Friday, January 23, 2009

SERVICE PROVIDERS WOOING SMES

Anirvan Ghosh
The Economic Times

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 percent 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 percent 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 percent 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.

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