Financial Daily from THE HINDU group of publications
Tuesday, Oct 08, 2002
Government saves the day for global vendors
BANGALORE, Oct. 7
THE Union and State Governments of India have emerged as major customers for the troubled global hardware vendors whose sales efforts to the private players remain muted tracking dismal economy.
A cross-section of vendors, spanning from networking equipment manufacturers to storage solution providers, see the Government emerging as their prime client in the near-term.
"The Government has emerged as a saviour over the last several quarters,'' said Mr Uday Birje, Country Manager (India and SAARC), Enterasys Networks. The downturn in the economy has forced the private sector to put a freeze on infrastructure expansion and it is the Government departments such as education and the public sector units that are currently investing in networking, he added.
Enterasys expects a near 10-15 per cent rise in revenues from the Government sector this year. Contribution from the Government is expected at close to 60 per cent of the company's overall revenues in India this year, up from 45 per cent last year. "We expect the revenues from government sector to increase in the coming years," Mr Birje said.
Nortel Networks also sees the Government emerging as a major buyer, said the company's Director - Marketing and Channels in India, Mr Sanjay Jotshi.
"The Government's buying is not much affected by the market conditions. Our enterprise portfolio LAN/WAN switching, VoIP solutions will be pushed in this buying segment. Besides, since security is of great importance for the Government, especially in the current atmosphere, we expect Nortel's security portfolio to be of interest here," Mr Jotshi said.
"The Government sector in India is too big to ignore," said Mr P.P. Subramanian, Country Manager India, of storage solutions provider Hitachi Data Systems.
"However, many of the opportunities are yet at a pre-bid stages. The ones that are already bid for are on a long decision making process. We cannot blame for slowness in decisions since storage is still a mystic commodity and the available expertise to evaluate and implement could make things tough," Mr Subramanian said adding that more than the Government, it is the public sector undertakings that have contributed to business in the current year.
"I believe that the Government would contribute only next year and Hitachi expects at least 20-25 per cent of its revenues in India from the Government sector,'' he said.
LG Electronics India Ltd's is initially focussing on the home and SOHO and is exploring the market opportunities in the Government sector.
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