The Structured Cabling Systems (SCS) market is just about 10% of the total networking commodity market of Rs 2,978 crore in 2003-04 as per recent reports published by Voice&Data, CyberMedia Research. Yet it is one of the most crucial elements in building any network in the information and communication technology space.

While all other aspects of a network, such as the hardware and software, tend to get more attention while building a network, the performance of the network depends a lot on the cabling infrastructure. Making the right choice of cabling solutions is as critical as the hardware and software that goes around it. Or else, it will be like driving a Ferrari on a bad road.

SCS IS CRITICAL
Today, network downtime is something, which no company would like to skirmish with, because of the cost involved in terms of lost productivity and revenue. In the previous year, the growth in cabling market was experienced in all the verticals for which uptime was very critical.

“As infrastructure needs for intelligent buildings grows, intelligent cabling systems would form key solutions for solution providers” KK Shetty, Country Manager, Amp Netconnect Business Unit, Tyco Electronics

According to some international estimates, the cost of one hour of downtime for commercial banking industry (including salary and revenues) totals around $34 million. Similarly, the downtime cost in the healthcare sector for about an hour is equated at $22 million. With many BPOs catering to international clients in these verticals, these downtime cost estimates become all the more relevant here.

In such a scenario, the most important aspect would be finding out which cabling infrastructure system will work well in a given setup. "It will depend on the performance level expected from the network. This has to be based on the applications that will run on the network. Applications demanding more bandwidth and higher speed such as VoIP, and IP-based video conferencing require a superior cabling infrastructure," says an industry analyst.

INDUSTRY PERFORMANCE
According to the Voice&Data CyberMedia Research, the Indian market for structured cabling grew by a decent 23% for the year that ended, 2003-04. The estimated market size was reported to be Rs 326 crore (Rs 265 crore in 2003-04). By 2004-05, industry experts project this market to hit the Rs 400 crore mark.

Source: Voice&Data, CyberMedia Research Source: Voice&Data, CyberMedia Research

According to Vikas Pinjarkar, GM, Structured Cabling, Sales, D-Link India, the cabling market has maintained a CAGR of 20-25% over the last five years. Next year it is expected to grow by 20-30%. KK Shetty, Country Manager, AMP Netconnect Business Unit, Tyco Electronics gives a similar view about the future growth rate of 30% for the next year.

There are more than 10 structured cabling systems vendors in the Indian market, but almost 70% of the market is held by the top three vendors namely: Systimax (earlier Avaya), Tyco and D-Link. During the year 2003-04, almost all the players in this segment ramped up their toplines and bolstered their bottomlines.

Market leader Systimax took a contented approach, biting only Rs 11 crore. But even that was enough to help it reach Rs 100-crore mark during the fiscal 200304. That meant a modest growth of 12% on a yearly basis. However, one needs to take in to consideration that the company completed change of hands from Avaya to Commscope in February 2004.

Tyco, the number two player, wasn't too aggressive either. Still, it retained its market share with Rs 79 crore. In fact, there were no upsets in the rankings. Tyco clocked a growth rate of 14.5%.

D-Link made the biggest splash and took away much bigger slices than others would have expected. D-Link, the only major player to be headquartered at Mumbai (most others are based at Bangalore) gulped down 45% more than what it could in the previous fiscal. It clocked Rs 45 crore, compared to Rs 31 crore last year.

Bangalore-based Krone also posted a decent growth of 25%. From Rs 16 crore earlier, it grew to Rs 20 crore. Like Systimax, Krone too had changed hands, in the previous fiscal. ADC of the US bought it out and the process got completed in May 2004. With this, the German presence in the Indian market came to an end.

For Molex, growth remained flat, while Panduit grew from Rs 8 crore in the previous fiscal to Rs 11 crore this fiscal. TVSICS and Dax too made their presence felt significantly with Rs 10 crore and Rs 7.5 crore in revenues, respectively. Belden, which started operations in February 2003, completed a full financial year in India. For the period April 2003 to March 2004, it did business worth Rs 10 crore. Thus, Panduit, Belden, and TVSICS were seen in neck-to-neck competition during the fiscal.

BFSI FUELED GROWTH
Customers segment that fuelled growth for the SCS industry during 2003-04 remains more or less similar to the networking industry customers. Major business continued to come from the BFSI, call centers, software development centers, government and PSU segments. "Broadband was another area where vendors concentrated and banked on for business," says Vikas.

Huge investments from customer segments have motivated many systems integrators to scale up their business and become complete end-to-end solutions provider for these verticals. Being a complete solutions provider would typically mean offering networking solutions as its major activity. However, the specialized nature of the business has forced very few to sustain for a longer time.

For all those SIs, who wish to take up business focused around providing complete networking solutions, structured cabling is the first step. According to industry experts, solution providers can look forward to opportunities through structured cabling as a first step in customer segments like BFSI, ITES, ISP, government and PSU segments.

"As infrastructure requirements for intelligent buildings grows, intelligent cabling systems would form key solutions for solution providers. This opens up service resources for our SIs," says Shetty.

TECHNOLOGY TRENDS
Structured cabling systems are available in copper or fiber. Unshielded Twisted-Pair (UTP) copper is most widely used, because it is highly reliable and the least expensive. For years, copper UTP solutions have been the preferred medium over which most LAN communicates.

It's now being debated whether fiber would replace copper as the preferred medium. Several years, ago Gigabit Ethernet seemed like a pipe dream. Today Gigabit Switch port (10/100/1000BaseT) sales have overtaken 10/100BaseT.

The Indian market has matured in structured cabling during the past couple of years as never before. The market is witnessing fast growth in the fiber segment as well. "The market is responding very positively in adopting these technologies," says Vikas.

A closer look of the market shows that growth in fiber is due to the increased use of fiber in the backbone and campus installations. Fiber takes the lead in applications that require high speed and high bandwidth.

Then why hasn´t fiber replaced copper? The answer is simple. It is expensive.

"Fiber deployments are at least six to seven times costlier than copper. Therefore, a cost effective way of doing things would be to mix and match the two. Ideally fiber on backbone and copper for horizontal cabling is advised," says Shetty.

Fiber cable allows more data to run much longer distances than copper, without degradation. Fiber is often used in the backbone of a system, typically between floors or buildings, while shielded or unshielded twisted pairs are used in the horizontal cabling.

TRENDS AND EXPECTATIONS
The market showed rapid maturity in terms of technology acceptance. Cat5e and Cat6 completely replaced Cat5 in copper, as users embraced superior technologies. At the same time, they increased pressure on pricing by taking good advantage of the competitive scenario. The average price of Cat5e for a 300-meter box was Rs 3,300 while Cat 6 sold at an average price of Rs 4,500 for the same length.

In the early years of network systems, every manufacturer offered its own proprietary systems, most of which were not compatible, thereby offering little flexibility, and significant costs every time a change was made.

This situation changed when the Telecommunications Industry Association (TIA) and International Organization for Standardization (IOS) created global standards for the industry. Now, the prevalent standards range from Cat5e to Cat7, which define the minimum performance specifications for structured cabling systems.

While Cat6 on UTP copper gained further momentum in the Indian market, another type of twisted-pair copper cabling, known as shielded twisted-pair (STP), specifically for Cat7 got established in few European markets.

STP is more expensive, but has greater signal-transmission performance. This is typically suited for areas with high electromagnetic interference, like factory floors. It is also ideal for organizations where data is critical and needs to be highly protected, such as banks, stock exchanges and hospitals.

However, Vikas feels entry of Cat7 is ruled out in the Indian market, since UTP itself is claimed to be achieving 10 Gbps.

According to international reports, STP (shielded twisted pair) is losing share in most countries. Globally it's growing by 6.3% annually only because of Germany, which accounts for more than 58% of the world STP market by volume.

“The Indian market has matured in structured cabling systems, and is responding very positively in adopting new technologies” Vikas Pinjarkar, GM - Structured Cabling - Sales, D-Link India

Another trend that is picking up in the SCS business is the growth of intelligent cabling system. Intelligent cabling system provides complete up-to-date accurate documentation in real-time that enables customers to minimize costly network failures and downtimes.

"It also helps integrate network layer and physical layer management, feature integration into facility management tools, reduce staff workload, and more importantly reduce the time for moves, adds and changes by automating the management of the physical layer," says Shetty.

Currently, vendors are putting in efforts to train solution providers for such intelligent cabling systems.

10 GIG OVER COPPER
Ten Gigabit Ethernet is very much prevalent in the form of fiber optics. But the question now is when will 10gig-over-copper become a feasible technology.

"The limitation that one sees here is in terms of distance which has been tested at 50 feet at present. Once this is issue is resolved, one would see deployment of networks on 10gig over copper. At present, it is only used for network backbone," says Shetty.

But for the market to gain acceptance, it is not just the issue of distance and speed. According to Shetty, it will gain acceptance in the market once the standards issue is resolved. The applications for this technology would include data center connections and backbone connections that also include horizontal cabling, where high densities of Gigabit desktop users might be aggregated via a 10G switch uplink.

As of now, Krone is the only player to offer the '10 Gbps over copper' solutions in the Indian market. Globally, the US-based cabling major Siemon shares the distinction with Krone. Systimax, Tyco, and D-Link are also testing their 10G offerings at their respective labs.

WiFi IMPACT?
Ever wondered what will happen to structured cabling if the popularity of WiFi connectivity continues to grow over a period of time? Structured cabling systems vendors are not at all worried about the growth of WiFi. In fact, most of the vendors manufacturing SCS are also manufacturers of WiFi gears.

According to vendors, the new wireless technologies will see deployment more on the personal and home applications. Security issues are bound to stay connected on wires. However, vendors are hoping that WiFi will become a part of the structure cabling system and hence will not have any impact on the SCS business.

"We see wireless technology as a complement to structured cabling, and in fact have our own product offering in this portfolio that complies with IEEE 802.11a, b and g standards," says Shetty.

According to Vikas, wireless will never be able to match the speed/throughput of wired network. "Another reason why wireless will not impact the wired networks is the return on investment factor. Greater the distance means higher cost; greater the bandwidth means higher cost; higher the security level means higher the cost," he explains. 

USERS CHOICE 
The PCQuest Users' Choice 2004 survey done by IDC India recently rated D-Link as the preferred vendor in the Structured Cabling category. The respondents of the survey were IT purchase decision makers of large enterprises. D-Link wins with Avaya, Krone and Finolex being the other members of the Users' Choice Club. Systimax just missed qualifying. According to the survey, D-Link has the highest brand loyalty at 94% followed by 79% for Krone and 76% for Avaya. Systimax has 65% brand loyalty, while Finolex has a low 54% brand loyalty.

NELSON JOHNY in Mumabi

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BENEFITS OF INTELLIGENT CABLING

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