ICW November 2013 Issue

FOCAL POINT: Take a look at how organizations that are caught in an arms race to deal with growth can fix the problem. >>> PAGE 41

CHANNELWORLD.IN

News AnalysisIf all goes according to plan, we could see cloud services being traded in stocks and bonds in the future. PAGE 10

On Record: Krithiwas Neelakantan, Director, Alliances and Channels, NetApp India, elaborates on the company’s evolving channel ecosystem. PAGE 14

The Grill: Tom Flink, VP-Channels and Market Development Sales, Citrix Worldwide, says the company’s channel partners will take big strides. PAGE 17

OpinionThe desire to avoid blame has the potential to damage a career. Make amends while you can or forever repent. PAGE 46

Case StudySecure Network Solutions deliveres a complex security solution for Sriram Group. PAGE 36

InsideNOVEMBER 2013 VOL. 7, ISSUE 8

STRATEGIC INSIGHTS FOR SOLUTION PROVIDERS | COVER PRICE Rs. 50ChannelWorldTARUN SETH, Founder and MD, Micro Clinic, believes the company’s strong legacy will help double its revenues this fiscal.

Here’s how six partner organizations have proven their mettle over the past two decades. >>> Page 22

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n EDITOR’S NOTE

Vijay Ramachandran

Garbage In; Garbage Out

A WHILE BACK a bunch of schools in the US start-ed to equip their students with leased laptops in a state and federally funded project. Despite home computer penetration of over 70 percent, the drive

dubbed the “one-to-one” program was designed to increase interactivity in teaching and help kids pick up skills like cre-ating multimedia presentations and being able to use the Netfor research. Skills that were expected to help boost their success in the real world.

Over a decade and hun-dreds of million dollars later, the program seems to have gone off its aims, with parents questioning its need, teachers finding it difficult to integrate the boxes into the curriculum, taxpayers asking for its closure, and schools actu-ally beginning to do so.

Interestingly, the schools rolling back the program span the spec-trum—rich and poor; urban and rural schools; large and small.

So why are so many stakeholders against it? For one there seem to be few upsides. While it improved attendance rates and re-duced dropouts, schools found that it’s had little or no impact on grades (reading comprehension and math are still best done with paper, schools learned). Worse still, they view it as a critical distrac-tion with the laptop actu-

ally getting in way of teaching.

The cost of training teachers, creating new lesson plans, putting infra-structure into place, main-taining the machines, and policing the network only adds to the problem. Some institutions found them-selves spending more time and effort on repairing laptops than on training teachers to adapt to teach-ing with them.

The only ones who are deliriously happy with the scheme are predict-ably the kids, who’ve also used them get really good at typing, network games, instant messaging to cheat on tests, downloading

porn, and hacking (in a New York school, student not only ran rings round network security but also posted detailed instruc-tions on doing so online).

Will the situation be any different in India or other developing economies? The problems endemic to the system are many. In our country, over 22,000 schools don’t have a single teacher, with 3 percent of schools still looking for a single student!

Or take Africa where many countries are part of the One Laptop Per Child (OLTC) plan promoted by digital oracle Nicholas Negreponte. The program to dole out low-cost de-vices in schools, has come in for criticism from the UNESCO Institute for In-formation Technologies in Education. The UN body maintains that “computers can’t solve the problems of a place where almost half a billion people live on less than $1 a day, and many lack clean drinking water. When textbooks, chalk,

water, and teachers are in short supply, high-tech investments should not be a priority.”

This is just an example of how technology is more often than not promoted with all the best intentions as a way to fix systemic issues, without a thought to how the technology bits will fall in place and inte-grate with existing frame-works. Governments and corporates trip doing this all the time.

Take e-governance projects. In India they correctly come under the aegis of the Department of Administrative Reforms, because e-governance isn’t about automating or computerizing a manual system, it always ought to be about fundamentally changing the nature of Cit-izen-Government interac-tions. Yet, the success rate of e-governance projects in India is a paltry 14 per-cent—a brutally expensive testament to an unchang-ing bureaucracy.

IT is a great lever to boost productivity. It’s also a great a leveler, helping countries such as ours to compete with more devel-oped economies. But, just blindly throwing IT at a bad system without changing the underlying process will only deliver bad results. nVijay Ramachandran is the Editor-in-Chief of ChannelWorld. Contact him at [email protected]

n IT is a great lever to boost productivity. It’s also a great a leveler, helping countries such as ours to compete with more developed economies.

NOVEMBER 2013 INDIAN CHANNELWORLD 3

■ NEWS DIGEST07 Fujitsu Will Keep IBM in Check | Despite its small market share, Fujitsu is committed to developing its Sparc64 chip, and it thinks it has a role to play in keeping IBM from becoming too powerful. 08 Cisco Completes Sourcefire Purchase | Cisco has completed its acquisition of cybersecurity solutions

provider, Sourcefire, for which it paid $2.7 billion. Cisco expects the acquisition to be slightly dilutive to non-GAAP earnings in fiscal year 2014 as a result of normal purchase accounting adjustments and integration costs. 08 Hybrid Cloud Might Outrun Private Cloud |According to Gartner, nearly half of large enterprises polled say that they will have hybrid cloud deployments by the end of 2017.

■ NEWS ANALYSIS 10 Trading the Cloud | If all goes according to plan, we could see cloud services being traded in stocks and bonds in the future. ■ OPINION03 Editorial: Vijay Ramachandran believes IT is a great lever to boost pro-ductivity. It’s also great leveler, helping countries such as ours to compete with more developed economies. 46 Paul Glen: The desire to avoid blame has the potential to damage a career. Make amends while you can or forever repent.

InsideINDIAN CHANNELWORLD ■ NOVEMBER 2013

FOR BREAKING NEWS, GO TO CHANNELWORLD.IN

■ THE GRILL 17 Tom Flink, Vice President-Channels and Market Development

Sales, Citrix Worldwide, says the company’s channel partners will take big strides. The company’s revamped channel strategy will launch a new phase of partner interaction.

■ FEATURE 38 Nine Open Source Ways of Making Money Low-cost marketing, hard bargains, keeping competitors in check—profiteering abounds in the open source community.

■ FAST TRACK 16 J.B. Hooda, CEO, Progression Infonet, says that the company focuses on what the clients need and not what they want. This has helped it build trust and credibility.

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22 Built to LastSuccess seldom comes easy in the enterprise channel business. But, six partner organizations have stayed profitable and relevant to market demands over the last two decades—and continue to do so. Read about how these enterprise channel veterans have become successful with their daredevilry—year after year—to emerge as champions of the channel business, and defied the challenges that have persisted through their journey. They have created a legacy of growth and achievement.

■ CASE STUDY36 At The Right PlaceHow Chennai-based Secure Network Solutions delivered a complex security solution for the financial services conglomerate, Sriram Group.

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■ FOCAL POINT

41 Containing Data GrowthENTERPRISE DATA EXPLOSION: Data growth is unavoidable. But it must be accompanied by data management policies that ensure the data created and retained is of real and lasting value. Of course that’s easier said than done. It involves careful thought and no small effort. Tossing a new shelf of disk into a storage array is much easier than developing mea sures that will curb growth. But we need to if we hope to becom ing slaves to our own creation—a fate that is far harder to recover from than to avoid.

44 Make Smart ChoicesENTERPRISE DATA EXPLOSION: Explosive data growth creates challenges beyond

fielding more and more storage capacity. Apply new technologies where it will do the most good for your organization’s workloads.

FOR BREAKING NEWS, GO TO CHANNELWORLD.IN

InsideINDIAN CHANNELWORLD ■ NOVEMBER 2013

19 Santosh Agrawal, CEO, Esconet Technologies, says that he wants the company

to be a strong services-based company that can relied upon as a friendly consultant.

■ ON RECORD 14 Krithiwas Neelakantan, Director, Alliances and Channels, NetApp India,

elaborates on the company’s evolving channel ecosystem.

CHANNELWORLDGeetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027, IndiaCHANNELWORLD.INPublisher, President & CEO Louis D’Mello ■ EDITORIALEditor-in-Chief Vijay RamachandranManaging Editor T.M. Arun Kumar Executive Editor Gunjan TrivediAssociate Editors Sunil Shah,Yogesh GuptaFeatures Editor Shardha SubramanianSpecial Correspondents Gopal Kishore, Radhika Nallayam, Shantheri Mallaya Principal Correspondents Anup Varier, Debarati Roy, Sneha Jha, Varsha ChidambaramSenior Correspondents Aritra Sarkhel, Eric Ernest, Ershad Kaleebullah, Shubhra Rishi, Shweta Rao Senior Copy Editors Shreehari Paliath, Vinay Kumaar Lead Designers Jinan K.V., Pradeep Gulur, Suresh Nair, Vikas Kapoor Senior Designers Sabrina Naresh, Unnikrishnan A.V.

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■ OPERATIONSVice President HR & Operations Rupesh SreedharanFinancial Controller Sivaramakrishnan T.P.CIO Pavan MehraSenior Manager Operations: Ajay Adhikari, Chetan Acharya, Pooja Chhabra Senior Manager Accounts Sasi Kumar V.Senior Manager Production T.K. KarunakaranSenior Manager IT Satish Apagundi Manager Operations Dinesh P., Tharuna PaulManager Credit Control Prachi GuptaSr. Accounts Executive Poornima

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Hybrid Cloud Might Outrun Private Cloud

PAGE 08: Cisco Completes Sourcefire Purchase

PAGE 09: Open Software is Not Free: Red Hat

PAGE 10: Trading the Cloud

WHAT’S WITHIN

F I N D M O R E A R T I C L E S AT C H A N N E L W O R L D . I N

News

SERVERS

Fujitsu Will Keep IBM in Check

from becoming too power-ful, said Noriyuki Toyoki, Fujitsu corporate senior vice president and the head of its server division.

IBM already has one gi-ant “cash cow” from its dominance in mainframes, he said. If IBM came to dominate Unix in the same way—it already has more than half the market, ac-cording to IDC—the in-dustry and its customers would be worse off, accord-ing to Toyoki.

“Two cash cows would make IBM much, much stronger. We have to stop it.

That would not be good for us and it’s never good for the customer. Customers need alternatives to get the best value,” he said. Fujitsu is a close partner of Oracle. They each develop a ver-sion of the Sparc processor, and they jointly design sys-tems and resell each other’s products.

Oracle has been finding a wider role for its own Sparc designs lately, but Toyoki said the future of Fujitsu’s Sparc64 is secure. The Unix market may be shrinking, but it’s still large enough to support multiple RISC architectures, he said.

He brushed off a suggestion that Fujitsu could walk away from Sparc64 and use Oracle’s chips instead. “Frankly, we would not use Oracle’s Sparc chips in our servers,” Toyoki said.

Fujitsu is usually listed in the top five Unix vendors, but it trails far behind IBM, Oracle and Hewlett-Packard. Toyoki hopes the work Fujitsu is doing to make Oracle software run best on Fujitsu servers will expand his market share. “I believe it will be a big differentiation,” he said.

Like Oracle, Fujitsu is positioning its machines for big data workloads, which can be processed more quickly on servers with large system memories.

-- James Niccolai

DOING BATTLE in the $9 billion (about Rs 56,000 crore) Unix server

market is not for the timid. Designing a competitive microprocessor is a costly business, and with the Unix market seemingly in permanent decline it’s easy to see why smaller players might drop out.

But Fujitsu says it’s in it for the long haul. Despite its small market share, the company is committed to developing its Sparc64 chip, and it thinks it has a role to play in keeping IBM

Tally Solutions unveiled its latest range of enterprise offerings—Tally.ERP 9 Re-lease 4.7 and Tally.Server9 Release 4.7. Loaded with dynamic features, the re-lease 4.7 offers Tally.ERP9 customers, greater excise and National Pension Scheme compliance. The Tally.Server9 Release 4.7 offers higher administrative control and the much need-ed data security. Speaking

about the enhancements. “Be it statutory compliance or data protection, we have always believed that our products should be tech-nologically advanced and simple to use, so as to en-able smooth business opera-tions,” says Shoaib Ahmed, president, Tally Solutions,

Tally.ERP9 Release 4.7 reportedly addresses the tedious excise compliance issue faced by most busi-nesses, especially by the manufacturing firms.

—ChannelWorld Bureau

Tally’s New Release

ERP


-

Cisco has completed its acquisition of cybersecurity so-lutions provider, Sourcefire, for which it paid $2.7 billion (about Rs 16,800 crore).

The $2.7bn figure refers to the aggregate purchase price for out-standing equity awards. Cisco ex-pects the acquisition to be slightly dilutive to non-GAAP earnings in fiscal year 2014 as a result of nor-

PremiumAV has strengthened its pres-ence across India, Middle-East, and Russia. It has witnessed increas-ing sales through e-commerce portals in last three months and plans to strengthen the same for faster global accept-ability.

CtrlS has appointed Modi Infosol as the second distributor for India. With this strategic partnership, CtrlS has set the tone for an aggressive growth plan Redingtonwill continue to be the distributor for CtrlS.

Sanovi Technologies has announced changes at its senior manage-rial levels. Amarjeet S. Gill, will be VP, Sales for India and SAARC, Sankara Krishnan will be president, Alliances and New Initiatives, India and SAARC, and Narayana Menon. K has taken on the position of direc-tor, Marketing for India, Middle East and APAC markets.

cloud computing, a business case for private cloud cannot rely on lower costs as the primary justification.

“Virtualization reduces capital expenses, and stan-dards, and automation re-duce operational expenses,” said Bittman. “However, taking the next step of add-

ing usage met-rics, self-service offerings and automated provi-sioning requires investment in technologies without a signifi-cant reduction in

operational cost. With this in mind, the driving fac-tor for going that next step should primarily be agility.”

Bittman also focuses on how IT departments and CIOs should not be as wor-ried about the technology implemented by under-standing that cloud services require operational pro-cesses that are designed for speed and customized for the services offered

“Too often, private cloud projects are started by choosing a technology, but technology itself does not solve the transforma-tional people and process issues,” said Bittman. It is much better to focus first on an approach to make transformative changes. In many cases, that means creating a separate orga-nization outside of tradi-tional IT processes—at least to incubate these projects —and focusing first on a simple project that has buy-in between IT and IT’s customers.

Progress made with private cloud varies enormously, according to Gartner. Most deployments are starting small, with a limited scope of functionality. Gartner believes that in a market with a lot of vendors vying for market share, the winners and losers will be determined very quickly and because of the importance of integration throughout the cloud management platform, smaller players will likely be acquired or go out of business within the next few years.

—ChannelWorld Bureau

mal purchase accounting adjust-ments and integration costs.

The agreement sees Cisco’s security portfolio expand with the addition of Sourcefire’s advanced threat protection solutions, as well as a set of enforcement and remediation options that are integrated, pervasive, continu-ous, and open. This will support Cisco’s threat-centric security

model which is designed to enable customers to address the full attack spectrum.

“To truly protect against all possible attack vectors, our focus

is to examine the nature of mod-ern networked environments and devices and to defend them by deeply understanding and analys-ing the mindset of the attackers,” Cisco Security Group SVP, Chris-topher Young, said.

With the transaction com-plete, Sourcefire employees join the Cisco Security Group led by Young. Sourcefire founder and CTO, Martin Roesch, will assume the role of vice-president and chief architect of the group, re-porting to Young.

—Nermin Bajric

M&A

Short TakesCLOUD COMPUTING

Hybrid Cloud Might Outrun Private Cloud

ACCORDING TO a recent survey re-port by Gartner, nearly half of large

enterprises polled say that they will have hybrid cloud deployments by the end of 2017. Acoording to Thomas Bittman, vice president and distinguished analyst at Gartner, only 11 percent of the or-ganizations have no plans to do so through 2014.

In the past three years, pri-vate cloud com-puting has moved from an aspiration to a tenta-tive reality for nearly half of large enterprises. Hybrid cloud computing is at the same place today that private cloud was three years ago; as actual deployments are low, but aspirations are high.

Speaking on the factors that will contribute to the rise in the adoption of hybrid cloud computing, Bittman says that while cost benefits is a major driver of private

BUY OUT: Cisco can now expand its security portfolio.

Cisco Completes Sourcefire Purchase

11%of organizations,

alone, believe that they do not have a

hybrid plan till 2014.

Source: Gartner

8 INDIAN CHANNELWORLD NOVEMBER 2013

OPEN SOURCE

Open Software is Not Free: Red Hat

Kaseya Launches Traverse Kaseya has launched Traverse, which provides a service-centric view of the distributed cloud and IT infrastructure. It provides network performance monitoring, business service management and predictive analytics for Cloud as well as on-premise, hybrid, virtualised and distributed environments. The product stems from Kaseya’s latest acquisition of service monitoring software provider, Zyrion in July. Traverse maps

Around

The World

business services to the underlying IT infrastructure components that support them, so that users can pinpoint which services or groups are affected by network, server or application problems.

—Julia Talevski

Big Data for Digital MarketingHP has assembled a number of its data-mining software programs into a service, called the HP Digital Marketing Hub, that can synthesize multiple sources of marketing data to help organizations better identify potential customers.

The HP Digital Marketing Hub will use HP’s HAVEn, a collection of technologies that the

company has assembled into a big-data-styled analysis platform.

—Joab Jackson

Unisys’ Mobile Security Solution

Unisys has launched Stealth for Mobile, part of the company’s Stealth suite of security products, to tap into the growing BYOD trend among enterprises.

It uses data cloaking and encryption techniques to help organisations mitigate cybersecurity attacks. —Sathya Mithra Ashok

OPEN SOURCE is a development model and not a support one that

does bug fixing, according to Red Hat global CEO and president, Jim Whitehurst.

“On a conceptional level, open source is a develop-ment model to come up with great software,” he said.

One of the problems Whitehurst highlights with open source software is that the things that make it an attractive de-velopment model, such as breaking problems down into small pieces and rapid fixing, also make it chal-lenging.

“It’s very modular, and the saying in the open source community is that we don’t do bug fixes, we fix it in the next release, but you release early re-lease often,” he said.

While Whitehurst ad-mits that the approach is “great for adding function-ality,” he said it leads to problems for someone try-ing to run a business.

“If you put a $100 mil-lion dollar billing system on Linux, two to five years from now you want it to work,” he said.

Every time there is a bug that gets fixed, Whitehurst said it only gets fixed up-stream in Linux, or there is a patch.

However, if a business is running a three year old version of Linux, the upstream people are typi-cally not maintaining it.

“Instead, they are fix-ing the brand new release,

which if you try to run your billing system on, may break it,” Whitehurst said.

What Red Hat does to overcome this is “freeze the spec” every few years, and then commit to sup-porting that software for ten years.

“Two years from now, when a bug gets fixed upstream, we have a set of engineers that literally track every package, every version of Linux that we ship,” Whitehurst said.

If there is a bug or security flaw in an old version that needs to be fixed, Whitehurst said Red Hat will do it without breaking binary

compatibility.“We have almost 800 people who do nothing but track those kernels and make those changes without breaking binary compatibility,” he said.A service such as that does not come free, and Whitehurst points out

that it is not something the upstream community does.

However, Whitehurst said it is something that needs to be done for “a product that is used for productivity.”

--Patrick Budmar


storage - would be pack-aged by service providers and sold on a market. In the exchange, investors and traders could buy up these blocks and resell them to end users, or other inves-tors, potentially turning a profit if the value of the resource increases.

The market for these resources would ebb and flow, just like with any other commodity, based on supply and demand. Perhaps around the holi-day shopping season, or directly after a natural di-saster, these blocks of cloud resources would be more valuable, for example. As concerns about government peering increase, highly-se-cure resources could be in higher demand than more vanilla offerings.

The benefit, backers say, are multi-fold. For cloud computing providers, it would create a whole new marketplace where their services are sold. Intro-ducing these new trading mechanisms in a future’s exchange would allow pro-viders to sell out a year’s worth of use for their data center before ever even lay-ing a brick.

For end users, there can be benefits as well. Namely, when providers compete in a marketplace, prices could come down. It would be a central location for end us-ers to compare and contrast options from multiple ven-dors. Almost like a farmer’s market for cloud computing resources, says Rob Bissett, senior vice president of prod-uct for 6Fusion, the North Carolina company pushing the idea that recently signed with the CME Group.

Perhaps the real winners are the investors though. Turning cloud resources into a commodity exchange

TODAY, CLOUD com-puting resources are bought and sold in a fairly

straightforward process: A company needs extra com-pute capacity, for example, so they contract with a provider who spins up vir-tual machines for a certain amount of time.

But what will that pro-cess look like in, say, 2020? If efforts by a handful of companies come to frui-tion, there could be a lot more wheeling and deal-ing that goes on behind the scenes.

An idea is being floated by several companies to package cloud computing resources into blocks that can be bought and sold on a commodity futures trading market. It would be similar to how financial instruments like stocks, bonds and agricultural products like corn and

wheat are traded on ex-changes by investors.

Could this actually hap-pen? “It’s got some chal-lenges,” says Jeffery Harris, the former chief economist at the U.S. Commodity Fu-tures Trading Commission, which oversees futures trading. Regulators would have to go through a long-check list to ensure there is no room for manipulation in such a market before al-lowing it, predicts Harris, who now is a professor of finance at Syracuse Uni-versity’s School of Manage-ment. There could be tech-nical challenges too, both in terms of how such an ex-change would be operated and how the resources sold on the exchange would ac-tually be consumed by end users. Overall though, Har-ris says the idea is viable, yet still in the early days.

Recently, the idea has gained some credibility be-cause one of the companies that proposed the exchange named 6Fusion has signed a letter of intent to explore the idea with the largest futures exchange market in the country, the CME Group.

There are a handful of other companies pursuing this idea too though. Gen-erally, the process would work the same: Blocks of cloud computing resources - for example a month’s worth of virtual machines, or a year’s worth of cloud

If all goes according to plan, we could see cloud services being traded in stocks and bonds in the future.By Brandon Butler

Tradingthe Cloud

n NEWS ANALYSIS


introduces a whole new set of actors, such as investors and traders into the mix. To them, the cloud is just one more commodity for them to trade like a stock, bond or grain.

Backers of the proposi-tion at 6Fusion say that a couple of dominoes need to fall before their plan can really take off. One key, Bissett says, is to have a common trading metric – a way to compare resources from multiple providers in an apples-to-apple fashion to ensure one commodity is equal to another. To that end, 6Fusion has created the Workload Allocation Cube, or WAC, which takes into account CPU, storage and input/output speeds to create a common metric that is applicable across multiple providers. By hav-ing a common trading unit, buyers and sellers can be on the same page. 6Fusion already allows customers to use the WAC to measure their consumption of cloud resources across multiple providers. Eventually, 6Fu-sion wants to trade those WACs on the CME’s fu-tures exchange market.

6Fusion isn’t alone in pursuing this idea. Euro-pean company Deutsche Borse, which operates the Frankfurt Stock Exchange, has proposed an exchange that is based on software from a company named Zimory, which would man-age some of the technical hurdles this idea faces. Zi-mory has a connector that produces a secure pipeline between end users and various cloud providers’ services that are traded on the exchange. It would allow end users to get cloud resources from one provider on an exchange, then potentially switch to

another provider based on price, performance or other metrics.

The 6Fusion folks say they’re just buying and sell-ing their WACs, they’re not in the business of actually delivering the resources to end users; third party consultants and systems integrators can do that.

Cloud provider Vir-tustream purchased the company SpotCloud in 2010, which was set up by Reuven Cohen – who now works for Citrix on its cloud operations – as a marketplace where users could compare offerings from multiple providers. Virtustream is still devel-oping that product. Cohen says the cloud is a natural fit for being traded on an exchange though. “The

cloud market is one with a lot of fluctuations,” Cohen says. “There’s unused, excess capacity, and a dy-namic market, which are key characteristics for an exchange.”

Harris, the economist, agrees that a volatile indus-try makes for a good com-modity exchange, but he’s unsure if cloud quite fits the bill.While prices have been falling in the cloud computing market for the past few years, they have not been going back up. It’s more of a trajectory down compared to volatility. Tech-nology advancements like Moore’s Law could render old resources not as valu-able as new ones too, which could be another hurdle for trading the cloud in a fu-ture’s market.

And then there is the col-lusion part, which Harris says is perhaps the biggest hurdle. Before allow-ing cloud resources to be traded on the CME, regula-tors would likely want to see some sort of guarantees to ensure there is no way a company could manipulate the market to their advan-tage. The day before a block of cloud storage hits the market another competing provider could announce that it has built a new data center and added a large amount of new supply to the market.

End users could grapple with a new buying model too. “Organizations will need to reorganize their entire businesses to take advantage of cloud markets, and will need to effectively design processes, manage risk, set financial controls, and allocate budget re-sponsibility through new policies,” wrote William Fellows, an analyst with the 451 Research Group in a report last year on the idea. “Are consumers ready for such a dramatic change to their supply chains?”

Harris says those who would benefit most are likely the market-makers that buy and trade these commodities. Eventually cost savings that the mar-ket creates could trickle down to the end users, but investors will be buy-ing and selling, looking to make a profit in between.

6Fusion hopes to explore the idea with CME Group in the coming months and hopes to make its own ex-change market generally available within the next half-year. That could be the first real iteration of a platform that could be much more dominant in the future.

CHICAGO-based derivatives market CME has signed a non-binding letter of intent to work with IT capacity firm 6fusion on the construction of a platform to enable trading of infra-

structure as a service (Iaas) compute capacity.The cloud exchange will enable financial contracts based on

6fusion’s Workload Allocation Cube (WAC) platform to be bought and sold on an open market. The WAC algorithm is used to meter utility IT consumption by combining resources attributes such as CPU, memory and storage usage into one measurement unit, allowing capacity costs be easily compared from one supplier to another.Under the development plans, CME Group is to provide an electronic trading platform, with the WAC monitoring software be used to track the fulfilment of capacity bought on the exchange.

“6fusion has overcome the technical barriers to establishing compute as a tradeable commodity,” said John Cowan, 6fusion CEO and co-founder. “Working with the world’s leading and most diverse derivatives exchange, we are setting a course to develop a robust spot and over-the-counter (OTC) derivatives market for cloud computing based on 6fusion’s innovation.”

William Fellows, vice president of Cloudscape at 451 Re-search, said that the CME platform will open up the market for cloud brokers to trade resources.“An IaaS exchange could unlock enormous potential for buyers, sellers, and brokers,” he said. “The normalisation of supply and demand quantification performed by 6fusion combined with the trading execution venue provided by CME Group has the potential to seriously disrupt the market.”

“As long as there are not many brokers, marketplace volumes will remain small,” Stefan Ried, principal analyst at Forrester Re-search’s Business Technology Futures team.

—Matthew Finnegan

A Cloud Compute Exchange Platform?


COMMITMENT QUOTIENT: HIGH

One Network believes that commitment to customers is very important. In that

vein, how would you rate Juniper Networks commitment to its partners?I would surely rate Juniper Networks quite high on its commitment to its partner community. We do get ample amount of dedication and support from the Juniper Networks channel and enterprise account management team, especially in terms of new business development. This is through various Go-To-Market strategies and lead generation programs.

Also, with the existing customer projects, Juniper Networks team is always actively involved with designing sets of solutions to help expand these projects fruitfully. Such a support enables partners to be increasingly effective in proposing solutions to rope in potential customers and sustain and retain the existing customer base.

Your revenues from the networking domain increased by 25 percent

in the last fiscal. What role did Juniper Networks play in enabling this growth? Juniper Networks indeed plays a crucial role in enabling such growth for its partners. For instance, over the last fiscal

Anuradha Makhija, Managing Director, One Network India, speaks about how Juniper’s expertise, and expansion to new domains other than networking is helping the solution provider in a big way.

Being an Elite partner, we have easy access to an exhaustive range of technical and sales resources. It helps us gain far deeper insights on the competitive analysis that customers usually demand and execute during the procurement process.

Also, quite significantly, the Juniper Networks team promotes us in several cases as their Elite partner, as we offer the required technological strengths and stack of products that help ease ourselves in while executing larger and complex projects.

You have a strong focus on the BFSI sector. How do you ensure consistent

business from the industry?I have always strongly maintained that BFSI is one of the most lucrative verticals over a long period of time, and some of the most critical projects are executed in this vertical. In my opinion, the key to success in this vertical is sustaining the high quality

of services provided. Here, we have always tried to be more focused on increasing our quality and standard of support delivery model. We have achieved this by ensuring that we provide customers with the maximum uptime anytime and anywhere. To underscore our commitment to high quality of services, I’d like to mention that we have gained the ISO 9001:2008 certification as well.

One Network has a strong presence in tier-I cities. What is your stretegy

to extend your services to tier-II cities?Since we already have a strong presence in most of the enterprise companies across India, we are in one way providing indirect support to their branch and regional offices in tier-II cities. Therefore, we certainly do plan to extend our services in tier-II cities in a more focused manner by ensuring that we also have our sales office present in a few of these locations. This helps us take the existing service support story to customers based in that region. In addition to this, we also plan to extend our supply chain in these cities because it would get us some logistical ease to carry out business more effectively.

Juniper Networks is expanding its portfolio beyond the networking

domain. How have you leveraged your foray into other areas such as security?We have had Netscreen, which was later acquired by Juniper Networks, in our product portfolio for security products for quite some time. In fact, our association with Juniper Networks started with Netscreen security products. We have large deployments and customer references of its firewalls, SSL VPN, and IDP products. We have also started focusing on Junos WebApp Secure (JWAS), formerly known as Mykonos Web Security (MWS), for Web application firewall products.

year, Juniper Networks has initiated several programs in conjunction with its partners to create an environment conducive enough to tap new customers. These joint programs have helped significantly to further our competitive advantage over the usual competitors in the market.

Juniper Networks presents a host of crucial differentiators such as single OS platform, virtual chassis for switches, and the modular architecture of Junos. This surely helps partners attract and gain customers’ interest in newer ways of creating networking ecosystem.

Thus, such marketing initiatives—clubbed seamlessly with technical differentiating factors that Juniper Networks offers—have helped us convert a slew of deals and have fueled our growth.

Software-Defined Networking (SDN) seems to be the next big

promise in networking. What is Juniper Networks strategy on SDN?Juniper Networks evidently seems to be one of leading proponents in the space of introducing this fairly newer concept of Software-Defined Networking. In my opinion, the acquisition of Contrail Systems for their SDN roadmap has, in a quite obvious manner, presented Juniper Networks with a competitive advantage over other key competitive players. This clearly shows Juniper Networks commitment towards investing and adapting, with the required agility, to the new and upcoming trends.

I believe that with QFabric for datacenter solutions in place and with its optimized network layer approach, adapting SDN would help Juniper Networks offer more control over data flow within the datacenters. All these factors make it quite favorable for Juniper Networks to show its readiness for SDN.

One Network is one of the exclusively Elite partners of

Juniper Networks. How does it help you as a solution provider?

Let’s Build the Best showcases stories of channel partners who have benefited from their relationship with Juniper Networks.

Authorized Distributor

“As one of our leading partners, One Network has consistently enabled expansion in Manufacturing and Financial Services verticals in the past 3 years. Our customers have always been vocal about their quality of support. We look forward for their continued high commitment for years to come.”

— Jitendra Gupta, Director-Channels, Juniper Networks India and SAARC

I D G S E R V I C E S

Director, Alliances and Channels, NetApp India, elaborates on

the company’s evolving channel

ecosystem. By Radhika

Nallayam

It has been a year since you took over channels at NetApp. What has been your focus area during this period? NEELAKANTAN: From a strategy point of view, we have been working on improving our market cov-erage. When I say cover-age, it also means that we want to have the right set of partners by geography, industry, and solution. We have also tried to improve our focus on the partner competency part, because some of our partners have to compete with the large, integrated stack vendors who are much bigger in size. That’s the reason why we felt it’s important for our partners to be able to compete with players of all types in the market. We also focus largely on developing the capabilities of our partner companies,

in the areas of finance, ability to underwrite cus-tomer risks, and an ability to execute opex-based deals among a lot of other things. So, coverage, com-petency, and capability—the 3C’s as we call it—have been our focus areas dur-ing the last year.

NetApp has multiple technology partnerships in the industry. How do you leverage these relationships? NEELAKANTAN: We work very closely with our alli-ance ecosystem partners like Cisco, SAP, Microsoft, and RedHat among oth-ers. One of the focus areas was to enable our partners to work with our alliance ecosystem and deliver services to customers as a complete solution. We have increased our efforts towards working with our alliance ecosystem. The convergence point will be the partner who imple-ments a particular solution for the customer. We are building our partner eco-system skills around archi-tecture and implementa-tion, as well as support delivery capabilities.

Isn’t it a complicated affair for a partner to work with your alliance ecosystem members for a single deal? Wouldn’t this model lead to multiple points of contact?NEELAKANTAN: I don’t think that it’s a complicated model. All the vendors (NetApp and its alliance partners) converge at the partner level. We work very closely with alliance partners to ensure that the SI is adequately skilled and has a common go-to-market and customer acquisition strategy. We have a list of partners whose skills and target

Krithiwas Neelakantan,ON RECORD n


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markets are known to us. We share that list with our alliance partners and they come with their partner ecosystem details. In fact, there are a lot of common partners already. Post the development of this en-gagement model, many of our alliance partners’ SIs have started working with us closely. At the same time, many of our exclu-sive partners have got an opportunity to work with our other vendors as well. As a result, the overall skill, coverage, and reach of all the partners have gone up.

What are the tangible benefits of this engagement model? NEELAKANTAN: This has helped us increase the number of customers in the last year. This year, 23 percent of our business came from new customers. By virtue of that, the value of deals has gone up. It has also helped us deep-sell a lot of new solutions to existing customers.

There is strong perception that NetApp is more of a mid-market player, and can’t be considered an enterprise-class player. Many of your competitors play it up well to their benefit. How do your partners deal with this? NEELAKANTAN: We don’t penalize our customers either on capacity or per-formance. So, whether it’s our smallest customer or an Exabyte class cus-

tomer, they get the same architecture. But most of our competitors seem to have a differentiated prod-uct strategy. So a small business is expected to in-

vest further when it grows in capacity.

Strangely enough, some of your key partners are of the opinion that you have a diluted SMB strategy. NEELAKANTAN: We don’t really differentiate our customers in terms of SMB and enterprise. For us, the customer is important. The management, effi-ciency, back-up, recovery, and integrity of the data are paramount. We are giving all our customers the option of activating and deactivating certain features. We don’t want to give a fundamentally defi-cient product. Many of our customers have multiple product lines that don’t even talk to each other.

So, you don’t really divide your target markets as SMB or enterprise. NEELAKANTAN: We do,

because the type of en-gagement is different and so is the kind of solution that goes in. We possess a fair share of the market in all customer segments. However, we don’t segre-gate customers based on the turnover of the com-panies. We have the key enterprise and commer-cial accounts in India. We classify them based on the nature of engagement we have with the custom-er. Some accounts need direct attention from our end. Overall, the five big markets for us in India are telecom, banking,

ITES, manufacturing, and government.

How successful has the unified storage story been in terms of market share, considering EMC now claims that it is the leader in unified storage?NEELAKANTAN: We must dif-ferentiate between market-ing and reality. That could be part of our competitors’ marketing strategies, but their product strategies betray themselves. We are really happy with the fact that most of our competi-tors have started following the scale-out or unified architecture that NetApp has been proposing for several years. An example is NetApp’s success in the cloud market. We have a very good presence in the cloud service provider mar-ket. A large number of cloud service providers prefer to deploy unified architecture, because their customers

want the same management features and performance matrices across different storage types. The success of NetApp ONTAP is also proof of the acceptance of unified architecture.

Most enterprises are now moving away from capex to opex-based purchases. How is NetApp and its partners gearing up for this? NEELAKANTAN: Custom-ers are definitely looking at opex-based procure-ment models. They are increasingly looking at services driven deploy-ments, wherein they turn

to a service provider who can offer them technology as a service. I think NetApp is well-placed to address this change in the market because of the capabilities we have built on the ar-chitecture. We also work closely with the service providers and our own channel partners. For chan-nel partners especially, the capex to opex shift calls for a different capacity. They need the financial strength and strong SLA capabilities to offer outcome-based and user-based solutions.

We have had close in-teractions with a lot of our partners as part of implementing our 3C chan-nel vision. I can say with confidence that many of our tier-2 SIs are already skilled in professional and consulting services and have evolved into the appli-cation space. They are not asleep at the wheel. n

KRITHIWAS NEELAKANTAN | ON RECORD n

We don’t segregate customers based on the turnover of companies. We have the key enterprise and commercial

accounts in India. We classify them based on the nature of engagement we have with the customer.”

15.2% Is NetApp’s

total revenue contribution

in 2Q13 to the $5.2 billion open networked disk storage market.

SOURCE: IDC


J. B. Hooda and Rohit Luthra co-founded Progression Infonet in 1995. According to Hooda, its co-founder and director, the company started during a

period when the market was “signifi-cantly under-serviced in terms of IT services”. Seeing the continuing evo-lution and growing dependence of IT in the country, Progression Infonet grew to provide more IT services that added value to its customers’ businesses. It now provides system integration services in areas such as servers, storage, networking, virtual-ization, private cloud, and datacenter build among others.

This approach of closely following and understanding market trends has allowed the company to adjust accordingly and keep growth as top priority. Given today’s economic

n FAST TRACK

Progression Infonet

situation, that’s saying a lot about the company’s success.

Proof of the company success can be seen in its financial earnings over the past few years. It has grown, in revenue terms, by almost 33 percent

in FY 2011-12 and maintained a 25 percent growth mark in the period from FY 2012-13. “We help our cli-ents adopt solutions that are ahead of the technological curve which helps reduce their capex costs,” says Hooda. This is the reason behind the company being able to retain and grow its customer base two-fold. Moreover, Hooda emphasizes that the company operates on a model that provides its clients with what they need rather than what they want. Currently, its list of partners include big names like HP, Microsoft, Oracle, Sun, VMware among others.

In recent times, Progression Infonet has been investing a lot into the cloud infrastructure services. According to Hooda, providing services (IT-as-a-Service, DR-as-a-Service, Collaboration-as-a-Service) is going to be the company’s focus in the future. The company’s background in SI services will provide a boost as it treads the cloud path. “Our step towards public cloud services has been the most significant decision we have taken,” says Hooda. “By understanding the nitty-gritty of IT infrastructure at the client side, and the challenges that arise in integrating services, we can address these issues by bringing customers onto our cloud,” says Hooda. n

—Eric Ernest

Founded: 1995

Headquarters: Gurgaon

Key Executive: Rohit Luthra, Co-Founder and Director

Revenue 2010–11: Rs 27 crore



Key Principals: HP, VMware, Oracle, IBM, SUN, Symantec, Audio Codes

Key Technologies: Servers, storage, networking, virtualization, private cloud, datacenter build, custom hosting, DR and back-up

Website: www.progression.com

Snapshot

We focus on what the clients need and not what they want, says J.B. Hooda, CEO, Progression Infonet.

REVENUE GROWTH

SOURCE: PROGRESSION INFONET

Rs 27 cr

2010-11 2011-12 2012-13

Rs 36 cr

Rs 45 cr

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Dossier

The Synergy Summit in 2013 focused on mobility for the best part. How well are part-ners buying your story across geographies? Ever since the consumerization of IT, mobility represents a great opportu-nity for our partners. This opportunity has been driven largely by enterprise customers, who have been asking for mobility solutions. At Citrix, we take mobility beyond the use of devices, and talk about the power of applications and data. What we communicated to our partners at the Synergy Summit was how they can leverage their investments around desktop virtualization.

Citrix also announced changes to its Solu-tion Advisor Program. How does this work with the Partner Accelerator initiative and how will it help partners in India? Yes, there are multiple phases; one of these being Opportunity Registration (OR) across our cloud networking products. We have also tiered some of the benefits across the program based on silver, gold, and platinum memberships. Another soft but tangible change, is that our program now has incentives with hard require-ments. This sends a message that if part-ners invest, then they can benefit well. In

n THE GRILL

VP-Channels and Market Development Sales, Citrix Worldwide, says the company’s channel partners will take big strides.

Tom Flink

Name: Tom Flink

Designation: VP, worldwide channels and market development sales

Company: Citrix

Present Role: He is responsible for channel and sales strategy to maximize the effectiveness of Citrix partners worldwide. In addition, Flink is also responsible for market development sales with a focus on identifying and executing emerging routes to market and defining sales strategies for new market opportunities.

Career Graph: Flink joined Citrix in 2007 and has over 25 years in computer industry sales and professional services management. Prior to his joining Citrix, Flink served as SVP Practice Management at MTM Technologies.


n THE GRILL | TOM FLINK

the past, it was more of an ‘by invitation only’ approach. Now, partners can and will be able to clearly see the difference. This is where the Partner Accelerator initiative comes in. We spend dedicated time to enable partners the same way we would enable our own salesforce.

The bulk of your partners are in the silver category and are inactive, which make the numbers unwieldy. Wouldn’t Citrix be better off trimming the partner numbers at that level? Initially, we wanted to make entering our program easy. We didn’t impose too many training costs and absorbed most of it ourselves, with exceptions made only for the advanced level of training. Our focus has always been on the overall productivity of part-ners. This explains why we do end up

having maximum partners at the silver level. However, we have evaluated these aspects and when we made announce-ments in May this year, we gave part-ners a grace period (up to January 2014) to meet some of new tiering mandates in terms of certifications and investments. We expect a lot of partners to fall out of the program if they aren’t up to it.

What we do is devise a structure and then we allow each of the geographies to work and implement the program in the way it suits best. In India, at the plati-num level, we don’t have any partners. At the gold level, we have six partners and at the silver level, which is the entry point, we have maximum partners. Over a certain period of time, partners have the opportunity to move to gold.

Smaller partners express that some of the larger partners and your direct sales team end up cornering the creamy accounts leav-ing only SMB business to them and that there should be a level playing field for all. Is this true? We have aligned with part-ners who are extremely focused with our delivery agenda. As a policy, we do not constrain any partner, large or small, from executing any deal. Again, all these are subject to competitiveness and investments. We do have direct sales teams, but they do not sell. To the best of what we believe, we do not place any partner at a disadvantage or restrict them by segment. The underlying bed rock is: You have customer connect, go ahead and seal the deal. That is where the Advisory Rewards program kicks in. Assuming a silver partner gets an enter-prise account, the partner can lock and add value to it.

We want to have more conversations with partners to tell them about the OR, and how it will pan out for them. A lot of partners, in our observation, do not keep abreast of the changes we have been messaging about. They are in a time warp. So, the gap has to be bridged and we intend to do that, going forward.

Your partner program is strangely silent on revenue commitments. Why hasn’t Citrix elicited revenue commitments from partners till date? Till date, revenue commitments were a soft mandate. One of the big, recent changes that we have brought about is in putting an absolute number to revenue targets. This, combined with

certification requirements, will signal a paradigm shift in the way partners work with Citrix. Our channel managers are investing time in talking to partners about the deadlines, the possibilities and opportunities for partners with these mandates. We’ve had conversations, meetings, focus groups, and round ta-bles to understand what partners really want. What I have heard over and over again is that partners are willing to in-vest in requirements, provided that they know what is in it for them. I am certain that these changes and programs are go-ing to do all of that and more for them.

How effective is the Mobile Boot Camp, which has kicked off, going to be for partners in India? The idea behind these events is that this presents an opportunity for us to share our new mobility story with partner business owners, technical lead-ers, and sales heads. We will also utilize the platform to emphasize on the new changes in the partner program.

Are there any more channel related an-nouncements in the pipeline? While there are no new announcements at the mo-ment, we expect there will be some next year on the lines that we will be helping partners raise the bar (in terms of com-petencies) on the work they will start based on the foundations set this year. We might also look at broadening the spectrum of OR to virtualization prod-ucts, which we are evaluating, based on partner conversations. However, we are aware of the fact that we don’t want a program that will end up putting money upfront on virtualization and that will only result in greater discounting with-out creating actual profit.

Customer focus and channel management is always a tightrope and it has been felt that Citrix, in recent times, is tilting towards the former at the expense of the latter. We are committed to our channel model. We expend time internally in order to make our people understand this. Having said that, we don’t measure our sales people across geographies, merely based on the money they bring in, but also on the lev-els of partner engagement. So, we see it more as a choreographed leverage sales model, and less as a tightrope. We will be consistent in these objectives. —Shantheri Mallaya

We have aligned with

partners who are extremely focused with our delivery agenda.


THERE IS no denying that hard work is elementary to being successful. But, there are times when luck helps afford some

relief. For Esconet Technologies, luck and fortune has played a keen hand in its growth during the last few quarters. It recorded Rs 22 crore in revenue in FY 2012-13, a 37 percent growth from the previous fiscal. “It is difficult to pin-point a particular strategy, but we got repeat orders that were substantial and acquired couple of new customers. Both these factors contributed to the growth. We were lucky in that sense, con-sidering the market situation,” says Santosh Agrawal, director and CEO of Esconet Technologies.

But before the repeat orders and new customers came by, Esconet

n FAST TRACK

Esconet Technologies

Technologies had put in the hard yards. When it began, almost four decades ago in 1975, as a distribution-focused company, the IT world was a tiny microcosm of its present self. The business model was based on

high margins, much like any other business. But during the early 90s, when the volumes increased and margins decreased, Agrawal sought to diversify. “We didn’t have enough funds to push through the distribu-tion model. So, we decided to pursue systems integration with only a limited focus on distribution,” says Agrawal. Its turnover, which was be-tween Rs 12-13 crore, dropped to less than Rs 5 crore owing to the reduced contribution of distribution. “It was difficult as funds seemed to dry up. But we focused on changing our internal mindset and attitude, and persevered,” says Agrawal. Slowly, as companies like VMware, Intel, Cis-co, and D-Link came on board, it saw gained more confidence and grew.

Currently, the SI is working on inexpensive DR and back up solu-tions for SMBs, which constitute almost 40 percent of its business. “As most SMBs are family run and don’t always have technical expertise, we help in fulfilling their technology needs. By providing the appropriate services, we would like to grow with them,” says Agrawal.

“Essentially, we want to be a friendly consultant and services-based company, that delivers what the customer needs, not just what they want,” says Agrawal. n

-Shreehari Paliath

Founded: 1992

Headquarters: New Delhi

Revenue 2012-13: Rs 22 crore

Revenue 2011-12: RS 16 crore

Revenue 2010-11: Rs 13 crore

Employees: 45

Key Executives: Sunil Agrawal, Director; Ashok Gupta, CFO; Manish Sharma, VP-Sales; Neeraj Mehra, VP-Services and Support

Key Principals: Intel, Cisco, EMC, VMware, RSA, HP, Paessler, Softros

Key Business Activities: IT Infrastructure setup, support and maintenance

Website: www.esc.co.in

Snapshot

We want to be a strong services-based company, says Santosh Agrawal, CEO, Esconet Technologies.

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TECHNOLOGY SPLIT

SOURCE: ESCONET TECHNOLOGIES

21%Networking

25%Others

9%Security

18%Storage

12%Enterprise

Applications

4%Desktops and

Laptops

11%Services

Insight

Anuj Bhalla, Vice President, System Integration & Maintenance Services, GIS, Wipro talks about how their strategic partnership with NetApp has helped the company.

Driving ValueWith Alliance

What trends in the technology market will drive Wipro’s

services portfolio in the future?This is the age of change. Things like cloud, BigData, storage consolidation, VDI, SAP, BYOD are at the forefront of technology adoption by customers. With this change in the IT environment, customers are looking at disruptive operations, seamless upgrades and easy manageability on a day to day basis. These are the potential addressable areas for Wipro. And with our investments in the

partner ecosystems and technology, we are now ready to take on these markets.

What are the biggest challenges in the channel community today

and how has your association with NetApp resolved them?Some of the biggest challenges that we see in the channel community today are consulting on business continuity, end to end IT solutions, SLA management and retaining the skills. But NetApp and Wipro’s stronghold in all the above mentioned areas and strong investments in areas like CDOT, FLEXPOD with NetApp, has helped us capitalize and tackle these issues head on.

For instance, Wipro, coupled with a tier 1 partner recently won a deal with a BFSI customer. The customer chose Wipro & NetApp for their technological benefits and the skills Wipro demonstrat-ed on NetApp’s technology. We have had wins in manufacturing sector on account of Netapp’s unique features on Data de-duplication at the block level.

How has NetApp helped you win over customers over competition?

NetApp storage boxes come with rich features. We have won cases with NetApp by displaying features like de-duplication, scale out architecture, replication and etc. One of our greatest wins would be winning a deal for server consolidation and data replication thanks to strong consulting and efforts to provide end to end IT solutions coupled with strong technology features from Netapp.

How would you rate NetApp in terms of profitability and other

engagement terms that exist in the channel community?NetApp is a whole hearted partner centric organization. Wipro is their ASP partner and we perform the SI services for them as well. NetApp has been one of our key storage alliances delivering strong business growth year on year.

How has your strategic partnership with NetApp helped Wipro grow in

the area of enterprise data storage?We have been NetApp’s strategic partners in the country for a decade and their only star partner in India. Our engagement with them cuts across all verticals with larger deals in sectors like BFSI, IT/ITES and manufacturing. We are well positioned to cater to ever changing demands of next-gen customers with Wipro’s advanced services like WIFLex and NetApp’s Flexpod, Clustered Data OnTap and virtualization solutions.

How have NetApp’s solutions and Wipro’s services helped solve

customer challenges while maintaining customer benefits?The capabilities’ of Wipro as a solution provider is well documented and acknowledged by most of the customers and OEM’s present today. We as a system integrator have been here for a long time and as an industry bigwig with a vast experience of managing customer IT infrastructure and rich delivery capability based on NetApp’s technology, we have efficiently demonstrated the features of seamless upgrades, migration, commitment on SLAs and storage reclamation.

What is the USP of NetApp’s value proposition that it offers to its

customers?NetApp’s array of storage systems which include the E-Series, FAS/V-Series and flash array storage systems has features that offer seamless migration throughout their product lines. Their uniqueness in block level de - duplication, thin provisioning, replication and storage visualization bring forth values that customers are benefiting from in real time environments. With CDOT, they offer seamless upgrade, zero down time for maintenance and others which help the customers manage NetApp boxes efficiently and independently.

I D G S E R V I C E S

Authorized Distributor

— Krithiwas Neelakantan, Director Channel & Alliances, India & SAARC,

NetApp India

NetApp’s Unified Storage & Clustered ONTAP is the preferred platform for our System Integrators . As customers move to converged & virtualized infrastructure , our partners are well positioned to deliver NetApp’s compelling value proposition.

Success seldom comes easy in the enterprise channel business. But, six partner organizations have stayed profitable and relevant to market demands over the last two decades—and continue to do so. By Anup Varier and Yogesh Gupta

n COVER STORY

ENTERPRISE CHANNEL VETERANS

Confident Stride >>> 24

Tarun Seth,Micro Clinic

Keeping Good Company >>> 26

Sudhir Kothari,Embee Software

Intelligent Business >>> 28

Ranjan Chopra,Team Computers

It’s about carrying on the legacy and doing something I love and have a passion for.

- Nik Wallenda

THE quote by the American acrobat, aerialist, daredevil, and high wire artist syncs well with enthusiastic entrepreneurs

running an IT business, even more so for enterprise solution providers who have built a time-tested legacy over the years.

A case-in-point is Tarun Seth of Micro Clinic, who explored the acquisition route to increase its market share in security and availability or Saurin Shah of Ashtech Infotech, established in 1987,


Success seldom comes easy in the enterprise channel business. But, six partner organizations have stayed profitable and relevant to market demands over the last two decades—and continue to do so. By Anup Varier and Yogesh Gupta

Shifting Gears >>> 30

Saurin Shah,Ashtech Infotech

Customer Connect >>> 32

ANIL KESAVAN,Vertex Techno Solutions

Tactful Maneuvers >>> 34

R.S. Shanbhag,Valuepoint Systems

hived its distribution business in 2000 to solely focus on systems integration. Another stalwart, Ranjan Chopra of Team Computers sensed a big opportunity seven years back and plunged into analytics to enjoy the first-mover advantage. These examples demonstrate business acumen and industry experience

of partner companies that have coursed the ‘highs and lows’ in their long-standing entrepreneurial career spanning over twenty years.

Read how six enterprise channel veterans have become successful with their daredevilry—year after year—to emerge as champions of the channel business.


MICRO CLINIC registered a 30 percent dip in its topline revenue for March ending 2013. As

a 22-year veteran in channel busi-ness, the dip from Rs 113 crore in

FY 2011-12 to Rs 77 crore the next fiscal was a severe blow. But Ta-run Seth, founder and MD, Micro Clinic says, “It was a conscious decision to avoid hardware orders with fewer margins. The bottom

n COVER STORY

With bold business strategies and a focused roadmap, Micro Clinic is set for a meteoric rise.

Confidentlines in FY 2012-13 were better than FY 2011-12.”

Seth, with his years of experi-ence and business acumen, had few aces up his sleeve. A month into the new fiscal, he took 100 employees from a Mumbai-based enterprise partner organisation to help refo-cus on security and availability in the Western region of India. “If we had to train our people, it would take years to develop the required skill set, by which time we would have lost valuable time in the mar-ket. IT does not wait for anyone. So, we got them onboard and start-ed,” he says.

Seth has couple more reasons to whole-heartedly believe in this business move. In his long standing career, he has never before seen the manner and conviction by which this new team sells availability so-lutions from NetApp and EMC to customers, he says.

Micro Clinic, primarily strong in North India, was mostly into fulfilment since its foray into stor-age in 2005. For him, profitability makes a big difference as it offers and conducts sizing and application testing to suggest the right mix to customers. “This new team added a second tier of security solutions to our portfolio,” Seth says. “We will extend ‘availability and security’ to northern and southern parts of In-dia. It was a God send opportunity, as the deal was finalized within

Stride

TARUN SETH,Founder and MD, Micro Clinic

l Be an ethical (reinvest the earnings) and credible (pay distributors on time) company. It makes little sense executing business for only top lines.

l Retain middle and senior management with lucrative remuneration to attract best manpower at par offered by tier-1 systems integrators.

l Tweak TAM (Total Addressable Market) of government and enterprise according to company’s strength and industry trends.

SECRETS TO LONGEVITY


three months of discussions,” says Seth. This new venture has started showing a profit since August 2013.

MONEY AND SKILLSYears ago, in 1991, as a first time entrepreneur with limited funds, Seth invested his provident fund money to begin business. “We were purely a service organisation. We had no money to execute hardware projects,” recalls Seth. By 2012, the company’s turnover grew from Rs 14 lakh that it recorded in 1991 to Rs 100 crore. The biggest challenge to-day for companies like Micro Clinic is the cash crunch. “There seldom is extra cash,” says Seth. “There has been zero borrowing till date and it was just one year in the last two decades that we did not make profits,” he says. In late 90s, branch offices that the SI added across In-dia amplified losses and the quality of people handling the location was a challenge, he says. HP appointed Micro Clinic as ASP in 14 locations five years ago which helped in sort-ing day-to-day expenses.

“But, a national presence across different states (with different li-cence policies) helps execute local delivery pan India,” he says. Micro Clinic has never closed any branch till date. “Today it adds brand value as we increase footprints in infra-structure, security, and availability. Now we will make more profits from these branches,” he says.

Its brand value has strengthened due to its credibility. Three years ago, a huge fraud running into couple of crores by the company’s employee in its Jaipur branch was detected. “Redington stood by us and gave us ample time to pay the due amount without interest charges. This is the market credibility we have built over the years,” he says. The company invested in Microsoft ERP four years back that coincidentally helped it de-tect the fraud. He credits the ERP to Ranjan Chopra of Team Computers who pushed him to implement ERP within Micro Clinic.

INNOVATION IN SERVICES These days, Micro Clinic has re-duced its focus on hardware rev-

that offered services to customers within four hours,” he says.

Five years back, Micro Clinic invested a substantial amount in R&D to build a services offering on the Kaseya platform. “But, it has not taken off in a big manner,” says Seth. That has not discouraged him. “Gartner predicts managed services to be 65 percent of total revenues of enterprise IT manage-ment by 2015-16. In the US, these services that we offer are doing well. We are among handful of SIs that are ready to ride the wave, es-pecially considering that we have a call centre, script, and people in place,” he says.

In 1999, the company transi-tioned by forging alliances with HP (Compaq earlier) and then added IBM. Presently, it is a premier partner for HP.

Micro Clinic keeps track on emerging technologies like big data and cloud. “It is important to have a bird’s eye-view on the vendor land-scape and align with right ones. Our existence is mostly due to the capability of our sales team and vendors,” he says.

Micro Clinic, that was purely a government player till 2003, shifted focus to the enterprise segment in 2007. Government sector has good prospects and we have formed a special team for this vertical. “The revenue split in future would be 30 percent and 70 percent in govern-ment and enterprise,” says Seth.

Micro Clinic is an SI and ser-vices company, with has more than 1000 employees, 15 branches, and 187 service locations. It has always ensured lucrative employee poli-cies to attract the best manpower at a price similar to tier-1 SIs. This has strengthened its position over the years. Our offices in Mum-bai, Ahmedabad, and Pune will strengthen top lines and we will record more than Rs 140 crore in revenues this fiscal. The first six months has yielded half that target. “The new team on board will accel-erate doubling of revenues, and im-portantly healthier bottom lines,” says Tarun Seth, founder and MD of Micro Clinic. n

enue. It now contributes to 50 per-cent of the revenue compared to 78 percent few years back. “Security and availability and services now contribute 30 percent and 25 per-cent respectively and also adds to margins,” Seth says. “Offering in-novative services to the customer is our survival mantra. From offering break and fix services in early 90s, we then invested in mobile vans

Started as a proprietor firm in New Delhi with an eight-member team offering services including FM, break-fix, AMC, etcetera, to enterprise custom-ers. The turnover for the first fiscal was Rs 14 lakh.

Implemented ERP in 12 branch offices across India to stream-line its fast expanding opera-tions and diversified enterprise customer base.

Developed managed services offering on the Kaseya platform for SNMP protocol, with over 970 scripts, to manage IT in-frastructure of mid-market and large enterprise customers.

Acquired a channel partner company with more than 100 employees to strengthen its Western India market and add information security and avail-ability to emerge as an end-to-end solution provider.

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FOUNDED IN 1987, Embee Software has evolved from being a value added partner for software products to a

trusted systems integrator with annual revenues of over Rs 200 crore. This journey of over 26 years started with Sudhir Kothari, the company’s MD and CEO, selling a commodity which was pretty much unknown to most--software licenses.

Most people at the time failed to understand the logic behind investing money in software. According to this lot, software is something that ought to come free with hardware. “In those days we had to go to each and every customer’s desk and explain the merits of the software while also emphasizing the need to buy proper licenses,” says Kothari.

If the customers it dealt with when it started off were less aware, the present day consumer is just too smart. While the adoption trends might have changed, the challenges associated with selling technology solutions don’t seem to abate. Earlier it concentrated its efforts on explaining the transactional outcomes from a particular technology. Whereas now, as an end-to-end IT consulting and solution provider, Embee helps customers identify areas in which a technology will help achieve business outcomes.

“In the career spaning over 25 years, the seven year period from 2002 to 2008 were the best years.” It was the time when technology

n COVER STORY

were fine with just transactional gains,” says Kothari.

But like all good things, this lasted only for a limited time. Today, with cloud and similar technologies creating disruptions, the situation demands that solution providers convince customers about the value proposition of newer technologies and operating models.

CONNECT WITH OEMs

Kothari was also never ready to compromise on quality. “I always wanted to work only with the best companies, be it customers or principals,” he says. But he is also quick to admit that not everything is about wisdom and foresight. “You also need some luck to work for you to succeed,” he says. Luck did favor the SI as it tied up with principals like Microsoft, IBM, Cisco, and HP-Compaq – companies that have not just survived but thrived in these past 25 years.

A strategy that also worked well within Embee was to emulate the best practices and strategies of its OEMs. “We picked out all that we felt was relevant to us and incorporated that within our organization,” says Kothari. This has greatly helped it stay relevant and stand tall in front of their customers as an example of practicing what they preach.

With six branches across the country and over 250 employees, Embee has invested in technology that helps add professionalism in the system and visibility to employees. The HR, sales, CRM, and financial management tools are all a part of their internal IT ecosystem. “We have spent more than Rs 2 crore in the last five years on technology that helps run our organization better,” says Kothari.

And a business is only as good as the people it employs. “We have made sure that we evolve with the times and made our HR policies such that it helps us retain the best talent,” says Kothari. Lot is also dependent on the fact that

Partnering with good vendors and customers has been the reason behind Embee Software’s success.

Keeping GoodCompany

Founded in 1987, it was incor-porated as a private limited company in 1992.

Started tie ups with major IT OEM’s and opened its first branch office in Jamshedpur outside its head office in Kolkata.

Started evolution from being a value added partner into an end-to-end systems integrator cater-ing to SMBs and enterprises. Implemented ERP practice inter-nally which was a clear indication of the company’s philosophy of ‘practice what you preach’.

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products enjoyed a pull market with customers coming up to partners and asking for solutions. They had the time and money to experiment as the Indian economy was doing well. They


at Embee, employees are allowed to take responsibility and have been given the freedom to take decisions, make mistakes, and learn. This is something most entrepreneurs in the enterprise channel business are not keen to execute. According to Kothari, the independence that the organization provides attracts risk takers. “People don’t just work for money – they work for challenges and the pride in solving those challenges,” he says.

CLOSER TO CUSTOMEREmbee, as an organization, also tries to take up work only with organizations where the customer-service provider relationship is understood to be

such a customer whose business shuts down and your payments get stuck,” he says.

This becomes especially relevant in the current business environment. “We are working on a solution that will help us track and analyze our existing customers so that we can reduce the risk of further exposure to those that are not doing too well.” This problem wasn’t as acute when the country was growing at a brisk pace. But now, over the last couple of years, solution providers are beginning to feel the pinch of defaulting customers which inflicts adverse effect to cash f low, at times..

Kothari also firmly believes that in order to be successful you have to take all the stakeholders along with you. “It is important that you maintain relationships with your suppliers and other partners,” he says. Having been in business from the time mainframes were mainstream to the popularity of the cloud, he feels that the pace of innovation has picked up. “Each time, the interval between technology innovations is reducing and we are now required to adapt to each of the changes in less and less time,” says Sudhir Kothari, managing director and CEO of Embee Software. n

one of give and take. “I would only like to work with customers who are willing to consider our inputs, respect our investment, and reward our efforts,” says Kothari. An advantage of working with such open-minded customers is that the solution provider also learns and grows.

Kothari also believes in staying close the customer as it helps a solution provider stay relevant. An area that it is working on internally is to figure out a way to identify the overall health of its customers by keeping track of their business and financials. “It’s very difficult to keep track when you are dealing with over a thousand customers. One time or the other you will fall prey to

SUDHIR KOTHARI,MD and CEO, Embee Software

l Align sales strategy from time-to-time to cater to the changing customer needs and raise awareness levels in the market.

l Emulate the best practices and strategies of its OEM partners and incorporate relevant ones within the organization.

l Empowered its employees to take responsibilites and have been given the freedom to take decisions, make mistakes and learn.

l Evolve its HR policies to help them retain the best talent.



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TEAM COMPUTERS celebrated its silver jubilee last year. But, the Delhi-based SI does not intend to slow down anytime

soon. What was conceived as a small 10-member organization is now a systems integration behemoth aim-ing to hit Rs 300 crore this fiscal.

Ranjan Chopra, chairman and MD of Team Computers is optimistic about its growth. “Staying ahead of the tech curve has been our strength from the time we started on a break fix services model,” he says.

For Team Computers, big data and analytics is a resounding success as it has executed more than 300 proj-ects across various verticals. Its slant towards BI and its success in this domain has opened up massive op-portunities in big data. But, how does Team foresee the potential in upcom-

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fore we take the plunge into a new technology,” says Chopra. For, being a promoter driven company, it is imperative for the company to have a futuristic horizon from an invest-ment perspective.

In the last few years, the focus at Team Computers has been to enhance the consulting layer to the list of services. “The end-customers are fine with hardware, software, and BI, but they need better perfor-mance out of IT infrastructures,” says Chopra.

Team Computers was amongst the first to deploy Google Cloud and it has embraced mobility in a big way. It believes mobility, big data and analytics, and cloud are clear trends across companies in India. “We have managed to do well in the last five years and managed to retain profit-ability by focusing more on activities around project management and business consulting,” he says.

RANJAN CHOPRAChairman and MD, Team Computers

Team Computers has done one thing consistently over the past 25 years: Innovate and change.

IntelligentBusiness

ing technologies? The answer lies in its team’s long years experience. The management team’s research and experience helps decide when to venture into new technologies at the right time. “The time a technology takes and stays mainstream, TAM, up scaling manpower, etcetera, are few important considerations be-

l The fate of a company and its employees are intertwined. Empower employees for a long-term journey to ensure maximum productivity.

l Challenge your business model according to customer demands. Plunge into technology trends like big data and cloud to enjoy first-mover advantage.

l Maintain financial health of the company. Income has to be more than expenses.

l Ensure end-to-end customer experience to maintain a respect-ful and profitable partnership.



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couple of software vendor compa-nies who he feels work for only their selfish profits. “The word ‘partner’ seldom means anything to them. A lot of price undercutting happens even though one partner would have worked more than the other. These OEMs are least bothered to make amends,” he says.

In the early days, Chopra made the mistake of having stakeholders in the company through a partnership models. “The partners need to select these stakeholders very carefully be-cause everyone wants to share profits but nobody shares losses,” he says.

But Chopra has always stuck to his guns. He believes in empower-ing employees to play the long in-nings. If the company does well, the employees’ careers will progress, and hence our fates—company’s and employees—are intertwined, he says. “The onus is on maximising employ-ee productivity without suffocating them with excess meetings or unre-alistic goals,” he says. The executives in the middle management and high management have been around for a long time. “I am against training em-ployees for just trainings sake. They should be trained to be more produc-tive which will drive company’s suc-cess,” Chopra says.

In these 25 years, Chopra has be-lieved that there should love, respect, and profit between an organization and its client. “The client should love working with you and have the respect for your competence as a technology company. There will always be cus-tomers who only look for L1,” he says.

Today Team Computers has whole spectrum of technologies at its disposal to help customers. “Opex model is the flavour and we do have the basics well covered, right from technology to finance, we offer them a choice between capex and opex,” says Ranjan Chopra.

Team Computers, today, caters to very big enterprise customers through its 1100 plus employee or-ganisation. “In the enterprise busi-ness, if the large customers benefits through technology, then we make good money. That is one of the many interesting facets of this journey,” says Chopra. n

TIGHTENING CASH FLOWFor Chopra, three laws of finance have been valid and, according to him, will stay so in the future too. “I believe in ‘Top line is vanity, bottom line is sanity, but cash is the only re-ality’,” he says.

Chopra and his finance team moni-tor a daily balance sheet–an initiative introduced five years ago. “Without this daily cash flow check, we do not

move ahead on any transaction. This is very important for any channel business,” he says. With such strong beliefs, Team has not faced financial trouble since it started operations. “Mid sized and big business organ-isations lose money due to less vis-ibility, which can lead to a financial disaster,” says Chopra.

Team also ensures that it collects payments before it pays OEMs and distributors. To make all this happen like clockwork, it focuses on project management. “To ensure smooth flow of working capital, select cus-tomers and verify their credibility as good paymasters,” says Chopra. Of-ten, entrepreneurs in the IT business tend to deploy short-term working capital into long-term capex. This could be dangerous, he adds.

Contrary to market trends, the SI has expanded its hardware business in places like Gujarat and Chandi-garh. Even though maintaining low operating costs at branch offices is a challenge the company doesn’t mind running operations on a relatively high cost, as branch offices have their own advantages for pan India enterprise solution provider like Team Computers.

EVALUATING VENDORS, EMPOWERING EMPLOYEESFor most partner organizations, the vendor-channel relation is a delicate game. Chopra had endured his share of highs and lows.

“I used to work hard exclusively with two big technology vendors. Therefore, when a competing vendor introduced an indirect channel route in India we didn’t work with them. But, we soon realised that there was no loyalty left between a vendor and a channel partner. So we re-strategized started working with that vendor too which has added value to both of us,” he says.

Owing to its robust legacy any OEM or vendor, old and new, wants to ally with Team Computers. “We always check the DNA of the com-pany .For example HP and IBM have long-term solid brand name as they are people focused organisation with minimal short changes,” says Cho-pra. Though, he is not happy with

Extending its reach to all major cities like New Delhi, Mumbai, Chennai, Bangalore, and Kol-kata to provide services to its enterprise customers.

One the first few companies in India to implement big data and analytics projects to help com-panies make decisions simpler and faster. Today, with more than 300 big data and analyt-ics projects, the company has received accolades.

Introduced Google’s enterprise solutions to the Indian market by bringing in innovative solu-tions like Google Enterprise Search and Google Apps for Business.

Pioneered the Institute of Busi-ness Intelligence, where the course content has been de-rived from the best practices in BI deployed at more than 200 customers across India and US.

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AT START of the new mil-lennium when the dotcom bubble was about to burst, Mumbai-based Ashtech

Infotech’s business model was crum-bling. With the challenge of bad debt looming, it seemed the end of the road for the 12-year-old company.

Ashtech was founded as services only company in 1987 that focused on third party maintenance ser-vices. But the company manage-ment had another plan in place. “It was a tough period that we man-aged to survive,” says Saurin Shah, MD, Ashtech Infotech. It sold its distribution business to Compuage in 2000 and decided to move to sys-tems integration.

This was not the first time the company had changed the business model. In late 80s and early 90s, commencing with reselling periph-

n COVER STORY

also had a parallel line of distribu-tion into monitors,” he says.

From recording revenues of Rs 11 crore in 1991-92, the company clocked Rs 73.10 crore in the last fis-cal. The two decade old legacy and corresponding numbers might sug-gest a modest CAGR for Ashtech. However Shah is unperturbed. “In the early days of business, the box pusher and distributor mode gave good top lines. We stay more focused on bottom lines since a decade to ensure a sustainable and steady growth - if not highly profit-able at all times,” he adds. From 2000 onwards, the company moved the value chain from entry level sys-tems towards enterprise products.

The company is expecting 20 percent CAGR this fiscal with revenues in excess of Rs 90 crore. In the last decade, there has been acquisitions of enterprise and mid

SAURIN SHAH MD, Ashtech Infotech

Ashtech Infotech has proved time and again that it stays relevant to the emerging needs of enterprises.

ShiftingGears

erals and distribution, the company dabbled in imports of peripherals and fax machines. That, according to Shah, was the need of the hour. The era of MNCs coerced the com-pany to venture into a office systems business as a Compaq business part-ner and Digital Alpha partner. “We

l Focus on company’s core strengths and select your sweet spots in terms of technology domains and the customer segment.

l Stay focused on bottom lines for a sustainable and steady growth for a longer period of time even if it is not highly profitable at all times.

l Work with big and well established technology vendors than experiment much with newer and smaller OEMs foraying in the market.



a steady growth,” says Shah. “We attempted to induct ex-

ecutives from partner companies but there is very little competent manpower. Also many executives aspire to join OEM and distribution companies,” he adds. It is conserva-tive and tries to retrain the existing manpower by scaling their skill sets to ride the change in technol-ogy. Last two consecutive years the company has been recruiting fresh MBA’s and a few Engineering Grad-uated from institutes of repute in Mumbai. By training and certifying them on the respective technologies of focus; they are being put to pro-ductive use.

It avoids complicated financial transactions at the enterprise end. “We do not favour opex pricing as companies like us are unable to structure these deals. It puts too much pressure on us,” he says. Though Ashtech executes deals through financing arms of say an HP or IBM, opex models, generally, are not proactively initiated by them.

Industry is abuzz with enterprise IT migrating towards more appli-cations-based models. But these applications have challenges in terms of subscription, margins, and sustainability for a reseller unless there is lot of customisation and software woven around it, believes Shah. Transformation from a hard-ware guy to selling applications and related cost advantage does not seem to work much in oits favour.

Cloud, mobility, and big data is a reality. “The addressable market typically starts with vendors’ hype which takes two to three years for a particular technology to become main stream and ensure good re-turns for channels,” he says. As one of the fifteen Consortium Partners of ‘All Time IT Solutions Private Limited’, we shared the risk and the investments for GTM to address the ‘Cloud’ Services Business.

Our journey in the channel busi-ness has been in sync with the market conditions with a regular refresh or product, solutions and services. “It has been an enriching one with few roadblocks like any business,” Shah. n

market customers that involved projects from server deployments to virtualization solutions to man-aged services.

SELECTING THE RIGHT VENDORThe biggest challenge for mid-size partner companies is handling too many product categories. “It is sim-ple to talk about the whole portfolio in front of the enterprise customer. But more than often most clients categorise the partners into differ-ent buckets like server vendor or network vendor,” says Shah.

A solution provider seldom receives 100 percent enterprise IT orders from a single customer despite maintianing good relations with them, he says. “They work with multiple channels. But one has to wait for the right moment to crack the deal and maximise the revenues from a single client,” he says.

But were there business strate-gies that did not click for Ashtech over the years? Shah says, “Many vendors who are excited about their technology knock on our doors. But the market isn’t matured enough and the cost structure does not spell success for these vendors.”

Ashtech discontinued four to five such vendor alliances. “These prin-cipals are often small in size with limited resources to create a mar-ket buzz. By the time the vendor becomes popular, the technology changes,” he says.

It makes better business sense to attach with old (but relevant) and bigger vendors and avoid working aggressively with the noise created by newer and small vendors, says Shah. “However, you can’t shoo any vendor because as a systems inte-grator one need to keep all options open,” he adds.

MANAGING THE COSTS Ashtech commands a strong pres-ence in western India with offices at Pune and Ahmedabad. According to Shah, when in 1994, the company started its Gujarat operations with Ahmedabad as regional headquar-ters it din’t expect the region to contribute almost one fifth of the overall revenues. But, it had to close the Bangalore office few years back as it did not much financial sense.

“Our main competition is from the Wipros and TCS’ of the world and local regional players. But we work with these big players too as collaboration between tier-1 and tier-2 partners is now becoming popular,” says Shah.

Ashtech Infotech is not highly aggressive on recruitment. “One can multiply growth by hiring tons of people but considering the margins and business chal-lenges existing today, we prefer

Ventured into ‘IT Product Distri-bution’ business being Master Distributor for TVSE for seven years (1988-1995) and LG from 1996-2000.

Decided to sell distribution business and solely focussed on its SI business with part-nerships with Oracle ( Sun Micro ) , HP, EMC, NetApp, VMware,IBM and other OEMs

Major re-branding exercise undertaken with launch of new logo and innovative punch-line, ‘Simplifying IT’, that was indica-tive of the company’s vision for its customers.

The employee strength crossed 250 plus across the branch of-fices—almost doubling in what it was in 1995.

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ANIL KESAVAN and Bijoy Nair , directors of Vertex Techno Solutions started the company in 1993 as a

sub-distributor for the HP-HCL partnership that sold the OEM’s printers. Twenty years later the company enjoys the status of being HP’s platinum partner in its printing and personal business. Today, Vertex is part of a select group of IT infrastructure solution providers who are solely dedicated to the HP portfolio. But Vertex wasn’t always about solutions and services.

During its initial years, Vertex focused on selling consumer technology products and was

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32 INDIAN CHANNELWORLD SEPTEMBER 2013

says Kesavan. It carried on with that model for a good part of the next decade after which, in 2008, it moved to becoming a value added reseller and a technology solution provider.

Sharp focus on the niche that they operated in helped Vertex sail through the rough waters of the dotcom burst. At the time, it concentrated its efforts on the box pushing business and sold desktops, and the new and emerging product of the time called laptops. “Today, we partner with HP and focus more on the enterprise business with virtualization and consolidation solutions,” says Nair.

SMB PUSHWhen it made the shift from being product resellers to a

ANIL KESAVAN (R) AND BIJOY NAIR, Directors, Vertex Techno Solutions

A unique model of growing with its customer has kept Vertex Techno Solutions in business.

CustomerConnect

involved with major OEMs till the end of 1999. “It was at the same time that the HP-Compaq merger was completed and we moved from sub distribution to becoming an end-customer focused product reseller,”

l Focus on the SMB sector, invested time and effort analyzing the financial health of its prospective customers, and grew along with them.

l A healthy internal competition between the founders along with complete transparency in dealings helped it build trust within its team and its customers.

l Supported customers in, both, good times and bad, and built credibility. This made sure it did not lose out to competing offers from other larger players.


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a presence as some of the other vendors in the state, we were able to pick up huge orders for HP,” says Kesavan. By delivering on time and exceeding expectations they were also able to expand their clientele in the government sector.

Another factor that contributed to its growth was the combined passion for the business. “We used to compete with each other in terms of the value we can add to the business,” says Nair. A healthy internal competition along with complete transparency in dealings helped build the trust within the team and with customers. This greatly helped Vertex keep pace with the times.

“While we had the passion and determination to do business, we did not know all the rules of the game,” says Kesavan. There was a component called turnover tax (ToT) that they weren’t aware of. At the end of two years of operations they realized they are required to pay ToT for those years and despite the fact that it would burn a significant hole in their pockets they decided to pay up the money and stay clean.

But that was money spent on an important lesson. They learnt never to miss the fine print. Instead of crying over spilt milk, Kesavan and Nair braved up to take the rough with the smooth. This also re-emphasized their commitment towards checking the customer’s financial health and looking for leakages before getting onboard.

“We have also built fantastic relationships with our distributors through our transparency and strong partnership with principals,” says Kesavan. Even in times of economic uncertainties that most organizations are facing today when payments are hard to come by, the SI has built a credibility that would make any distributor want to work with it. “We might have been a little slow but our operational efficiency and investments in right areas like solutions have helped us remain profitable,” says Kesavan,director of Vertex. n

SEPTEMBER 2013 INDIAN CHANNELWORLD 33

technology solution provider in 2008, it observed that not only were desktops and laptops being commoditized but so were enterprise products like servers. So, instead of talking about the hardware Nair made sure that he highlighted the solutions that were being offered along with it. “That’s how virtualization and consolidation came into the picture,” says Nair.

They may not have been the first off the block in the solutions space, but were smart enough to channel their energy in a direction that would help them gain on their competitors. “We saw that the market was nearly saturated in terms of the enterprise business. So we quickly focused our attention on the SMB sector,” says Nair. This was a decision that paid rich dividends.

A lot of its SMB customers, who had just 30 employees, today employ more than 500 professionals. But the commitment, flexibility, and transparency displayed by Kesavan, Nair, and their team built credibility with these customers and made sure that Vertex remained their partner even in the face of competing offers from other larger players.

This model of growth along with its customers wasn’t merely stroke of luck though. Team Vertex invested enough time and effort in understanding the financial health of its prospective customers and analyzing their ability to pay. But once they took on a project they stuck it out with the customers in good times and bad.

TILT THE SCALEA deal that marked a turning point in the journey of Vertex was when they bid for a project tender floated by a defence body. This was during the onset of the global recession and Vertex had only started off with its corporate business. Despite competition from bigger channel partners and principals themselves, Vertex was chosen as the L1 partner for the project. “But it was only after picking up the tender that we realized that there were elements in terms of software that weren’t the core of our business,” says Nair.

Even without the necessary skills on board to tackle the project, the team managed to successfully complete the entire project leading to a great customer satisfaction. “The recession gave us a huge opportunity to gather our resources and understand how we could use multiple partnerships to do fulfill the deal,” says Kesavan.

This project was testimony to their attitude of being adaptable and bold in the face of challenges. The slow economy also led them focus sharply on the growing mid market segment. During the same time it also started operations in Kerala. But unlike its business in Bangalore, most of the projects in Kerala were with the government. “Though we didn’t have as strong

Started the company as a sub-distributor for the HP-HCL partnership that sold the OEM’s printers

Moved from sub distribution to becoming an end-customer fo-cused product reseller. Carried on with that model for a good part of the next decade.

It moved to becoming a value added reseller and a technology solution provider. It focused on being an end-to-end technol-ogy solution provider.

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Anil Kesavan

FOR R.S. Shanbhag, chairman, and MD of the over Rs 270 crore ValuePoint Group, it all started one winter evening

in 1991 with a six by four store room in his cousin’s house, a landline on his desk, ten thousand rupees in his account, and a deep-set desire to cre-ate jobs. After a brief stint as an em-ployee in multiple cities, Shanbhag decided to settle in Bangalore and start his entrepreneurial journey.

“My first customer was the Na-tional Public School Group. It gave me an advance to supply desktops and setup its computer lab,” says Shanbhag. That was just the kind of start a budding entrepreneur needed. Many of the parents who came to know of the company after Chair-man put in a word of appreciation for the good work he had done too added to his client list. This went on for a couple of years. The mar-ket was highly disorganized with non-standard distributors who were prone to procuring materials from unauthorized sources and selling in the grey market. By 1993, the effects of liberalization had started to kick in and the market opened up for IT with the entry of the big technology vendors like Intel and HP. Shanbhag knew that this was the moment that could make or break him.

He reached out to his childhood friend Sampath Kumar and started a venture that has been successful ever since. The year 1996 proved to be yet another turning point with the split in the partnership between HP and HCL. HP needed a partner who could execute orders that were

n COVER STORY

to move out of the transactional business and do something that will complement Valuepoint’s strengths,” says Shanbhag.

With interests in diverse fields such as language translation, litiga-tion support, and educational ser-vices, the Valuepoint Group today has eight subsidiaries and associate companies, with over $2 million (about Rs 12.2 crore) in investments that has been raised without any ex-ternal funding. Shanbhag attributes the success of the group’s diversifi-cation efforts to his involvement in bigger deals which helped him bet-ter understand the painpoints and challenges faced by organizations. “This led me to think of other ways in which we could help those orga-nizations and I started seeing allied opportunities in fields beyond IT,” he says.

GROWING THE ARMYMoreover, in 2004 one of Shan-bhag’s acquaintances, Gururaj A., joined Valuepoint from Compaq and brought an aggression that com-pletely changed the sales outlook of the organization. “Till then, we hardly had a dedicated sales effort and relied mostly on word of mouth business,” says Shanbhag. Within the next 15 months Valuepoint breached the Rs 100 crore mark in terms of revenue. During this time it also continued to add newer products and services to its portfolio.

However, from 2008 the “box business” was beginning to get in-creasingly unsustainable. “As was the behavior of the entire channel back then, we were acting as fulfill-ing centers that would get the bill of material, coordinate with principals, supply the necessary materials, and do the necessary break-fix services,” says Shanbhag. In order to stay rel-evant, Valuepoint decided to move into the solution business. It was around the same time that Gururaj moved out to head the group com-pany, KnowledgeWorks, and Val-uepoint was joined by Ganesh Ma-habala. Leaning on his experience at VMware and Sun Microsystems, Mahabala helped Valuepoint create and take advantage of the opportuni-

Whenever the winds of business changed, Valuepoint made sure that it caught in its sail.

TactfulManeuvers

Recognized as premium busi-ness partner for HP

Signed up with Cisco, Syman-tec, and APC as partner

Opened branches in Tamil Nadu, Andhra Pradesh, and Kerala

Became a gold certified partner for Microsoft and a platinum partner for HP-ESSN

1997

2005

2006

2011

FLASHBACK

getting piled up. “We latched on to the opportunity and tied up with HP for a partnership which is still going strong,” says Shanbhag.

It was smooth sailing from then on till the dotcom bubble burst. The economic uncertainties of the time led Shanbhag to the think beyond technology sales and generate paral-lel sources of income by diversifying the business. “By 2003 I had decided


ties in solutions space. “Though our topline got affected initially, we took a firm decision to stay the course with services,” he says.

Shanbhag admits that it was a heavily dependent on one or two brands and few loyal customers at the time when they were looking to move into the solutions space. Ma-habala changed all of that and drove the company into being a solutions consulting organization that was no longer dependent on a few brands. Though HP remains our forte, we moved from selling what we had to offering solutions based on what the customer wanted. “True system inte-gration can’t be solution dependent but customer requirement depen-dent,” opines Shanbhag.

This commitment to the solutions business paid off in the subsequent years and it was able to transition into a full-fledged solution provider from being a mere box pusher. “As markets moved, our leadership styles and the way we address the market

Second, when it came to showing commitment towards the business it put its money where its mouth is. They decided to continuously rein-vest in the business year-on-year. “We were more interested in build-ing the organization than building personal wealth,” says Shanbhag.

The third rule was slightly more personal. They vowed not to bring in direct family into the operations of the company. This helped them draw a firm line between family and busi-ness. But it was not just these rules that served as guiding principles for Shanbhag. From a young age he was associated with spiritual organiza-tions and social service initiatives. “I realized that money is not the only wealth that we can create. While it is one of the needs, it is not the only thing that one must pursue,” he says.

Instead of chasing a big car, a fancy bungalow, or business class travel for international trips, Shan-bhag and team dedicated that their efforts to creating wealth for every-one associated with them. And he believes it will be possible to con-tinue to do so because even as the business delivery models change organizations would always need datacenters, networks, application software, and client computing de-vices for the creation of anything meaningful. Valuepoint, therefore, will continue to help form the back-bone of those organizations. n

also transformed,” says Shanbhag.

LESSONS LEARNTThis journey has not been without its fair share of lessons and learn-ings. As a first-generation entrepre-neur in the IT field, he had to learn on his own as there were no tem-plates to follow. “Moment we started the solution business, we faced chal-lenges in the form longer sales cycles and payment cycles that we had not faced in our earlier years,” says Shan-bhag. The cost of operations versus returns was another challenge. Shanbhag attributes the longevity and success of Valuepoint not only to the business acumen it possessed but also to the discipline that it main-tained. “Right at the beginning, we set down a set of basic ground rules that we decided to adhere to,” says Shanbhag. First and foremost was the decision never to evade taxes. “We wanted to have all our transactions in white and not encourage cash deal-ings,” he emphasizes.

R.S. SHANBHAGChairman and MD, Valuepoint Systems

l Introduced innovative leadership styles and transformed the way it addressed the market every time the markets and operating environment changed.

l Never evaded taxes and avoided cash transactions. Also, vowed to keep reinvesting the profits from their business.

l Kept business and family separate by not including close family members in the day to day operations of the business.



How Chennai-based Secure Network Solutions delivered a complex security solution for Sriram Group.By Radhika Nallayam

KNOWING YOUR place is an im-portant attribute in business. Trying to be everywhere, even in a cutthroat market,

won’t take you too far. At least, that is what Chennai-based Secure Network Solutions (SNS) firmly believes in and has been following for many years. The company has never altered from its core focus—security. If you thought such strategy is old-fashioned, think again. SNS has not only won many multi-core deals, but has been paid a premium by most of its customers for remaining an exclusive security partner for them. The SI’s recent project for Sriram Group is a perfect case-in- point.

FAIR SHARE OF THE PIE The Rs 60,000 crore Sriram Group had a fairly complex IT scenario. With more than 500 remote locations that are situated across multiple tier-3 and smaller towns across India, the com-pany had thousands of users logged into its core finance applications in the datacenter throughout the day.

What made the scenario a lot more complex is the infeasibility of set-ting up MPLS networks in many of these locations. As a result, a lot of its remote employees were accessing the applications through the Internet. “There were a lot of security concerns in branch offices. Internet access restriction at many of these branch offices was impossible. We wanted to take control of the remote locations

AT THERIGHT PLACE

N.K. Mehta, MD and CEO, Secure Network Solutions, enhanced security

operations at Sriram Group.


Key parties: Sriram Group, Secure Network Solutions

Location: Chennai and 350 remote locations

Key People Involved: V. Sendil Kumar, AVP-IT, Sriram Group; N.K. Mehta, MD and CEO and S. Subramanian, Head-Customer Support and Consulting from SNS

Cost of Implementation: Rs 1 crore

Key Technologies: Fortinet UTM appliances, security reporting appliances, centralized security management appliance, end-point security

Post Implementation ROI: Seamless and secured access to centralized applications, centralized management and reporting, improvements in organizational efficiency and productivity

Snapshot

a pan-India deployment. Most of our remote branches had no technical staff and this would have made remote de-ployment a tricky affair,” says Kumar. Though SNS had presence in nine lo-cations in the country, did the SI have the bandwidth to handle such a high-volume deployment? The question was looming large. The team worked on a master plan to remotely deploy the UTM boxes at all remote locations within a short span of time. Without much ado, the technical team trained the engineers present in all the 60 re-gional locations of Sriram on the new technology. These engineers in turn executed on-site deployments in many of the remote locations that came un-der their region. SNS had dedicated re-sources to remotely help deploy boxes in locations in which no technical sup-port was available.

Kumar does not regret the fact that SNS came at a premium; definitely not after experiencing the best-in-class post-implementation support offered by SNS. And those are not SLAs that exist on paper only. Any technical staff from Sriram can directly speak to an engineer at SNS in the event of techni-cal glitches or support issues—no call centers or no multi-level procedures.

“It’s important to give a personalized touch to support. We don’t provide the kind of support where the customer has to wait for hours after logging a call,” says Mehta. And Kumar is quick to agree. “Its commitment is very im-pressive as it has a young and enthusi-astic technical team. We could get the resource on time and to be very frank, we have never faced any discomfort with SNS ever since we started work-ing with the SI,” he says.

by deploying entry-level firewalls. At the same time, throughput and heavy utilization of firewall was becoming a concern at the datacenter level,” says V. Sendil Kumar, assistant vice president-IT, Sriram Group.

To start with, Kumar and his IT team decided to deploy UTM boxes at 200 remote locations and also to take additional measures at the datacenter level. This meant that the partner who would get the project would have to implement the boxes in Sriram’s nu-merous small-town locations, where they didn’t have even a single engineer for technical help.

While SNS was Sriram’s existing se-curity vendor, the sheer magnitude of the project prompted Kumar to consid-er larger SIs. As expected, the project had many aspiring takers—right from tier-2 SIs, to tier-1 players, vendors, and even a large ISP. The team at SNS knew that they were going to face an uphill task.

ALL EARS Amidst a bunch of aggressive aspirers, SNS knew that it had to be different from others. Most importantly, SNS decided to focus on coming up with a security-only solution, though there were requirements around networking and other datacenter components. “We realized that all the other contenders were offering security as part of a lot of other technologies they sell. But we do only security, and the customer’s most important requirement was around security. We knew this would give us an upper-hand over others in terms of understanding the require-ments correctly and coming up with the right solution,” says N.K. Mehta, MD and CEO, SNS. While some of its competitors tried to upsell to Sriram by clubbing the secu-rity solution with other requirements, a few others tried to woo Kumar with lower pricing. Not one to compromise on features, Kumar carefully studied all the proposed solutions. SNS pitched a Fortinet solution, while others pro-posed different brands. With so many remote offices, Sriram’s requirement was clearly unique—a point that most of the bidders overlooked. The pro-posed solution from SNS had all that Sriram was looking for—centralized

CASE STUDY

SNS delivered an impressive POC. Other

players could not really produce any satisfying results. One of the POCs by a player even went totally wrong.” V. Sendil Kumar, Assistant Vice President-IT, Sriram Group.

management, reporting, high through-put, web filtering, and web blocking among many others. The POC run by SNS finally sealed the deal.

“Once we understood Fortinet is better, we approached SNS and it im-mediately provided a POC, which was impressive. Other players could not really produce any satisfying results. One of the POCs by a player even went totally wrong,” says Kumar.

SUPREME SUPPORT It turned out that winning the deal was only half the battle. “Even though we were aware that SNS was better in many ways, we were concerned about


IN THE beginning, open source software looked like a saintly gift to the commonweal. Program-mers would work hard, then give

away the fruits of their labor to any-one who wanted it. Everyone would benefit from this act of pure charity.

Over time, however, companies realized they could make money and give away the software at the same time. They could do well by doing good. This wasn’t a shock to some of the original open source advocates—it was how some intended it to be. Richard Stallman, for one, always said that “free speech” was more im-portant to him than “free beer.” He embraced the idea that companies

Low-cost marketing, hard bargains, keeping competitors in check—profiteering abounds in the open source community. By Peter Wayner

could charge anything they like—as long as the user could fiddle with the code and distribute the result.

Many companies took this as a blessing to make money and serve their destiny. The smartest fig-ured out how to use open source to strengthen their business, spread their brand, and bolster their power. Open source was not so much a char-ity as a different kind of marketing, a way to squeeze into the marketplace.

The savviest open source devotees embrace this self-interest. Everyone along the chain, they note, must be motivated to contribute for a reason. The genius of open source, they ex-plain, is that it helps coordinate our

selfishness and turn it into something that benefits everyone. The contribu-tors become equals, and there’s little squabbling about rights to blocks of code. The sharing lets everyone concentrate on the quality of the soft-ware, not on licensing issues.

Here are nine ways companies use open source to profitable ends. While these approaches may offend the na-ive, most fall under the heading “Be-fore you do good you must do well.” A project backed by a flourishing business is much better than a pile of code that may or may not be fixed in the future. Freedom without stability isn’t worth very much.

Open source as low-cost marketingAdvertising costs money. Trade shows are expen-

sive. Marketing budgets are never adequate. Many companies see open source as a cheaper alternative. Re-

9O p e n S o u r c e

WAYS OF MAKING MONEY

STRATEGY No. 1


leasing all or part of the product as an open source package can attract users who will use the product and discover what it does. The product speaks for itself and brings in the us-ers, then the salesforce steps in when it’s time to upsell.

Some open source companies such as MySQL have said it’s a mistake to focus too much on how many are get-ting the product for free. It’s not usual for companies to cite figures where 90 percent or more are not paying. They usually don’t cost the company very much because the open source packages cost little to distribute.

The trick is to make sure that the moneymaking features are compel-ling enough to support the rest of the product. They should be a small part of the product but crucial for the folks who will pay. Sometimes the extra may be a feature that in-creases stability for enterprise cli-ents that want their software to run smoothly 24/7. Others offer privacy and force users of the open source version to broadcast their work to the world. These small features are supporting hundreds if not thou-sands of companies today.

Open-sourcing code to reduce support costsHave a problem? Here’s a stack of code. Figure it out

for yourself.While it sounds callous, many open

source companies rely on pointers to the source code when dishing out support. The proprietary companies need to write a complex description of what the API does, but the open source companies just point to the API gateway that does the decoding. Anyone can read the source—and many do. It’s now common for com-panies to run a support forum next to the code with open debate about the software. It’s just faster.

Good, well-documented open source software can be a gift for ev-eryone involved. The able customers can answer their own questions with-out waiting for a support technician to dig up the code. The support team can save themselves the hassle of try-ing to translate the code into English. Done well with a vibrant community,

everyone can benefit with access to the open source.

Open-source to reduce development costsYour company needs a tool or library or component.

Developing it in-house would cost big bucks. Now imagine there’s an open source version that does half of what you need already. Paying for someone to add the necessary fea-tures may look foolish or generous or both because the open source license will mean all the additions must be shared with everyone. But it will also cut the development bill in half. If the software isn’t a critical part of the business, this can be a smart way to slice development costs while appearing to be magnanimous and devoted to the community.

Some companies solve these problems by paying the developers they know and trust. Others adver-tise for people who are already con-tributing to the project. A number of crowdfunding sites like Bounty-Source let users pool their money to sponsor programmers to deliver the code. They come and go, but the idea lives on.

In some situations, a group of companies can rally around an open source code base, with each contrib-uting a fraction of the development costs. They all save money while building a crucial tool they use to-gether. The savings can be signifi-cant. Even if there’s only one other partner, the costs might be cut in half. If there are 10, the costs could be cut by 90 percent.

Open-sourcing code to push back against a rivalWhen Google launched its Android OS, Apple’s iPhone

controlled an overwhelming amount of the smartphone market. Giving Android away as an open source platform made it easier for Google to work together with the other phone manufacturers to create a flourishing platform that could support apps that everyone could use. The open source license made each company an equal partner in the project by giving them access to the source code and control.

They could feel secure in choosing it because they knew that Google couldn’t revoke access.

This shared process is growing more common. OpenStack, a project sponsored by Rackspace, lets smaller cloud companies band together and offer a common platform that will be more attractive than the dominant cloud from Amazon. Not only can the customers choose between multiple companies, they can also install the cloud tools in their own datacenter. The same basic structure is found in all of the clouds, and the scripts work the same everywhere.

Tapping open source to launch a competitorThe open source license makes one thing simple:

Starting up a rival. All it takes to cre-ate a new company from scratch is access to the source code repository. After you download it, you can hang your shingle and start competing from the first day—heck, the first few minutes.

Starting up a competitor, though, is far different from sustaining the effort. Downloading the code is easy, but gaining even the basic compe-tence takes months. Becoming a true expert can take years. Really compet-ing means building a team that can offer real expertise.

This is why competition only ap-pears in rapidly burgeoning areas where demand far exceeds supply. When interest in Hadoop exploded several years ago, new startups ap-peared quickly. All began with the same Hadoop core, but they quickly began to specialize by offering their own special add-ons.

Open-source to keep competition in checkCompetition in the world of open source is a two-way

street. While anyone can come along and snarf source code in seconds, they are often bound by a license that forces them to contribute all of their innovations back. If the new competi-tor does anything clever, all of the old teams also gain access to everything. Some of the most popular licenses like the GPL guarantee that everyone

OPEN SOURCE STRATEGY | FEATURE n

STRATEGY NO. 2

Strategy No. 3

STRATEGY NO. 4

STRATEGY NO. 5

STRATEGY NO. 6


n FEATURE | OPEN SOURCE STRATEGY

must share alike.This share-and-share-alike rule makes it hard for any upstart to challenge an effective lead-er. Any neat innovations that come from the upstart can be absorbed by the leader, making it hard for the upstart to gain any real traction. The rule that makes it easy to start up a competitor also makes it impossible for the competition to flourish.

Michael Tiemann, one of the founders of the early open source powerhouse Cygnus, once said presciently, “Fortunately, the open source model comes to the rescue again. Unless and until a competitor can match the 100-plus engineers we have on staff today, most of whom are primary authors or maintainers of the software we support, they can-not displace us from our position as the ‘true GNU’ source. The best they can hope to do is add incremental features that their customers might pay them to add. But because the software is open source, whatever value they add comes back to Cygnus.”

While this can sound like an evil monopolist speaking, the idea has limits. If the leader does a bad job, invests in silly enhancements, or squanders its revenue on worthless add-ons, a new fork can steal the momentum. It’s not impossible.

This rule limiting the power of forks doesn’t hold if there are two legitimate reasons for the separate code bases to exist. If there are two distinct uses for the software, two different groups can easily special-ize in both. The competition can survive if it serves a different and distinct market.

Open-source to drive a hard bargainWhile many open source licenses are flexible, some

are increasingly Draconian. One of the newest, the Affero GPL, insists that the code must be shared if the code is merely running on a public server. The license emerged after some in the open source community

noticed that some developers were benefiting from open source soft-ware but avoiding the requirement to share their own contributions. They weren’t “distributing” the software, just running it, and the GPL only forced sharing when you “distrib-uted” the software.

Some developers find this require-ment easy to follow. They may be just experimenting or merely offer-ing a free service. Sharing their own improvements doesn’t put them at a competitive disadvantage. But many in business find the rule more trouble than the cost of buying a commercial license. The strength of the license helps nudge them to support the product.

The AGPL is a popular choice for many of the newer projects like the various NoSQL data stores. Mon-goDB, for instance, adopted the li-cense for its core tool: The database. The company chose to protect the drivers, though, with the more lenient Apache license to encourage people to link to its core offering.

Open-source to develop shared standardsEvery business and mar-ketplace needs a set of

standards so that customers know what to expect and businesses know

what to build. Open source can often help create these standards of in-teroperability.

Take HTML, the language we use for marking up documents on the Web—but also a crucial standard that allows Web browsers to compete. Once the industry coalesced around the HTML standard, browser makers were able to innovate and compete on features instead of content. Content creators, on the other hand, were assured that the Web pages they pro-duced would generally work on all available browsers.

Open source tools often lie at the center of this evolving standard. The mobile browser marketplace, for instance, was largely defined by the WebKit rendering engine originally created by Apple but adopted by Google and others. Apple could have kept this technology proprietary, but that would have meant less interop-erability between the iPhone and other smartphones, translating into fewer websites with content tailored to and rendered readable on smart-phones in general. That would have slowed the marketplace. Releasing it as an open source toolkit nurtured a shared standard.

Open-source to control the futureA number of businesses, big and small, pay their employ-

ees to work on open source projects. Some even donate large blocks of code that they spent plenty of money to cre-ate. They want to make sure they influ-ence the way the code base is develop-ing, and the easiest way to do this is to contribute lines of code.

This influence is constant. Many of the most important contributors to all the major projects like Linux also work for companies that want to stay current. The goal, of course, is to make sure the open source code remains useful for their purposes. If the library or tool is growing, the new features may not be compatible with the com-pany’s proprietary tools. But if the company writes a big chunk of the new features, they’ll be able to ensure it fits their needs. As Alan Kay, the inventor of the Alto, once said, “The best way to predict the future is to invent it.” n

STRATEGY NO. 8

STRATEGY NO. 9

The genius of open source is that it helps coordinate our selfishness and turn it into

something that benefits everyone. The contributors become equals, and there’s little

squabbling about rights to blocks of code.

STRATEGY NO. 7


IDC estimates that enterprise data doubles every 18 months. That’s an astounding statistic,

but somewhat difficult to wrap your head around. A simple analogy may help.

Let’s say you’re an avid movie buff, and when the American Film Institute’s top 100 DVD collection came out in No vember

Organizations are caught in an arms race to deal with growth. By Matt Prigge

1998, you were one of the first to buy it. A collection of 100 DVDs is large enough to be impressive, but small enough to browse easily and find some thing you want to watch. Weighing in at around 28 pounds and taking up about 4 feet of space on your bookcase, even the most cramped NYC loft is likely to have

EVERYTHING ABOUT ENTERPRISE DATA EXPLOSION

FocalPoint

space for it. Best of all, Apocalypse Now is only a quick 30second visual search away from your DVD player.

Now, let’s apply IDC’s enterprise data growth stat to your primo collection. After doubling every 18 months, in November 2010, your collection would number 25,600 discs. It would weigh about 3.5 tons and occupy roughly l,000 feet of space. Unless you kept the DVDs scrupulously alphabetized, finding the one you want could take hours. Your collection would have grown to such a massive size, it would al most be useless. It would be a ball and chain dragging behind you until you just give up and get rid of most of it.

That’s precisely what’s happening with our data. Personal, cor porate, governmental—it doesn’t matter. We’re keeping and main taining way more data than we can possibly ever use. The fact that an 18GB disk available in 1998 is roughly the same size, weight, and cost as a 2TB disk today only obscures the problem and makes us lazy about policing our data growth.

We may be able to store all that data, but when we lose the ability to manage and exploit it effectively, its value decreases. As a result, many businesses are spending more and more time and capital to store data that’s worth less and less to the business. Data growth is unavoidable. But it must be accompanied by data management policies that ensure the data created and retained is of real and lasting value. Of course that’s easier said than done. It involves careful thought and no small ef

fort. Tossing a new shelf of disk into a storage array is much easier than developing mea sures that will curb growth. But we need to if we hope to becom ing slaves to our own creation—a fate that is far harder to recover from than to avoid.

PATHS TO DATA CONTAINMENT You may not be able to stop data growth, but at least you can slow it down. Unfortunately, no one containment method fits all. Grappling with growing mountains of data requires a creative combination of several different approaches.

NONTECHNICAL METHODOLOGIESThe data we store didn’t appear out of thin air; someone created it and decided it was worth retaining. Before you attempt a technological fix, you need to influence the behavior of those who create and maintain business data. Starting at the source is almost always a successful strategy.Controls. The storage quota is one of the oldest means of controlling data growth. Quotas are often over looked these days, because they’re seen as an imposition on the business by an overreaching IT organization. It doesn’t need to be that way.Quotas accomplish one important goal: They force users and depart ments to ask for more storage when they’ve run into a predefined limit, rather than simply allowing them to fill all available space. IT may ultimately be forced to accede to requests for additional storage space, but the simple fact that a request was necessary gives IT a chance to ask for justification.

ContainingData Growth


Showback. No quota implementa tion is complete without reports that show how users are consuming data. But capacity reports that simply list megabytes consumed and/or avail able fail to tell a meaningful story. Instead, tie the storage capacity con sumed to the expense of maintaining it in a “showback” report. Hardcosts are a great way to buttress calls for restraint.

Common pitfalls in implementing showback include inadvertently omitting portions of the storage in frastructure and failing to educate users on all the components necessary to deliver enterprise class storage. In the former case, you might neglect to factor in the cost of storage resources deployed to implement the disaster recovery (such as replicated warm site SANs or backup hardware and

software) or even the labor necessary to manage those resources. Be scrupulous. Capture it all.

A comprehensive picture of what data storage costs risks giving us ers and stakeholders a nasty case of sticker shock. Some may take this seriously and curb data growth. At a time when anyone can buy a 2TB hard drive at an office supply store for about $100 (about Rs 6,200), careful education is required to justify the expense of storing and protecting data within an enterprise storage infrastructure.

Social engineering. There are many other less obvious ways of influencing user behavior. When searching for incentives to conserve space, don’t be afraid to think out side the box. Host a “Biggest Loser” competition, where departments that cut back the most win gift certificates, or plan an Earth Daythemed storage conservation event. Even if little storage is recovered through such efforts, making data management part of the corporate consciousness can be well worth the effort.Chargeback. Simply showing the true cost of storing data may not be enough to change behavior. Passing on the costs to departments through a chargeback mechanism, creates a sense of data ownership that would be impossible to gain through other means. Note that

implementing chargeback is not something IT can do on its own. It requires substantial support from stakeholders, which may not exist in all business environments.

TECHNICAL METHODOLOGIESAfter you’ve done all you can to curb data at the source, focus on the storage infrastructure itself. All kinds of new technologies are emerging to ensure data is stored in the most efficient ways possible.Data deduplication. Data duplica tion is a big

source of inefficiency. A deduplication system identifies and eliminates redundant files, reducing the amount of disk necessary anywhere from 10:1 to 50:1 and beyond, depending on the level of redundancy in your data. Originating with backup systems, deduplication technology has made inroads in primary storage as well. This can be especially valuable when used with unstructured data such as departmental file shares, where users are prone to making multiple copies of the same files.

Other sources of duplication may require more effort to remediate. Take email systems: one user, for ex ample, may send a large attachment to hundreds of users—duplicating that data hundreds of times with a single click. If that duplication occurs within a proprietary email engine, deduplication software may not be able to reach in and eliminate it.Data structuring. One way to deal with data growth is to impose new structure. In the email example, email archiving software can strip attachments from email databases and store them outside of the email infrastructure using single instance storage (effectively applicationlevel deduplication).

In other instances, simply implementing document management solutions can have an enormous impact on the creation and reten tion of business data. Document management systems can replace difficulttocontrol file shares an d make it possible to curb

duplication. They also capture the metadata you need to determine when data can be archived or deleted.Lifecycle management. One of the hardest things to do in any storage infrastructure is to manage the latter part of the data lifecycle—when it should be archived or deleted.

Nobody likes deleting data; there’s something about it that feels unnatural. After all, effort went into creating it and nobody wants to be forced to recreate it.

Creating a methodology users can employ to determine when to archive or jettison old data requires careful consideration. It may be tempting to archive or delete any data over a given age, but that’s typically a poor yardstick. To make that determination, you need metadata that describes the data’s purpose. That metadata generally won’t exist unless you’ve structured your data.

DOOR DIENo matter what combination of approaches you use to curb data growth, simply ignoring the problem and continuing to shovel storage at it will inevitably lead to even higher data growth rates. Attack the rate of enterprise data growth, implement both technical and nontechnical approaches to educate users, and increase storage efficiency. You can decrease the amount of storage you need to deploy and also maintain the organization’s ability to effectively le verage its data. The longer you wait, the harder it will be—so don’t waste any time.

FOCAL POINT | ENTERPRISE DATA EXPLOSION

Data growth is unavoidable. But it must be accompanied by data management policies that ensure the data created is of real and lasting value.


EXPLOSIVE DATA GROWTH creates challenges beyond fielding more and

more storage capacity. Transactional performance often suffers, too, and stopping it from decaying can get awfully expensive. Increased user counts, everexpanding databases, and an endless parade of new applications all conspire to gum up the works and may even force you to rethink your storage architecture. One culprit stands out: Serverbased computing such as VDI has tremendous impact on the performance profile of storage infrastructures. Shouldering the disk load of a single user session is one thing. But the aggregated load of hundreds or thousands of sessions can create an

overwhelming transactional disk load for the entire server infrastructure.

Even if data growth is entirely organic, with a stable number of users and the same old applications, simply ensuring that backups complete within their windows requires performance that keeps pace with capacity growth. Data grows. No matter what happens, that growth will put an everincreasing burden on your storage infrastructure.

IN SEARCH OF THE GOLDILOCKS ZONEIf you have very deep pockets, you can address this endless need by throwing more and more high performance spinning disk at the problem. For those with a license to print money, a steady stream of new

SSDs will certainly do the trick. But most of us live in a more frugal reality, with the challenge to identify the right mix of storage hardware and software to meet a particular organization’s capacity and performance profile, while avoiding massive on going time investment from storage administrators.

Storage hardware runs the gamut from large, slow disk that is costeffi cient on a perterabyte basis—such as multiterabyte NLSAS and SATA to small, fast disk that is costefficient on a perI/O basis, such as SSD or subterabyte 15,000 rpm SAS. Fielding the right mix of cheap capacity and cheap performance while leveraging the benefits of both has always been the hardest part of designing

a storage infrastructure that’s “justright.”

Luckily, several intelligent storage methodologies have emerged to make achieving this balance easier and less costly than it once was. As with battling capacity growth, fighting the forces of entropy that seek to destroy disk performance demands the skillful combination of several different approaches.

STORAGE TIERINGSeparating storage hardware into tiers, each with its own characteris tics, is a simple, timehonored strategy. The top tier(s) deliver the highest performance to frequently used data; the bottom tier(s) provide commod ity capacity for much larger datasets that can endure greater latency.

Managing storage tiers manually can be inexact and time consuming. Storage administrators must closely monitor the performance of all storage volumes to determine whether they should be moved up or down in the tier structure. Worse, it’s extremely common to find that only very small portions of a dataset are being heavily used, meaning that very likely some toptier storage will be consumed by data that simply doesn’t need to be there.

Fortunately, a growing list of storage vendors has added automated storage tiering to their feature sets. Implementations vary, but the gen eral idea is to automate the process of balancing storage among differ ent tiers, often making rapid storage placement decisions that respond quickly to changing workloads. Better yet, most implementations balance

Apply new technologies where it will do the most good for your organization’s workloads. By Matt Prige

Make Smart Choices


between tiers on a blockby block basis. This means that, within a mountain of mostly dormant data, the system can find and elevate small quantities of heavily used data to top tier storage, leaving the rest on a less costly bottom tier. All but the cheapest storage con trollers come equipped with some kind of highspeed cache, usually deployed in the form

of battery backed DRAM or, increasingly, small amounts of highspeed flash. These caches are used by the storage controller (be it in an array like a SAN or inside a standalone server) to quickly absorb gobs of disk writes until they can be written to disk and to store heavily used storage blocks so they can be accessed quickly.

At a high level, this approach shares a lot of characteristics with automated storage tiering. The big gest difference is that oncontroller caches are generally very small, usually not much more than a few gigabytes. That’s enough to absorb a quick spike of writes, but it can easily be overwhelmed by more sustained workloads that the underlying disk can’t keep up with.

Similarly, when employed to ac celerate readheavy workloads, the relatively limited size of the cache forces the controller to decide what to read into cache and what to let age out. In general, sequential read loads (such as backups) can be accelerated to some degree by a read cache, but cache size limitations usually prevent random read loads from being accelerated at all. In fact, poorly designed or configured readahead cache algorithms can actually decrease random read performance.

The fantastic amount of perfor mance offered by enterpriseclass SSDs has caused a shift in this traditional storage cache model. Because singlelevel cell SSDs are nearly as fast as DRAM, many storage vendors have optimized their controller software to exploit SSDbased storage tiers just as they would have used a controller cache—exponentially increasing the size and effectiveness of the cache.

Using SSD as a controller cache within a storage array isn’t the only innovative approach. A growing number of serverside caching products has popped up in the past few years. In these configurations, a server charged with serving a par ticularly heavy storage load, such as a database server or virtualization host charged with operating a VDI environment, can be equipped with its own highperformance solid state storage. That storage is then used by the server to cache data read from and written to a storage array, there by shifting much of the storage load from the array back into the server where latencies are lower and performance

SOLID-STATE drive adop-tion will continue to grow and it will be more than

10 years before it is ultimately replaced by a new memory tech-nology, experts said.

SSDs are getting more attractive as NAND flash gets faster and cheaper, as it pro-vides flexibility in usage as a RAM or hard-drive alternative, said speakers and attendees at the Hot Chips conference in California.

Emerging memory types under development like phase-change memory (PCM), RRAM (resistive random-access mem-ory) and MRAM (magnetoresis-tive RAM) may show promise with faster speed and durability, but it will be many years until they are made in volume and are priced competitively to replace NAND flash storage.

SSDs built on flash memory are now considered an alterna-tive to spinning hard-disk drives, which have reached their speed limit. Mobile devices have moved over to flash drives, and a large number of thin and light ul-trabooks are switching to SSDs, which are smaller, faster and more power efficient. However, the enterprise market still relies

largely on spinning disks, and SSDs are poised to replace hard disks in server infrastructure, experts said. One of the reasons: SSDs are still more expensive than hard drives, though flash price is coming down fast. “It’s going to be a long time until NAND flash runs out of steam,” said Jim Handy, an analyst at Objective Analysis, during a presentation.

Handy predicted that NAND flash will likely be replaced by 2023 or beyond. The capacity of SSDs is growing as NAND flash geometries get smaller, so scaling down flash will become difficult, which will increase the need for a new form of non-volatile memory that doesn’t rely on transistors. Many alternative forms of memory are under development. Crossbar has de-veloped RRAM that the company claims can replace DRAM and flash. Startup Everspin is offer-ing its MRAM products as an alternative to flash memory. HP is developing memristor, while PCM is being pursued by Micron and Samsung.

But SSDs are poised for widespread enterprise adoption as the technology consumes less energy and is more reliable. The

smaller size of SSDs can also provide more storage in fewer servers, which could cut licens-ing costs, Handy said.

“If you were running Oracle or some other database software, you would be paying license fee based on the number of servers,” Handy said. But in enterprises, SSDs are inherently parallel, and better suited for server infrastructures that need better throughput. Multiple SSDs can exchange large loads of data easily much like memory, Huffman said. SSDs can be plugged into PCI-Express 3.0 slots in servers for processing of applications like analytics, which is faster than hard drives on the slower SATA interface.

The $30 billion (Rs 1.8 lakh crore) enterprise stor-age market is still built on spinning disks, and there is a tremendous opportunity for SSDs, said Neil Vachharajani, software architect at Pure Storage.

SSDs will ultimately match hard drives on price, and the newer memory and storage forms will have to wait, said Huffman, “Hard drives will be-come the next tape,” he said.

—Agam Shah

SSDS Still Maturing

FOCAL POINT | ENTERPRISE DATA EXPLOSION


can be guaranteed. Since the cache is located within the server, only that server can take advantage of the performance gains. Other servers (in a database cluster, for example), can’t access that storage in the event that the server containing it fails. However, for truly enormous transactional storage loads, these drawbacks tend to be out weighed by the benefits.

ADVANCED OPTIMIZATIONA range of other less obvious performance optimization techniques are being used by storage vendors to wring every last drop of performance out of the hardware. One great example is to position heavily used data on the outer rim of spinning disk where the rotational speed is greater. This allows the disks to read and write that data with fewer, smaller disk head seeks and results in marginally better disk performance, regardless of whether the disk in question is a highspeed l5K SAS drive or a 7.2K SATA disk. In a tiered storage environment, this provides array controllers with yet another tier to work with when deciding where to position a given piece of data.

QUALITY OF SERVICEEstablishing QoS levels is crucial to any storage infrastructure. Just as storage quotas restrict data growth, storage QoS can constrain storage performance on a per workload basis. Although there are several ways to imple ment QoS in storage environments, all the approaches share one common goal: To ensure that the storage workloads the organization values most are given preference over work loads considered less valuable.

For example, this might mean that the stor age volumes or servers making up a database cluster for a line of business application are given preference over a data warehousing system. A warehousing system charged with constantly updating various enduser reports could theoretically use a nearly unlimited amount of storage performance and force the database cluster to contend with it for avail able resources. By implementing QoS rules that prefer the database traffic over the warehousing system, the reports may be pro

duced a little less frequently, but user access to the line of business app won’t be impeded.

These kinds of QoS rules are most frequently applied in two different places: On the storage array or, increasingly, within a virtualization environment. QoS rules applied on the storage array generally tend to be the most effective, because they affect performance at the source, even dictating how advanced optimization techniques such as automated tier ing and disk placement are used. You could prevent data that wasn’t performancecritical from ever being repositioned to the top tier of a multitier deployment. Or it could be prevented from occupying the outside rim of a disk regardless of how active it is.

Virtualization infrastructures, on the other hand, generally comingle different work loads within the same storage volume, which decreases the storage array’s ability to differentiate between

one workload and another. In those cases, storage QoS rules can usually be applied at the virtualization hypervisor level. This effectively restricts the storage through put for some virtual machines and allows oth ers to consume resources unrestricted.

TUNING THE STORAGE MACHINEFielding a storage infrastructure faced with rapid data growth is a difficult task no matter how you slice it. The trick is to deploy storage resources strategically, with the right mix of performance and capacity. Include as much automation intelligence as possible coupled with smart resource allocation rules. When you find the right mix, you can get by with the minimum necessary, both in terms of capital investment and administrator time. Once your template is established, you should be able to scale out efficiently as the relentless demand to harbor ever more data rolls on.

Lean storage techniques will keep a lid on storage investments over the next few years, though the world’s

enterprises still are on track to buy 138 exabytes of storage system capacity in 2017, IDC said.

Annual sales of storage capacity will grow by more than 30 percent every year between 2013 and 2017. But that growth will be slower than the steep pace record-ed a few years ago because organizations have adopted ways of using storage more efficiently, including cloud storage ser-vices, IDC analyst Natalya Yezhkova said.

Data deduplication, data compres-sion, thin provisioning, and storage virtualization all will help enterprises limit their purchases of new storage capacity, Yezhkova said. Those techniques can re-duce the amount of space consumed by a given bit of information or help companies allocate new storage as needed instead of overbuying.

The average amount of storage space companies acquire will grow by an aver-age of 35 percent to 40 percent per year

for external storage and 33 percent to 38 percent for internal, IDC said. That rate should stay pretty constant all through the forecast period, according to Yezh-kova. In terms of enterprises’ storage spending, the annual average growth rate will be 4.1 percent, hitting $42.5 billion (Rs 2.6 lakh crore) in 2017.

Though fast, the annual growth rate from 2013 through 2017 will be dramati-cally slower than what it was before new efficiency techniques took hold, she said. Part of the reason enterprises will be add-ing capacity more slowly in the coming years is that some will send their data to cloud storage services, Yezhkova said. If those cloud providers buy drives directly and assemble their own storage systems, they don’t show up in this IDC forecast.

However, when companies shift some of their storage to cloud services, they are putting it on infrastructure that’s typically more efficient, she said. Because they’re in the business of storage, cloud provid-ers run a tight ship.

—Stephen Lawson

Efficiency Will Hold Down Storage Growth


n OPINION

The Silent Career Killer

THERE’S A silent killer attacking the careers of tech-nical people. It runs rampant through organizations, destroying the future job prospects of even the most talented geeks. They end up sidelined, passed over

for promotions, or laid off. Sadly, this killer can lead us to en-gage in some self-destructive, dysfunctional behaviors. I’m talking about geeks’ all-too-common compulsion to avoid being blamed for anything. (And if the thought “I would never do that” just passed through your mind, you are doing it without even being aware of it.)

Nearly every geek has some degree of this tendency. It’s just part of our DNA, in-extricably intertwined with the reasons we chose technical work in the first place. We love problem-solving and finding the right answer. Conversely, we hate being wrong.

The desire to avoid blame shows up at work in three distinct behaviors, none of them helpful.Being defensive. When things go wrong and you say something like, “Hey, it’s not my fault,” you send a number of negative messages all at once. You sound petulant and immature, like a kid who just knocked over a lamp. And you seem more con-cerned with yourself than the work or other people. Rather than discussing how to make things better, you’re focused on your image—without realizing what a poor image this conveys.Blaming others. Another dysfunctional response to things going wrong is to blame other people. “Hey, Sandy chose that plat-form, so don’t blame me.” Here again, you sound immature and self-centered. But this time it’s worse. You also sound disloyal to your colleagues.Preventing blame. The most subtle, pervasive, and insidious form of avoid-ing blame happens long before things go wrong. Here, you position yourself to be immune to blame, thus demonstrating that

avoidance is a primary concern even when nothing has gone wrong. This is usually expressed through “CYA” behaviors like officiousness, unnecessarily rigid adher-ence to process, or preemptive defensive-ness. You’ll say things like “Don’t blame me when this falls apart” or “I’ll be happy to change the color of that button after you submit a change order.” Although this ver-sion usually doesn’t give people the impres-sion that you’re immature, it does radiate self-centeredness. And worse, it not only gives the impression that you are more con-cerned with protecting yourself than doing good work, it also ensures that the impres-sion is accurate. If you focus your creative energy on avoiding blame, you have less creativity to focus on your work.

So, how do you get out of this trap? The first step is to recognize that you’re in it. This can be hard, since blaming yourself can be the most painful blame of all. Once you’ve accepted that you engage in blame avoidance, you can do two things to break the habit. First, you can recognize the impulse and choose a different response. Second, you can ask colleagues to privately point it out. Just telling them that you want to work on it goes a long way.

No amount of technical talent can over-come the career damage of blame avoid-ance. If it’s infected your career, you owe it to yourself and your colleagues to address it right away. n

The desire to avoid blame has the potential to damage a career. Make amends while you can or forever repent.

Paul Glen, CEO of Leading Geeks, is devoted to clarifying the murky world of human emotion for people who gravitate toward concrete thinking.

PAUL GLEN


ICW November 2013 Issue

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