Structured Cabling Market: Poised To Touch Rs 400 crore

The Structured Cabling Systems (SCS) market is just about 10% of the total
networking commodity market of Rs 2,978 crore in 2003-04 as per recent reports
published by Voice&Data, CyberMedia Research. Yet it is one of the most
crucial elements in building any network in the information and communication
technology space.

While all other aspects of a network, such as the hardware and software, tend
to get more attention while building a network, the performance of the network
depends a lot on the cabling infrastructure. Making the right choice of cabling
solutions is as critical as the hardware and software that goes around it. Or
else, it will be like driving a Ferrari on a bad road.

SCS IS CRITICAL

Today, network downtime is something, which no company would like to
skirmish with, because of the cost involved in terms of lost productivity and
revenue. In the previous year, the growth in cabling market was experienced in
all the verticals for which uptime was very critical.

“As infrastructure needs for intelligent buildings grows, intelligent cabling systems would form key solutions for solution providers” KK Shetty, Country Manager, Amp Netconnect Business Unit, Tyco Electronics

According to some international estimates, the cost of one hour of downtime
for commercial banking industry (including salary and revenues) totals around
$34 million. Similarly, the downtime cost in the healthcare sector for about an
hour is equated at $22 million. With many BPOs catering to international clients
in these verticals, these downtime cost estimates become all the more relevant
here.

In such a scenario, the most important aspect would be finding out which
cabling infrastructure system will work well in a given setup. "It will
depend on the performance level expected from the network. This has to be based
on the applications that will run on the network. Applications demanding more
bandwidth and higher speed such as VoIP, and IP-based video conferencing require
a superior cabling infrastructure," says an industry analyst.

INDUSTRY PERFORMANCE

According to the Voice&Data CyberMedia Research, the Indian market for
structured cabling grew by a decent 23% for the year that ended, 2003-04. The
estimated market size was reported to be Rs 326 crore (Rs 265 crore in 2003-04).
By 2004-05, industry experts project this market to hit the Rs 400 crore mark.

Source: Voice&Data, CyberMedia Research Source: Voice&Data, CyberMedia Research

According to Vikas Pinjarkar, GM, Structured Cabling, Sales, D-Link India,
the cabling market has maintained a CAGR of 20-25% over the last five years.
Next year it is expected to grow by 20-30%. KK Shetty, Country Manager, AMP
Netconnect Business Unit, Tyco Electronics gives a similar view about the future
growth rate of 30% for the next year.

There are more than 10 structured cabling systems vendors in the Indian
market, but almost 70% of the market is held by the top three vendors namely:
Systimax (earlier Avaya), Tyco and D-Link. During the year 2003-04, almost all
the players in this segment ramped up their toplines and bolstered their
bottomlines.

Market leader Systimax took a contented approach, biting only Rs 11 crore.
But even that was enough to help it reach Rs 100-crore mark during the fiscal
200304. That meant a modest growth of 12% on a yearly basis. However, one needs
to take in to consideration that the company completed change of hands from
Avaya to Commscope in February 2004.

Tyco, the number two player, wasn't too aggressive either. Still, it
retained its market share with Rs 79 crore. In fact, there were no upsets in the
rankings. Tyco clocked a growth rate of 14.5%.

D-Link made the biggest splash and took away much bigger slices than others
would have expected. D-Link, the only major player to be headquartered at Mumbai
(most others are based at Bangalore) gulped down 45% more than what it could in
the previous fiscal. It clocked Rs 45 crore, compared to Rs 31 crore last year.

Bangalore-based Krone also posted a decent growth of 25%. From Rs 16 crore
earlier, it grew to Rs 20 crore. Like Systimax, Krone too had changed hands, in
the previous fiscal. ADC of the US bought it out and the process got completed
in May 2004. With this, the German presence in the Indian market came to an end.

For Molex, growth remained flat, while Panduit grew from Rs 8 crore in the
previous fiscal to Rs 11 crore this fiscal. TVSICS and Dax too made their
presence felt significantly with Rs 10 crore and Rs 7.5 crore in revenues,
respectively. Belden, which started operations in February 2003, completed a
full financial year in India. For the period April 2003 to March 2004, it did
business worth Rs 10 crore. Thus, Panduit, Belden, and TVSICS were seen in
neck-to-neck competition during the fiscal.

BFSI FUELED GROWTH

Customers segment that fuelled growth for the SCS industry during 2003-04
remains more or less similar to the networking industry customers. Major
business continued to come from the BFSI, call centers, software development
centers, government and PSU segments. "Broadband was another area where
vendors concentrated and banked on for business," says Vikas.

Huge investments from customer segments have motivated many systems
integrators to scale up their business and become complete end-to-end solutions
provider for these verticals. Being a complete solutions provider would
typically mean offering networking solutions as its major activity. However, the
specialized nature of the business has forced very few to sustain for a longer
time.

For all those SIs, who wish to take up business focused around providing
complete networking solutions, structured cabling is the first step. According
to industry experts, solution providers can look forward to opportunities
through structured cabling as a first step in customer segments like BFSI, ITES,
ISP, government and PSU segments.

"As infrastructure requirements for intelligent buildings grows,
intelligent cabling systems would form key solutions for solution providers.
This opens up service resources for our SIs," says Shetty.

TECHNOLOGY TRENDS

Structured cabling systems are available in copper or fiber. Unshielded
Twisted-Pair (UTP) copper is most widely used, because it is highly reliable and
the least expensive. For years, copper UTP solutions have been the preferred
medium over which most LAN communicates.

It's now being debated whether fiber would replace copper as the preferred
medium. Several years, ago Gigabit Ethernet seemed like a pipe dream. Today
Gigabit Switch port (10/100/1000BaseT) sales have overtaken 10/100BaseT.

The Indian market has matured in structured cabling during the past couple of
years as never before. The market is witnessing fast growth in the fiber segment
as well. "The market is responding very positively in adopting these
technologies," says Vikas.

A closer look of the market shows that growth in fiber is due to the
increased use of fiber in the backbone and campus installations. Fiber takes the
lead in applications that require high speed and high bandwidth.

Then why hasn´t fiber replaced copper? The answer is simple. It is
expensive.

"Fiber deployments are at least six to seven times costlier than copper.
Therefore, a cost effective way of doing things would be to mix and match the
two. Ideally fiber on backbone and copper for horizontal cabling is
advised," says Shetty.

Fiber cable allows more data to run much longer distances than copper,
without degradation. Fiber is often used in the backbone of a system, typically
between floors or buildings, while shielded or unshielded twisted pairs are used
in the horizontal cabling.

TRENDS AND EXPECTATIONS

The market showed rapid maturity in terms of technology acceptance. Cat5e
and Cat6 completely replaced Cat5 in copper, as users embraced superior
technologies. At the same time, they increased pressure on pricing by taking
good advantage of the competitive scenario. The average price of Cat5e for a
300-meter box was Rs 3,300 while Cat 6 sold at an average price of Rs 4,500 for
the same length.

In the early years of network systems, every manufacturer offered its own
proprietary systems, most of which were not compatible, thereby offering little
flexibility, and significant costs every time a change was made.

This situation changed when the Telecommunications Industry Association (TIA)
and International Organization for Standardization (IOS) created global
standards for the industry. Now, the prevalent standards range from Cat5e to
Cat7, which define the minimum performance specifications for structured cabling
systems.

While Cat6 on UTP copper gained further momentum in the Indian market,
another type of twisted-pair copper cabling, known as shielded twisted-pair (STP),
specifically for Cat7 got established in few European markets.

STP is more expensive, but has greater signal-transmission performance. This
is typically suited for areas with high electromagnetic interference, like
factory floors. It is also ideal for organizations where data is critical and
needs to be highly protected, such as banks, stock exchanges and hospitals.

However, Vikas feels entry of Cat7 is ruled out in the Indian market, since
UTP itself is claimed to be achieving 10 Gbps.

According to international reports, STP (shielded twisted pair) is losing
share in most countries. Globally it's growing by 6.3% annually only because
of Germany, which accounts for more than 58% of the world STP market by volume.

“The Indian market has matured in structured cabling systems, and is responding very positively in adopting new technologies” Vikas Pinjarkar, GM - Structured Cabling - Sales, D-Link India

Another trend that is picking up in the SCS business is the growth of
intelligent cabling system. Intelligent cabling system provides complete
up-to-date accurate documentation in real-time that enables customers to
minimize costly network failures and downtimes.

"It also helps integrate network layer and physical layer management,
feature integration into facility management tools, reduce staff workload, and
more importantly reduce the time for moves, adds and changes by automating the
management of the physical layer," says Shetty.

Currently, vendors are putting in efforts to train solution providers for
such intelligent cabling systems.

10 GIG OVER COPPER

Ten Gigabit Ethernet is very much prevalent in the form of fiber optics. But
the question now is when will 10gig-over-copper become a feasible technology.

"The limitation that one sees here is in terms of distance which has
been tested at 50 feet at present. Once this is issue is resolved, one would see
deployment of networks on 10gig over copper. At present, it is only used for
network backbone," says Shetty.

But for the market to gain acceptance, it is not just the issue of distance
and speed. According to Shetty, it will gain acceptance in the market once the
standards issue is resolved. The applications for this technology would include
data center connections and backbone connections that also include horizontal
cabling, where high densities of Gigabit desktop users might be aggregated via a
10G switch uplink.

As of now, Krone is the only player to offer the '10 Gbps over copper'
solutions in the Indian market. Globally, the US-based cabling major Siemon
shares the distinction with Krone. Systimax, Tyco, and D-Link are also testing
their 10G offerings at their respective labs.

WiFi IMPACT?

Ever wondered what will happen to structured cabling if the popularity of
WiFi connectivity continues to grow over a period of time? Structured cabling
systems vendors are not at all worried about the growth of WiFi. In fact, most
of the vendors manufacturing SCS are also manufacturers of WiFi gears.

According to vendors, the new wireless technologies will see deployment more
on the personal and home applications. Security issues are bound to stay
connected on wires. However, vendors are hoping that WiFi will become a part of
the structure cabling system and hence will not have any impact on the SCS
business.

"We see wireless technology as a complement to structured cabling, and
in fact have our own product offering in this portfolio that complies with IEEE
802.11a, b and g standards," says Shetty.

According to Vikas, wireless will never be able to match the speed/throughput
of wired network. "Another reason why wireless will not impact the wired
networks is the return on investment factor. Greater the distance means higher
cost; greater the bandwidth means higher cost; higher the security level means
higher the cost," he explains. 

USERS CHOICE 

The PCQuest Users' Choice 2004 survey done by IDC India recently rated
D-Link as the preferred vendor in the Structured Cabling category. The
respondents of the survey were IT purchase decision makers of large enterprises.
D-Link wins with Avaya, Krone and Finolex being the other members of the Users'
Choice Club. Systimax just missed qualifying. According to the survey, D-Link
has the highest brand loyalty at 94% followed by 79% for Krone and 76% for Avaya.
Systimax has 65% brand loyalty, while Finolex has a low 54% brand loyalty.

NELSON JOHNY in Mumabi

BENEFITS OF INTELLIGENT CABLING

SCS IMPLEMENTATION TIPS

Look at the layout first: Enterprises need to keep the physical layout and
structure in view during procurement. An implementation plan can typically have
these components vertical cabling; horizontal cabling, the backbone media and
user points.

When enterprise locations are spread over two or more nearby buildings, it
calls for external cabling. Internal cabling takes care of intra-building needs,
and can be across various floors (vertical cabling) or floor-wise (horizontal
cabling).

Map requirements to technologies: Costs can be optimized, without
compromising on the performance, by opting for different levels and types of
technologies. For example, it's better to install a fiber-optic backbone to
interconnect the buildings. Additionally, there can be some coupling with
multi-paired copper telephone cables for the connection of buildings with the
public telephone network and the provision of internal lines/services between
buildings.

Internal cabling needs special attention: Internal cabling should be designed
in such a way that it's able to meet present as well as future needs. This is
because the internal cabling is much more complex than external cabling and an
improper plan can make a future expansion a big nightmare. In other words, the
infrastructure should be fully extendable, especially in terms of technologies.

Ensure robustness: Robustness of a structured cabling solution should be high
on the buyer's priority. That comes from the solution's ability to
facilitate smooth and uninterrupted heterogeneous traffic while ensuring high
network uptime.

SOURCE: Voice&Data

Because You Can't Dig It Every Year...

Life to cost ratio:
The cabling infrastructure is expected to last far longer
than software or hardware. A good cabling infrastructure will therefore need to
reflect a lot of vision regarding future applications and yet be cost effective.

Look at fiber's no-interference advantage: Fiber is completely
future-proof. It remains unaffected by EMI and RFI effects. Two core
tight-jacketed cables are normally used for these applications. Mostly
multi-mode 62.5u fiber goes in multi-storied buildings as a vertical backbone
and 50u laser graded or single-mode fiber goes as a horizontal backbone in the
big campus-wide projects.

Make it future-proof: In years to come, since the gigabit reaches to the
desktop, the necessity of 10-gigabit backbones will be a must thing for the
bandwidth-hungry applications. With the installation of 10-gigabit backbones,
companies will have the capability to begin providing gigabit Ethernet services
to workstations and, eventually, to the desktop in order to support applications
such as streaming video, high-end graphics etc. As the speed and bandwidth of
the network increases the distance that copper cable can support decreases. For
a long-term plan, it is best to use single-mode fiber since it will be a much
superior solution at a relatively much lower cost.

Share same resources: Real-time cabling management could be very effective in
the premises networking where different groups use the same backbones and share
the same resources. It's very essential to identify the various groups and
provide them the set up and bandwidth accordingly.

Sophisticated solutions: Cabling infrastructure is generally considered a 10
year investment as opposed to two or three years for electronics. For major
projects, sophisticated gigabit solutions are also available. Large enterprises
may find such solutions more suitable.  

SOURCE: Voice&Data

How Cat5e and Cat6 Compare

The general difference between Category 5e and Category 6 is in the
transmission performance and extension of the available bandwidth from 100 MHz
for Category5e (Cat5e) to 200 MHz for Category 6 (Cat 6). This includes better
insertion loss, near end crosstalk (NEXT), return loss and equal level far end
crosstalk. These improvements provide a higher signal-to-noise ratio, allowing
higher reliability for current applications and higher data rates for future
applications.

Because of its improved transmission performance and superior immunity from
external noise, systems operating over Cat6 cabling will have fewer errors vs.
Cat5e for current applications. This means fewer re-transmissions of lost or
corrupted data packets under certain conditions, which translates into higher
reliability for Cat6 networks compared to Cat5e networks.

Although Cat6 and Cat5e connectors may look alike, the former have much
better transmission performance. For example, at 100 MHz, NEXT of a Cat5e
connector is 43 dB, while NEXT of a Cat6 connector is 54 dB. This means that the
latter couples about 1/12 of the power that a Cat5e connector couples from one
pair to another pair. Conversely, one can say that a Cat6 connector is 12 times
less 'noisier' compared to a Cat5e connector. This vast improvement in
performance was achieved with new technologies, new processes, better materials
and significant R&D resources, leading to higher costs for manufacturers.

Source:www.tiaonline.org