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STRATEGY Simplifying Services By Suveen K. Sinha
This is a topic on which Yadav loves to speak. He pitches a good sales spiel about the simple and uncomplicated lives 3Com's customers can lead. ''The Comworks architecture enables service providers to launch multiple forms of services-data, internet protocol telephony, wireless access, cable access, or digital subscriber link access-by adding components modularly without having to change the underlying hardware.'' And this architecture works at the point of access (where the subscriber first hits the network). It is this branch of the network that is 3Com's territory. How Radical Is This Simplicity? Actually, fairly so. Internet service providers work 24X7; they cannot afford to bring the network down every time they wish to add to its capabilities. That's what 3Com's Lego-like modules help. For instance, when Satyam Infoway decided to provide fax over IP services, all it had to do was add a Comworks 8200ip fax server, and another one to run the software. The underlying platform remained the same. As Atul Kunwar, the 37-year-old chief executive of Bharti BT Internet (it provides internet services under the Mantra brand) and a former country head of 3Com points out: ''I don't need to build a separate platform every time I launch a new service. It is certainly a great help if you can do different things on the same underlying platform.'' Not surprisingly, Bharti BT Internet is among the five large ISPs who are 3Com customers. The others are VSNL, Satyam, Caltiger, and Tata ISP. Together, these ISPs account for close to 85 per cent of Net subscriptions in India. 3Com claims to power between 80 per cent and 85 per cent of their access ports. A little number-crunching reveals that between 60 per cent and 65 per cent of Net users in India hit a 3Com access port when they log on-far higher than the 41 per cent share the company enjoys at the point of access globally. That could explain why 3Com India is confident of more than doubling its turnover, from Rs 140 crore in FY 2000 (June, 1999-May, 2000), to Rs 350 crore in FY 2001. And these numbers fit in with IDC estimates that the Indian data communication equipment market will grow to about Rs 3,000 crore by 2002-03, a compound annual growth rate of 34 per cent over the 1999-2000 base of Rs 1,234 crore. Isn't 3Com a little too focused? That's only to be expected. Just as former smokers become the most zealous anti-smoking campaigners, 3Com, once boasted a reasonably nebulous focus. It was only in early 2000, that the company spun off the high profitable Palm division into a separate company, Palm Computing, and exited two of its other businesses, high-end business-networking, and analog modems (it used to make them). Instead, the company decided to focus on the access end of the network in three segments: domestic, Small and Medium Enterprises (SMEs), and carriers. The debate on the wisdom of that restructuring rages on. Standard & Poor (S&P) dropped 3Com in favour of Palm Computing from its glamorous S&P 400 index. And the company doesn't operate in the three hot network businesses its rivals like Cisco, Nortel, and Lucent are squabbling over: the core of the telecommunication carrier network through which most internet traffic travels; metropolitan networks, or the building of fibre-optic networks within big cities; and web switches, networking equipment that speed internet for Web surfers. Thus, Cisco, which believes in powering the entire network, has access to a much bigger market. That apart, listing major ISPs on one's client list is not such a big thing. Most ISPs buy from a number of vendors. Bharti BT Internet's basic network is powered by Cisco; its secondary network, by Nortel. Cisco, Nortel, and Intel enable the company's Local Area Network and Virtual Private Network. Its remote access servers are from either Nortel or 3Com; and the infrastructure it has recently built for dial-up access is from 3Com. ''Each equipment vendor can say, 'I have provided equipment to the top ISPs'. What is important is who has created the core; who has done the aggregation; and what kind of access mechanism they have set up,'' says Manoj Chugh, 40, Cisco's President for India and the SAARC countries. What's in store for 3Com in India? The company's increasing turnover in India translates into increasing investments: 3Com typically invests 10-15 per cent of its turnover in a high-growth country. This money will go into setting up a lab in Delhi for the demonstration and evaluation of new concepts being introduced. 3Com also plans to launch solutions for domestic long distance telephony this month to cash in on the opportunity created by the government's decision to open up the sector to private operators. Soon, 3Com's Indian operations will plug 0.e-connect, its parent's global effort at B2B transactions (the company doesn't sell on-line in India right now, and prefers working through distributors like Techpack and Ingram Micro and partners like Micro Village, IBM, HCL Comnet, HCL Infosystems, CMS, and Siemens). Still, as the CEO of a leading ISP points out: ''A lot will depend on whether 3Com can make the case that 'radical simplicity' actually means a technology that does all the work a user, or network manager needs.'' If it can, Yadav can still afford to go easy on Saturdays. |
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Vijay
Yadav is all of 35, works 14 hours a day, Monday to Friday, takes it easy
on Saturdays (typically, eight-hour days), is comfortable wearing jeans to
work on Fridays, and, in these politically correct times, is ever ready to
share a smoke with co-workers and other visitors. It is not particularly
easy to slot the Country Manager, carrier, and internet service provider
business (that's what his card says), of 3Com India as a conformist.
Somehow, though, he fits in well with what analysts tracking 3Com stock on
the NASDAQ (the company's Indian operations aren't listed) term Chief
Executive Eric Benhamou's mantra of 'radical simplicity': giving the
customers easy-to-use technology.