Greening The Enclosures

Having impacted most of the businesses across the world, recession has also
affected the enclosures business. Not only were the big players hit, the smaller
ones just managed to survive. Since 'go green' was the mantra, vendors
contributed their bit to this initiative. Most vendors concentrated on saving
energy and reducing the heat content. Industry giants like Rittal and Emerson
were affected by the economic slowdown, where a lot of investments in the
private sectors were postponed. Most of these players cater to the capital goods
industry and private organizations. Even though the government sector undertook
some projects, implementation of these were really very slow. As a result,
enclosures growth was almost flat last year, which should revive in this fiscal
year.

Developments

AK Nathan, MD, Rittal India said, "Rittal recently launched a specially
designed product, RiMatrix5 for IT space. This will convert the traditional
datacenter to 'green' and is completely eco-friendly. The modular rack mounted
UPS for this solution has a very high efficiency characteristic even at 50
percent load, which is not the case with most of the commonly used UPS systems."

Another big player in the market, Emerson is looking at launching new
products in 2010. Emerson's main focus will be optimization of IT and creating
one stop infrastructure solution for most of the SME/SMB sector. The company's
new initiative 'Optimize IT' comes with an integrated camera that can photograph
people accessing the rack and e-mail it to the datacenter administrator, thereby
aiding remote monitoring. NetRack, a Bengaluru-based company locked reasonable
growth last year. They plan to become a Rs 100 crore company in the next five
years and have already started by building a unit in Peenya Industrial Estate,
Bengaluru.

Going Green

All big and small vendors are following the green trend. 2009 witnessed a
number of initiatives being taken to reduce carbon footprint and save energy. In
large IT companies, datacenters face problems in cooling. They have to cool the
entire volume of air present inside the space which consumes and wastes a lot of
electricity. Big players like Emerson, Rittal and APW have fine-tuned their
technology to address this issue and introduced new products.

Marketing strategy

Rittal plans to appoint more SPs and VAR's which will increase their market
penetration. Moreover, Emerson also is planning to introduce innovative
strategies to enhance their channel network and leverage on their existing
relationships with business partners, distributor team and sales team. In
keeping with this ethos, Emerson is very aggressively targeting the 1-3KVA
segment and is advertising and hosting promotional schemes for channel partners
to boost sales in the category. They are also planning to introduce a system of
certification which will give its partners resources and recognition to tap new
markets and create business opportunities. Within Emerson's long standing pool
of exclusive Enterprise Business Partners, the company is creating three partner
certification levels-Platinum, Gold and Silver indicative of the level of
engagement with customers. They have 70 channel partners across the country.
NetRack plans on having a regional manager for each region who would co-ordinate
with partners of that specific region. Since they are present in metro's across
India, the company has appointed regional managers for each office to facilitate
interaction between channel partners and end-customers as well.

Growth opportunities for channel space

Emerson has more than 60 authorized service providers that offer a
multi-location support network. Since their market presence is over 20 years,
they claim to be consistent in customer retention and have witnessed increase in
business due to customer reference and effective service. Emerson is also
investing heavily on training programs called 'Channel Empowerment'. These
training programs focus on skills and knowledge upgradations, primarily to
address the following objectives:

• Build awareness about the basics of power electronics and understanding
  the UPS industry
• Update on new technologies, customer applications and new solutions for
  uptime.
• Adopt a service-oriented approach to build strong relationships with
  clients
• Training programs focused on 'value' creation and communication on uptime
  solutions.
• Service training programs on all the products and applications and channel
  management

Apart from these there are various schemes by Emerson. The objective of these
schemes is to drive partners to push the sale and create a profitable
proposition for themselves with a well planned purchase pattern for Emerson
products. Additionally, given the global recession scenario, these schemes will
certainly pass on extra benefit to our partners and motivate them to sell more.

Partner Profiling

The IT industry is growing and there is a huge demand from the hardware
sector. The enclosure business will be in demand till there is usage of active
components like servers, switches, routers and modems.

Vendors are now more critical in choosing the right kind of partners. When
asked about Emerson's strategy on choosing partners Smrutiranjan Das, Product
Manager-Rack Solutions, Emerson said, "You need to have a sound knowledge in the
IT hardware market and an understanding of the server and networking segment
since an enclosure is much more than just a metal sheet, it includes factors
like cooling arrangement and power distribution, that play an important role in
increasing the overall usage efficiency." Nathan of Rittal commented, "Rittal
has a wide range of products and solutions in the IT field which offer excellent
growth opportunities to SPs. They can position their offerings using our
products as vehicles.

Partners are empowered and encouraged to directly approach customers with
full back up from our team. The role of our sales team is getting increasingly
converted to business development, awareness creation and promotion, thus
generating ample opportunities for our partners."

Both Emerson and Rittal are looking at specific profiles of partners before
roping them. Nathan added, "Basic application knowledge in the field of
networking and server hardware as well as structured cabling is what we
generally look for. SPs need to have able and motivated sales persons to
interact with users and end-customers and translate concepts to concrete
hardware requirements. For RiMatrix5, SPs must be able to leverage on the
various advantages our solution provides end-users in terms of lower Opex and a
technically much better solution for high density DC applications." Even though
business was slow for Emerson last year, they have still managed to lock in
decent growth with the help of their partners.

Market overview

"Rittal has pinned its hopes on the end-user, BFSI and government verticals.
Even though their main revenue comes from the IT/ITeS sector, they are also
focusing in providing end-to-end IT solutions," noted Nathan. APW is also
expecting much from the current financial state, and is hoping for its
improvement.

Overall even though the market was down, most vendors managed to retain their
big customers. Small players benefited by making most of the price difference
and offering end-to-end solutions. Vendors also appointed partners in key tier-1
and 2 cities to make their presence more felt. APW invested on technology and is
now offering products which are eco-friendly. NetRack, Valrack, BCH Electric
catered to verticals which had no presence of big players. Hence they were able
to sustain the meltdown successfully.

Revathi Raghavan

revathir@cybermedia.co.in