Cover Story SME - Heart And Soul of Indian Economy


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There is a divergence of views on the definition of an SME. However, there is a unanimity on the fact a humongous growth potential for the SMEs exists in the country

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Cover Story SME - Heart And Soul of Indian Economy

  1. 1. COVER STORY There is a divergence of views on the definition of an SME. However, there is a unanimity on the fact a humongous growth potential for the SMEs exists in the country. G one are the days when most SMEs had only a limited budget for capitalIT purchases. Today, the market potential is and will also be key in developing India’s semi- urban and rural areas thereby expanding the domestic market”unbelievably high. In fact, small- and medium- "The IT needs of both SME and largesized businesses (SMEs) are a segment thatworldwide spends an estimated US$234 billion The potential of SME enterprise are similar. While SMEs in developed pats of the world are more oragnised, in India(about Rs.10.53 lakh crore) per year on ITproducts. sector in India is really the segment is still conservative to an extent so far as investment in technology is concerned. As elsewhere in the big economies, Small and huge as it plays a vital role However, realisation is now downing on SMEsmedium-sized enterprises (SMEs) play a major in India that IT spend is something of anrole in the Indian economy. The SME segment for the growth of Indian absolute must," says Ravinder Raina, Countryhas come to the forefront in the last few years Head - Private Network Solutions, NEC India due to several reasons; government economy by contributing HP foresees a humongous growth potentialthrust towards the segment, increasing business for the SMEs in the country. “Today, SMEs areopportunities in a robust economy, domestic 45% of the industrial the backbone of the Indian economy. They aredemand, opportunities through globalization,rise of tier-2 and 3 cities and towns and output, 40% of exports, essential to sustain a competitive and efficient market. In developing countries like India, theirmomentum in entrepreneurial ventures. “The SME sector in India is growing at an 42 million in employment, role is all the more critical, as apart from aiding the growth of the economy, they also helpexceptional rate and this growth is invariably create one million jobs reduce the poverty,” says Nitin Hiranandani,contributing to the overall economic growth Director - Laserjet Enterprise Solutions,of the country,” says Ram Prasad, Deputy every year and produces Imaging & Printing Group, HP.GM - Consumer Product, Epson India. Sriram Niraj Kaushik, Senior Director, AlliancesRajan, VP - South, IBM India/South Asia, says, more than 8000 quality & Channels, Oracle India, airs his opinion on“Small and Medium Businesses (SMBs, or Small the definition of an SME. He says, “Typically aMedium Enterprises, variations of the same products for the Indian very large organization will typically have moreconcept) have long been the engines driving theeconomic growth of the country. As the global and international markets. complexity but even smaller organizations also will have different degrees of complexities.” Toeconomy continues its steady recovery, it is this Oracle level of complexity determines whethergroup of entrepreneurial companies that are the enterprise is SME or for success.” Dell has kept its definition of SMBs very VP Sajeevan, Director – Consumer System simple. Organizations having employee strengthProducts Division, Canon India, says, “They are of 100 or less are called small businesses, morea major link to the supply chain to Corporates than 100 but less than 500 are called medium Ram Prasad Sriram Rajan VP Sajeevan Deputy General Manager - Vice President - South, Director – Consumer System Consumer Product, Epson India IBM India/South Asia Products Division, Canon India44 October 2011
  2. 2. COVER STORYbusinesses & 500 employees & more are large launched under EDGE series and part of theenterprises. robust and realiable Think brand. The range Anand. S, CEO, Zicom Electronics Security of products include ThinkCentre Edge 91z,Systems Ltd, says, “It’s a known fact that India ThinkCentre Edge 71z, ThinkCentre Edge 71,has the 2nd largest SMB segment amongst ThinkPad Edge E420s(SSD), ThinkPad Edgethe peer nation groups of BRIC, with over E420, ThinkPad Edge E420s (HDD). We are35million SMB and MSME establishments. on a continuous surge to innovate as per theBy 2015, this is projected to grow to 45million changing trends of the market.”establishments. Amongst the various SMB “With increasing entrepreneurial desire andverticals, Professional Services and Retail have inflow of investment, we are going to witnessa very high technology adoption rate.” the unleashing of huge inherent power of SMEs Nitin Hiranandani in our country in time to come,” says Hemendu SMEs: Opportunity Galore for Director - Laserjet Enterprise Solutions, Sinha, Business Head, B2B, LG India.vendors Imaging & Printing Group, HP Rajiv Sodhi, Director - SMB, Microsoft For Cisco, SME is one of the fastest India, says, “SME constitute the chunk ofgrowing verticals. Arun Dharmalingam, VP, businesses in India and Microsoft is gearedCisco India & SAARC says, “We at Ciscobelieve that the business needs of an SME/B SME’s up to meet the requirement of most of these SME’s. Microsoft provides the basic productremain quite similar to that of big organizations and the platform for partners to be able to– smaller enterprises want a good and reliablenetwork that will help them conduct their Contribution provide customized solutions to a diverse set of verticals.”business efficiently, a secure place to store theirinformation and easy to use collaboration tools towards GDP in Indian SMEs are playing dual role of preferred supplier and largest customer poolthat could help them connect all the employees for IT sector. The rapid growth of ITES, IT-together.” “A large number of companies in the IT 2011 was 17% software and IT-hardware sectors have provided platform for many IT start-ups. “Lowersector are from an SME background. Theyare poised for a huge growth rate in providing which is expected investment, cheaper skilled labour, financial aid provided by the government and other financialsoftware and hardware products and services. institutions are major driving forces for theMost of these companies offer IT services aswell as software products. Custom application to increase to growth of SMEs in these sectors,” says Vinit Mahulkar, National Sales Manager- VoIP- IT/development and IT consulting are the twosoftware services which are seeing huge 22% by 2012. Networking Segment, Matrix Comsec Pvt. Ltd. The Small and Medium Enterprise segmentdemand from network security solutions,” says in India shows great promise and scope forHemal Patel, CEO, Elitecore (Pprovider of growth. As the SMEs grow their business soCyberoam). does their need for infrastructure and peripherals Dell sees tremendous opportunity in to set up a smooth running office. SMEs lookthe SMB segment and believes it knows this for cost effective products that are also supersegment better than anyone else. “As one of efficient. Canon CSP (Consumer Systemsour top five global business priorities, we are Products) division offer a host of products likecommitted to addressing the pain points of laser printers, inkjet printers etc that offer highthe small and medium businesses and have a end printing solutions to SMEs. One suchrange of SMB specific products and solutions,” example is the laser printer Canon LBP3300,says Satyen Vyas, Director, Medium Business, specifically designed for high volume printingCSMB, Dell India. to meet workload demands. The MF 4450 Rajiv Rao, Director SMB-Lenovo India says, on the other hand is a cost- effective printing“As a company, our main focus is to understand solution – Multi function Laser Printer- that hasour customers. We lay special emphasis to cater a huge potential in semi-urban and rural areasto specific needs of the target segment, allowing of India. Another innovation for SME is wi-fius to be their preferred partner. Keeping this in Niraj Kaushik Laser MFD 4420 W – This will enable the usermind, we have recently introduced an exclusive Senior Director, Alliances & to print from anywhere in the office.product range for SMBs with attractive features Channels, Oracle India Cisco offers a spectrum of SMB specificand competitive pricing. All the products are solutions that have been built with their unique Anand. S Arun Dharmalingam Hemal Patel CEO, Zicom Electronics VP, Cisco India & SAARC CEO, Elitecore (provider of cyberoam) Security Systems Ltd October 2011 45
  3. 3. COVER STORYrequirements in mind. “The technologies that technology because of its ability to cut costsare covered within our SMB-class solutions run and reduce the need for capital equipment -the gamut from offerings such as switching and both hardware and software.routing that help organizations connect disparate “While IT budgets across verticals continuebranches, security tools to protect the network to increase, Cloud computing is expected toagainst rogue attacks and downtime, datacenter/ reshape the Indian IT market by generating newstorage solutions for storing an organization’s opportunities for the IT vendors and drivingprized intellectual capital, telepresence units changes in traditional IT offerings. The rapidlythat provide a medium to conduct meetings via growing enterprises, vast base of SMBs andvideo technology, collaboration tools helping government adoption are driving the growthemployees stay connected with each other, of this sector,” says Amit Mehta, Director –digital media systems for retail to virtualization Satyen Vyas Marketing, EMC India & SAARC. Accordingtechnology facilitating the adoption of cloud Director, Medium Business, to Sundara Raman, Chief Architect - Ramcocomputing by SMBs,” says Arun Dharmalingam CSMB, Dell India OnDemand ERP, “Our message to the SMEof Cisco. market highlights the benefits that a customer “We realize that SME’s are in need of can reap by moving to the Cloud.”products and solutions that exceed their Rajiv Sodhi of Microsoft says, “Microsoftcustomer expectations and Epson productsserve the purpose in this regard,” says RamPrasad of Epson. Anshul Gupta, COO, Go IP SMBs account has one of the most comprehensive portfolios of products to meet the specific requirements of the SME sector. We are uniquely presentGlobal Services Pvt. Ltd says, “We realize thatthere is a need to ensure that the IT is made for $257B of the as leaders in the productivity and cloud space to offer a compelling proposition to the SMEsimple for the SME to understand and consume.It has to be often a TCO model for the SMEleadership rather than ROI model. Our effort is IT opportunity sector.” Symantec provides solutions for security, data protection, availability, and storageto make IT to be consumed on demand so thatthere do not have to be upfront commitment in 2011, which management for the highly virtualized and scalable environments required for cloudon IT but on a pay per use model.” Bhaskar Joshi, Manager- Marketing, OfficeImaging Solution Division, canon India says, is 59% of the computing. “Symantec’s solutions for the SMB market incorporate the features that a SMB user can implement with ease, yet integrating“As SME are continuously looking for costeffective hardware and Software solution to total market. elements of enterprise level technology,” says Ajay Goel, MD – India & SAARC, Symantec.develop robust IT Infrastructure and Canon Anshul Gupta of Go IP echoes the view thatentry level offerings in Hardware and Software cloud is the next step for SMEs. He says “OurDomain is supporting these SME in their service focus remains bringing quality RemotePursuit of Advance Print Management and Infrastructure managed services to the SMB/Workflow Management Infrastructure.” SME segment at an affordable cost, with the same delivery quality of an enterprise segment. Vendors Cloud Computing: The Next As the new initiative we are working on comingBig Wave in SME Market up with cloud services for this segment.” Small to medium sized enterprises (SMEs) Philips has a wide range of products toare the primary market for several channel cater to almost all the sectors and has specificpartners. Even for an industry prone to hype, monitors to target the SME/SMB sectors. “Wethe buzz surrounding cloud computing is sky- have monitor range from 18” to 27” LED. Thehigh. There is no doubt that few sectors have PowerSensor range from Philips is in-built withgenerated more interest than cloud computing. PowerSensor technology which features a builtCloud computing promises to be providing in people’s sensor. Harmless infrared signalscost-cutting offerings that are strongly appealing detect the presence of a person in front ofto SMEs. After all the more popular cloud the monitor - and automatically reduce energycomputing gets, the less hardware SMEs will Rajiv Rao consumption by up to 80% the minute theyneed to buy. Director SMB-Lenovo India walk away,” says Gautam Ghosh, Country A growing number of SMEs in India are Director- India, MMD. Thus, controlling thegetting to grips with the cloud computing power consumption of the monitor and not Hemendu Sinha Rajiv Sodhi Vinit Mahulkar Business Head, B2B, LG India Director - SMB, Microsoft India National Sales Manager- VoIP- IT/Networking Segment Matrix Comsec Pvt. Ltd.46 October 2011
  4. 4. COVER STORYcompromising with the superior quality that Coimbatore, Goa, Kochi, Lucknow, Vadodara,Philips has to offer. Other than this, Philips Vizag, Nepal and Bhutan,” says Surajit Sen,has a range of monitors which are easy on your Director Channels Marketing & Alliances,pockets and yet are brilliant performers.” NetApp India. In terms of storage, SMEs require holistic Storage for SMBs storage solutions that work well in networked In India also, SMBs are heading towards environments, have built-in backup capabilities,a data deluge and given the requirements of and simplified remote access capabilities. Theseeffective storage, management and retrieval of attributes are necessary to realize the benefitsdata storage has assumed the role of a critical of lower costs and increased administratorIT enabler in todays time. As per IDC, the efficiency.Enterprise Storage market in India is expected Anshul Gupta “WD is banking on the diversifying SMEto witness a double-digit growth. A significant COO, Go IP Global Services Pvt. Ltd. market for storage products. We are able toportion of this growth would be contributed by focus equally well on all verticals courtesyorganizations (especially SMB enterprises) in our extensive distribution set-up,” says Sushilcities other than the top four metros. Bandi, Country Manager for the Indian Sub- At about $35 billion, the size of the storage continent, Western Digital. He adds, “Wehardware and services market for solution also have specialist distributors that have an India is home toproviders serving clients in the SMB space is expertise in consulting smaller businesses onmind-boggling. And, there are just as many the right storage solutions for their IT systems.vendors with storage solutions as there are This current set-up is working quite well for us,potential clients ready to snap them up. The easy deployment and affordable the second largest especially as we gear up to enhance focus on the immense potential of the AV drive segment.” SMB base in theavailability of technology solutions are keydrivers for the SME fraternity to adopt better ERP Solutions Right for SMEstechnology. The business challenges in the SME Todays small businesses are increasinglyMarket are not new, and their transformationsare putting pressure on IT resources to change world with 35 using technology for business advantage and competitiveness. It was not so in the distant million companieswith them. “Today, with simple to understand past that ERP was considered an expensiveGUI based management, storage has become proposition. However, things are changingeasy to deploy, manage, protect and is fast. Sundara Raman of Ramco OnDemandexpandable to the future needs. Most customers ERP; says, “SMEs can benefit from the winningbased on their experience are looking to partner combination of OnDemand technology andwith vendors who are ready to take the role of a business expertise from a pioneer in Cloudtrue partner and help customers in adopting the ERP market, and get assured of zero or lowerright technologies,” says Amit Mehta of EMC. capital expenditure, faster implementation, ease EMC has market specific storage bundles of adoption, and automatic upgrades.”for SMB in India. These bundles are approved “Solution providers are quite excited at theconfiguration and make it easy for customers prospect of growth of SMEs in the country.and partners. With the ICT sector booming - ERP, CRM, The storage giant NetApp defines SMBs as Broadband and Telecom, there is huge scopeorganizations which spend more than $50,000 for modernizing Indian SME sectors withper year on storage, or which have 250-1,000 IT solutions,” says Ankesh Kumar, Directoremployees. Presently, the company is busy - Channel Products & Marketing, Emersonin formulating strategies with an increased Network Power.focus on Indian SMBs and will pitch its FAS SMEs and Security2000 product line (at entry level) for the Today information security is a real issue.SMB segment. “As an organization NetApp Like large enterprises, SMEs are also badly indoesn’t differentiate between SMBs and SMEs. need of better security, and they are in the knowHowever, SMBs contribute 30% of NetApp’s Bhaskar Joshi of the importance security plays. For Indianrevenue, the company has decided to work Manager- Marketing, Office Imaging SMEs, security is a high-priority or critical-with its distributors-Redington and Avnet to Solution Division, Canon India priority issue.increase its focus in Ahmedabad, Chandigarh, Though SMEs cannot afford to have Amit Mehta Ravinder Raina Sundara Raman Director – Marketing, EMC Country Head - Private Network Chief Architect - Ramco India & SAARC Solutions, NEC India OnDemand ERP48 October 2011
  5. 5. COVER STORY Gautam Ghosh Ajay Goel Sunil Kripalani Country Director- India, MMD MD – India & SAARC, Symantec Vice-President Global Sales & Marketing, eScandedicated resources to handle the securityof the network, they face the same level ofinformation security risks as enterprises. Hence, India is home tothey also need to implement high level ofInformation security that can ensure BusinessContinuity. It has become vital for SMEs to find the second largestnew ways to perform their operations efficientlyand cost-effectively. “We, at eScan understand SMB base in thethe challenges faced by SME. Hence, we havespecially designed security products that haveenterprise level security to help SMEs deploy a world with 35strong security strategy built around the simplebut powerful architecture of endpoint security million companiestechnology,” says Sunil Kripalani, VP GlobalSales & Marketing eScan. Small and medium enterprises contribute Ankesh Kumarto more than 30% of the total revenue of Director - Channel Products &the overall IT security market. “Hence, the Marketing, Emerson Network PowerSME market opens a very wide window ofopportunity for McAfee and its partners toincrease their sales service revenues as wellas margins,” says Terence Gomes, Manager -Inside Sales South Asia, McAfee. Each day, SMEs have more and more criticaldata that needs to be secured and with theamount of information growth, their storageneeds are also on the increase. Despite thecriticality, SMEs continue to have low budgetsfor their IT infrastructure. “Our solutions across security, data medium businesses to be always connected andprotection are designed to address specific always protected. Our Worry-Free Businesschallenges and made just for the SMB user,” Security Services is one initiative in thatsays Ajay Goel of Symantec. direction,” says Amit Nath, Country Manager Trend Micro has identified SMB as an India and SAARC, Trend Micro. nimportant market segment. “We as security Terence Gomessolution provider, promise a safer, smarter, S. Mohini Ratna / Manager - Inside Salessimpler security solution that allows small and Deepak Singh / South Asia, McAfee Surajit Sen Sushil Bandi Amit Nath Director Channels Marketing Country Manager for the Indian Country Manager India and & Alliances, NetApp India Sub-continent, Western Digital SAARC, Trend Micro50 October 2011