“We have not done anything dramatic. Our customers and partners are happy with us and there is no reason why we should not be at number one”

With HP having emerged as the leader in Indian market for shipment of
servers in Q2 2007, Mouton is confident of his well-laid strategies and aims to
hold this position in the coming year. While interacting with the channel in
India during his recent visit, he touched upon the emerging opportunities in
mid-market and shared his views to strengthen it

Over the last two consecutive quarters, the server unit shipment in the
Indian market has grown by approximately 12 percent. What factors according to
you are driving this growth?

This growth is a good sign for the industry in India as well as the global
market. We have seen a substantial growth from the server providers across the
globe, and Indian market has been doing a commendable job. From a global
perspective, the reason for such a growth is that the servers are being
showcased in an expanded approach to the industry and it is serving all the
verticals.

For some products, the growth takes place in one vertical while there is a
fall in another, which is not a healthy sign. For servers, the whole market is
growing rapidly and across the environment. It is horizontal in nature and
indicates the growth of all the sectors.

In India, there are two to three factors that are driving this growth. First,
the economy is doing well and people have more money to spend, so they are
investing in IT in small or big ways.

James Mouton Senior VP and GM-Industry Standard Servers, HP

Another reason is the increased mergers and acquisi­tions happening in the
country.

Thirdly, as per the market feedback, Indian government has been showing a lot
of interest in IT, and segments within government like schools and educational
institutes are getting computerized. There is also lot of pressure on research
institutes in India to compete with the global ones, and in the process, lots of
IT activities are happening.

HP has emerged as the leader, both in terms of factory revenues as well as
unit shipments during Q2 2007, followed by IBM. What factors have attributed to
this success?

It is our strategy and focused approach of our team members that has helped
us in achieving the growth. HP has designed its plan in a way that is focused on
harnessing this opportunity. We keep coming up with innovative products that
address the demands of specific market segments.

Secondly, for us, the channel plays an important role in diversifying the
expansion of a vendor. So to sustain our position, we will try our best to make
our customers and channel happy. In this era of stiff competition, offering
customized products to users is the solution to maintain the position.
Understanding the market requirement is another important aspect that we always
follow up. For instance, in July we launched some low-end products, and
understanding the price sensitivity in APAC region, the products were first
launched here in India rather than in the US.

We have not done anything dramatic. Our customers and partners are happy with
us and there is no reason why we should not be at number one. We would like to
maintain this position in future.

How comfortable is the channel while transacting with HP?

In India 85 percent of our business comes through channel and we try to do
our best for their growth also. In a market, which is driven by partners, the
success of a company solely depends on the performance of its partners.

We try to maintain a consistent behavior with our dealers because partners
play an important role in establishing a product in the market. They sell many
brands at a time, so vendors have to be careful as they can loose their
credibility among the partners.

Dealers have the ability to recommend a brand to the customer. They can be
successful only if the partners trust them. Luckily, we have been consistent
with our policies, backend, pricing and product innovation.

In the channel business, consistency of vendors towards its dealers is
directly proportional to its success in the market. If there is any immature
behavior by vendor, partners get hurt as they have the sense to feel it.

Product delivery is not the end; service and support are areas that need
great attention. In my interaction with couple of partners in India, I felt that
they seek respect and credibility from vendors.

How is HP expanding its server market in the country?

In India, we are expanding in B and C-class cities. We started with eight
cities in India. Last year, we added 18 cities. This year we will get into 30
cities.

This expansion gives lot of comfort to customers and brings us closer to
partners as well. India is a wide market and there are lots of unexplored areas.
We are making it a point to launch interesting products at entry level that
would help us grow in SMB and mid markets.

While expanding our reach further in the country, we have considered the
price point, requirement and affordability of those regions. While expanding, we
are making it a point to strengthen our sales team in every region so that
connectivity is high and dealers get proper attention. Communi­cation has to be
strengthened from every perspective.

What according to you are the challenges and loopholes in the Indian
market?

Here people have phenomenon capability and desire, but there are lots of
fundamental issues in the market that hamper the business quite often.
Transpor­tation is not an easy thing in India. Infrastructure needs to be
polished, and IT has to be implemented to solve these problems. The issue of
energy or power, especially in SMB is another hurdle that needs proper
attention.

Also, Indian enterprises, big or small are finding it difficult to retain
their employees. This is a major cause of concern as it leads to frequent
disruptions in business. Channel partners also have same pain points and they
seek support from their vendors.

Since the market is growing, there are challenges at the lower end of the
business also. Customers need more education. Since they look for solution and
not just the product, so we have to package the server with application that
offers complete solution. Now here the challenge is how to generate requisite
knowledge at a level that is understood by the not-so-IT-savy customers who want
to use the best of the product. So another challenge is to develop the software
in the appropriate language to sell the product in a convincing manner.

What strategies should one work on in a market like India?

The overall agenda should be to increase the level of competence among the
partners and customers. Vendors should offer solution as per customer need, and
when hyper growth is happening, one should not forget the basics. One should
have the ability to maintain its position in the ups and downs of the market.

Amrita Tejasvi


amritat@cybermedia.co.in