March 01, 2013 l Volume 2 Issue 09
Cover Story Channel partners say that while their costs are spiraling, their AMC and FMS contract rates are falling. How can they regain their profits? How do they get customers to pay extra?
24 Cover Design : Deepjyoti Bhowmik
EMC adds more rebates and incentives 8 Ctrl S scouts for partners Kaspersky aims to double market share
Norton plans a strong comeback 10 HP strengthens retail presence
Amit Nath Country Manager, India & Saarc, Trend Micro, speaks about the companyâ€™s plans for its value business and volume products
18 Special Focus 11 things you need to know about PartnerOne overhaul HP recently unveiled its revamped PartnerOne channel program. We list the key features of the overhauled program
Delta plans for aggressive growth 14
READ More Opinion
Computer Reseller News
20 Second innings for ultrabook The concept was sound, and the market had high hopes for the ultrabook. Unfortunately, things didnâ€™t quite work out, but now Intel is again trying to make it a success
Tech Focus Ubuntu gets in the game With Ubuntu Linux for tablets, its developer Canonical is aiming to be a serious player in the exploding tablet and convertible market
starting line MUST
EMC adds more rebates and incentives
Ctrl S scouts for partners
n RAMDAS S
Data center services company Ctrl S is planning an aggressive channel-led growth strategy. The company, which crossed the `100 crore revenue mark in 2012, is now looking at scouting partners to target SMBs. “Currently we have 1,500 large and midsize customers and our revenues grew 108 percent in 2012. Our data center in Hyderabad is completely occupied, and the Mumbai center will be fully occupied within the next 12 months. We have opened our third data center in Delhi. The channels will play an important role in our next phase growth by driving both our co-location and managed services in the SMB segment,” said P Sridhar Reddy, CMD, Ctrl S. The company’s Hyderabad DC is 20,000 sq ft big, with a rack capacity of 972, while the Mumbai facility can house 5,000 racks with 2 lakh sq ft space. The new Delhi facility will house around 14,000 racks across 3.5 lakh sq ft. Ctrl S plans to sign up SMB-focused partners in the top eight cities and is investing significant Sridhar Reddy resources for its channel GTM. “We have recruited 25 people to drive channel expansion and engagement. We are also setting up a dedicated support for the channel which will go live in April 2013,” Reddy said. The company has already put in place a partner program called Star which promises several partner benefits. Said Reddy, “We have a good partner rebate and incentive structure, and we have a lead generation engine. Besides, we have allocated substantial budgets for joint marketing with some partners.” According to Reddy, Ctrl S is India’s only tier-4 certified data center services provider that offers penalty-backed SLAs. “We offer 99.995 percent uptime. Our facilities are ISO 20000-1, ISO 27001 and BS 25999 certified. All our services contracts are SLA-based with penalty clauses.” n — Sonal Desai
Computer Reseller News
MC India has revamped its Velocity Solution Provider program targeted at tier-2 channels and launched a number of channel initiatives focusing on partner profitability. The vendor has also widened its rebate schemes to include more product ranges such as DataDomain, Avamar, VFCache and Isilon, apart from the regular VNX and VNXe ranges. “The best news is that everyone earns dollar rebates from the first sale, and you make more money if you sell our products as part of a solution. A partner will straightaway earn 3 percent on the solution sale, and another 2 percent if the solution is for a product that is positioned for the SMB and mid-market,” explained Praveen Sahai, VP, Channels & Alliances, EMC India. The company has already revamped its partner portal to qualify the case for rebates based on deal registration. Another move from EMC has been to shift more services revenue to partners. “We have removed certain stringent guidelines that existed before. Now any partner can pursue specialization, and our goal is to shift as much of deployment, integration and post-sales services to partners,” he added. The biggest investments EMC has made have been on the MDF front, where, Sahai said, worldwide investments have doubled. “Most importantly we have shifted the ownership of lead generation to the partner, and we will back partners to make their own strategies and deliver results. We figured that while our own sales engine used to pass leads there was the additional leg-work of re-qualification by the partner who then had to make a fresh pitch to the customer.”
“Everyone earns dollar rebates from the first sale, and you make more money if you sell our products as part of a solution” Praveen Sahai
Vice President Channels & Alliances, EMC India
He informed that the contribution from tier-2 channels in India in 2012 touched 50 percent from just 20 percent three years back. “Around 10 tier-2 partners did business of $1 million and above, and around 16 other partners did more than half a million. Close to 30 partners annually contributed more than $200,000.” While distributors Ingram Micro and Redington are managing 100-odd Growth Partners, the EMC channel sales team will work with 27 Premier partners from tier-2 channels and provide them direct sales support. “We used to have around 40 partners but have now consolidated the number to just 27,” Sahai said. “Protecting the profitability of existing partners is of paramount importance, and we believe we have decent coverage with the current mix.” With the big data market finally waking up, EMC also has the Isilon Preferred Partner program within the Velocity Channel program. “We recently concluded the first focused partner event in Jaipur for partners keen to do business in big data and the HPC cloud. Now any of our Velocity Partners can specialize in selling big data solutions.” n
starting line MUST
Kaspersky aims to double market share
Norton plans a strong comeback
n ABHIJEET MUKHERJEE
Norton is trying to regain its lost glory in the consumer market. Apart from launching an India specific SKU called the System Builder pack, the company has embarked on a channel expansion drive in upcountry locations. “The System Builder pack contains a single media with five different license keys. PC assemblers face problems with 3 or 5 user packs having single license keys. This is because once the software is activated on the first user PC, the validity of the other licenses gets compromised. With the new SKU, resellers can sell all the user licenses separately,” said Ritesh Chopra, Country Sales Manager, Consumer Products & Solutions, Symantec. The System Builder pack is available at an MRP of `3,499 for one-year license and Chopra is confident that the new SKU will create strong channel demand. “We see a huge opportunity for this SKU among system builders in the smaller cities. We are currently on a drive to recruit system builders in these cities,” added Ritesh Chopra Chopra. The company expects to enroll close to 2,500 system builders who will undergo product training, both online and instructor-led. Of this, it plans to enroll close to 500 system builders for its Norton Champ partner program. Norton will soon embark on a multi-city roadshow to achieve its geo expansion. “In order to enroll partners and create awareness for the new SKU, we will conduct road shows in 80 cities during the entire year, covering 20 cities each quarter,” said Chopra. Last quarter, Norton introduced toll-free support in Hindi. “Based on the feedback from partners we have launched tele-support in Hindi and plan to add more regional languages. This will remove the language barrier and help partners and customers in smaller cities to get the right support,” opined Chopra. n — Abhijeet Mukherjee
Computer Reseller News
aspersky Lab is increasing its focus on SMBs with its new product line and channel initiatives, and is aiming for `100 crore from its endpoint security business in 2013. The company recently launched the Kaspersky Endpoint Security for Business (KESB) that combines its anti malware technology with new mobile and system management tools. “We are known as an antivirus vendor. The new product includes functionality such as data encryption, mobile device management, system and application deployment, vulnerability scanning and automated patch management, all of which can be controlled from a single management console,” explained Maxim Mitrokhin, Director, Operations, APAC, Kaspersky Lab. KESB comes in four flavors: Core, Select, Advanced and Total Security. While Core provides only malware protection, Select provides application, device and Web security in addition to malware protection. Advanced has added features including 256bit data encryption and systems management, while Total Security has mail, anti spamming and collaboration security features. Core has a base list price of $20.50 per license for a 100-user license per year, Select is priced at $30.50 and Advanced comes for $55.50. The price of Total Security is yet to be announced. KESB’s differentiating factor is that it is created from a single code base. “Since our product is based on one platform and one console, IT administrators can see, control and protect all systems and endpoints within the organization’s IT infrastructure,” Mitrokhin stated. With the launch of KESB,
“We have 800 partners; these include Silver, Gold, Platinum and Master Platinum partners. We want to double our partner base this year” Maxim Mitrokhin
Director Operations, APAC, Kaspersky
Kaspersky is aiming to increase its market share in the `1,000 crore Indian endpoint market from the current 5 percent to 10 percent in the next 12 months. The increased SMB focus will help the company to double its growth rate from 20 percent to 40 percent in 2013. Instead of focusing on tier-1 cities, the company will tap SMBs in smaller cities. It has drawn up a strategy with its four regional distributors— TechMatrix (west), iValue InfoSolutions (north), Sea Infonet (east) and E-Caps Computers (south). “We have 800 partners including Silver, Gold, Platinum and Master Platinum partners. We want to double our partner base this year. We have also improved our Green Team partner program,” informed Mitrokhin. In order to increase its support footprint, the company has launched a new program— Kaspersky Engineers Club, to provide intensive training to the engineers of its existing partners. Said Mitrokhin, “In the first phase we will train more than 500 engineers of our top 100 partners. Later we will expand it to all partners.” To talk about its new products and channel initiatives, the company will soon embark on a 15-city roadshow. n
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edit opinion Making your services business profitable dhaval valia
ur annual survey of IT services threw up some shocking statistics. Of the 125 people who took the survey, most admitted that although their operational costs for providing IT support and management services (AMC and FMS) have gone up by an average of 70 percent in the last two years, their AMC contract rates have either remained flat or dipped. Only 14 percent of the respondents said that they had increased their services rate-card in sync with the increase in operational costs, while one-third said that their contract rates had fallen compared to what they were earning 12-18 months earlier. These figures are scary. Traditionally, for most resellers, the contribution of services to the topline is an average 30 percent, but its contribution to the bottomline is 60-70 percent. Services are also core to a partner’s business because it is the only offering that a reseller can call his own since the products he sells are of other brands. More importantly, services help a partner to create stickiness with customers. What is the reason for the eroding margins? Resellers largely blame it on external factors. Nearly 78 percent of the resellers taking the survey said that customers are not willing to pay more for their services. 75 percent said that the lack of quality manpower was the second biggest reason. The high cost of training was the third most voted reason. I differ with all the three main reasons provided, but, for reasons of space, let me examine only the first reason here. Customers pay well if the services provided are SLAdriven and not just plain-vanilla hardware maintenance. The unfortunate thing is that most resellers sell hardware maintenance services and not IT support and management. As a result, AMC rates get locked with the price of the asset they manage. Besides, there is a considerable difference between offering AMC/FMS and providing IT support and management. In the first case, a reseller is treated like an outsider (and in many cases, even as a bonded laborer), while in the second case, the reseller is treated like a partner or stakeholder. Understandably, the survey also revealed that resellers are anxious to rectify the situation to become profitable. Charging customers for services which are currently offered for free is the first step to start this process. Saying no to low-margin deals, deploying tools to remotely monitor and automate basic systems management processes, investing in the right training and people, and eventually moving to offer mission-critical services are other steps in the way forward. This edition’s cover story covers all these aspects and offers practical tips on how to make the services business profitable once again. n E-mail CRN Executive Editor Dhaval Valia at firstname.lastname@example.org 12
Computer Reseller News
Volume 2, Issue 09
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starting line HP strengthens retail presence n AMIT SINGH
ollowing the integration of its PC and printing businesses, HP is now focusing on strengthening its retail presence. Said Raj Kumar Rishi, Consumer Business Head, Printing & Personal Systems, HP, “We will leverage the combined channel strength of the PC and printer business to drive geo-expansion. Also, having a single team has increased our on-street presence.” Nearly 150 of HP’s 300 authorized sub-distributors are currently distributing both PCs and printers. “Almost 25 of them were earlier distributors for either portfolio, but are now selling the entire range. Further, all HP Worlds are now offering printers and supplies apart from PCs,” said Rishi. HP has embarked on a rebranding
“Our retail strategy is to have more exclusive stores in the top 100 cities while in other cities we will target multi-brand outlets” RK Rishi
Consumer Business Head, Printing & Personal Systems, HP India
exercise of HP Worlds and several multi-brand outlets (MBOs). HP has already rebranded all its 300 HP Worlds to create a visible pull for printers and supplies. In addition, it has done in-store branding at 350 MBOs for its combined portfolio. “In
the current quarter we will do similar branding exercises with 700 MBOs. Apart from branding we have trained sales executives of all the exclusive and multi-brand stores,” said Rishi. At 50 HP Worlds, the company has created demo zones for hybrid PCs, and Wi-Fi zones to display its hotspot printers. Further, HP plans to create shops-in-shops for its PCs and printers at 250 large MBOs. Explained Rishi, “We want to improve the customers’ retail experience and want them to see the performance and features of HP products before they buy them.” According to Rishi, the combined portfolio is already providing significant topline and bottomline growth to partners. “The partner who was earlier selling only PCs is now selling not just printers but also consumables which is a high-volume and high-margin business.” n
Delta plans for aggressive growth n AMIT SINGH
he Mission Critical Infrastructure Solutions (MCIS) division of Delta Power Solutions is aiming to double its revenue in FY2013-14 with its focus on SMBs as well as its portfolio of energy-efficient UPSs, modular solutions and monitoring services. The MCIS division grew 50 percent in 2012 over the last year. “Currently, 60 percent of our business comes from SMBs and the rest from enterprises. Last year we had more than 600 installations through our 38 Enterprise Business Partners. We are increasing our focus on SMBs and seeking opportunities in verticals such as BFSI, specifically cooperative and rural banks,” said Suhas Joshi, Director, Delta. Delta has a range of products with power efficiency of up to 96 percent. Moreover, with its modular UPS solutions, customers can start with low investment and later upgrade to higher capacity. The modular
Computer Reseller News
“We have a direct service presence in metros and most tier-2 cities. In 2013, we will work to have a direct presence in tier-3 cities as well” Suhas Joshi
Director Delta Power Solutions
portfolio consists of NH+ and BPH series. While the NH+ series covers the 20-480 kVA range and is focused on SMBs, the BPH series, targeted at the data center and server room environments, ranges from 25-1,600 kVA. Additionally, Delta has recently introduced its Ultron EH Series, targeted at SOHOs and small businesses, with power ratings of up to 20kVA.
“Most UPSs are normally designed with a 1-phase input, but our Ultron EH Series has a 3-phase input, 1-phase output; this not only matches the load requirement of small businesses but also simplifies power distribution from the UPS,” explained Joshi. The company will launch its 24/7 remote monitoring services in March 2013 through its NOC in Gurgaon. “In most cases downtime is caused by external factors such as temperature, humidity and fire, which are not related to the UPS,” said Joshi. “We will offer services like status reports on power loads, humidity and temperature to proactively avoid such circumstances.” Delta is also planning to increase its support network beyond tier-1 and -2 cities. “Right now we have a direct service presence in metros and tier-2 cities, while tier-3 locations are catered to by partners. In 2013, we plan to have a direct presence in tier3 cities as well,” he said. n
Result of GfK conducted “Channel Satisfaction Survey” for Rashi
Partner perception towards Rashi Rashi is a Channel Friendly company
I feel like a part of Rashi family / brand
Rashi has good relationship with its vendors
Doing business with Rashi is profitable
Rashi is strong on Business Ethics
Rashi fulfiles its commitments
Stock is always available at Rashi
GFK Survey base = 1003 partners in 64 cities Rashi is a strong on all brand cues. Being Friendly and Family like come out to be the strongest feeling towards the brands.
• Rashi emerged as a strong relationship oriented organization with high scores on channel friendliness and partner involvement. • More than two thirds of partners would recommend Rashi to other partners. • Over 50% of partners opined Rashi as “Very Good” in Overall perception & 36% have opined as “Good”
edit opinion Time to make it right Kelley Damore
t is sad to say, but the oldest, largest and longest-standing channel partners in the industry— Microsoft and HP—are becoming less and less relevant to solution providers. And unless they change course, both companies are going to do serious damage to a program, a culture and a heritage they spent decades
building and cultivating. Let’s start with Microsoft. Of all the decisions in 2012, this was the one that has perplexed me the most: Microsoft’s surprise decision to circumvent the channel from reselling Surface tablets. The company is imitating Apple and as a result, too focused on the consumer market when what it should be doing is focusing on the enterprise market. That would play to its strength and heritage and give it chance to enter a market where Apple is weak. Instead, Surface today is a wanna-be iPad. Solution providers building out data centers and working with the enterprise make no money on Microsoft’s software offering. But they could on Surface if Microsoft created a program to resell the devices to companies where partners could provide mobile integration services. By upsetting the channel and focusing its efforts and dollars on consumers, Microsoft stands to lose in the place where it is the strongest. In fact, it is already losing. Hundreds of millions, if not billions, are being spent on broad-based marketing and, despite this effort, analysts report anemic Surface sales. Now let’s move on to HP. Righting the ship has proven harder and will take longer than HP executives anticipated. While the company is looking inside at operational issues within each product line and declining sales of HP’s core products, it has dropped the ball on engaging the channel. Channel conflict in the field is growing and business units are driving individual partner programs, according to solution providers. Many feel there is no advocate for them within HP. Partners say that market development funds and incentivebased funding dropped significantly in 2012. The worry is as HP looks to fix the problems internally, the market will have passed it by. Some solution providers are vocal about their displeasure, but others are just quietly investing in Cisco, Oracle, VMware and EMC. The sad part is most solution providers are rooting for HP. They wanted HP to turn this around. But the reality is they need to be profitable to survive themselves and if they don’t see programs and incentives to sell HP product, they will be forced to look elsewhere. Microsoft and HP say the channel is important, but 2013 is the year they prove it to solution providers or become the latest in a list of companies whose time has come and gone. n E-mail Kelley Damore at email@example.com 16
Computer Reseller News
Three tales about e-tailing The feature in your latest issue on e-tailing was interesting. It was heartening to read that instead of competing with online retail, the three partners are joining the bandwagon. It will be interesting to see how their online venture fares in the long run, but kudos to them for treading into uncharted territories. Padmanabhan K via email
ASIRT launches imumbaiitstreet.com The recent initiative by ASIRT to launch a search portal for customers looking to buy IT products and services is appreciable. However, it would help if ASIRT can include a customer rating mechanism for listed partners, as that would help customers choose the
best reseller. Amit Shah via email
iSpirt needs channel support to succeed I appreciate the formation of iSpirt. Since, Nasscom was not taking due interest in IT channel welfare and redressal of issues, especially double taxation, it is a timely decision to part ways. In fact, now we can expect timely and active representation. Policy makers and even customers have no clear understanding of how software should be taxed. The issue has been around for three years, and a majority of software resellers are doing business on negative cash flow because of TDS. Hope you guys succeed in getting your voice heard. Sridhar Naik via email
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channel chief “2013 is the year of the channel” Amit Nath, Country Manager, India & Saarc, Trend Micro, spoke with Abhijeet Mukherjee about the company’s plans for its value business and volume products What have been the performance highlights for Trend Micro in 2012? We posted growth of about 25 percent. Most of this growth came from two segments: government and consumers. We did fantastic in our government business with large-scale projects. The revenue from the government segment, which contributed 11 percent in 2011, grew to 33 percent in 2012. Our investments on the consumer front also paid off as our consumer business grew about 35 percent. The contribution from enterprises and SMBs was 60 percent and 40 percent respectively. In the enterprise space, BFSI and IT-ITeS continue to be major segments for us, contributing 30 percent and 20 percent respectively; 17 percent came from hospitality. In BFSI we won a couple of large data center security projects. Virtualization security, advanced persistent threat (APT), and data center security solutions were the primary drivers for growth, and will continue to be so in 2013.
What kind of government projects did you execute? The government is realizing the need for security and has allocated substantial budgets to enhance security in the next 2-3 years. With our focused approach, dedicated products such as Deep Security for data centers, and our partnership with VMware for virtualization security, we bagged many large government deals in 2012. We won a large project worth `4 crore for securing one lakh endpoints for the electricity board of a state government. We also won three government data center security projects each in the range of `50 lakh-60 lakh. In addition, we are part of the Crime and Criminal Tracking Network and Systems (CCTNS) project that is being implemented across India. In our estimate, the government opportunity related to security will be close to $2 billion in 2013. The government business is expected to contribute half of our India revenue this year.
What are your plans for products in the current fiscal? We launched Deep Security in early 2012 for
“The government opportunity related to security will be close to $2 billion in 2013. Government business is expected to contribute half of our revenue this year” 18
Computer Reseller News
server security; this received good response from the enterprise segment, and contributed around 15 percent of our revenue last year. Recently we launched our integrated DLP product called I-DLP. With virtualization, security at the endpoint is getting revolutionized. With thin clients, integrating DLP at the endpoint level has become crucial. With I-DLP, customers no longer need to deploy a separate security infrastructure. I-DLP has helped us win deals with many BFSI customers because traditional DLPs are expensive. At present we are running PoCs with several large enterprises. The other new product we are excited about is Deep Discovery, which is aimed at managing APTs. The product works on the Detect, Analyze, Adapt and Respond model. Deep Discovery provides sand boxing or virtual analysis. We plan to launch it officially by early March 2013.
What are your plans for the volume segment? We plan to double our volume business this year. In 2012 the volume business did well enough to garner 5 percent market share; our aim this year is to increase it to 10 percent. We are also watching the consumer acceptance of our Android-based mobile and tablet security which
channel chief is currently available for free download on the Google Play Store. We expect traction for this category to grow exponentially within the next 6-12 months.
What is your overall growth strategy for 2013? We have a clear 3-point growth agenda. The first is to leverage our wins in the government to garner more market share; we have set the goal of achieving the No 1 spot in the government segment by 2015. The second is to dig deeper into our enterprise accounts, to sell new products like Deep Discovery and I-DLP to large customers. The third is to increase the market penetration of our volume products both with SMBs and consumers.
What are the channel initiatives planned for this year? We have termed 2013 as the Year of the Channel. We want to reinvigorate our channel business, and will announce a new partner program and a new partner portal by the end of February. Under the new program, the Affinity, Affinity Plus and Affinity One partner levels will be replaced by Silver, Gold and Platinum respectively. However, the basic level of partnership will remain Registered partners. To enable more partners to join the revamped Affinity Partner Program we are lowering the entry barriers. Earlier, for the Affinity level, partners had to commit to a Trend Micro business of $250,000 per annum which has now been reduced to $150,000 for Silver partners. Affinity Plus partners had to meet an annual commitment of $300,000 which has been reduced to $200,000 for Gold partners. The minimum commitment for Affinity One partners of $500,000 per annum has been reduced to $350,000 for Platinum partners. Out of our active partner base of 225 we currently have 46 Affinity partners, 22 Affinity Plus and seven Affinity One partners. These will automatically transition to the new partner tiers. In this year, we want to increase the number of Silver partners to 88, Gold to 40 and Platinum to 12.
How will the new program increase partner profitability? We have introduced sales incentives and deal protection as new initiatives to increase partner profitability. We have linked the sales incentive to the type of solution partners are selling. Partners selling emerging solutions or onboarding new customers will get more incentives; this may range from 4-5 percent of the deal value on a quarterly basis. To bring more clarity to channel deals we have introduced a deal-locking mechanism which will offer preferential pricing and higher incentives to partners. Besides, we are enhancing our rebate structure. Depending on the annual business review, for Platinum partners rebates will range from 7-10 percent of the total Trend Micro business they have done in a year. For Gold partners it may range from 5-8 percent and for Silver partners 3.5-4 percent.
“We plan to double our volume business. In 2012 the volume business garnered 5 percent market share; our aim this year is to increase it to 10 percent” What are the initiatives planned to develop channel partners? We are getting aggressive in training and will recognize partners on the basis of their specializations apart from their tiers. We have identified sub-sets in partner tiers in the form of specializations such as virtualization security partners and SI partners. To enable partners on the ground we will deploy our enterprise resources to focus on the channel. We already have five channel managers and will deploy two more this year. In addition, we will hire a channel marketing agency to provide leads, develop channel partners, and help them in marketing and co-branding activities. n
FORM IV STATEMENT ABOUT OWNERSHIP AND OTHER PARTICULARS ABOUT NEWSPAPER / MAGAZINE COMPUTER RESELLER NEWS TO BE PUBLISHED IN THE FIRST ISSUE EVERY YEAR AFTER THE LAST DAY OF FEBRUARY 1. NAME OF THE PUBLICATION
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KAILASH PANDURANG SHIRODKAR INDIAN YES
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KAILASH PANDURANG SHIRODKAR INDIAN YES
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HP unveiled its revamped PartnerOne channel program at the recently concluded Global Partner Conference. We list the key features of the overhauled program n Steven Burke
ewlett-Packard is aiming to put a year of channel trials and tribulations behind it with a massive overhaul of its PartnerOne channel program unveiled at the company’s recently concluded Global Partner Conference. The details of the new PartnerOne were announced soon after the keynote by Meg Whitman, CEO, where she pledged that partners will make more money selling HP than competitive offerings as the computer giant doubles down on simplicity and profitability for partners. “Our objective is for us to be the most profitable partner that you do business with. We are going to reduce the number of programs, and we will put more focus on making our compensation structure predictable. It is pretty simple. The more you sell, the more you’ll earn. That is how we want to run our compensation programs,” said Whitman.
Increase in back-end rebates HP knows that back-end rebates are critical to partner profitability. The new PartnerOne is heavily weighted on the back-end rebate with a program that allows partners to earn those back-end rebates from the first
HP is backing up its new PartnerOne program with new rules of engagement aimed at preventing its direct salespeople from poaching accounts from partners 20
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sales dollar. That’s a blockbuster change since 40 percent to 50 percent of partners did not qualify for those back-end rebates last year because they failed to meet their HP sales quotas. HP says the average partner will earn 5-10 percent more in total back-end rebates. The company paid out $2.5 billion in back-end rebates to roughly 160,000 partners in the last fiscal year and plans to exceed that dollar amount this year.
Earn more by learning more The program will now reward partners that invest in higher specialist HP certifications with increased rebates. Stacking HP certifications like advanced networking specialist and converged infrastructure specialist means big bucks for partners. HP, in fact, is promising partners that if they increase their HP certifications and sell more product lines, they will earn more than they would, selling the siloed offerings from competitors.
No cap on how much partners can earn The new PartnerOne eliminates a cap on how much
The company is reducing the number of certifications required for partners to achieve specialty designations by 60 percent by fiscal year 2014
special focus partners can earn in back-end rebates, opening the door to virtually unlimited income for partners. Under the old program, depending upon the region, partner’s back-end rebates were capped once they hit 300 to 500 percent sales-growth targets. Partners say those targets were tough to hit. Nevertheless, the new program eliminates them, rewarding partners even when they post astronomical sales gains.
New rules of engagement HP is backing up its new PartnerOne program with new rules of engagement aimed at preventing HP direct salespeople from poaching accounts from partners. Under the revised rules, HP says it “will not move a customer from an indirect sales model to a direct model on specific registered opportunities without express engagement with the channel partner, and it must be based on customer choice only.” Whitman, for her part, says HP salespeople who ignore the rules will find themselves out of a job. “If you are scooping a partner deal that you have no business having your fingers in at all, then we will take care of that. It’s not appropriate.”
Additional MDF flexibility HP is extending the amount of time partners have to use all important market development funds (MDF) from three months to six months. That gives partners more time to work hand in hand with the HP Partner Business Managers (PBMs) plan and roll out events and seminars aimed at winning new business. No small matter given partner complaints that HP MDF funding was on the decline last year.
NBO rewards paid upfront HP’s New Business Opportunity (NBO) program aimed at providing a higher margin for new HP customers is moving from a back-end rebate to a front-end incentive offering. HP says the NBO incentive will be paid up front with the option for the partner that registers the deal to provide a discount to the customer, provide a higher commission for the sales rep or drop directly to the partner’s bottom line. Those NBOs primarily come in areas like software, networking and storage, where HP’s customer share is not as great as in the server and printer markets. HP says NBOs accounted for about $200 million in incentives in the past. That’s money that partners will now get on the front end, eliminating costly paperwork associated with getting the funds.
Reducing certification requirements HP is reducing the number of certifications required for partners to achieve specialty designations by 60 percent by fiscal year 2014. The changes in the HP ExpertOne program are part of HP’s drive to make it simpler to do business with the company. Partners say that could give HP an edge
The new PartnerOne eliminates a cap on how much partners can earn in back-end rebates, opening the door to virtually unlimited income for partners in getting more partners to commit to HP given the more stringent certification requirements from some HP competitors.
PPS services specialization Given the huge managed services opportunity, HP sees the new PPS specialization being formally included in PartnerOne as a big step to get any and all HP partners to sell managed print services. HP, in fact, is aggressively recruiting partners to sell more HP services. The PPS addition, previously a separate offering, is all about making it simple to add those services to the partner line card.
Verified online supplies reseller program It’s no secret just how critical the printer supplies business is to HP profitability. In a bid to eliminate printer supply counterfeiting and gray-market activity, HP is introducing the HP Verified Online Supplies Reseller Program. The new program provides authorized HP partners with an online insignia verifying to consumers that they sell original HP supplies.
Adding Vertica to PartnerOne HP’s Vertica Analytics Platform is now part of PartnerOne. HP is recruiting not only current software partners for the big data product but also longtime infrastructure partners. Those infrastructure partners will now be able to sell the analytics platform with pre-integrated solutions on HP Servers. Given HP’s sizable server market share and the increasing demand for big data solutions, HP Vertica Analytics is a guaranteed big opportunity for partners. HP estimates the capital investment in certifications and training to sell Vertica Analytics at about $150,000. HP also hinted that Autonomy will be added to the program. But, don’t hold your breath. The Autonomy partner initiative is being piloted with specialties related to the software suite being phased in throughout the year.
Single unified channel platform HP is investing $100 million in what it is calling a new Unison Platform billed as a single unified channel platform. The new offering, which includes a Salesforce.com module, is bringing 15 separate partner tools from quoting and configuration to lead management and passing into a single unified platform. HP is launching Unison this year, but it will take 18 months until the full comprehensive single platform is completed. n
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Channel partners say that while their costs are spiraling, their AMC and FMS contract rates are falling. How can they regain their profits? How do they get customers to pay extra? n RAMDAS S
ccording to the recent CRN AMC/FMS Survey 2013, the once-lucrative domestic IT support services comprising annual maintenance contracts (AMCs), annual service contracts (ASCs) and facilities management services (FMS) are not sustainable for nearly 60 percent. 125 channel partners from across the country participated in the survey. Around 46 percent say that the average costs including manpower, travel, training and certification have grown by 50-100 percent over the past 3 years, 20 percent say that these costs have grown by over 100 percent, and around 7 percent report cost hikes in excess of 150 percent. “A major increase has been in the engineers’ salaries
which have hiked by more than 100 percent in the past 3 years. The rise in fuel costs is reflecting in transportation costs. The costs of administration, training and support have also risen by about 50 percent,” says Shrikant Gurjar, CEO, Micromate Peripherals & Computers, Pune. Just 14 percent partners reported that they managed to get a proportional increase in their services billing for the IT support rendered. Around 31 percent say that they managed to charge customers extra YoY, but admit that the marginal hikes in billing are not commensurate with the cost increases. While 20 percent say rates are stagnant, almost 35 percent complain that they have been forced to accept contracts at lower rates despite the cost increases.
Dos and Don’ts of the Support Business l
Try to provide the maximum support remotely, and limit engineer visits to the customer’s place to save costs. Employ automated tools for management. Outsource critical deliverables either to the OEM or to a RIMS provider if you cannot deliver a particular service. Partner with solutions specialists for critical services such as backup, DR, cloud, database, mobility and security that yield more revenue. l Use community support for learning and collaboration, and encourage this culture within the organization.
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l Stick l
to only a vanilla AMC offering. It will never give you profits, and customers will stray away. Play the price game. It is the easiest game to play and lose money, and in the long term, the customer. Stick to all customers. Learn to fire some customers. Not all customers are assets. Hire the cheapest engineers. You pay peanuts, you get monkeys. Make your engineers work round-the-clock. Allocate at least 15 percent of their time for skill upgradation.
cover story The picture is dismal because just about every other outsourced industry segment from security to travel to housekeeping serving Indian enterprises has managed to increase its average service billing citing the very reasons the IT industry is complaining about. Research firm Computer Economics (CE) says that the average hourly billing for endpoint support has been growing in Europe and the US over the past three years at a CAGR of around 10 percent despite recessionary trends in those economies. According to CE, monthly outsourced desktop support billing rates there range from $29 (`1,595) to $51 (`2,805), which amounts to `19,140 and `33,460 annually. By comparison, 45 percent of Indian service providers support a desktop at less than `1,500 annually, with just 6 percent saying that they are able to bill `2,500 and above per desktop per annum.
Have you increased your AMC rate in the past 3 years?
Yes, in sync with cost rise
What is the AMC rate per endpoint billed by you? Above `2,500
For reasons of legacy The biggest reason why Indian IT support service providers earn less is the legacy of calculating the maintenance and support costs of assets based on the value of the assets. Since the average selling price of the PC has fallen by over 50 percent in the past decade, most customers are unwilling to change the practice because it works in their favor to pay less for support. “The main issue is that we have never been able to clearly demonstrate the difference between IT support and hardware maintenance to the customer,” says Ashok L, CEO, 247 Computer Services, Chennai. “85 percent of IT support calls are not related to hardware, but are software- or network-related, or are just users bungling up. Unfortunately, our industry tries to bill in percentage of only hardware asset costs. What about the costs of the software, maintenance, integration and customization?” Rajesh Savla, AGM, Services, Orient Technologies, Mumbai, points out anomalies in the case of FMS too. “Most companies try to bill per employee for FMS, which may sound logical. However, the correct method of billing needs to take into account the number of assets the employee manages.” Competition from large national service providers such as Intarvo, Digicare, Wipro and Redington IT Services is also said to be a reason for the decline in profits, especially in the case of larger orders and multi-city support requirements. “Besides, there are several smaller and unorganized partners who have mushroomed, and who are undercutting,” laments Gurjar.
`2,000 to 2,500
Less than `1,500
`1,500 to 2,000
What are the reasons for decrease in AMC rates despite cost increase? Decrease in the prices of endpoints
Unable to convince customer
Lesser hardware failures
IT budgets slashed
39% Lack of SLAs
What steps you will take to increase profits of AMC/FMS business? Offer mission-critical services
61% Bill for services that are offered free
58% Employ automated tools
53% Avoid low margin deals
What is the increase in operational costs of AMC/FMS over the past 3 years? What are the biggest challenges faced by your AMC/FMS business? 7%
More than 150%
Customers unwilling to pay more
Lack of quality manpower
75% High training costs
50% High cost of automation tools
31% Base: 125 channel partners
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cover story “Engineers’ salaries have risen by more than 100 percent over the past 3 years. Administration, training and support costs have also gone up by about 50 percent” S Gurjar
CEO, Micromate Peripherals & Computers
Another reason which partners give is the 3-year warranty upgrades at low cost offered by some vendors; this essentially means that for three years customers do not have to pay extra for support. Partners point out that with technology obsolescence occurring faster than ever, customers may consider a technology refresh instead of extended support after the warranty period— which further reduces the overall opportunities for support
“We have not been able to clearly show the difference in IT support and hardware maintenance. Even today, 85 percent of IT support calls are not hardware related” Ashok L
CEO, 247 Computer Services
services. “Customers also realize that hardware failures are less, and hence are reluctant to pay extra for services,” says Vipul Datta, Director, FutureSoft Solutions.
Too many freebies Another reason why support revenue is slipping is the amount of services that are bundled free along with a sale. Realizing this the Association of Systems Integrators and
5 tips to improve profitability of services business Mumbai-based TechGyan, a cloud specialist and Microsoft MVP partner, focuses on customers with less than 100 nodes. Suresh Ramani, CEO, tells us about TechGyan’s best practices in post sales services consuming. Informs Ramani, “To expedite matters Brand your services: TechGyan has branded its we use online technology forums in a major way. services and graded them by Gold and Silver We are part of the Microsoft forum where we levels. “While hiring for services the customer immediately post a problem we can’t spot or fix. should have the confidence that you will deliver. Within four hours guaranteed we get a solution Branding is key to creating this confidence. from a tech expert or a community member.” Grading services by SLAs helps to create strong TechGyan has also subscribed to Experts Exchange. differentiation,” says Ramani. “It is the world’s largest technology forum where TechGyan’s Gold managed services plan is you get troubleshooting responses in less than for customers who don’t have a strong internal an hour for any complex problem,” Ramani says. IT team and rely entirely on TechGyan for “The forum is pan-technology, so you can post infrastructure management. The Silver plan is questions about any technology or product. The for customers who have an IT team but require suresh Ramani fee is negligible.” additional support. Use tools for remote management and Charge per hour, not per person per month: automation: TechGyan uses open source and vendor tools TechGyan provides an hourly plan even for annual FMS to provide automated managed services. “You don’t have to contracts. “We guarantee only 150 hours per person per buy expensive tools for remote and automated management,” month. If the FMS customer uses more than 150 hours in asserts Ramani. “One free open source managed services tool a particular month he has to pay pro rata. We don’t carry we use extensively is Spiceworks. We use Microsoft Intune forward or adjust hours,” informs Ramani. which is available on the cloud. We have also developed skills TechGyan clearly tells customers that out of the 175 around Microsoft System Center, and our engineers use it onhours per month 25 hours will be allocated to enhancing premise to automate endpoint management.” TechGyan uses the engineer’s skill-set. “We are following this practice from MS Lync for remote troubleshooting with its onsite engineers 2006. Initially customers complained about the hour-cap; and the customer’s IT team. however, we told them that that’s how services are provided around the globe. Now they have all understood. Most of them Collaborate: TechGyan has partnerships with like-minded also appreciate the time we allocate for skills upgradation. partners for the sharing of services capabilities. Says Ramani, Customers stop treating our engineers as slaves because the “A group of 4-5 partners works together. When one of my FMS traditional person-per-month contract is like bonded labor” engineers is sick or absent, I immediately call one of these Ramani says. Internally too, TechGyan measures its services partners for a replacement. We have a pre-agreed hourly rate revenue by the hour. for such collaboration. We also collaborate on sharing skillsets. In case I don’t have a skill-set to address a software issue Use tech forums: Nearly 80 percent of the issues with services of my customer I take help from other partners.” n are software-related, and solving these problems is often time-
We provide an hourly plan for annual FMS contracts. We guarantee only 150 hours per person per month. If the FMS customer uses more than 150 hours in a particular month, he has to pay pro rata
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cover story Retailers (ASIRT) has introduced a rate-card for services that are tied to SLAs under the ASIRT Gold Member partner program. “AMC rates are falling due to reckless competition. By introducing a rate-card we ensure that partners providing support have enough margins,” explains Chetan Shah, Chairman, ASIRT. While not everyone in the industry thinks that a rate-card will help, they agree that the free services are bringing down the value of the services industry. “Ideally, like any other industry, the IT industry too should charge for delivery and installation,” says Rajeev Mehta, CEO, Zest Systems, Delhi. Some say that lack of customer awareness is the cause of this, and that the industry needs to start educating customers. “We cannot remain profitable as an industry unless we educate customers that the margins in sales do not cover the extra services that we throw in which have costs attached,” argues Vivek Ashturkar, Director, Prominent Systems, Pune. For long, comprehensive AMCs have been the main revenue earner for service providers. However, with the cost equations changing and competition increasing, the business is no more lucrative. Comments Nanda Kumar, VP, Kaseya India, “The AMC business is like the life insurance business—only operators who offer the lowest premium and can sign many customers thrive in the insurance business. Similarly, a service provider who signs on many assets for coverage at the lowest price keeps getting more business. AMCs should be only about delivering value and not about calculated risk management.” A suggestion which many in the industry feel would work is to de-couple the hardware and software side of support, and quote separately for AMC, ASC (which does not cover the cost of hardware spares) and FMS under different SLAs with penalty conditions. “A comprehensive SLA which can clearly present the value a service provider’s service levels can bring will help partners gain more business,” believes Shafi Ahmed, CEO, Technodreams Consulting, Bengaluru. Some have met with success. “Few customers realize that the warranty support offered by PC vendors does not cover many areas. When customers realize this or when we educate them, they come back for paid support,” says Kshitij Kotak, CEO, Fortune Greycells, Mumbai.
MSP tools 52 percent of the partners surveyed felt that profitability can be achieved by investing in MSP and automated tools which reduce the need for engineers to visit customer sites to fix problems. Since these tools can identify the more than 80 percent of cases which are software-related, the theory is that by using these tools one can cut down the number of onsite calls which in turn increases margins. However, not all partners have succeeded with automation. Several say that the transition has not been smooth, and many have given up on automation. “We agree that there are partners who have succeeded with automated tools and there are partners who have failed. It’s
Read this before you pitch Kamal Sharma, CIO & Director, Mindlance, provides a few tips on what needs to be considered before pitching for a comprehensive AMC contract Inventory audit: The first step should be to do a complete audit of the hardware, network and software inventory that needs to be supported, and then draw out a comprehensive detailing of the same while preparing the SLA. Risk-point analysis: Once an audit is complete it’s important to identify the possible issues that would be difficult to support under SLA conditions. These could be gateway devices or some critical servers or storage where response to downtimes will cost the client. They could also be client devices used by key executives. Plan extra for these riskpoints and calculate these risks. Plan spare inventory: At Mindlance we have a logistics manager who plans the specific spares needed for supporting a customer under a specific SLA. Depending on the products supported, we recommend anything from 5-35 percent of spares in stock. If there are generic parts which are likely to be available ex-stock from local suppliers, ensure that the service engineers have access to such options. Choose OEM support options: Regular OEM support packages Kamal Sharma are expensive and offer less margins for a service provider especially when you are planning to offer end-to-end support. However, there would be one or two hardware products where it may not be easy for a partner to provide back-to-back support, and a failure to do so could result in an unhappy customer. That’s why it’s important to go back to an OEM and sign an extended onsite warranty if absolutely needed. Invest in tools: Beyond software for technical support, AMS or remote management, it’s important to invest in simple tools for managing the service desk, field engineers and number of hours spent on problem resolution. At the very minimum you require a time tracker, help desk and ticketing application. Transparency helps: Good support does not come cheap, but most SMBs do not understand what goes on behind running a support business. Even so, we have seen that customers do understand when we go into details and explain various investments, internal costs and the backup options we provide to make sure the customer’s IT operations run smoothly. n
Beyond software for tech support, AMS or remote management, it’s important to invest in tools for managing the service desk, field engineers and number of hours spent on problem resolution
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cover story “AMC rates are falling due to reckless competition. By introducing a rate-card, we ensure that partners providing support have enough margins”
“The AMC business is like the life insurance business—a service provider who signs on many assets for coverage at the lowest price keeps getting more business”
Vice President, Kaseya India
important to understand the reasons for failure and success. Those partners who have succeeded have managed to transform their support teams to use automated tools, and invested time in understanding the transformation and educating their customers,” says Kumar. Hyderabad-based Choice Solutions has been one of the biggest success stories in AMS. “Ultimately, the margins are really a result of how many endpoints an engineer can manage,” explains KV Jagannath, CEO, Choice. “Today, with tools, we are able to manage 400 desktops per engineer. When we started off it was around 100-125 desktops per engineer. The tools cost almost one-third of the revenue we earn per desktop for support, but, with tools, the productivity of an engineer has gone up three times, and that’s where you make money.” Jagannath continues, “We have stayed away from AMC
deals as far as possible, and we advise our peers not to chase pure-play AMCs. Automation will need time to show results, and patience is key.” Still, one of the biggest bottlenecks for a small service provider is the cost involved in the migration process. Most automated tool vendors reduce pricing considerably only for volumes. For example, the cost per endpoint drops from `750 to `120 for Sapphire IMS (Technodream’s IT support management system), as volumes move from one to 10,000. Apart from this cost there are the additional costs of training, server licenses and process migration which a small service provider finds a hindrance. Ahmed defends the licensing practices, saying that volume discounting is the only way to trigger more adoption. Both Technodreams and ManageEngine—the MSP
Some very blunt talk by Kshitij kotak, ceo, fortune grecells
et’s face it. Our industry is under enormous stress—that of prices falling year after year, multiplying costs, payment defaults, bad debts, and investments in the training of employees who then jump jobs faster than monkeys. We’re not there yet, but we are racing to become a sick industry with no entry barriers, dubious players, senseless price-wars and zero foresight. Some partners promise the sky at basement prices to win business. Ultimately, they deliver sewerage-quality services because it is not possible to deliver services for the prices they quote. Kshitij Kotak One partner in Mumbai offers a comprehensive AMC at `500. Anyone who knows Mumbai will know that two visits to a customer will cost more than this. However, people throng to him even though he rarely provides service. When he does, it is delayed by a week or sometimes even longer. When I confronted him he shrugged it off saying that no one will put him behind bars for `500. And for every customer he loses, he finds two more. Thankfully, these illegitimate minds are still in a minority, but they damage the business of honest partners who lose business to them. But is this the only reason for SIs to not profit adequately? Sadly, no. Having been a functionary of the Association of Systems Integrators (ASIRT), I can say that the most glaring
reasons for low profits are (i) not knowing the real cost of a service, (ii) the inability to show value, thus accepting whatever price the customer demands, and (iii) the absence of a USP to make a compulsive pitch and be indispensable. Building a USP and being able to show value require efforts, but to not know the real cost of the services you provide to customers is outright stupid. This is true. Most partners know or can compute the cost of products, but have no clue about the cost of the services they offer. No wonder the SI business is not profitable. At ASIRT, it is one of our objectives to help partners make their services business profitable. We have devised a simple tool called Evolve which helps partners to discover the real cost of servicing customers. You can download the ASIRT Evolve Tool Excel sheet from www.asirt.in/evolve Many partners who have used this tool were shocked to find out that while they believed they were making healthy margins on services they were actually bleeding. It is not that I was born with this smartness. I made mistakes and learnt. A fool learns from his mistakes, a wise man learns from others’ mistakes and does not repeat those himself. I was a fool to learn from mine, so you be wise and do not repeat my mistakes. n
We have devised a simple tool called Evolve which helps partners to discover the real cost of servicing customers. You can download the ASIRT Evolve Tool Excel sheet from www.asirt.in/evolve
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cover story arm of SaaS provider Zoho, are offering a cloud-based option for customers as well as partners. While Technodreams offers infrastructure management services at `1,500 per IT technician per month, ManageEngine offers a multiple cloud-based licensing model for partners and customers. “We believe that automated managed services will be driven through the cloud; this has made the entire business model just like any cloud-based business working on the freemium model which appeals to both channels and customers,” says Shailesh Kumar Davey, VP, ManageEngine. “You can start off with no investment and run tool-based technical support by paying as low as $15 to us. Today we have close to 70 channel partners, and Ingram Micro as our national distributor.” Almost 61 percent of the partners polled think that the best way to increase revenue is to focus on services which the customer sees value in. “It’s apparent that plain vanilla services are of no interest to customers, and that they need better RoI. The focus should be on offering services which are perceived to be more critical to customers, and this means moving up the value chain,” advises Sachin Rao, Director, Archon Consulting Systems, Bengaluru.
Manpower woes One of the biggest challenges for partners has been manpower, which includes training, retraining and retaining. Says Ahmed, “Today, 90 percent of IMS providers are unable to afford a graduate for a desktop technician’s post or as an L1 engineer because at the revenue per asset they cannot afford to. At the same time, even small businesses are investing in software that is complex and may need to interoperate. Once again, the solution to the problem is automation so that most of the work is done through processes.” Some partners have tied up with local computer training institutes for getting freshers; however, their performance has been mixed. The main reason for disappointment is that the quality of freshers trained in institutes is poor. Choice Solutions has therefore signed up with three engineering colleges in Andhra Pradesh where the company is investing in teaching an elective course in AMS tools and is promising recruitment. “It’s an experiment which if successful could help us evolve better models for creating manpower specifically for the industry,” explains Jagannath. Many partners fund employees for certification and training. At Mumbai-based TechGyan,15 percent of an employee’s time in a month has to be set aside for training. “We do not pay for an engineer’s certification or education, but if he indeed gets a certification we
“Margins are a result of endpoints an engineer can manage. When we started it was 100-125 desktops per engineer. Today with tools, the number has increased to 400” KV Jagannath
CEO, Choice Solutions
Free remote monitoring tools
lenty of free and/or open source tools for managed services are available. These may not have the advanced features of a paid tool such as Kaseya or SapphireIMS, but they are good enough for remote monitoring and/or automating certain basic endpoint functions. Helpdesk: The most fundamental requirement for a service organization is a service request ticketing system and helpdesk. While not an open source tool, Spiceworks (www.spiceworks.com) offers several additional features including an SNMP-based network discovery system. Spiceworks has excellent community support. OTRS: (www.otrs.com) is another popular helpdesk and ticketing tool which has a community of over 10,000 users. Network troubleshooting: Wireshark (www.wireshark.org) is the No 1 in Windows-based real-time network traffic analysis, and is recommended as an essential tool for monitoring any network. It runs on both Linux and Windows. Wireshark also helps users generate reports. Inventory management: A key requirement for any sysadmin is a way to locate all the devices connected to the network and identify what software and hardware are installed on their systems. OCS-NG (launchpad.net/ ocsinventory) is therefore a must in a sys-admin’s armory. It requires the installation of an agent on the endpoint so that the sys-admin can pull all that information into a repository that’s easy to visualize and search. Security scanning: Originally a Unix-only tool, Nmap (www.nmap.org) for Windows has been an important security resource for Windows shops for more than 10 years. This security scanner and network mapper can also be used to perform network inventory, manage service upgrade schedules, and monitor host or service uptime. It supports all Windows desktop and server OSs. Nmap also supports Unix systems. n
cover his costs by providing a salary increase which covers the cost of certification in 4-6 months,” informs Suresh Ramani, Director, TechGyan. “For a small channel partner it’s difficult to manage and train manpower, hence at AKITDA we have been looking at training our members’ staff through common initiatives,” says Jyothi Sankar, CEO, Gentek Computers, Thrissur.
The beginning There is no doubt that the channel ecosystem needs to get its act right on issues related to services business and that too on an urgent basis. Educating the customer is as important as educating themselves about the realities of the business. “Channel partners need to get their internal house in order and at the same time create a strong value proposition for customers by offering services that customers want. If the customer doesn’t understand the value of services provided by a partner then he should be dropped. By losing a customer you will lose some business, but by running an unprofitable business you will shut down,” concludes Kshitij Kotak. n
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market focus Second Innings for ultrabook The concept was sound, and coming as it did from Intel, the market had high hopes for the ultrabook. Unfortunately, things didn’t quite work out, but now Intel is again trying to make it a success n ABHIJEET MUKHERJEE
hen in August 2011 Intel launched ultrabooks— its thinner, lighter and faster version of notebooks—it touted them as the next wave of the PC revolution. The company even made an aggressive forecast that ultrabooks would account for 40 percent of the notebook market by the end of 2012. But even 18 months later ultrabooks have failed to create much impact in the PC market. According to industry estimates, ultrabooks form less than 5 percent of global notebook sales in 2013. Global research firm IHS iSuppli has estimated that out of the over 180 million units of total notebooks sold globally in 2012 only 10.3 million were ultrabooks. In fact, earlier, the same firm had forecast sales of 22 million ultrabooks for 2012 but was forced to halve its projections due to the low uptake of ultrabooks. In India, the picture is even bleaker. According to one estimate, ultrabook sales in India are less than one lakh units since its launch. Comments Vishal Tripathi, Principal Analyst, Gartner, “Ultrabook sales have been abysmal. Intel has launched ultrabooks to create excitement in the PC market, which is shrinking. Its purpose was to create an ultra-thin category which could offer many of the features that a tablet offers such as ultra-thinness, light weight, longer battery life and a faster boot. However, Intel’s inability to price it right resulted in the initial failure of the ultrabook.” As per Intel’s specifications, ultrabooks have to be less than 21 mm thick, have minimum 5 hours of battery life, less than 10 seconds of boot time, and weight of less than 1.5 kg. Faster boot time require PC OEMs to have a SSD. Intel had also recommended a benchmark price of less than $1,000 per unit. “The primary reason for the high price of ultrabooks
Year of the ultrabook Intel has no option but to admit the failure of ultrabooks. Sandeep Aurora, Director, Marketing, Intel, South Asia, looks at it differently. “Ultrabooks, like most new products, were a different category, so it took a while for consumers to adopt the ultrabook as a PC form-factor.” Intel now plans to make 2013 the year of the ultrabook. It intends to bring down the price of the device from the current $1,000 to below $699 by June 2013. For this, the chip maker is working on several strategies. It has accelerated its plans to launch its nextgeneration processor, Haswell, which will provide superior performance and also consume 20 times less power than the Ivy Bridge processors; this will definitely push the growth of ultrabooks. The company is also working with OEMs and component suppliers to minimize the cost of production of the device. “Intel is trying every possible way to bring down the cost of ultrabooks,” says Quraishi.
“Ultrabooks were launched to create excitement in the PC market which is shrinking. However, Intel’s inability to price it right resulted in its initial failure”
“Ultrabooks, like most new products, were a different category, so it took a while for consumers to adopt the ultrabook as a PC form factor”
Principal Analyst, Gartner
has been the high cost of SSDs—an important component of the device which enables booting in less than 10 seconds,” explains Tripathi. “The price difference between HDD and SSD remains huge—a 256 GB SSD costs `8,000-10,000 more than a 500 GB HDD. Also, there was no aggressive push from Intel.” “Manufacturing an ultrabook without an SSD would bring the cost on par with that of any other notebook. Besides, an ultrabook does not have many other features such as an ODD and Ethernet ports which also bring the price down,” remarks Unaez Quraishi, Director, Sales & Distribution, System Business, Asus.
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Director, Marketing, Intel South Asia
market focus “Currently, the entry-level ultrabook is available at `55,000, but we expect a drop of 25-30 percent by the next quarter which will propel demand” Unaez Quraishi
Director, System Business, Asus India
It also plans to introduce ultrabooks with voice and gesture recognition. “We have a number of gesture-based ultrabooks coming into the market, so 2013 is going to be a busy year for us as well as for those involved in bringing the PC market back into the green,” adds Aurora. He says that Intel will soon launch a massive highdecibel campaign across India to create awareness and drive demand for ultrabooks. “We will educate the youth through our My Discoveries program, and execute a campaign touching multiple points from college campuses to BPOs and IT hubs. Besides, we will continue to promote the idea that discoveries are wonderful when powered by the Intel inside.”
OEM initiatives Seeing the new moves from Intel to push ultrabooks, OEMs expect that the prices in this category will come down by 30-40 percent which should improve the product’s sales. Says Quraishi, “Currently, the entry-level ultrabook is available at `55,000, but we expect a steep drop of 25-30 percent by the next quarter to take the entry-level price to less than `40,000. At this price we expect ultrabook sales
to grow exponentially.” Dell has already cut the prices of its ultrabook offerings and is showing the way to other vendors. Its Inspiron 14z ultrabook retails at `40,000 online and `46,990 offline, while the company has launched Inspiron 15z for a MRP of `41,999. “Though we have just launched the new devices and the results are awaited, we expect to see the demand for the ultrabook to soar by at least 25 percent at these price-points,” says Shishir Singh, Director, Product Marketing, Dell India. Lenovo is another vendor that is pushing ultrabooks aggressively. Says Nityaprakash Patnaik, Head, Consumer Business, Neoteric, a national value-added distributor for Lenovo, “Lenovo has provided demo units to each of its 200-odd LES stores and close to 600 LESLite stores to provide a touch-and-feel experience to users. It is also offering its A60 smartphone as a freebie with its Ideapad U series priced at `54,000. With such innovative schemes we expect ultrabook sales to grow.” Meanwhile, HP is bundling a 16 MP Nikon Coolpix digital camera worth `6,950 free with the HP Envy ultrabook to push the product. The Windows 8 Touch will act as a booster for ultrabooks. “Windows 8 touch-enabled notebooks are catching up fast, and ultrabooks with touch are expected to do very well,” says Singh.
Conclusion With the PC market shrinking and consumers making a bee-line for smart devices such as tablets, Intel needs to create a differentiation for the ultrabook in the notebook market. Even so, the success of the ultrabook will finally depend on how Intel executes its market strategy. n
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tech focus Ubuntu gets in the game
With Ubuntu Linux for tablets, its developer Canonical is aiming to be a serious player in the exploding tablet and convertible market n Edward J Correia
n the heels of its smartphone edition launch at CES, Canonical recently unveiled the all new Ubuntu for tablets, a version of the popular Linux distro, that the company claims, offers a unique UI experience and also a convergence between devices of different form factors. Ubuntu for tablet offers multiple advantages which Canonical believes will help it position as a premium provider of secure, stable, enterprise-tested OS for devices from smartphones to servers. From a physical UI perspective, Ubuntu for tablets is similar to the Windows 8 tablet experience. Source code for Ubuntu for tablets is already public. Canonical expects the first smartphone with its OS to launch in October 2013 and the first tablets are expected in early 2014 along with Ubuntu 14.04.
Split screen The UI of the new OS is very similar to that of Windows 8. Just like Microsoft’s OS, Ubuntu tablet OS also provides a feature that allows screen splitting. Called Side Stage, the technology permits phone and other apps to occupy less than the full screen and keep running normally. “Apps can declare which form factor they are compatible with,” said Mark Shuttleworth, CEO, Canonical. “Most tablet apps will be able to run fullscreen, or split screen with Side Stage.”
One binary, many devices Canonical claims that its OS deploys as a single binary, adapts to target hardware and presents the optimal experience on all Ubuntu platforms.
The new OS uses the same code base for TV, PC, phone and tablet. Developers can write a single app binary that will declare which form factor it will support and run on any device 34
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“We have exactly the same code base for TV, PC, phone and tablet. That means developers can write a single app binary that will declare which form factor it will support and run on any device,” said Shuttleworth. According to Canonical, apps built for Ubuntu for tablets will work with the smartphone version using the same binaries, and vice versa.
Cross platform The new OS supports HTML 5, which the company believes will open the platform to apps written for Android and iOS. “We are doing more to open cross-platform development. It’s easy to wrap an app with a Java interpreter AOT to push apps into Software Centre, our app store. What’s more, its native toolkit is closely aligned with BlackBerry. Apps originally built for Ubuntu phone will run unchanged on Ubuntu for tablets. Windows apps can run on Ubuntu as a thin client,” informed Shuttleworth.
Enterprise security Canonical claims a compelling security proposition for enterprises as the security underpinnings of Ubuntu on tablets is identical to the security of its server installations. That means that the same encryption is in use when targeting mobile devices as when deployed on servers. “We expect adoption in the enterprise to include multiple users on a single tablet, which is passed around in office, the factory floor, among military personnel. We have included per-user and fulldisk encryption and data protection,” informed Shuttleworth. Device-to-device sharing is now a standard service on all Ubuntu devices. n
The security underpinnings of Ubuntu on tablets is identical to the security of its server installations thus making it a compelling proposition for enterprises
n Narendra Modi, CM, Gujarat, congratulating Moin Shaikh,
Director, Innovative Telecom & Softwares, at the inauguration of Surat Safe City project
Innovative makes Surat a safe city Gujarat Chief Minister, Narendra Modi, inaugurated the Surat Safe City project which has been implemented by Surat-based Innovative Telecom & Softwares. It is one of India’s first city surveillance projects in the city. The project is being implemented in 5 phases, and aims to deploy 5,000 surveillance cameras at 500 locations that will cover an area of 150 sq km. The first phase, costing `10.5 crore and completed in record time of less than 4 months from the date of tender issue, included installation of 104 CCTV cameras; setting up of a state-of-the-art Command and Control Center (CCC) equipped with 280 sq ft video wall; a datacenter with 200 TB storage; and an integrated physical security information management system. n
n Nimisha Kalawatia, Assistant Manager, Procurement and
Neehar Pathare, Vice President, IT, Financial Technologies, with Paresh Shah, Partner, PH Teknow, at the event
PH Teknow event PH Teknow recently conducted an awareness program for Microsoft’s latest products. The event was attended by more than 100 partners and customers. The event kicked off with a product presentation by Syed Jaffar, Partner Account Manager, West, Microsoft. He spoke elaborately on Windows 8, Windows server 2012, SQL 2012 and Office 365. Jaffar also highlighted features of the new Microsoft Surface tablet and Windows 8 smartphones. Jaffar’s presentation was followed by another presentation by Rajnish Malik, Business Development Manager, Cloud solutions, Microsoft, who gave an overview of the Office 2013 suite. n
ASIRT launches mumbaiitstreet.com
n Subhasish Gupta (center), Country Manager, Allied Telesis, felicitating winners of Where Eagles Dare incentive scheme
ASIRT has launched a search portal called www.mumbaiitstreet.com, to connect customers with the IT partners in Mumbai, Navi Mumbai and Thane. The portal aims to make searching of IT products easy for the IT managers and CXOs, and enable them to connect with the best products, services and solution providers nearest to them. ASIRT wants to make the new portal the default search engine for customers looking for IT system integrators and retailers in Mumbai. It plans to run multiple online marketing campaigns to popularize it. n
Allied Telesis annual partner meet Allied Telesis concluded its third annual partner meet in Jaipur. The two day event attracted more than 50 partners from across the country. The event held sessions like Stairway to the cloud which gave partners an overview on Allied’s deployment of their cloud solutions and services which was followed by a live demonstration. The company also felicitated winners of its incentive scheme program. The meet helped Allied Telesis to strengthen its relationship with the partners. n
n Kshitij M Kotak, President, ASIRT, launching the partner search portal www.mumbaiitstreet.com
To feature your company’s events in CRN, send write-ups with photographs to email@example.com
Computer Reseller News
New Products Huawei smartphone
uawei has launched its smartphone Ascend Y210D. Targeted at the youth, the smartphone is powered by 1 GHz Qualcomm processor, 256 MB RAM expandable upto 32 GB. It runs on Android 2.3 OS platform. The 3.5 HVGA screen device has a dual SIM (3G and 2G). Other features include Wi-Fi port, 2 MP camera with CMOS sensor as well as a 1700 mAH battery. The device comes in two colors of ceramic white and phantom black, The product is priced at an MRP of `4,999, carries a 1-year warranty, and is available with Huawei authorized distributors. n
ViewSonic lamp-free home projector
iewSonic recently launched its laser LED hybrid full HD home cinema projector called the ViewSonic PRO 9000. The lamp-free projector enhances 50 percent color range and has 1,00,000:1 contrast ratio. The new projector comes with an environment friendly Mercury-free laser LED light source which increases its lifespan upto 20,000 hours, more than 5 times that of conventional systems, thus reducing the total cost of ownership. The Pro9000 provides instant on/off, preventing the risk of damage from overheating. The device features
Adata wireless storage reader
data Technology has launched its DashDrive Air AE400, a wireless reader that can read as well as stream data from USB storage media. The device runs on iOS, Android, Windows (XP, Vista, 7, 8), OS X, and Linux 2.4+, and can also double as a wireless hotspot as well as mobile charger. The AE400 supports 802.11 b/g/n wireless networking. When functioning as a network bridge, the Internet connection can be shared by up to 10 devices at the same time. As a storage reader, the AE400 permits for wireless data transfer between mobile devices and SD card, USB flash drive, or portable HDD. It supports up to 3 users simultaneously streaming 1080 p video, or up to 5 users simultaneously streaming 720 p video. The device is priced at `6,500, carries a 1-year warranty, and is available with Adata authorized distributors. n
a wide variety of connection options comprising dual HDMI, composite and S-video inputs. It also has built-in speakers for home entertainment. The projector is priced at an MRP of `1.80 lakh, carries a 3-year limited warranty, and is available with ViewSonic authorized distributors. n
Digiliteâ€™s new motherboard
igilite has launched its new motherboard DLFM2A55M-DGS with integrated AMD Radeon HD 7000 series graphics. The AMD next-gen A-Series APUs provide 3D gaming experiences similar to discrete-level graphics card solutions. The motherboard supports dual channel DDR3 1866, dual VGA output. Other features of the new motherboard include support for socket FM2 100 W processors, and AMD dual graphics. It comes with 1 print port header and 1 COM port header, 4 ready-to-use USB 2.0 ports and 2 USB 2.0 headers. It also has 5.1 channel HD audio. The product is priced at `3,990, carries a 3-year warranty, and is available with Digilite authorized distributors. n
The products featured here have not undergone any benchmarking or testing. The trailers contain information provided by vendors and distributors. To feature your companyâ€™s products in CRN, send write-ups with photos to firstname.lastname@example.org
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shadow ram GET
Parallel importers making merry over Chromebooks
hile Google has been silent on its plans to sell Chromebooks in India, parallel importers are making merry by importing different versions of the Chromebook, and selling them for a premium. “Chromebook, because of its novelty and low prices have become a hot-selling product in the US and Europe. For the past two quarters, it has been the top selling product on Amazon. This has created a strong opportunity for parallel operators, who are selling them at a 30-40 percent premium in India,” informed a retailer based in Bengaluru. According to him, the $199 Acer C700 Chromebook which should retail at less than `14,000 is being sold at around `20,000, while the Samsung Chromebook available for $249 on Amazon is being sold at `24,000. Last month, there were speculations that Google will launch the products across Asian countries in March. However, so far there hasn’t been any buzz about the launch, forcing many to believe that Google may have postponed the launch. n
“I want to start my own business” Rana Gupta, Business Head, Safenet, India & Saarc, has more than 15 years of experience in the IT industry. He has also worked for Rainbow Technologies and Altos India. If not in the IT industry: I would have been a teacher.
Biggest Passion: To be perfect at whatever I do. Behind the wheels: Skoda
Fabia. Gadgets I can’t live without: Dell notebook, BlackBerry. Weekends are for: Family, and preparing for the week ahead. Favorite holiday destination: Goa in India, and Hawaii abroad. Hate the most: Someone trying to explain why something cannot be done. Favorite Movie: Sholay. Favorite Stars: Amitabh Bachchan, Brad Pitt, Harrison Ford, Pierce Brosnan, Irrfan Khan, Sean Connery. Role Model: My better half. Ultimate ambition: To start my own business. Wildest thing I have ever done: None. Thing I most want to do in life: Learn to play a musical instrument. If I became the PM: It would be like ‘Welcome to Hell’ for the system. Celebrity I would like to spend a day with: Narendra Modi. One person I would like to meet and why: Anushka Sharma to imbibe her energy. Deepest and darkest fear: It is deep and dark. n — CRN Network
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