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The effects of the US recession may be felt in India. But solution
providers have no reason to fear. They only need to know which technologies and
products they should focus on, as customers will demand better RoI and lower
operating cost
Whether or not India is going to feel the pinch of the recession in US is an
ongoing debate, but what is sure is that IT spending in companies across the
country is seeing a dip. According to IMF's World Economic Outlook, the Indian
economic growth is likely to slip to 7.9 percent in 2008 from 9.2 percent in
2007. In 2009, the Indian economy is expected to expand at a slightly higher
rate of eight percent.
Speaking about the effect of the recession on India, Stephen Roach, Chairman,
Morgan Stanley Asia said, “If the US goes into recession, you are going to feel
it in Asia and you are going to feel it in India.” So though we cannot say for
sure to what extent the US recession will impact India, we can be sure that
'India stands to catch a cold.'
As the echoes of US' recession is being to be heard in the Indian economy now
solution providers (SP) who have been banking on US backed contracts to keep the
cash registers ringing are getting increasingly worried. But is India really in
the throes of a recession?
According to Sanjiv Bhavnani, CEO of New Delhi-based Visesh Infotechnics, the
recent market trends and the impact it has made on the business, it is certain
that recession is happening in India. “Global recession is happening and as
usual it has had its impact in India too. With the rise in salaries and
difficult times faced by the industry, we can surely call it as a recession,” he
said.
However other SP differ over his point of view, and would like to term the
current market situation as a slowdown and not recession. G Balakrishnan,
Director of Mumbai's Ontrack Solutions is one of them.
“Frankly I refuse to believe that we are in a recession period. We are at
best in a slight slowdown. In the last few years we have been witnessing fast to
very fast growth and it's but natural for things to slowdown at some point of
time.” he said.
Even Saurin Shah, CEO of Mumbai's Ashtech Infotech agrees with Balakrishnan.
“We are witnessing a slowdown period and not a recession. There are lots of
differences between the two and the impact of recession would be huge than what
we are witnessing right now in our country,” he claimed. He also said that the
current scenario would continue for a time being.
For Ajay Mian, CEO of All eTechnologies, only time could say whether India is
in the recession period or not. He opines, “I feel that recession or slowdown
depends on how long it would last and the impact it makes in the business for
that time being.”
And market reports say...
Technically for a country to qualify for the recession there are few points
like rising inflation, huge unemployment crisis, dip in salaries apart from the
hit in the GDP. With, which the conclusion is simple that India is in its
gradual economical slowdown and not in the recession period.
However one can't rule out the impacts of US recession, which is happening in
India. According to the financial firm Morgan Stanley's annual tech report, the
uncertainty in the US may delay the tech spending in the first half of 2008 in
India, which clearly reflects the current situation in the Indian IT industry.
According to the International Monetary Fund report, the impact of the US
recession would be lesser in the emerging economies like India and China when
compared to the developed nations. Bhavnani of Visesh noted that at present
there is no drop in the domestic market as far as this situation is concerned.
“However this is the first quarter of this fiscal and I feel this will
deteriorate further and SP will feel the pinch only then,” he added and said
that the present situation would continue to remain for next two years and one
has to be prepared for facing the situation.
Shah of Ashtech too said that this impact of slowdown would continue for at
least one to three more quarters. Customers who were mostly focusing on the
international market especially US were the one's who were mostly affected. This
is primarily due to the depreciation of the dollar and obviously the
appreciation of the Indian rupee.
“Those who were concentrating on the US markets were the most affected one's
due to the dollar depreciation as in one case their revenues were directly
affected and in another case due to instability, their IT spending were
literally in disparity,” he mentioned.
Echoing his views Mian of All eTechnologies said, “There has been a
significant impact for the people who have been highly concentrating on the US
and European markets. In general the salary has gone up and there are lots of
employment crisis happening. If it continues further for six more months then
there will be much more impact.”
Even though the impact due to the US recession has been less, All
eTechnologies wasn't spared by the effect of depreciation of dollar. “Definitely
in that area our revenue has seen a 15 percent dip than the previous years and
it is an ongoing crisis everywhere,” he claimed.
| “We have seen an increase in the
enquiries for alternate computing solutions”
P Raghuraman, Country Manager-Emerging
Businesses, HP PSG India told Ruth Samson that this is
not the time for solution providers to push the panic button. Instead they
ought to focus on offering alternative or complementing solutions
Do you think the recession has affected
companies in India and their IT expenditure budgets?
Well, one thing we can surely say is that, in the last two quarters,
there has a visible increase in the enquiries for alternate computing
solutions which can offer a significantly lower total cost of ownership (TCO)
compared to the existing options. Specifically, the ITeS and financial
services customers are showing a lot of interest in evaluating new remote
computing technologies.
What offerings do you think are luring
buyers during this time?
We are offering a range of Remote Client Solutions (RCS), in which, any
user-from entry-level to knowledge workers to demanding professionals,
engineers and more-can access the applications and resources they need with
greater control, location flexibility and total cost savings, up to the
largest scale. It serves more types of users in any location with greater
security.
This solution easily manages your entire
client environment, It delivers great company-wide savings where in you can
migrate and deploy quickly with total cost savings even when the scale of
users is in tens of thousands.
Some other proven remote computing solutions
which can be implemented are server-based computing, VDI), blade PCs and
blade workstations. In all these implementations the choice of front-end
client access device is a thin client. The latter offers tremendous energy
savings, consuming less than 33 percent the power of a standard desktop,
physical space savings, very low maintenance cost, long lifecycle, with no
virus related worries. This means a big cut down on the IT department
resources for desk side support as all the support and management is done
over the network centrally. Finally the employee has the flexibility of
working from any desk.
How can thin clients benefit a company
that is pulling the strings on its IT budget?
It is not just about meeting the budget which is available, but it is
also about reducing the running cost over a significantly long period of
time, thereby allowing the IT team to utilize the budget in other critical
things that they would need. Thin clients deliver many benefits to the
organizations in the form of energy savings (1/5th the power consumption of
a standard desktop PC), space savings, negligible failure rate due to no
moving parts, low heat generation and user flexibility.
Since all the data is centralized in a data
center, which has a disaster recovery back-up, there is no fear of losing
any data thereby ensuring 100 percent uptime for each and every employee. As
the control is centralized you can now implement standards, ensure
discipline and adherence to processes and establish best practices.
Where is the most demand for thin clients
coming from? Are you seeing any traction from the upcountry market?
The demand is across segments today ranging from SMB, education, medium
to large businesses. The most visible and large requirements are coming from
ITeS, banking and financial as well as from large government projects across
variety of applications. Upcountry is definitely a focus area for HP and we
see tremendous value in customers using RCS in these markets.
Would you think that in some way the
market slowdown has given rise to Green IT?
Energy savings, controlling heat dissipation etc have always been seen
as important. The challenge was in the availability of alternate client
computing technologies, which could be implemented to achieve these
benefits. Now with HP giving a wide portfolio of RCS, customers see value in
implementing these and taking advantage of the TCO benefits.
What steps are you taking to market these
green products or increase awareness about them among the channel so that
they can pass on the message to the end-users?
Thin clients, blade PCs etc are best examples of client computing
helping to implement Green IT. We have a focused approach towards partners
engaged in HP's RCS portfolio and help them with training, marketing
collateral, creating success stories, special demo subsidy for doing
solution POCs (proof of concept) to their prospective customers plus
conducting seminars for their prospective customers etc |
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