Target verticals
Without a doubt, the drivers of this market are banking, financial, education and ITeS sectors. Thin clients are a need-based technology. Adhikari cited an example of a Hutch store or Dominos outlet. Here, the employees do not need CPUs at their workstations. Terminals are just required to take orders and they do not need local storage.

Because of the nature of their business or the way they work, these verticals prefer thin computing. Dave pointed out that the number of computers required in these segments is very huge so they would have to undertake a lot of upgradation and maintenance for each PC.

Balaji added, “In BPOs and call centers, computer viruses are major threats. Data is critical and so is its security. Agents can not forward the data or misuse it when a thin client is deployed.” The government (education side) is another huge potential market, which has picked up in the last year, according to Balaji. “I am betting on the education (government) sector. We support most regional languages. This will drive our numbers,” he added.

HCL recently also supplied a large number of thin clients for a tender from the Maharashtra High Court. Balaji pointed out that that though the potential was huge in the government sector, it would take time for the deployments due to policy addiction, and not to mention, bureaucracy.

While agreeing that the major demand for thin computing was coming from the niche technology adopters such as BPOs and BFSI, Adhikari was of the view that at least for Wyse, the driver was definitely not the government sector. “Though the government sector is huge, unfortunately we are not focusing on it. This sector is very price sensitive and wants very low prices, which we cannot offer. For example, if a product costs $500, we can offer it at $480. But the government would ask for it at $200. Since the volumes are currently very low, we cannot offer it at such prices,” said Adhikari.

Richard Brown, VP-International Marketing, VIA Technologies and Sanjay Peer, Director-Channel Development, India and SAARC, VIA Technologies display thin clients from VIA

Channel window
Most vendors in this space have chosen a select channel route for their products. HCL recently partnered with Ingram Micro for their thin clients. It has SIs across the country (11 locations and 60 authorized service providers). Wyse too, as its national distributor, has signed up Ingram. The disti further identifies partners for the product from its network of 8,000 partners across the country.

The irony is that if thin clients propagate low maintenance, how would this deal benefit the SI who banks on post-sales service for revenue? According to Sanjiv Bhavnani, CEO, Visesh Infotecnics it is, “Because of the high configuration of thin clients, cost outflows reduce. Thus the customers are happy with the service provided. In such a scenario, the demand for thin clients increases and more people are willing to deploy it in their offices. Given the rise in demand, even if the service revenues are affected, it doesn't bother much as more people are inclined to install the features, leading to sound profits.”

Agreeing with Bhavnani about the vast selling opportunities out shadowing the service revenue, B Mukund, CEO of Chennai-based Mukund Infoservices said, “When we have more opportunities from deploying thin clients we will not be considering the amount received from servicing. The servicing revenue is not at all a factor in our total revenue.” According to Mukund, HP and Wyse are the two major vendors in the thin client market. “These vendors have an edge over others in terms of superior technology and a better channel network than others,” added Mukund.

So would the SIs in the segment recommend this business to others? “I would definitely recommend thin clients as I feel it will find a strong customers base in the years to come. From a users perspective, there is a definite market as we are living in a mobile world and seeking better connectivity,” answered Bhavnani.

Vendors on their part offer incentives to their partners from time to time. Incentives could be a trip abroad for meeting targets, or various incentives for getting repeat orders.

Forecasting
Vendors and partners alike seem to agree that thin client is like a sunrise market. Speaking about the road ahead, Peer commented, “We firmly believe that India is going to be a one million unit market by 2011. All the ingredients for fueling the market demand are in place. BFSI, government (including e-governance and e-education) would contribute a major chunk of the numbers.”

Mukund added that the future of thin clients is very bright and that there would come a time when this technology would be deployed in every home with more enhancements. With so much growth and dynamics in the market, such as Cisco's virtualization and SMC's centralized data storage, this market sure looks like its going to be a hit. It is only a matter of time for this sunrise market to boom.

Ruth Samson
ruths@cybermedia.co.in
(With inputs from Amrita Tejasvi in New Delhi)

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