Structured Cabling: India On A Live Wire

By : |November 30, 2006 0

India is fast turning into a ‘dream destination’ for most multinational companies across a wide gamut of industries: IT services, BPOs, telecom, banking and finance, manufacturing, automobile and retail verticals. And to help them spin threads of success are present the vital backbone partners-the structured cabling vendors.

[image_library_tag 685/11685, height=”150″ width=”176″ border=”0″ alt=”” ,default]

"India has always been an early adopter of technology"
-Dr Ispran Kandaswamy VP & MD of Asia Pacific, Systimax Solutions

In FY 2005-06, the structured cabling industry revenues jumped to Rs 574 crore*, a whopping 76% growth in last two fiscals. (Structured cabling market revenue in India was Rs 325.5 crore  in FY 2003-04 and Rs 416 crore in FY 2004-05*).

As connectivity boom is unleashing in India, the structured cabling vendors have upped the ante in the fiercely competitive market. The warpath is open for the vendors where newer technologies are being introduced to woo customers; each offering unique value proposition, driving forward to consolidate current position. 

Barring a few glitches owing to international copper price hike, the industry is keenly tracking the movements of MNC giants in India and the emergence of plenty money-raking business opportunities.

Striking on Hot Iron
The technology scenario in India has caught the attention of companies and investors at a time when analysts believe India is ready to leapfrog to the next stage of technology revolution rather than follow the natural evolution pathway. The platter of emerging technologies is simmering hot in India. And there are enough reasons for it.

VoIP: A Growth Pill for The Market


"We are glad to note that customers are keen on quality and not necessarily going for cheaper products"
-Gaurav Ahluwalia, country manager, R&M

According to FTM Consulting forecasts, VoIP applications are expected to account for 66.5% of total horizontal cabling systems globally by 2010, exceeding LAN networking applications for the first time. Its also estimated that by 2011, the VoIP market will further increase and account for 88.9% of the total market.
Structured Cable Market Potential
  • The industry revenues stood at Rs 574 crore* in FY 2005-06 in India

  • The global data center cabling market is poised to grow from $680.9 mn in 2006, at an average growth rate of 26.8%, to $2,235.1 mn by 2011

  • In FY 2005-06, 65% of total deployments done on Cat6, 32% on Cat5e and 3% belong to Cat6A

  • Potential market for Cat6A to grow by 5% in India this year, after ratification of standard

  • Emerging markets in tier 2 and 3 cities

  • Focus on emerging verticals-manufacturing, retail, real estate, health and hospitality sectors

  • New technologies like Intelligent Cabling, PoE, and Cat7 find more takers






“India has always been an early adopter of technology,” remarks Dr Ispran Kandaswamy, VP and managing director of Asia Pacific, Systimax Solutions.

 VoIP tops the list of technology boom waiting in the wings. The evidence is on ground as both PC LAN networking and VoIP are being installed simultaneously, in most new cabling installations. Past issues of quality, security, etc. have been resolved. Cable for VoIP applications is predicted to account for the major UTP cable market in next five years. Besides this, there is a growing trend towards interoperability and providing higher security to the user as well.

India is extremely bandwidth hungry. KK Shetty, director, Sales, India & SAARC, Tyco Electronics feels the time is ripe to introduce emerging technologies and latest products in India that spur the high bandwidth demand. “In a matter of 3-4 years, we shall see more of integrated SCS networks where PoE, intelligent cabling and normal cabling standards will all converge to provide a real intelligent system,” he states optimistically.

Melting Pot of Opportunities
Here’s some food for thought –

  • India is the second fastest growing economy in the world
  • Over the next five years, more than $150 bn will be invested in infrastructure
  • The BPO sector has been growing at 60-70% annually and is projected to reach $12.3 bn by 2006, and by 2008 it is expected to reach $21-24 bn (NASSCOM estimates)
Easy Steps to Implement Structured Cabling

Step 1 Scalability: Choose a cabling standard that ensures upscaling easily. Identify bandwidth requirements; ask what applications will you use on the network, now and in future.

Step 2 Planning: The range and layout of your network should be chalked out in advance so that you can plan optimal cable layouts.

Step 3 Flexibility: Assess the flexibility of your network in terms of adding or changing network nodes. 

Step 4 Cost: Cabling will be a one-time investment and probably 7-8% of your total infrastructure budget. So don’t skimp on cabling costs just because you have spent heavily on other aspects of infrastructure (like storage, servers or switches). 

Step 5 Vendor Choice: Go for a vendor that preferably has manufacturing expertise and stable R&D roadmap. Choose a certified system integrator who will adhere to standards strictly.

More such statistics are testament of the rising mercury of opportunities in India. K Surendar, country manager, Dax Networks comments, “As BPO sector in India is booming, we are seeing the number of nodes in an average network site going up to 7,000, from just 100-800 nodes last year. This spells good business for infrastructure providers.”

Milind Tamhane, VP, Manufacturing, D-Link India is excited to see the spurred infrastructure growth. “We are witnessing the huge expansion of infrastructure, more correctly so, planned infrastructure growth in commercial as well as residential domains; both are direct indicatives of SCS Industry growth,” he adds.

Spelling out the dominating trends seen in India, Peter Karlsson, senior VP, Enterprise Solutions, CommScope believes there are three main trends affecting structured cabling business today. “Firstly, the fact that India is the fastest growing market in the world today for every business vertical. Secondly, globalization is bringing several MNCs, to India and likewise many Indian companies are expanding outside. And lastly, it is the consolidation of businesses that is leading to decentralization. As a result, many data centers are mushrooming. All this augurs well for structured cabling market in India.”

Data Center At The Epicenter
The industry witnessed stagnation in the historic growth of LAN data communications market for structured cabling systems. However, one prolific area where structured cabling is expanding horizontally is the data center. This new niche market is fast developing and can provide renewed growth for structured cabling system suppliers.

According to a new study from FTM Consulting, data center cabling is a new developing growth market for both the fiber and the copper SCS suppliers worldwide. The global data center cabling market is poised to grow from $680.9 mn in 2006, at an average growth rate of 26.8%, to $2,235.1 mn by 2011.

Banking, financial services and insurance (BFSI) sector, BPOs and telecom companies are sharply focusing on wiring up all their branches and manage data centers. Dileep Kumar, enterprise product manager, ADC Krone opines, “Many data centers driven companies are leaving no shortfalls in getting their networks up to global standards and implementing the best infrastructure solutions. As a result, more and more cabling vendors are offering unique end-to-end solutions tailor made for data centers.”

[image_library_tag 686/11686, height=”167″ width=”250″ border=”0″ alt=”” ,default]
Cat5e and Cat6 are still the dominating cabling standards in India

Cabling Choices Galore!
Compared to 2003, the portfolio of cabling vendors in India has grown multifold. Customers are looking beyond Cat5e and replacing traditional choices with the more mature Cat6 and Cat6A. A few bold customers are going for Cat7 and fiber solutions especially in the BFSI and ITeS verticals.

Trends show a surge in demand for CAT6 and CAT6A as 10Gigabit Ethernet (10GE) cabling products swell in demand, slow but steadily. Power over Ethernet (PoE) and Intelligent Cabling are the ‘new kids on the block’ that have enthused the cabling industry in India.

For now Cat5e and Cat6 are still selling like hot cakes, and it will take 3-4 years before Cat6A and intelligent cabling will rub the sheen off Cat5e in India. Kumar Natarajan, regional director, India, Panduit notes that the dominance of Cat5e will not fade away soon. “Most of the market requirements will be met by CAT5e and CAT6 in India. Very few customers face the demand for high-speed bandwidths and so the volume for CAT6A will be very low to start with this year,” he says.

Initial deployments of 10GE over UTP were seen in data centers especially in IT/ITeS, BFSI; storage area networks and for building robust backbones. Dileep notes a change in that trend with the standards ratification. “Now one can expect 10G Base-T UTP cabling system finding a place in emerging areas like enterprise campuses, health, manufacturing and government institutions where width and depth of the network is crucial and have to be future-proof ready,” he notes.

"SCS consumption within a network is 7-8% of the outlay. So the effective impact of copper price hike is minimal"
-Milind Tamhane, VP, Manufacturing, D-Link India

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Over the next five years, the key growth drivers for data centers, and for cabling, will be increased centralization of databases and computing resources

"In a matter of 3-4 years, we shall have more integrated SCS networks where PoE, intelligent cabling and normal cabling standards will all converge"
-K K Shetty, director, Sales, India & SAARC, Tyco Electronics

“Power-over-Ethernet (PoE) is gaining momentum, as there is an increase in wireless access points and deployment of VoIP in the country,” notes Rajesh Kumar, country manager, Siemon. Small vendors like BNA Technology Consulting have also made headway in implementing installations with PoE readiness. Kashi Vishweshran, director, BNA Technology Consulting adds, “The demand is likely to pick up significantly in the near future, especially with expected introduction of IP based premises services by some large ISPs.”

"Power-over-Ethernet is gaining momentum, as there is an increase in wireless access points and deployment of VoIP in the country"
-Rajesh Kumar, country manager, Siemon

But with so many choices to make, how would the customers make a prudent choice? Rajesh Shenoy, key account manager, India, Belden CDT offers this advice, “A lot of time vendors go blindly by the TIA standard. They must understand that a standard is only a minimum acceptable criterion. It only gives direction. One must go for solutions with higher headroom.”


Money Not a Factor
Traditionally, the customers for cabling solutions had been approaching the vendors on price point. But this has changed in recent past. Customers are realizing the importance of investment in infrastructure.

Dr Kandaswamy of Systimax notes, “Businesses don’t usually appreciate how important infrastructure is although it is the backbone of your establishment. But now new global customers have set the trend of choosing infrastructure over IT investment.”

Vendor Speak On Future Plans in India

[image_library_tag 688/11688, height=”125″ width=”86″ align=”left” border=”0″ alt=”” ,default]KK Shetty,

[image_library_tag 689/11689, height=”125″ width=”83″ align=”right” border=”0″ alt=”” ,default]Dr Ispran Kandaswamy

Systimax has a pretty good track record of R&D and has over 600 patents in this space. The roadmap for innovation in cabling entails adding intelligence to the infrastructure, and we are pushing the envelope on getting 40 gigabits over fiber or even100 gbs on fiber. There’s a lot of work also going on for PoE.

[image_library_tag 690/11690, height=”125″ width=”98″ align=”left” border=”0″ alt=”” ,default]Dileep Kumar, enterprise product manager, ADC Krone

We also have some very interesting products to launch for the enterprise market as well as data center solutions. We have many products like cable management, fiber guides, fiber management systems etc apart from the cabling that go into a typical data center. We are ready with our second generation of 10G Base-T UTP products. We launched Midspan PoE products last year and have made significant installations already.

[image_library_tag 691/11691, height=”125″ width=”83″ align=”right” border=”0″ alt=”” ,default]SA Mohan, sales director, India & ASEAN Region, Molex

[image_library_tag 692/11692, height=”125″ width=”92″ align=”left” border=”0″ alt=”” ,default]Milind Tamhane, VP, Manufacturing, D-Link India

You can expect good consolidation of our strengths in active networking product designing capabilities. We have plans to introduce products in PoE, FTTH and intelligent cabling areas in recent future.

Our Enterprise Business Unit as well as the Channel sales is determined to reach the magic figure of Rs 100 crore this year. We have some very prestigious government, public sector and private industry SCS projects on the anvil and expect a very aggressive performance this year.

Molex has set up the headquarters of ASEAN region in India. This is a proof of Molex’s huge commitment to the Indian market. Earlier, the operations were looked after from the Australia office. We are aiming to be number 1 in the Indian market in next three years time. As part of our expansion plans, we are looking at opening new branch offices. We set up an R&D center in Bangalore only for structured cabling last year. The focus is to enable faster time to market and products that will be a value-add to our existing portfolio.

As our fiscal year is November-October, we are now planning for our FY 2007 business year. Or main focus in FY 2007 will be channel development. Our focus on verticals like Govt, BFSI, ITeS will continue to grow, however our major focus will be on providing solutions.
, VP & MD, Asia Pacific, Systimax Solutions
We have recently opened the executive briefing center (EBC) in India, which is our way to show our commitment to the Indian market, our customers here and to our business partners. The market is growing at the pace of over 25% in India, and India is the fastest growing market for us. We are growing faster than the market growth in India. The EBC is a unique one-stop gallery of all our products where potential customers can touch and feel technology before investing on a long-term infrastructure.
director, Sales, India & SAARC, Tyco Electronics
We want to introduce optical fiber and copper hi-density products for large data centers and telecom players. We will also launch end-to-end PoE product line to serve future-ready businesses. Our R&D focus is on building integrated cable system, one that will comprise of intelligent cabling, PoE components, and normal cabling standard. Retail, manufacturing, refinery and real estate are hot and happening new markets. We are also heavily investing in training and expansion of offices across the country. As of now we don’t have any manufacturing plans. However, we feel it will be the right time to look at manufacturing here when the demand reaches a critical mass like 100,000 boxes per month.


[image_library_tag 693/11693, height=”125″ width=”89″ align=”right” border=”0″ alt=”” ,default]Kumar Natarajan, regional director, India, Panduit

[image_library_tag 694/11694, height=”106″ width=”85″ align=”left” border=”0″ alt=”” ,default]Rajesh Shenoy, key account manager, India, Belden CDT

Currently, Belden is working on projects worth over $3.2 mn in India. Some of them will be completed by the end of the year. These projects include some high-end IT companies, financial services companies, and entertainment sector. In terms of technology, there are some projects on intelligent cabling management, Plenum cables (cables made of Teflon for fire protection), and Cat6a.

[image_library_tag 695/11695, height=”125″ width=”85″ align=”right” border=”0″ alt=”” ,default]Rajesh Kumar, country manager, Siemon

One of the prestigious orders bagged is from BLB, one of the largest stockbrokers in India, for Cat6 solutions in their Delhi and Mumbai centers. Apart from this, we have also successfully executed some major contracts for Punjab National Bank, ABB, SSIT, Bagalkot Engineering College, Future Info solutions etc.

[image_library_tag 696/11696, height=”125″ width=”78″ align=”left” border=”0″ alt=”” ,default]K Surendar, country manager, Dax Networks

Gaurav Ahluwalia, country manager, Reichle & De-Massari (R&M)

[image_library_tag 697/11697, height=”125″ width=”82″ align=”left” border=”0″ alt=”” ,default]Kashi Vishweshran, director, BNA Technology Consulting

BNA has made a decision to move up the value chain through its design consultancy and project management division, while at the same time taken a new initiative called to reach out to tier-2 or even tier-3 cities with quality IT infrastructure services, over the web at very competitive price levels. We are currently working on a few innovative implementations of VoIP based solutions over fiber that would deliver significant cost reduction in certain situations.

We are officially launching the R&M office in India by this year-end in Bangalore. In our first year of operations, we have done $5m in India. We see a huge potential market in India. We will focus on enterprise market and plan to launch carrier products next year for telecom companies. The global vision of the company is to be No. 1 in next five years.

For the next fiscal, our target revenue is Rs 10-15 crore as we see new markets. We are trying to move into SMB segment, beyond the traditional tender driven market into corporate driven market. We are investing heavily in training and channel partner programs. Our focus is on aesthetic improving products and PatchSee Intelligent Patch cord is in that line of product. We hope will pick up good business in India.

For the fiscal year 2006-07, our prime focus will be on financial sector, data centers and ITeS. As part of our expansion plan, we are looking for appropriate partners and major system integrators across India. We are planning lots of vertical seminars; road shows and educational programs for our certified installers to enhance their skills/update them on the recently launched TERA 10G, fully shielded end-to-end cabling solution. IEC has also recognized the interface based upon Siemon’s TERA connector as the standard interface for a new high-performance class of cabling and this strengthens our position here. We are also working within IEEE to ensure that our cabling is compatible with the new PoE Plus standard.

Belden is planning for some major initiatives in the region, including developing region specific products, R&D, and expansion of the team. There are a slew of new product launches planned for the next six months. In the last few months, we have launched some new products: new VoIP patch cord with a different boot for both the end, a patented Bonded-pair patch cord and an angular, 0U wire manager.
Panduit India will continue to focus on the Premium market segment-top software companies, ITeS, global accounts and MNC banks and corporations. We are looking at sustained and consistent business. Panduit is keen on making a significant investment in India. We are beefing up our office infrastructure, resources, investments in marketing activities and strengthening the SI and distribution system to gain market share.

The Indian customers are prudent while choosing technology and vendor for a long-term investment on infrastructure. Dileep Kumar of ADC Krone says, “Typically a networking gear consisting of computers, switches etc., will have a maximum useful life of 3-5 years whereas structured cabling has a maximum useful life of 10-15 years (3 X networking gear). That means the cabling you install today should support three generations of networking gear.”

Although the market faced an onslaught of high price rise in international copper prices, the vendors fared well for themselves. “Customers need not worry too much about copper price hike as SCS consumption within an average network is 7-8% of the outlay, so the effective impact on total cost will be minimal,” notes Milind Tamhane of D-Link.

R&M, a new entrant in India, studied the market in India for the last one year and concludes that the customers here are looking for quality. Gaurav Ahluwalia, country manager, R&M says, “We see a huge potential in India and glad to note that customers are keen on quality and not necessarily going for cheaper products. This is a good sign of the mindset of Indian customers for structured cabling.”

"Most of the market requirements will be met by CAT5e and CAT6 in India. Volume for CAT6a will be low to start with this year"
-Kumar Natarajan, regional director, India, Panduit

Expansion Mode
The cabling vendors are literally tracking the technology footprint across India. As IT/ITeS companies are penetrating the tier-2 and -3 cities, the cabling companies are also making their way. As a result, all cabling vendors have chalked out elaborate strategies to push distributors and channel partners in emerging markets.

Traditionally, the tier-1 cities have been the high-revenue earners for the vendors, but now newer opportunities are being offered in the mid-market segment from cities like Coimbatore, Cochin, Kolkata, Chandigarh, Bhopal, Pondicherry and Mysore, to name a few.

Kumar Natarajan, regional director, India, Panduit affirms, ” We sense growing opportunity in the mid-size market as the Indian corporate segment, PSUs, government and Indian banks are pushing the IT button although this is a bit more price sensitive segment.”

[image_library_tag 698/11698, height=”150″ width=”196″ border=”0″ alt=”” ,default]      [image_library_tag 699/11699, height=”133″ width=”225″ border=”0″ alt=”” ,default]
Data centers demanding 10GE need to be future-proof  

KK Shetty of Tyco says, he has enough reason to be upbeat for next 20 years. “Telecom players are growing five times every year. BPOs and KPOs are touted to create over 8 mn jobs in next 2-5 years. This means over 24 mn nodes,” he says. Shetty is also eyeing a new potential market-the retail industry. “We are all aware of the plans by Reliance Industries to open pan-India network of retail outlets. This is going to open the floodgates for cabling market and we expect it to impact our business remarkably.”

Kumar Natarajan of Panduit sees real estate as another potential market. “The builder market will be a very big segment for the cabling vendors. Bangalore has set the trend for the same and other cities will follow suit very soon. Leading corporates and residential markets are keen on building ready-to-use infrastructure buildings. However, the challenge in this market is to be price competitive,” he adds.

There is a new way of thinking emerging for smaller players. It is no longer about boxes but about ports and software. Players are looking more and more at providing customized end-to-end cabling solution. With 10G over UTP, PoE and Intelligent cabling technologies gaining acceptance, cabling installations are becoming more skill based than before. Following the right installation practices and adherence to standards is very important when it comes to new applications that require higher data rate transfer.

"We hope to see accelerated growth of intelligent cabling in India as it has a definite utility value that customers can benefit from"
-SA Mohan, sales director, India & ASEAN Region, Molex

In order to stay ahead in the race, the industry has given priority to staff retention and training. With numerous orders on hand, the installers are gearing up for training personnel and technicians. Understandably, they would love to see better supply and adequate staff to strike a balance.

The contest is on to drive emerging markets with zeal and perfection. So as India is tipped to be the 14th highest IT spender by 2008, its business as usual for the structured cabling market.

Malovika Rao

Source: Voice & Data

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