Faced with drying demand, service providers — from videoconferencing to software solutions to air charters—are going all out to woo small and mid-size businesses like never before.
When Obeetee, a carpet making company in Mirzapur had to figure out how to participate in a trade fair in Atlanta with its senior executives not able to make it, the decision was quite simple. Using high-end videoconferencing equipment this carpet maker with offices in the US could transmit its chairman's message to the conference, which is one of the biggest in the sector.
Companies like these find themselves increasingly being targeted by bigger players, and also by other small and medium businesses (SMBs) making cutting edge products. While most of the companies did see the SMB space as one huge market, there seems to be a sense of urgency to get them on board as clients, as some of the bigger clients seem to have suffered the fallout of the US recession and have cut costs. Emerging businesses across sectors now find themselves at the centre of attention from MNCs and other Indian biggies.
While companies in most sectors go slow on their expansion plans, US-based LifeSize Communications is going all out on India, betting on the fact that companies here are cutting down on travel costs, and on their new HD videoconferencing system. "We aim to grow much faster here," says Craig Malloy, worldwide CEO of the Texas based company. He says that with companies cutting down on costs, they have a better opportunity to market their range of products and also expand the market to emerging businesses. The company has had an India presence since 2006, in the form of a software development centre that the company plans to expand. But now, the recession has forced some companies to cut down on travel and other costs, which has resulted in some of them embracing videoconferencing more readily, says Malloy. But another equally important factor has been the availability of videoconferencing equipment.
The high end equipment of LifeSize delivers telepresence quality video communications--true 1920x1080 video at 60 frames per second, which is a marked improvement over the currently in vogue 1280x720 at 30 frames a second. This is transmitted over existing broadband networks with as little as 1 Mbps bandwidth. The result is a very natural, face-to-face communication across towns and around the globe. Video and data are captured in real time and sent instantaneously through an IP address using any bandwidth. "We now plan for around 50% growth, and make sure we are making around a million bucks every quarter," says Malloy. The Indian SMB market is now a new target beyond existing clients like Reliance, Wipro and ACC. In two years the company has captured around 10% of the videoconferencing market in India, and for more market share, the SMBs are an essential target.
PTC, another US-based company, has meanwhile turned its attention to the emerging businesses in the automotive sector in the country. "These emerging businesses show a lot of innovation." says Rafiq Somani, country manager, PTC. In the US, Parametric's maintenance and services businesses, which drive about 70% of its revenue, continued to perform well despite a tough market. In these times, analysts foresee reduced spending on CAD (computer-aided design) software solutions.
The Needham, Massachusetts based firm is increasingly working with SMBs over the past few months for its advanced 3-D CAD technology. "The SMB segment, as far as manufacturing goes, has definitely come of age," says Somani. As India fast emerges as a global manufacturing and product development hub, SMBs will form a critical component in domestic and global product development value chains. PTC's SMB business is expected to grow at 35-40% per year.
One reason which Somani feels has expedited the rise in demand for more sophisticated technology is that the emerging businesses are entering into deeper partnerships with OEMs (Original Equipment Manufacturers), they globalise, expand their product or service portfolio, and are becoming a more mature market for players like PTC. This allows us to bring our SMB customers even more value, by helping them adopt higher value solutions from PTC's more advanced product development and lifestyle systems, like Windchill. Some of their SMB customers are players like Electronica, and Advec, who are using the technologies to supply to top players like GM or Ford. Advec Hi Tech, is moving into four wheeler components now, from its existing two wheeler.
Interestingly, even in aviation, a fast growing air charter company is also quite bullish on his fellow SMBs in other sectors, at a time when airlines are facing a crisis and cutting back on ticket prices. Airnetz offers a third party operated B200(a Turbo propeller) and a 3 Seater R44 helicopter on this route, B200 which has seating capacity of 8 passengers charging around Rs.20,000 for one passenger. "Corporate passengers landing late night or early morning find a flight pool cheaper than using cars," says Atul Khekade, CEO, Airnetz on why this is going to be attractive for SMBs and other companies as well. The charges of hiring a Corolla or Camry, according to him, for return trip are around Rs.20, 000 while his service is costing almost the same. For the more luxurious Robinson 44 charges will be around Rs. 35, 000 for one passenger with food and luxurious service of a charter flight and with 5 times lesser time.
It has over 180 aircrafts in its India network and has exclusive access to over 700 aircraft in India, Dubai, Europe and USA, according to Khekade, whose focus on emerging business clients has grown manifold in the last few months, since the recession started. "The era of private aviation is beginning to start as flight pool option with corporate jet is making the travel sometimes cheaper than a luxury sedan. For sectors like Mumbai-Pune , attending a meeting by flight pooling a private jet turns out to be cheaper and time saving for the corporate," says Khekade, who says that demand for such services is only going to rise through the recession.
Be it any of these sectors, the SMB players are making their mark, says Malloy as he walks into the new, and bigger, development centre and shows the crystal clear HD conferencing where his US head seems to be sitting across the table. Quite like the emerging players, who now find themselves seated across all the big players eager to make a mark in India when the recessionary winds are blowing.
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