“Any partner selling around 200 to 500 PCs month can place an order with us, and we will offer HCL Peripherals monitors under their own brand name”

Clarifying that the constant changes in its top management has not
affected its business, Balaji sheds light on the SI-branded peripherals that the
company is offering. He also shared details on HCL's plans to venture into the
memory business while becoming more aggressive on its thin client product line

There have been a lot of changes in HCL Peripherals' top management. Is
this the reason for the company maintaining a low profile in the market?

There was some restructuring done in the company to focus on certain
verticals. Few people quit or left, while few were given additional
responsibility. But this didn't affect the company's profile in anyway.

We want to keep certain issues away from the media, and therefore we were not
open in some aspects of our business. It might look like we are keeping a low
profile but that is not true.

HCL Peripherals' input device business reportedly has not been doing as
well as compared to its other business lines. Is this true? Do you think this
product line will be shelved gradually, especially in the face of competition
from other brands?

S Balaji Deputy GM, HCL Peripherals

I don't agree. We successfully launched our combo pack, which included a USB
keyboard and an optical mouse. The orders for this product have doubled in a
quarter. Our national distributor Ingram Micro India is successfully carrying
out our product distribution process.

Even our own Diamond keyboard range has done well, though we are marketing it
through our original equipment manufacturer (OEM) partners. We have sold over
one lakh Diamond keyboards and are expecting some more orders to come. Though
our channel did not have a good time with this, we had a good turnover through
our OEM partners.

Recently we launched our 19- and 22-inch TFT monitors. Without good response,
we would not have done this.

Please elaborate on your plans to offer partner-branded peripherals like
monitors.

We call this a 'Small OEM program'. Under this, any partner who sells around
200 to 500 PCs a month can place an order with us, and we will offer them HCL
monitors in their own brand name, as it creates a good branding exercise for
them and they can sell it at a premium. We have been doing this for two years
now, and for the past six months, this program has been more intensively carried
out with successful results.

Not many know about your products like thin clients. How do you plan to
make the channel aware of your entire product line?

Our thin clients have not been sidelined but it has been repositioned. The
thin client market is booming and we have provided thin clients to several
organizations. We have been providing them with main requirement in banking,
BPOs and other verticals that need a lot of storage.

For the past two months, we received many orders. As compared to last year,
we had 20-30 percent growth in revenue from thin clients, and this year we
expect that to grow even more. We have also been awarded with the 'Best Thin
Client Provider' award for this year.

We are arranging training programs for channel partners in major cities every
quarter to make them aware of the new programs, which are being launched by HCL
Peripherals. It will include presentations, demos and interactions.

What are the focus areas for HCL Peripherals?

This year, we are focusing on the display and networking, which we are
driving through the channel. The display product line is going to run through
second and third-tier channels. Ingram Micro is our national distributor for
this segment.

System integrators will be used for networking. We have tied-up with very
specific project-oriented system integrators and they will be carriers of this
growing network program of HCL Peripherals.

What is the channel's contribution to HCL Peripherals' entire turnover?

The channel contributes around 20-25 percent to the entire turnover of HCL
Peripherals. This is not at all a small contribution, as getting revenue through
the channel is always difficult. But we have managed to have a good margin too.
We hope to improve this in the coming years, as we have bagged a huge order
through our channel recently.

HCL has not launched any channel program for several months now, the last
being in May 2006. This is surprising since you say that HCL is very
channel-friendly. When will the next one be rolled out?

HCL Peripherals does have channel programs for almost all product lines, but we
have not advertised it. We have launched our mechanical keyboards, combo pack
which has multimedia keyboard and optical mouse. We have also had many schemes
for partners like, gold coin scheme, money scheme, etc to encourage them. We
have planned a program, and it will be announced shortly.

What plans do you have to help your channel grow the value chain? How, in
absolute tangible terms, do you propose to achieve this?

Today, we are providing end-to-end products to increase the value offering
of the channel. Earlier too, we were providing a mixed bag of products to them.

An HCL Peripherals partner can have networking, embedded product like thin
clients, touch screen monitors and entire range of products. We are also in the
process of launching a couple of new 19- and 22-inch wide monitors. For the
channel we have a scheme called 'Gold Coin Scheme' running for the past two
quarters successfully, and last year, we had 'Monsoon scheme'.

Such schemes have worked wonders with our channel. They were able to achieve
targets very well and that was showcased in our revenue figures.

Is HCL providing any aid to its channel partners in credit management?

HCL Peripherals is not directly involved in offering credit, but our national
distributors like Redington and Ingram do so.

What are the three verticals that HCL has created in its business
structure?

We are focusing on display, networking and technology. The display segment
will cover monitors and PC business, for which Sarang Babu will be

the head. Networking will cover thin clients along with existing networking
products.

V Venkatesan will lead this segment. And I will take care of the technology
vertical. This will include products like terminals and servers.

What other plans does HCL have on its agenda?

We are now planning to enter memory business and facilitating this venture.
A lot of other work is also underway.

NR Sethuraman

sethuramannr@cybermedia.co.in