Education and SMB segments drive upcountry growth

Not long ago, IT- related activities and investments of leading vendors, as

far as the Maharashtra region was concerned, were directed towards upcountry

markets such as Pune followed by Nagpur. However, with the change in consumer

behaviour and with technology becoming more user-friendly and affordable,

markets such as Nashik, Kolhapur and Aurangabad are increasingly becoming

important. One of the reasons for this shift is that Mumbai has reached a point

of saturation. Moreover, verticals such as education and government in these

upcountry loca­tions have started procuring equipments locally. Vendors have

gauged the potential of markets such as Nashik, Aurangabad, Kolhapur and even

Amravati and are now looking at moving beyond the markets of Nagpur and Pune. A

host of partners are being appointed in these areas and local support and

infrastructure is being set up to ensure smooth business.

Shedding light on this, Shreekanth Chopra, Proprietor, Pushpam Computers and

Software, Pune said, “Cities such as Nashik and Kolhapur have emerged as

promising cities as far as IT penetration is concerned. Their proximity to

Mumbai makes them the preferred destination for IT investments. Moreover,

vendors are now investing in these regions, getting together a local support

team and putting infrastructure in place in order to reap rewards from these

markets.”

Chopra further added that channel partners in these locations have started

receiving international exposure and segments such as retail, hospitality and

government are witnessing a lot of traction. While the government organizations

and police departments are looking at IT for their set of projects, a major

growth is also palpable in the end-consumer space.

“Around three years ago, the contribution of upcountry locations such as

Kolhapur and Nashik to our business was not more than 10 percent. However, this

figure now stands between 25 to 30 percent. This is a clear indication that

apart from Nagpur and Pune, other upcountry locations in Maharashtra are also

showing signs of growth and emerging as prominent destinations for IT-related

investments.”

Ambreesh Rele, Proprietor, Pune-based Aarem Computers added that

organizations are in need of cost-effective solutions and therefore, they are

moving to upcountry locations such as Aurangabad and Nashik. Nashik already has

one or two BPOs and they are attracting a lot of IT investments. “The primary

reason for the growth here is the net connectivity and computerization that is

becoming prevalent in these markets. Aurangabad has a lot of manufacturing and

auto and ancillary industries, which are clearly driving IT investments in these

regions,” Rele said.

Vinod Verma, CEO, Key Computers based in Nagpur said,“Several upcountry

locations in Maharashtra apart from Pune and Nagpur are developing markets and

are undoubtedly emerging as prominent IT destinations. Education and government

have been the major verticals that have driven the growth. Vendors have also

enhanced their focus on the tier-3 partners and have started realizing the

importance of expanding their presence in these cities. They are engaging more

with partners and a lot of business is now happening locally.”

Verma further shared that while the slowdown may be affecting Mumbai,

upcountry locations in Maharashtra such as Amravati and Chandravati are showing

positive signs of growth and development. “It is only the corporate segment that

is not indulging in buying, but other segments such as SOHO, retail, government

and education are driving growth here,” quipped Verma.

Rajiv Gite, CEO of Minitek Systems India, Nashik noted that the SMB segment

has been the vertical that has driven growth and penetration of IT in markets

such as Aurangabad and Nashik. “Prior to slowdown, SMB contributed around 30 to

40 percent of our overall revenue. The market may have slowed down but verticals

such as education and SOHO are still witnessing a lot of traction. The vendors

are extending their support and have realized that they need to gear up for

further IT investment.”

Echoing the same sentiments, Naresh Lalwani, CEO of Cybernet IT, Pune added,

“As far as the IT market is concerned lot of vendors have penetrated into Nashik,

Kolhapur and Auranagabad. The education segment contributes nearly 40 percent of

revenues to our business. While most of it comes from Pune, even the nearby

areas are witnessing exponential growth as far as hardware products such as PCs,

server and storage is concerned. A host of schools and colleges have been set up

in Pune and nearby areas and the demand for IT products is naturally on the

rise.”

On the other hand, Reeta Budhay, CEO, Business Algorithams, Nagpur shared

that as far as the SOHO and retail segments are concerned apart from Nagpur and

Pune, even the nearby upcountry locations are showing signs of development.