‘On-demand services will drive IT growth in India’
Over the last couple of years, value added distributor and solutions provider – iValue Infosolutions, has been busy forging relationships with a number of technology and channel partners, as it prepares itself for the next wave of growth in the Indian IT industry. S Sriram, CEO of the company shares his thoughts on the recent industry trends and the company’s plans for the coming months.
SaaS has been the buzzword for quite some time. However, recently it has gathered commendable momentum, with the Internet being used to deliver applications, services, and platforms. What, in your opinion, is the reason for this trend?
The global recession changed the mindset of many organizations. Close to 70 percent of IT budgets were spent just for sustenance, which resulted in very little left for investing in to future. Also, companies, both large and small, started shifting focus from a Capex to Opex model. As IT keeps getting more complex and costly, users have also started realizing the challenges of managing it.
SaaS offers these companies a compelling value proposition at a lower cost and with no management issues to worry about. We see more and more vendors offering their solutions through cloud model and this trend will continue to grow strongly in the years to come.
With SaaS being viewed as one of the key components in an organization’s strategy, how will it gain relevance in the Indian market?
Businesses are looking at IT to provide them with scalable, flexible, anytime, anywhere access for enterprise applications like ERP, CRM, BI, storage, security, etc. through a variety of devices. The value proposition for start-ups and smaller organizations is even more compelling as they can take advantage of SaaS from day one, without worrying about old investments towards on-premise, legacy applications. We will see steady transition towards SaaS model due to such benefits. The next wave of IT growth in India is going to be driven by SMB and SaaS will be a major factor here.
Which type of companies will be the key adopters/implementers of on-demand services and cloud computing?
BFSI are early adopters followed by the telecom, ITeS, and manufacturing sectors. The government will be the biggest adopter through its state data centre and e-governance initiatives. Business needs and relevance are the key drivers for some of the verticals to take the lead. We see a steady transition from on-premise model to private cloud and on to public cloud by bigger entities. SMB’s are more flexible when it comes to the public cloud, however, we still need the market to stabilize and mature.
How do you address each of these segments? Does each one have a different set of requirements? What is your go-to-market strategy?
Each vertical has its unique requirements depending on the nature of business. We have been offering on-premise solutions around digital asset protection and management along with services such as compliance, auditing, design, and reviews through iValue InfoSolutions.
We have formed a separate entity named iManage Technology to focus on SaaS, remote infrastructure management services, etc. We plan to address the consumer segment through partnerships with telcos, SMBs through iValue channel partnership, and the enterprise segment through NSI partnership and our direct team at 10 locations across India.
Between iValue and iManage we can offer end to end needs of the customer including phased migration and management from on-premise to cloud.
One of the USPs of on-demand services is that they are cost-effective. How critical is this factor in our country?
The TCO, over a period of say five years, is multiple times that of acquisition costs coupled with obsolescence, manageability, and technology understanding challenges. Retention and training of in-house IT team for constantly evolving technology is increasingly becoming difficult coupled with manageability of legacy applications. Hence it’s obvious to look at cloud-based delivery via an Opex model. From the service provider end, the same infrastructure can be used for delivering and maintaining the application across thousands of customers, couple this with technologies like virtualization and the overall cost per customer is much lower. This helps in more customers taking advantage of the relevant applications thus expanding the market which is win-win for all.
What are the concerns or pain-points faced by customers when it comes to adoption of such technologies?
The biggest insecurity is what happens to the relevance and role of internal IT team. The second challenge is what happens to the current on-premise investment on hardware, software, application, and customization. The complete dependency on the service provider for business critical application is also something that worries some companies.
Another issue is managing the transition and ensuring a smooth user experience without causing business disruption. Last, but not the least, are issues in the cloud model with respect to data privacy, data security, and compliance aspects.
We are sure that all the above points will get addressed as the model matures.
In the last couple of months, iValue has had many tie-ups. How do you plan to leverage these?
Our go to market strategy focuses on customer lifecycle methodology. We keep looking at business challenges of our customers at every stage of their growth and look at relevant services and solutions that help them address these challenges to grow their business. Our portfolio expansion is based on these compelling business needs so that we and our partners are of more relevance to each one of our customers. Our foray into services as a dedicated GTM strategy and then spinning it off as a separate entity in two years is an example of this.
How many more tieups are there in the pipeline and when will these be announced?
As of now, we have signed up 22 vendors and we plan to announce some of them in a phased manner over the next couple of months. This helps us in aligning and driving the business in a focused way in line with the business plan across channel and customers.
What attributes do you look for in a partner? Does iValue educate partners about SaaS and the cloud or does the company look for partners who are already aware of these developments?
Our approach with partners is very focused. We identify specific offerings of mutual interest with each of the partners and do not attempt to sell all our offerings with each of them. We do partner empowerment for the identified solutions. We then jointly work with partners to develop business in a focused way.
Though we work with partners who are already focused in the area for our brands, we also partner with companies who show interest, commitment, and zeal in new areas.
How many channel partners are associated with your company as of today?
Over the last two years, we have done business with 350 unique partners covering 125+ locations. This includes national system integrations, regional system integrators, and location specific partners. We have steadily increasing our direct presence from 6 to 12 locations thus expanding our reach and coverage for partners to take advantage.
Are there any plans to add more partners in this financial year?
We constantly look for partners with expertise and interest for each of our offerings across geographies. We also keep adding new offerings for our partners to take advantage of. Many partners use our offerings to add to their clientèle. We just expanded into the east with operations in Kolkata and will continue to expand our partner base in a focused way.
What is the advantage of being a VAD in the Indian market? How does this affect/impact business growth?
iValue, with its unique GTM centered around product life cycle evolution and customer life cycle adoption, has focused teams for enterprise and channel. We are an extension of each of our vendor organizations, addressing end to end needs of channel and customer along with business development. We play the role of a technology enabler for compelling, niche, and relevant offerings in the security, storage, and enterprise wireless space. We play a critical and challenging role of learning, understanding and then charting the growth of niche offerings with specific strategies, till customers start identifying with the brands.
At this stage pure play distribution model take over from VAD model, as its more of fulfilment than market development/creation. Since the technology around digital asset protection and management is continuously evolving due to ever increasing threat landscape, we will continue to see new technologies along with consolidation of matured technologies. This has been the fastest growing space within IT for some time now and shall continue to remain so for the near future. Hence, the scope to add value will continue to be high with a steady shift from solution to service due to the growth of the cloud model.