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Selling just a niche technology and a single product line can be a task for others, but is a pleasure for Pune-based Nitin Naik of Cubix Micro Systems. His perspective is that since he is involved in just one technology, he can give it his fullest attention and devise strategies to propel its sales. At the moment, he is focused on popularizing the concept of switching over IP, which he feels has great scope, with the way IP is becoming a way of life for enterprises the world over. Excerpts of internview with Nitin Naik who talks about the company and its future plans.

You have been trying to promote the concept of switching over IP. How successful has this been?
IP has become a way of life for most enterprises. Most applications are now ported on IP so it is only logical that switching should be too. This is why we are trying to popularize this concept.

There are many advan­tages of switching over IP vis-à-vis the traditional KVM switching. For one, with IP an admini­strator can remote manage the network rather than being physically present near the product. It offers cen­tralized access, which means that distances can be scaled and remote and secure server manage­ment is possible.This concept started get­ting popular worldwide when data centers began to gain center stage. With the emer­gence of these centers, enter­pri­ses started expecting zero downtime and instant monitoring of their systems. This is possible with swit­ching over IP.

We have some very good products in this category and have been working on evan­gelizing this concept. So far, we were trying to educate our clients in one-on-one inter­actions about it. But now we are getting more aggressive about it. Soon we will have events where we will talk about why this tech­nology makes sense for part­ners and customers alike.

What is your channel structure?
We have a hybrid channel model. Till three years ago, we were selling directly and when we started selling through the channel we had only 25 partners. Today, we have around 12 gold part­ners, who could be loosely defined as regional distribu­tors. Though they stock our products, we ensure that they have some technical exper­tise about it as well.

The next rung of the chan­nel has value-added resellers (VAR) of which we currently have 100 active members. They sell the entry- and mid-level products and regularly buy from us. There are others who buy on a case-to-case basis as well. This year, we will increase this VAR base to 150, especially in the smaller cities.

Don't you also sell directly to customers?
Yes, 60 percent of our busi­ness is done directly with customers. For instance, Infosys is one of our custo­mers, and they prefer buying straight from us, rather than routing the order through a partner. And since the quan­tum of business that we do with them is very high, we can't deny them this direct service, just to keep the channel happy. The volume of business done by the channel is high, because they sell entry- and mid-level KVM switches. But the value of our direct business with enter­prises is much larger, because these are for the high-end switches.

Also, Cubix is in a better position to sell to the enter­prise segment, as our core competency is KVM switching. But for a channel partner, switching is one of the many technologies he offers. So he might not be able to focus on the business as well as we can.

But solution providers like Wipro Infotech or CMC Ltd deploy Infosys's projects. So does it not make sense to partner with these solu­tion providers and let them offer your products as part of their entire solution package?
Of course, it does. In fact, we do have some solution provi­ders who buy from us direc­tly. But they are not part of our active channel net­work. This is because they buy from us, based on the pro­jects that they are wor­king. Some enterprises have stan­dardized our products for their network and if they insist on Aten switches, then the solution provider will procure the goods from us.

So are you planning to sign up solution providers to your channel network?
Absolutely, yes. We will soon have more of these solution providers on board and they will recommend Aten swit­ches for all their projects. These will include the high-end switches as well, which require a good deal of pre-sales consultancy to the client.

What will the margins be for your solution providing partners?
The margins for solution providers will be much higher, especially if they sell the high-end products. This is also because they will have to provide a lot more pre-sales consultancy to customers. So their margins will be in the region of 20 percent.

What other plans have you got on your agenda this fiscal?
This year, we want to expand into smaller towns as well. We have already got six offices in the country and will shortly be opening one in Kerala. We will also be increa­sing our channel network from 100 to 150 this fiscal.

What is the nature of your tie up with Aten?
We started operations in 1992 impor­ting and distri­buting connec­tivity pro­ducts. We later on started adding KVM switches and video speakers to this portfolio under our own brand name. In 1999, we had a tie-up with Taiwan-based Aten International. This was more of a technical tie-up as we had the technical skillsets to offer their KVM switches. Since then we have been exclusively distributing Aten's products.

What are the customer verticals that you are targeting?
We offer our solutions to most of the industry verticals like telecoms, ITeS, data centers, enterprises, govern­ment, research agencies, financial and banking insti­tutions, stock exchanges, airlines, etc. Any company that has more than one server and needs these to be inter-connected is a prospective customer for us. In fact, 80 percent of the top 500 enterprises in India are our customers. Overall, we have around 1,500 customers in the country.

What is even more interes­ting is that a lot of these clients have standardized on our products across all their divisions and sister com­panies. For instance, Satyam Computer Services, L&T, Reliance Group, Dell, Bajaj Group, Telco, etc use only Aten KVM switches wherever they have their operations.

Similarly, government institutions like CDAC, Natio­nal Chemical Labora­tories or National Infor­matics Center mention that they require Aten switches in any tenders that they float. This talks a lot about the brand share and loyalty that we have esta­blished with our clientele.  

Vinita Bhatia, DQ week