Enterprise Application Software Aiming SMEs as Bull's Eye

It can be viewed as a hand-in-glove
relation, with the demands and knowledge level of SMEs on the rise. They are
fulfilled by vendors as they make solutions keeping this particular vertical in
mind.

The rain God has finally answered the prayers of Indians and the grey clouds
have given way to rains. But there are no dark clouds for solution providers and
vendors in the enterprise application business. It's raining clients for them,
and is a time to rake in more moolah.

In the recent past, Small and Medium Businesses (SMBs) and large corporates
alike have become more aware of the benefits of systematizing their work in all
departments — be it HR, sale, production or customer-related. Thus, for the
smooth functioning of their work and to increase productivity, IT heads and CTOs
are not just consciously deploying various solutions, but also set aside a
budget for the same.

Solutions that manages everything

Traditional ERPs and CRMs continue to exist. That apart, vendors have also
realized the need for solutions for HR management and disaster recovery too.
"Our customers in the SME segment are seeing their competitors in the
enterprise verticals use and benefit from HR management solutions. Since they
want to be more profitable and drive high performance in the firm, they too are
demanding them," said Shabbir Imani, MD, Nexstep Infotech. The company is
an IBM partner and has an HR solution-ProwESS.

Atul
Hemani, Director of Omnitech Infosolutions says that companies prefer to take
the step-by-step approach. "They first set-up their business application
software and then to protect their privacy and also to prevent data-loss and
other similar contingencies, implement infrastructure management solutions like
security and disaster-recovery applications," he said.

Like most IT products that grew manifold this year, maximum takers for these
applications were found once again in the BFSI and telecom sectors. The telecom
sector pumped in the extra buck in software to manage the exponential growth in
subscribers; therefore everything from billing systems to network management
systems required additional resources.

According to DQ Top 20 (2004), it is estimated that more than 90% of all
large enterprises (Above Rs 50 crore in revenue) have an ERP in place. While CRM
posted a growth of approximately 50% over last year.

SME is the way to go

A unanimous voice that is loud and clear says that SMEs will consciously
deploy enterprise applications. Several reasons can be attributed for the same.

"SMEs are at a stage, wherein not only is their data increasing
multifold, but there is an equal need to protect that data as much as is needed
by corporates. There is a burning need for them to deploy both storage and
security solutions," explained Pravir Arora, Director, Marketing, India and
SAARC, Computer Associates (CA).

PARTNER SPEAK ATUL HEMANI Director, Omnitech Infosolutions KN PRASAD  Head, Marketing, Apara Enterprise Solutions RAKESH MUNIGALA  GM, Client Services, Four Soft  SHABBIR IMANI  MD, Nexstep Infotech “80% needs of customers in a particular vertical are quite similar and are thus taken care of by packaged software. The balance specific needs of about 20% are then customized” “Business from SMEs will continue to rise. In the previous fiscal, 15% of our business came from SMEs and this time, we plan to rake in 25% from that sector”  “Service providers will expand their service offerings, thereby integrating several systems for more effective and efficient systems” “When selling a solution to an SME customer, its not just the technology that has to be sold. One has to sell the benefit also, as this segment looks at value for money of the solution that is deployed”

"It is quite possible that the SME player is competing against the
enterprise one. Thus, he would want to be sound technically and so will need
them," Pravir opined.

He further added that it's not just the corporate and enterprise segments
that are experiencing data explosion and the need for securing them. Citing a
very plausible situation, he said that in case of a power failure, a person
would not like to lose the data that he has.

"No company, big or small would want to replicate and rebuild his data
in case it is lost. Hence, SMEs are open to investing in disaster recovery
solutions," Pravir added and also said that it's a vendor that treats
large enterprises and SMEs as equals.

An observation that Shabbir has made from his interactions with SMEs is that
they have to be treated differently than enterprises as it's not just the
technology that has to be sold. "The solution provider along with the
technology should be able to deliver the benefit of the solution too, which is
what they ultimately look for," remarked he. What SMEs want in their
solution providers is long term support and a trustworthy partner.

The reason Shabbir supports SMEs is that it's not only a virgin market, but
is also very huge, thus posing as a lucrative aim to target.

As compared to last year, majority solution providers have witnessed a
considerable rise in their business coming from SMEs. Amit Nayak, Corp Sales
Head, Shrink eTechnologies, Surat said, "There was a significant rise in
clientele from SMEs. It rose to 44% from a meager 27% compared to last
year." It's a similar viewpoint that Shabbir shares, whose business from
SMEs shot up to 50% from 35% in 2004. While, Atul said that his business grew
marginally by 10%-12%.

Open Source and its share

Open source-based applications are gaining wider acceptance. Both solution
providers and vendors are propagating it also. The biggest advantage with using
open source as is known is lowering the Total Cost of Ownership (TCO). "In
a large corporate, one approaches the CTO or CIO when a solution has to be
deployed and they are very cost-conscious and are looking at avenues to reduce
the cost to the company. Thus, large enterprises and corporates are using open
source-based solutions more. But on the other hand, SMEs are not really
concerned about the technology deployed. They want the system up and
running," said Shabbir.

Atul seconds Shabbir for large enterprises vouching for open source-based
applications. "They get value for money. Before deploying a solution, we
ask the customer as to which Operating System he wants, and if the employees don't
find it user friendly, then we don't use it," explained Atul.

There are vendors who have increased the products in their kitty for open
source solutions. Red Hat is primarily an open source operating systems company.
Its Directory Server is an LDAP-based server that centralizes application
settings, user profiles, group data, policies and access control information
into an operating system-independent, network-based registry. Its other solution
is Global File System (GFS), which is an open source cluster file system which
allows a cluster of Linux servers to share data in a common pool of storage.
Using Red Hat GFS, enterprises can easily manage a cluster of servers as if it
were just one server.

Training for solution providers

Most vendors in the enterprise application business take the channel route
to reach the potential customers. "The Certified Channel Partner (CCP)
program, which Red Hat has launched, helps the channel to build specific skills
and expertise for delivering services and support as per customer expectation
and demand. They are emerging exponentially as more customers understand the
value of Linux," remarked Javed Tapia, Director, Red Hat India.

CA's Pravir informed that they have a calendar-based training for channel
partners that is carried out very regularly. The training is divided in two
parts-one for sales personnel and the other type is the technical training,
which is provided to partners. Veritas, a vendor that propagates Linux-based
applications has trainings and demos for partners across the country. "We
constructed a series of Webcasts that address challenges in making optimum use
of current Linux assets," said Agendra Kumar, Country Manager, Veritas
Software.

SAP has set up a community of Education Partners across India. They offer
well-designed and accessible training on SAP technologies. SAP's training
partners in India are Siemens Information Systems and Genovate Solutions. The
training centers are located across India in Bangalore, Chennai, Delhi,
Hyderabad, Kolkata, Mumbai and Trivandrum. 

Oracle PartnerNetwork offers tools and resources like selling and marketing
resources, training and certification resources, technical resources and
support, development resources, business discounts and rewards. They help
partners create solutions across the broad spectrum of Oracle platforms and
applications. Last year, Oracle India launched the ISV Lifecycle Program—a
four-pronged program designed to identify, recruit, train and help ISV partners
go to market.

Services as source of revenue

Solution providers in the enterprise application business provide services
along with the solutions. "We provide consultancy to architect the solution
needed and share our knowledge of domain expertise too. That apart, we offer
training to customers and help users in the usage of the solution," Shabbir
told. He added that price is commanded from the years of expertise they have in
this business.

Surat's Amit Nayak elaborated his services saying that they provide
certification services for tier I, II and III help desk for software products.
It also offers overall E-commerce-enabled web interfaces for customer
interaction and hosted support. Atul summarizes the services his company offers
by saying, "We tell the customers that you run your business and we will
take care of your IT infrastructure." He further added that they offer
their services to clients based outside the country and explained that they
build the solution in India and then is deployed overseas.

Packaged solutions gaining ground

More customers these days want packaged solutions as they are not willing to
wait till the solution is customized. "We generally make different
solutions for different customer verticals. The needs of customers in a
particular vertical are quite similar. Thus, 80% of the requirements of a
company are taken care of. The balance specific needs of about 20% are then
customized. If an entire solution has to be customized, then understanding the
situation, planning, coding and other several aspects take up a lot of
time," remaked Atul.

Talking from a different angle, Shabbir said that customized solutions are
used by extremely niche customer verticals and if their needs are different
compared to what the solution offers. He added that the market for custom-made
solutions is shrinking. KN Prasad also shares a similar opinion that SMEs are
also increasingly opting for packaged solutions.

Amit feels that the retailing and national franchising business management
requires more customization. According to him, they are done in retrospect of
user interface, operation and deployment.

Piracy not a big threat

Enterprise applications being a high-expense, high-risk area, piracy is not
as rampant as is in other commonly used applications. Yet, vendors and solutions
providers spread awareness about genuine solutions in their own ways. Nagaraj
Bhargava of SAP said, "We have not come across cases of piracy. But there
have been some instances of unauthorized training centers imparting SAP training
to students who were not aware of the authenticity. To tackle these threats, we
have been conducting regular raids with the concerned authorities."

Veritas also consciously discourages third party intervention and makes it a
point to comply with the copyright laws. It also has a Copyright Compliance
Policy that is mandatory for all employees to follow. Oracle's Subhomoy
Sengupta, GM-Sales, Oracle India was of a different opinion. He said that
although it has decreased in the past some years, it is still high in India.
"The more mission-critical an application, the more corporate it is and
there are fewer chances of piracy as compared to individual desktops," he
added.

Another solution provider on account of anonymity observed, "Piracy is
an easier route that can be adopted by customers. It is controlled in India by
the Government's laws. But our general mentality is that unless a significant
threat is posed to us, we are not willing to pay."

The road ahead

Brighter times lie ahead for solution providers in this business. Vendors
and solution providers are optimistic about the enterprise application software
in general that includes office management tools, security solutions, storage
solutions, disaster recovery solutions and others too. "What I feel is that
large enterprises and SMEs will go in for a homogenous system. What most
customers right now have is an ERP from one vendor and a security set up by
another and storage by the third vendor. These days, owing to time constraints,
they would like their IT infrastructure managed by one vendor and also to reduce
confusion," asserted Pravir.

In the storage area, companies are realizing that the answer to voluminous
increase in data is not in purchasing a new server or increasing the bandwidth,
but managing data efficiently by deploying storage software, with the existing
hardware. "Organizations are also outsourcing their disaster recovery
solutions and taking extra space from data centers that have more
capacity," observed Agendra.

VENDOR SPEAK NAGARAJ BHARGAVA  Marketing, Alliances and Sales Operations, SAP India PRAVIR ARORA  Director, Marketing, India and SAARC AGENDRA KUMAR  Country Manager, Veritas Software  JAVED TAPIA  Director, Red Hat India “We conduct raids regularly with concerned authorities so that piracy is curtailed and that training sessions in our company's name also don't take place” “In the days to come, SMEs and large enterprises would want all enterprise solutions of a particular vendor so that they are homogenous and easy to manage” “Organizations are outsourcing their disaster recovery solutions and taking extra space from data centers that have more capacity to fulfill their storage requirements” “Channel partners are getting mature as services and support as per customer expectation and demand are emerging exponentially. This is because customers now understand the value of Linux”

Oracle's Subhomoy talked of Service Oriented Architecture (SOA) as a future
trend. SOA is a collection of services to pass data or the requested service.
SOA simplifies integration and application development as it optimizes reuse of
application functionality across multiple systems.

SOA, when compared with previous attempts at components-based architectures,
relies heavily on standards-based Web services, which don't place any
requirements on the underlying technologies. "Key benefits offered by SOA,
which has led to enterprises moving towards it include reusability,
adaptability, and support for multi-channel deployment and multi-constituency
business models," explained Subhomoy.

So if you are a part of the enterprise applications brigade, then go all out
and step out to enjoy the rain as you enjoy the high-tide in your business. As
would have been your own experience, the dark clouds are nowhere to be seen in
your professional side.

AMISHI SHAH


With inputs from Vinita Bhatia, Mumbai and DQC News Bureau— New Delhi and
Bangalore