Looking forward

It's India shining for the structured cabling in­dustry. Buo­yed by
foreign investors, the coun­try is now one of the fastest growing regions for
most vendors, not only in Asia, but also across the world. As com­panies
aggressively push in different technologies and get ready to go beyond class A
cities, they are also adding more people, new facilities, bigger offices;
creating and ensuring that the business partner network is in place.

It's easy to see why the sun rises in the East now. At the macro level, the
Indian market has been growing at CAGR of 25-30 percent for the past two-three
years. And most companies, big and small, have reported growth of 20 percent
over the last one year. Take Belden CDT's case for instance-its structured
cabling business in India grew by a pheno­menal 53 percent last year-the
other geographies pale in significance. The YoY growth in Asia, in Europe, and
the US was just around eight percent.

What's fuelling demand and the subsequent growth in India's new economic
structure, which has chan­ged a great deal for the better the last decade has
particularly seen a steep rise in IT-driven enterprises such as data centers,
knowledge centers, BPOs, and disaster recovery centers among others.
High-bandwidth and high-speed demands are pushing the limits of data
transmission in LAN net­works. The demands of advanced applications such as
fast ethernet, and gigabit ethernet are pushing cabling solutions to reliably
transfer voice, video, and data infor­mation. As networking de­mands escalate,
new and forthcoming network appli­ca­tions have higher and higher data
transmission rates. And data centers and network operating centers, which are
mushrooming, require networking of SAN's and NAS's. The bull market feel, is
because India domi­nates the international mar­ket for outsourcing of ITeS and
IT-based BPO. India's share of this global market of $40 billion is more than
$28 billion and this is expec­ted to grow to $56 billion

by 2007. What ena­bles effec­tive and efficient enterprises is the IT infras­tructure
of which cabling is an impor­tant part.

The latest trend is the emergence of the cash rich middle class that is
driving the consumer and retail seg­ments. Apart from these, many educational
institu­tions and rural-urbanization projects are underway in both public and
private sectors. These emerging market segments demand high technology products
and solutions such as intelli­gent cabling systems, besi­des high-speed data
network systems. Even though the pace of growth is fast, the area of growth is
mostly centered around the top class cities. There is still a large portion of
India that has to catch up with this growth. As the infrastructure gears up to
meet this gro­wth, structured cabling will continue to be an important and
integral part of network systems.

Even as the major driving force is the IT/ITeS sector, struc­tured cabling
is being dep­loyed in all mar­ket segments-FIs and banking services,
government, and tele­com. “The interes­ting fact is that in the tier two and
tier three cities, even the SME's are sho­wing a greater accep­tance of
structured cabling for their LAN networks. And customer demands are no different
in India. If anything, they are more demanding than else­where! Higher
bandwidth and high-speed, future proofing, product quality, reduced lead times,
and competitive prices are re­quire­ments of enter­prises today,” said Bala
Chandran, MD, ADC Krone.

Though enterprise de­mands change based upon the segments they are in, the
current trends indi­cate high demand for high speed networ­king products in
both cop­per and optical fiber, espec­ially for data cen­tric environ­ments,
stru­ctured cabling pro­ducts such as factory preter­minated and tested cas­settes
that are as easy as plug and play, are gaining popularity because of their fast
and easy to install features. “The intel­ligent cabling systems that help
manage the physical layer of the network are also gaining momentum in the market
as they assist in easy detection of moves, adds, and changes (MACs), help
maintain auto­matic logs of network chan­ges, serve as reference point for
creating asset utilization reports and also provide security,” informed KK
Shetty, Country Manager, Tyco.

Tyco has been in the structured cabling market in India for the last 10 years
and its efforts in penetration the country have been highly successful, “We
have indeed crossed the threshold of class A cities and are quite comfortable in
class B and C cities as well. This is largely attributed to our three national
distributors, each of whom has offices and rese­ller networks in A, B, C, and D
class cities. This distri­bution model is further augmented by the presence of
at least two regional distributors in all the key cities,” said Shetty. There
is also a large network of thousands of resellers across India.

In addition, Tyco has a direct contracted relationship with almost 120 system
inte­gra­tors or Network Desi­gners & Installers (ND&I) that carry
out the actual installa­tions at customer sites. “The presence of over 1,200
Tyco certified engineers who have attended globally accredited training programs
has further served to enhance our market penetration efforts. We cur­rently
have three training centers in India (Bangalore, Mumbai, and Delhi) that run
this globally accredited training program. The fourth one is scheduled to become
operational shortly in Hyderabad,” Shetty added.

ADC Krone similarly, has a presence in markets bey­ond class A cities
through its national and regional distri­butors, and 300 plus certified
installers in India. It has a

15-year old manufacturing facility here and believes that with an established
outsour­cing model, it will be able to scale rather easily. “We do have a
design team, which partici­pates in collaborative global engineering and desig­ning
initiatives. This includes investments into Pro-E and 3D modeling and creating a
vast pool of external vendor partners who support on tool design and
proto-typing,” said  Chandran.

But unlike Krone, Tyco or Systimax (with 90 certified partners), Belden is
not in a position to expand that rapidly beyond class A cities because of the
lack of dedi­cated resources. Investm­ents are therefore on its way. It will
pour in money in commercial resources, in its sales and marketing pre­sence.
Either a better logistic infras­tructure or a manufacturing capacity in this
region and also some investments in engine­ering talent may follow soon.

Goutam Das

goutamd@cybermedia.co.in