows Vista and offers some stunning improvements has created a positive halo around the product,” he says.

Channel expectationsDCC also asked some channel part-ners what they expect Microsoft to do to curb piracy and how they are faring with Windows 7.

“For Microsoft, enhanced end-user education is required and as far as the channel is concerned, t h e c o m p a ny n e e d s t o r e q u e s t the channel to be sensitive to the piracy issue and further educate

their staff and customers about the same,” says Shah.

A r u n M a n a g a v e o f A d i t y a Peripherals, Kolhapur, says that Microsoft has made a lot of efforts t o p o s i t i o n Wi n d ow s 7 i n t h e market and reduce piracy. “We are receiving a very good response for Windows 7 as compared to Windows XP Pro or Vista.”

“Though Microsoft is one of the most proactive companies in fighting piracy in India currently, neverthe-less, more roadshows and education across all verticals would help them create more impact,” says Subbaram Gowra, Managing Partner, Gowra Bits and Bytes, a Microsoft Gold Certified Partner. However, he avers that though it’s very difficult to make a copy of Windows 7, there is every possibility that this is happening.

On the quest ion of Windows 7 being able to reduce piracy, PK Harikrishnan, CEO of Alltime Power Technologies, Cochin, has this to say: “If it were this simple, Microsoft would have done i t by now. To promote Windows 7, Microsoft doesn’t expect licensed sales to be 100 per cent anywhere in the world.” He further believes that to start the initiative to curb piracy completely, Microsoft should start working more closely with IT dealers. “Instead of filing cases against them, Microsoft should work closely with them, espe-cially with associations, and educate the end users on the advantages of using licensed software,” he says.

Another way Microsoft can further create a pull from consumers is to give them something extra. Says Ramani of Techgyan, “Microsoft should offer some useful add-ons, which should be available as downloads for users who are using genuine Windows 7.”

Overall, Microsoft’s efforts seem to be paying off, but legal slackness on the part of the government has meant that reducing piracy is a slow, tedious process. Says Shah of Xpress Computers, “Increasingly, not only large enterprises, but small busi-nesses and mature home consumers are becoming aware of the perils of using pirated software. But probably the reason that the success levels are not as high as expected is that the government has not been very strin-gent in stopping the sale of pirated software.”n

[email protected]

Microsoft needs to

request the channel to

be sensitive to the piracy issue and fur-ther educate

their staff and customers.Chetan Shah,

MD, Xpress CoMputers

If curbing piracy were this simple, Microsoft

would have done it by now. To promote

Windows 7, Microsoft

doesn’t ex-pect licensed

sales to be 100 per cent anywhere in the world.

PK hariKriShnan, Ceo, AlltiMe power

teChnologies

Page 15: White Boxes Limited Opportunities

vendor speak Sage Software

DIGIT CHANNEL CONNECT 22 AprIL 2010

DCC: Are you looking at increasing your current partner base in the country?

Not really. It doesn’t make sense for us to sign on more partners, because we want all our channel partners to be active throughout their association with us. At present, we have about 40 partners and they are all active and generating enough business for us. What we want to do is to increase cross-sell for our various products among the existing partners.

DCC: You had acquired an Indian payroll company some time back. Please give us an update on this acquisition.

We had acquired Chennai-based Pocket Software, which provides payroll software, about a year back. At the time of acquisition, they had close to 200 installations. And we are happy to announce that today, the installations have crossed 350. Also, we are aiming to give it a pan-India push rather than restrict it to the southern regions of the coun-try. Another change that we have brought in is that the sales model of Pocket is now channel-driven instead of the erstwhile direct-sales model.

DCC: Has Sage identified any key verticals for its three product lines?

For our CRM range, we are pretty strong in brokerages, stock trading and online travel segments. The ERP

“We are trying to commoditise crm”

At present, we have about 40 partners and they are all active and

generating enough

business for us. What we

want to do is to increase cross-

sell for our products.

We ourselves host the

applications on our servers

in the US or our channel partners can

tie up with data centres or ISPs for providing hosted CRM

solutions to their

customers.

line of products has a strong pull from project companies, pure play distributors, as well as BPOs and ITES companies. The Pocket payroll is where we would probably have a very large channel footprint since it is very easy to install and will appeal to a large number of SMBs across India. There is a lot of untapped potential in India for payroll applications.

We are also trying to commoditise CRM by announcing a pricing of Rs 1 lakh (which will depend on the number of users) through radio ads.

DCC: Sage had also started hosted CRM services a few years back. Is it getting traction from customers?

We have deliberately kept our hosted offerings at a premium level, because there are many freeware CRM solutions available on the Web. We want the customers to try them out and come to us when they need a scalable solution that meets their needs. In fact, many of our custom-er s for hosted solutions end up buying the software after running it for a while.

DCC: Does Sage host applications itself, or can the partners also do it?

We have a dual model in which we ourselves host the applications on our servers in the US or our chan-nel partners can tie up with data centres or Internet Service Providers for providing hosted CRM solutions

to their customers. In case a lot of customisation of the software is needed, we prefer that our partners provide the hosting, as they are closer to their customers and can serve their needs better.

DCC: What are the issues you face with the hosted model?

The churn rate in the hosted model is very high. One thing is that if you have a large number of users, then the per-month running cost is high – which makes many customers go for outright purchases eventually. But, the hosted model is a good and effective way for customers to test our products.

DCC: With all the talk of cloud computing, do you think Indian businesses will go for this model as far as ERP and CRM are concerned?

We have been hearing this for many years now, but things haven’t changed as much as they are hyped. In India, most businesses want to have full control on their costs, and with the cloud computing model, they find it difficult to estimate how many concurrent users they will have for a software like ERP. So, it will be dif ficult for them to get a handle on their recurring costs. But, the model may work to some extent in case of CRM.n

[email protected]

—Thomas Abraham, MD, Sage Software India

In an exclusive interaction with DCC, Abraham talks about Sage’s partner focus, new product initiatives and the limitations of cloud computing for Indian businesses

Page 16: White Boxes Limited Opportunities

‘channel bonding’

DIGIT CHANNEL CONNECT 23 AprIL 2010

C omputer Association of Eastern India (Compass) has announced the successful completion of its IT expo,

Xplore Digitally. The event, which took place at Netaji Indoor

Stadium in Kolkata from March 12 to 15, was inaugurated by Debesh Das, the Minister for IT, West Bengal.

T h e h i g h l i g h t o f t h e e ve n t w a s the l ive webcast o f the expo for a l l four days in real-time. The expo also witnessed an inter-college IT quiz where 30 colleges in and near Kolkata participated.

According to Pawan Jajodia, the Chairman of Exhibition Committee, Compass, “The event, which showcased the latest product offerings in the IT space, was hosted with an estimated budget of Rs 1.25 crore. Though the footfall was less this time as compared to last year, it helped generate good business for most partners that attended the expo.”

He further informed that there were 100 stalls and 20 pavilions spread across an area of 1,160 sq ft.

JK Baid, the CEO of Eastern Group was the primary sponsor of the expo and the Guest

of Honour. The association has conducted this expo

after a gap of one year, due to the economic slowdown. But Alok Garodia, President,

Compass, exuded confidence over the fact that the association has successfully weathered the crisis, and the market is now maturing in the region. n

T amil Nadu-based Vellore Association for Information Technology (VAIT) has announced the results of its recently

conducted yearly elections for the term 2010-2011.

SR Ramesh of Sree Gur uraja Systems & Services has been elected as the president; J Mothilal of Universal Computer Systems as Secretary, and R Sairam of Sriram Computers (Arni) as Treasurer. Other important elected members are BR Sathishkumar of Sun Systems & Solutions as VP; K Baskaran of Digitech Computers as Joint Secretary.

The executive committee members include CP Praveen of Vasavi Computer Academy, M Kumaran of Sri Balaji Computers, C Arumugam of Intech Computers, J Prakash of Prohard Computers, C Sureshbabu of Networth Systems, and M Saravanan of Carewel Systems.

T h e a s s o c i a t i o n h a s a l s o a n n o u n c e d plans to regularly conduct technical seminars in the region. n

Vellore association elects committee for 2010-11

Compass concludes its IT expo

M Jacob Durairaj of Avalon Data Products has been elected as the new President of Tirunelveli-based Computer Dealers Association Tirunelveli

(CDAT). The President was elected as part of a new 17-member

team, which will be the in charge of the association for the term 2010-11.

Among the new members elected, D. Mohan Babu of Veefores Associates was appointed Secretary; T. Kumar of Sathyam Computers & Consultancy as Treasurer; Arumugam of Global Infosys as Vice President and Muthukumar of Agni Computers as Jt. Secretary.

In addition, R. Muttiah Pillai of Bits Computers Systems and N. Ananthavaratharajan of BG Systems have been elected as Confed Executive Committee members.

Ananthavaradharajan, CEO, BG Systems and Confed EC Member – CDAT - shared that the association is in the process of collecting approvals from all its members for the Confed-SOUL project implementation and reported that most of the association members have already expressed their willingness for the project to be imple-mented in the region.

He emphasised that the association’s focus for 2010-11 will be to conduct more expos in the region and develop healthy relations with the vendor and the distributor community. n

Jacob Durairaj elected new CDAT President

Compass expo innauguration ceremony

Page 17: White Boxes Limited Opportunities

techno touch IdentIty theft

DIGIT CHANNEL CONNECT 24 AprIL 2010

What you post online is what you are. Or what you give away.RobeRt Siciliano

ClickMind Your W hether you think that social media is an

asset to your organisation or a liability, one thing is clear: the number of people signing up on social networking sites is

increasing. There are close to half a billion people who are active on social media. Last time I checked, Facebook had more than 400 million users and Twitter 50 million. Some say social media sites such as Facebook and others combined have close to a billion views per month. Web 2.0 is alive, and has changed the game for IT professionals.

There are thousands of social media sites worldwide such as Facebook, LinkedIn, MySpace, Twitter, and YouTube.

However, social media is still in its infancy. There are many security issues plaguing social media sites. Users are tricked into clicking links. Viruses enter the network as a result of employees downloading or simply visiting an infected page.

For the past one year, I’ve been screaming about the trouble with social media - the numerous loopholes it has created and how criminals are exploiting them for crimes such as identity theft and brand hijacking. Social media creates many oppor-tunities for criminals to make “friends” with their potential victims in order to create a false sense of trust, and use it against their victims in phishing or other scams. I predicted long ago that the problem will get a lot worse before it gets better. Indeed, that’s what has happened - criminal hackers have taken hold and are in full force.

We hear about a new Twitter phishing scam almost daily,

Page 18: White Boxes Limited Opportunities

DIGIT CHANNEL CONNECT 25 AprIL 2010

techno touch IdentIty theft

whether it’s via direct messaging or a shortened URL. My spam folder is filled with emails from Facebook phishers, requesting new login credentials, or a “friend” who’s sending me a video that’s actually a virus.

Not too long ago, it was big news when a criminal broke into Facebook accounts, impersonated the victim, sent messages to the victim’s friends, claim-ing to have lost his wallet in the UK and begging for a money wire. Lately, I see such stories every week.

Pinching where it hurtsScammers aren’t just stealing identi-ties and spreading malware. They are brand jacking in ways that are hurting companies’ bottom lines. While many may not have sympathy for the bottom lines of billion dollar corporations, this hurts the little guy too. Knocking off software, hardware, merchandise, and movies ultimately cost legitimate taxpay-ers’ jobs and hurts the economy even as the money is directed to criminal hack-ers elsewhere in the world. Liz Miller, vice president of the Chief Marketing Officer Council, says, “Counterfeiting operations are highly organised and very global.”

Imagine if someone used your name and image, or the name and logo of a business you own, to create a profile on Facebook, Twitter or some other social networking website. Then, they start posting blogs and sending out links while pretending to be you. Establishing an online presence using someone else’s identity creates unlimited opportunities for a scammer.

Social media identity thefts are of different types and occur due to a number of reasons:

1.WINNINg CLIENTS: An imper-sonator may be attempting to steal

your clients or potential clients.

2.CYbER SqUATTINg: A person could be squatting on your name or brand,

hoping to profit by selling it back to you or preventing you from using it.

3.gAININg bACKdOOR ACCESS: Criminal hackers could be posting

infected links which, once clicked, could infect the victim’s PC or network with a virus that gives hackers backdoor access.

4.dAMAgINg YOUR bRANd: An impersonator may intentionally

pose as you, and even blog as you, in order to damage your name or brand. Anything they say to the world that is libellous, defamatory, or just plain wrong, hurts your reputation and can even make

you the target of a lawsuit. Identity thieves could be parodying you or your brand, by creating a tongue-in-cheek website that might be funny and obvious, but will most likely not be funny to you. An imperson-ator may be using your identity to harass someone you know.

5. PIggY bACKINg: An impostor may be obsessed with you or your

brand, and simply want to be associ-ated with you. Posing as you could yield attention and satisfaction.

6.ObTAININg PRIVILEgEd ACCESS: Impersonators may wish to use a

name or brand that has leverage, such as a celebrity or a Fortune 500 company, to obtain privileged access.

7.ExTRACTINg CREdIT CARd INFORMATION: If you or your

business sells products or services, iden-tity thieves might pose as you and offer deals with links to spoofed websites, in order to extract credit card numbers.

8.COLLECTINg PERSONAL INFOR-MATION: An identity thief may

pose as a government entity for the purpose of extracting data and commit-ting a new account fraud.

Unfortunately, the list of frauds keeps on growing, and is limited only by the imagination of the thief.

the to-do listSome guidelines you can keep in mind:

1.Register all your officers, company names and branded products on

every social media site you can find to prevent Twitter and cyber-squatting. do the same for your full name and those of your spouse and kids on the most trafficked social media sites, blogs, domains or web based email accounts. If your name is already gone, include your middle initial, a period or a hyphen. It’s up to you to decide whether or not to include your picture and basic bio, but consider leaving out your age or birth-day.

2.Set up a free google Alerts for your name and get an email every time

your name pops up online. You will find out if there is any site that disparages you. get a google profile.

3.Set up a free StepRep account for your name. StepRep is an online

reputation manager that does a better job than google Alerts of fetching your name on the web.

4.go to Knowem.com. This is an online portal that goes out and

registers your name at what they consider the top 150 social media sites.

5.Start doing things online to boost your online reputation. blogging

is best. Make google bring your given name to the top of search in its best light. This is a combination of online reputa-tion management and search engine optimization for your brand.

Watch before you leapMost people who post their personal information online do not recognise the potential impacts of their actions.

Sir John Sawers is the head of MI6, essentially the british equivalent of the CIA. His wife posted sensitive personal information to her Facebook page, includ-ing the address of the couple’s London apartment. She also posted family photos that included her half-brother, who was an associate and researcher for a histo-rian who has been convicted of Holocaust denial. Her Facebook profile was left open to anyone in the London network.

Patrick Mercer, Conservative chair-man of the Commons counter-terrorism subcommittee, has pointed out that these types of Facebook postings leave Sir John Sawers open to criticism and potentially, blackmail. “We can’t have the head of MI6 being compromised by having personal details of his life being posted on Facebook. He is a long-serving diplomat and ambassador and his family are well aware about it. I would have hoped they would have been much more sensitive to situations like this which could potentially compromise his security.”

While all of us may not be high profile targets, you can still be a target at some level, and the more intelligence you make available to potential hackers, the easier it is for them to harm you. If you use social media and regularly update your status or profile, please keep the following advice in mind:

1.before you post anything online, think about what a hacker, stalker,

employer, or potential employer could do with that data.

2.don’t give away specifics. don’t post your address, date of birth, kids’

names, pets’ names, phone numbers, or any account numbers or financial infor-mation of any kind. You really shouldn’t even post children’s photos online.

3.do not tell the world you are going on vacation! Or if you won’t be at

your home for several hours. Why would you let potential burglars know that you are away?

4.before posting pictures or videos, consider what a criminal or poten-

tial employer might see. Could they be used against you in any way? n

Robert Siciliano is the CEO of IDTheftSecurity.com.

Scammers aren’t just stealing

identities and spread-

ing malware. They are

brand jacking in ways that are hurting companies’

bottom lines. While many may not have sympathy for the bottom lines of bil-lion dollar

corporations, this hurts the little guy too.

According to the 2010

Identity Fraud Survey

Report by Javelin Strat-

egy & Re-search, over 11 million adults were affected by

identity theft in the US.

Page 19: White Boxes Limited Opportunities

special report SaaS

DIGIT CHANNEL CONNECT 26 AprIL 2010

The ServicePlay

Despite huge growth prospects in India, Software as a Service has some hitches and hiccups that make the channel partners jittery.

Soma Tah

ndia has emerged as one of the fastest growing SaaS markets in APEJ (Asia Pacific excluding Japan) in the

last couple of years. According to a Springboard Research report, the Indian SaaS market was pegged at Rs 251 crore in 2009, and is expected to reach Rs 488 crore by 2010.

Contrary to the popular belief that SaaS primarily appeals to the SMB sector, the highest SaaS penetration is still amongst the large enterprises. While, the trend of SaaS adoption is visible across multiple segments, the requirements and purpose of adoption differ.

The leading reasons for SaaS adoption in India is ease of use, and zero or low maintenance. However, a substantial amount of the market growth can be attributed to the difficult economic conditions of 2008-09, where the cash-strapped businesses have shown a greater affinity towards the on-demand solutions, which are also cost-effective. While large enterprises are using SaaS within particular business units to enhance automation and optimization, the SME segment’s preference is to have support for end-to-end processes. It allows small and medium sized businesses (SMB) and micro, small and medium enterprises (MSME) to focus on their core business instead of putting in efforts towards managing IT infrastruc-ture. When compared to large enterprises, SMBs and MSMEs also don’t have enough resources to invest upfront, and hence are the low hanging potential segments for SaaS providers. In terms of verticals, SaaS penetration is strongest in the telecom sector, and is then evenly spread across other major sectors, including education, BFSI, healthcare, manufacturing, and retail. According to a Gartner report, some of the major offerings under the SAAS model are CRM,

I

Page 20: White Boxes Limited Opportunities

special report SaaS

DIGIT CHANNEL CONNECT 27 AprIL 2010

ERP, email, security, content, communi-cations, and collaboration (CCC).

According to Balaka Baruah Aggarwal, senior research manager for emerging software at Springboard Research, SaaS will proliferate rapidly in the next 18-24 months, not only in top-tier towns and cities, but even to secondary places. “The SaaS-related services and consulting revenues will also grow substantially as more partners enter the ecosystem,” she says. Now, the question is, how important would be the partner’s role in the entire SaaS ecosystem?

Importance of channel’s roleIt’s an imperative for the SaaS vendors to build an effective go-to-market strategy and a set of strong channel relation-ships, so they can rapidly and profitably extend their market reach and satisfy the needs of specific market segments. As R. Sukumar, GM – Sales, RamcoOnDemand ERP, says, “It’s a volumes game and the channels are the only way to take it to the market. With their local knowledge and contacts, they can plan a vital role both in sales and implementation.”

Ganesh Swaminathan, Director - Office of Innovation, CSC in India, says, “Customers are used to doing business with the people they know and trust, and hesitant to do business with new and third party suppliers. They are also trying to reduce the number of vendors they rely upon and will prefer to turn to their existing suppliers. This means SaaS and cloud-computing vendors will need to align themselves with established re-sell-ers and other companies who have access to customers, especially IT/business deci-sion-makers. One of the major challenges for SaaS providers in India is the lack of knowledge about Indian workflows and IT support. In order to grow their business and to continue educating the market about the benefits of SaaS, channels play an important role.” Vendors can benefit from resellers in selling horizontal soft-ware services by leveraging their domain knowledge & integration capabilities of reselling partners.

Channel apprehensionsA related study report from Springboard Research shows that SaaS is gaining significant acceptance in India at the cost of on-premise applications with 32 per cent of SaaS adopters in the country replacing an on-premise application. By 2010, around 30 per cent of new license purchases in APEJ will be in the form of SaaS or delivered through the SaaS model, predicts Gartner.

But the resellers are not so keen on the transition from an upfront revenue model to a different mode of business, where they would be selling a virtual product with a different compensation structure and support requirements.

In an upfront on the premise model, the dealer or reseller buys the software, sells the license to customers, and gets a specific amount as margin (7-10 per cent markup on software and up to 5 per cent on hardware) on sales. But, the business model with SaaS is a little bit different, as the customer has a subscription license agreement procured either directly from the vendor or through reseller referrals. In this particular model, partners get a certain percentage of the first year contract value and also a certain amount of the recurring value on renewal. Opportunities also exist to charge per transaction, event, or other unit of value to the customer. These alternative pric-ing models come about because custom-ers actually “lease” the software from the vendors, and the vendors have the ability to view all transactional activity within the system.

Some of the key apprehensions with this model are the loss of customer ownership, and the declining commis-sion structure. The margin in SaaS varies between 10-12%, which is lower than the traditional on-premise model. Besides the upfront sales revenue, resellers generally used to get a decent percentage for provid-ing first level support in the on-premise model – a reason why SaaS is yet to find partners. The support needs in SaaS also depends on how the users want to optimize the resources, and is not about typical integration and customization requirements, which used to be a top user concern in on-premise deployments.

The biggest challenge is user maturity in understanding SaaS model. There are certain areas of genuine apprehensions in terms of security vulnerabilities, integra-tion complexities, regulatory compliance management, long term TCO uncertain-ties, SaaS service standardization, and SLA guarantee, etc. B. Raghavendran, Vice President, Channel Operations

and Commercial Strategy, Cisco India & SAARC, says, “While customers agree about the benefits of cloud computing, they have concerns about cost and flexi-bility, particularly about security, compat-ibility with existing applications, lack of a migration path from existing applications to clouds, freedom of choice, federation of internal and external resources, lack of SLAs for policy-based management, and interoperability. Additionally, while bandwidth has been a challenge in the past, over recent years, India’s broadband infrastructure has matured significantly, thereby encouraging more and more businesses to explore this option.”

“The SaaS adoption is increasing because most initial apprehensions are addressed. The value proposition is understood. The SaaS vendors are quite successful in demonstrating a cost-effective alternative deployment model to provide reliable services with high degree elasticity. Once the basic technology foun-dations and business models are in place, there would be a compelling need for SaaS vendors to engage the ‘traditional’ value-added resellers or system integra-tors to reach out to a larger customer base quickly. In the context of the Indian market, I think positioning of SaaS as a viable alternate model is not fully understood. The basic infrastructure for enabling a reliable SaaS delivery is criti-cal in India,” says Hemen Goswami, CTO Infogain Corporation.

Newer avenues of businesses can become lucrative for a channel player. Vineet Sood, Head, Channels and Alliances, Symantec India, says, “Awareness on how SaaS can add to their revenues and offerings in terms of value addition needs to be highlighted. With the SAAS model being subscription based, a channel player may not always find it that lucrative in comparison to the license model; so it needs to be commu-nicated that this area will see increasing adoption, and to be ahead of the curve, they will need to play a role in the same.” In fact, vendors feel that channels can add huge value on top of the core offering.

Vijayant Rai, Director – Channels (India & SAARC), CA says, “SaaS is still a relatively new and evolving model. Vendors are working to enhance the core offerings as per user/market require-ments and feedback. Channels should see this as an opportunity to expand beyond their current offerings. Additionally, there will definitely be opportunities to develop on-site / add-on ‘services’ offer-ings around the core SaaS application.” n

[email protected]

“Awareness on how SaaS

can add to their reve-

nues in terms of value addition

needs to be highlighted.”

Vineet Sood, Head, CHannels and allianCes, symanteC india

The SaaS adoption is

increasing as most initial apprehen-sions are

addressed. The SaaS

vendors are successful in demon-strating a

cost-effective alternative

deployment model.

PK Hemen GoSwami, CtO, infOgain COrpOratiOn

Key challenges in adoption

n Lack of user maturityn Security vulnerabilitiesn Integration complexitiesn Regulatory compliance

managementn Long-term TCO uncertaintiesn SaaS service standardizationn SLA guarantees

Page 21: White Boxes Limited Opportunities

guest expression Managed LAN

DIGIT CHANNEL CONNECT 28 AprIL 2010

A s companies star t to tackle LAN infrastruc-ture upg rades, many of them are deciding

to outsource LAN management. Industries across the spectrum – financial services, healthcare, manu-facturing and retail – are choosing to outsource LAN management.

A few years ago, a LAN was a fairly well-defined entity. It usually existed within the four walls of an office, and primarily handled data access to internal resources. However, the number and types of applications moving across the LAN infrastruc-ture have changed considerably. And the complexity of managing them, of ensuring their quality, performance and uptime, have caused many to begin to look towards outsourcing,

Vendors, analysts and custom-ers typically point to three major factors driving IT departments to look into managed LAN services: the increasingly dispersed locations of company branches; the security challenges that come with relying more on wireless access points; and the advent of high-bandwidth appli-cations that have made managing local networks much more difficult than when networks were only for data transfers.

Outsourced managed services are driven by two things, namely, the complexity of the environment and the skill set required for managing it, and the cost of the environment.

Nowadays, the challenges faced by businesses are becoming more complex; and the blurring of once

Managed Local Area Network (LAN) services may represent a sliver of the overall managed services market, but have become the fastest-growing segment.Chandra Bhanu ParaPally

Multiple

Drivers

Page 22: White Boxes Limited Opportunities

guest expression Managed LAN

DIGIT CHANNEL CONNECT 29 AprIL 2010

known edges are making the deci-sion making process more difficult. Systems are complex and efficiency is not achieved by cutting costs alone. Systems now have to be effective. The information you need for informed decision making is increasing, but the ability to analyze it needs to be better.

The speed of change in business is also accelerating; so is the need to respond to the challenges. This is no time to be left behind.

This is the environment we oper-ate in. Business leaders need to face them head on, understand them, and create strategies to meet them.

Trend towards outsourcingW i t h t h e a d v e n t o f R e m o t e Infrastructure Management (RIM) over the last few years, more and more work is being carried out from remote locations like India. This growing skill set will, in turn, drive the costs further down and improve the efficiency for the companies plan-ning to outsource their LAN services.

India has highly qualified, skilled professionals, and has demonstrated its capability in managing the clients’ networks remotely. System integra-tors like CSC have established their base here, and are providing services to clients through their global deliv-ery model. Over the years, service of ferings from low cost centres have evolved and matured. A few years ago, there was only the mere monitoring of LAN. But today, the expanded view of this offering ranges from providing expert level or 3rd line support, design and engineering, and implementation/project work. Many companies adopted several operating models like offshore-onshore collabo-rated model, India heavy, dedicated staff/FTE and unit rate based models.

Service providers and system inte-grators can provide sophisticated ser vice-level ag reements (SLA) around managed network services, including managed LANs. These SLAs include provisioning, notifica-tion of problems, restoration and service availability.

For the most part, it is not just that customers want their LANs to run a certain way. It is more that they want the applications like WLANs, unified communications, etc., on top of their LANs to run a certain way. Also, the cost of buying and managing LAN/ WAN management tools is on the rise. So, it is getting more cost effec-tive for companies to outsource this capability.

Moving all applications to IP is just one of the major factors driving managed LAN adoption. As compa-nies invest more resources into creat-ing branch offices, many of them are looking for ways to cut down opera-tional expenditure and concentrate more on their core service offering to become leaders in their segments. So, instead of having local staff in their IT department to manage LANs at branch offices, many of them are relying on third parties and consoli-dating their expenditures.

As companies increasingly expand into geographically dispersed loca-tions, many of them are also turning more toward wireless LANs (WLAN) to deliver services to their workers.

The advent of WLANs is spark-ing more demand for managed LAN services, as wireless systems require greater attention to security measures than wire-line systems. Additionally, wireless networks

With the advent of

Remote In-frastructure

Manage-ment (RIM) over the last few years, more and

more work is being

carried out from remote

locations like India, which in turn will drive the

costs further down and

improve the efficiency

for the companies planning to outsource their LAN services.

Components of managed Lan serviCesManaged LAN service will bring up faster problem solving, better service, capacity management and increased service availability, monitoring and preventive maintenance. The scope of Managed LAN services includes:n Assessment, design, and installa-

tion servicesn 24x7 monitoring and managementn Service desk (Help desk) available

around the clock by phone, mail, web

n Fault management which includes incident and problem manage-ment

n Configuration management.n Change managementn Security managementn Monthly statistics reportingn On-site troubleshootingn Periodical on-site maintenance

(two, three, four times per year)n Proactive system health checkn Network optimizationn Performance management and

capacity planningn Service Level Agreement with fixed

reaction and restoration timesn Formal metrics like MTTN, MTTR,

MTRS

driving forCes for ConvergenCe of networksn Cost management n Cost reduction via consolidation of

traffic over one network n Understanding ROI and knowing

how much to spend and what to spend it on vs. service level require-ments

n Cost vs. value transparencyn Business relevant reporting n Effective communications n Ability to support evolving business

applications like e-learning, inte-grated supply chain management, multimedia conferencing, etc.

n Ability to understand and manage business communication holistically

n Increased levels of security n Reducing the number of access

points and hence the number of potential security threats

n Enabling effective policy manage-ment and enforcement

n Enabling a focused approach to dealing with security threats

n Transparencyn Converged networks enable deliv-

ery of a consistent, reliable user interface to the network

n The number of invoices is reduced and the ability to correlate invoices and services is increased

n Agilityn Ability to mitigate and adapt

efficiently to regulatory/industry changes

n Ability to protect past and future investments

present much different set of design when compared to than wire-line networks, which means that many companies may feel more comfort-able consulting with an established carrier or service provider to design, implement and manage their WLANs than their own in-house operations.

Companies are much more inter-ested in managing VoIP, web applica-tions and video quality on their LANs than earlier. Application performance is key and companies that are deploy-ing local VoIP or videoconferencing networks are often looking to the service providers and system inte-grators to provide managed services for them.n

Chandra Bhanu Parapally is Principal Consultant, Networks, CSC.

ChANDrA BhANu PArAPALLy

Page 23: White Boxes Limited Opportunities

channel champs

DIGIT CHANNEL CONNECT 30 AprIL 2010

channel champs

AgrA, Ajmer, AmrAvAti, AmritsAr, BhAtindA, BikAner,

BilAspur, gwAlior, jABAlpur, jhAnsi, kotA, mAthurA, pAtiAlA, udAipurFeB – mArch 2010

the event was really good and well organised.

Ag

ra

Ajm

er

Am

rava

tithe annual channel champs programme organised by digit channel conect saw a host of enthusiastic participants across cities in the northern and western regions. here are some short takes from the attendees at the event...

cities

Poonam JoshiInfo Micro

Prakash PurohitCompu Shop - Amravati Computer Dealer Association - President

this is my first time at the event and i would like to attend it in the future. i haven’t read the digit channel connect magazine and would definitely like to subscribe to it.

DiliP kalaHi-Choice Computer

sanDeeP surroachLG - Assistant Manager Associations, Chennai

i haven’t attended this event before, but i found it to be really good and would like to be an active par-ticpant in the future.

the main issues affecting us are price war, doA cases, lack of loyalty, and no accountibil-ity among resell-ers. dcc needs to address these issues in their magazine.

avaDh agarwalInfotech Solution - Amravati Computer Dealer Association - Vice President

the event was well orgainsed and the response was quite satis-factory. 9dot9 mediaworx has done a commendable job by conducting an event like this.

this was my first chan-nel event and i would like to attend it in future also. i do read the dcc magazine and would like to subscribe to it.

avinash YeotikarRadiant Computer

Jhan

si

Page 24: White Boxes Limited Opportunities

DIGIT CHANNEL CONNECT 31 AprIL 2010

Bik

aner

this is my first channel event and i really liked it. i have read the dcc magazine earlier and have already susbcribed to it.

i have to give special kudos to 9dot9 for holding this event. it was very well organised. the gathering was substantial and the response was really good. we are looking to take this event to other cities in rajasthan.

i found the event to be really informative and it was a good experience overall. i would like to become a regu-lar particpant at this event.

the event was very interac-tive and knowledgeble. it should be conducted on regular intervals.

vikas kelli Global Computers & Communication

suniel kumar Gigabyte - ASM

maheDra singh Computer Temple

sanDeeP chauhan LG-ASM

Bh

atin

da the channel champ

event is a good activity and should be done at regular intervals.

i have attended this event for the first time and would like to attend it in future as well. i have read the dcc magazine - it helps the reader to gain useful inforamtion.

overall, it was a very good event. i would like to say that we need bet-ter services and support at local level.

it was a good event, which was well organ-ised. the response was also quite good.

manav singla M-tech Sales - Association of Bhatinda Computer Dealers - Secretary

JagPal sighMalwa System

DeePak likhY & rohit sahani

Dinesh goYalShubham Infitech System - Association of Bhatinda Computer Dealers - Treasurer.

Page 25: White Boxes Limited Opportunities

channel champs

DIGIT CHANNEL CONNECT 32 AprIL 2010

channel champs

Jab

alp

ur

Pati

ala

Gw

alio

rM

ath

ura

Ud

ai

this particular event was really knowl-edgable and quite well organised.

i found this event to be really informa-tive. the response to the event was overwhelming, as was evident with the huge gathering.

i’ve attended the channel meet for the first time and found it to be excellent and very useful for our community.

the response to the event was really good. the channel meet should also be organised in chandigarh.

arDhman singh

suriJit singh manhas LG - ASM

navJit singh Standard System

ashish choubeY LG-Manager-Chandigarh

Page 26: White Boxes Limited Opportunities

DIGIT CHANNEL CONNECT 33 AprIL 2010

Ko

ta

Bila

spu

r

channel champschannel champsA

mri

tsar

this is my first chan-nel champ event and i would like to attend it in the future also. i haven’t read the dcc magazine, but i would like to subscribe to it.

i have attended this event before and i would surely be an active participant in the future.

harmit singhAnsh Computer

rishi chohan Extreame Machine

Page 27: White Boxes Limited Opportunities

analyst speak SaaS

DIGIT CHANNEL CONNECT 34 AprIL 201034

Redefining the

Software InduStry

H i g h c ap i t a l ex p e n d i -ture and Total Cost of Ownership (TCO) have long been a deterrent for

small and medium scale enterprises to deploy best of the breed IT solutions. At the same time, the current economic scenario has forced large-scale enter-prises to look for alternate methods to control and reduce IT costs while meeting the growing business needs for technology. Software as a Service (SaaS) delivery model is a disruptive innovation that caters to these needs, and one that is definitely transforming the software industry.

SaaS is not a product or a technol-ogy, but a delivery model wherein the software vendor develops a web based application, and hosts, operates, maintains and upgrades it for use by its customers. SaaS applications are ideally developed over a multi-tenant architecture, enabling the vendor or the service provider to host the application on a single instance for multiple customers.

Deploying software over this model not only cuts the capital investment in traditional perpetual licensing, but also reduces the need for IT infrastructure and resources required to administer and support the applications. Customers pay on a subscription basis, thereby shifting the expenditure from a CAPEX to an OPEX based model. This usage-based cost structure and pay-as-you-use pricing has led to early adoption by small and medium scale businesses across verticals. Other key drivers boosting the uptake include the flex-ibility for customers to try the appli-cation via trial versions and switch vendors, in case the application fails

The SaaS market in India

is expected to record a compound

annual growth rate of 53%

for the period 2008-2015. The country,

characterized by high presence

of SMEs, growing need for mobility,

strengthening internet

infrastructure with heavy investments

expected in 3G and WiMax,

promises a huge potential in this

space.

SaaS is not a product or a technology,

but a delivery model wherein the software

vendor develops a web based

application, and hosts, operates, maintains and upgrades it for customer use.

to meet expectations.SaaS offerings span across appli-

cations such as customer relation-ship management (CRM), enterprise resource planning (ERP), human resource management (HRM), web conferencing, email, office suites, and security. Independent software vendors (ISVs) have also started offering niche applications through the SaaS model.

Concern over securityData security has been one of the main obstacles in the path of SaaS adoption. Vendors will have to play a part in developing secure systems and governance procedures and convinc-ing customers about the security of enterprise data and information. This requires not only having well defined processes in place, but also the abil-ity of vendors, channel partners and service providers to bring about a paradigm shift. Organizations today (especially the larger ones) prefer to maintain control of data within their own data centres. This is a mindset that will change as the hosted model matures and stabilises.

The need for gaining competi-tive advantage through streamlined processes, increased operational effi-ciency and improved customer relation management has given a huge boost to ERP and CRM applications. Traction is also visible for content, communi-cation and collaboration applications (CCC) over the hosted delivery model. Growth in the CCC segment is primar-ily driven by conferencing and e-mail solutions.

Enterprises (large or small) invest-ing in these solutions will definitely consider the hosted model going forward. However, for the large

customer base, which has already spent large sums of money on prem-ise implementations, building required infrastructure and training a team with skill-sets capable of handling the customised application, the high switching cost could be a restraint. These organisations will take the ‘Hybrid model’ approach as a transi-tion. The hybrid model is the phase between the on premise and hosted models. Mission-critical applications are likely to still be procured using the conventional license-based method, while the peripheral applications and other collaboration tools can be migrated to the more inexpensive managed model.

A recent study done by Frost & Sullivan highlights the increasing awareness levels and market potential. The SaaS market in India is expected to record a compound annual growth rate (CAGR) of 53% for the period 2008-2015. The country, characterised by a high presence of SMEs, growing need for mobility, strengthening internet infrastructure with heavy investments expected in 3G and WiMax, promises a huge potential in this space. There is an active participation by many global software vendors, as well as regional vendors, to provide SaaS based offer-ings in the region.

The IT and ITeS markets in India have witnessed the highest adoption of SaaS solutions. Established infra-structure in these verticals, enabling Internet access to all employees and greater use of CRM and CCC tools, are the prime drivers for adoption. The SMB segment in the manufacturing vertical is another segment show-ing traction. The slower adoption in the BFSI segment is characterised by the complexity arising from the data security related challenges and the stringent regulatory guidelines and compliances.

SaaS is on its way to revolution-ize the way software has been devel-oped and delivered. Customers will realize several other benefits like greater flexibility and easier scal-ability offered by the model over a period. Product vendors will re-think the architecture and technology, and newer offerings will focus on multi-tenant features. It will also realign the entire IT value chain. n

Nishchal Khorana is Programme Manager (South Asia & Middle East),

ICT Practice, Frost & Sullivan.

Software as a Service is a disruptive innovation, with far-reaching effects on how software will be delivered to companies.NishChal KhoraNa