Special Focus
Door to Structured Growth
Despite the economic gloom, structured cabling is expected to grow at 20 percent on the back of strong demand from sectors like government and education, and increasing virtualization, data center and IP applications deployments.
By Faiz Askari
In recent years technology uptake has matured, and businesses are increasing their dependence on technology. With enterprises using bandwidth-intensive, Internet-led applications such as VoIP and video-conferencing, structured cabling solutions (SCS) have become a critical element of IT infrastructure.
The overall cabling market in India stood at Rs 1,350 crore in 2008, growing at 20 percent over 2007.
Naresh Chandra Singh, Principal Research Analyst, Gartner, opines that 2009 will be a tough year for network cabling, however he expects the segment to do better than other technology segments, “Market situations have changed compared to last year. Segments like IT/ITeS and manufacturing have been largely affected by the recession. This will definitely impact the structured cabling market negatively in 2009. However at the same time data center solutions, managed services, virtualization, growing adoption of IP applications will work in its favour.”
“Our estimates show that the market for structured cabling was $230 million in 2008. The main drivers in last few years have been IT, ITeS and BFSI. However, we are seeing the emergence of Infrastructure and Govt entities as major spenders. The growth has been hovering over 30 percent over the past few years but may come down to 20 percent this year which is still much better than the rate that overall IT market may witness,” says Kshmendra Narain, Head, Sales and Marketing, Belden, South Asia.
Agrees Vinod Nair, Director, Marketing, Avaya GlobalConnect who expects demand for cabling to grow significantly in 2009 despite the economic gloom, “The next generation solutions in voice, audio-video and surveillance are on the IP platform. We therefore, see huge demand coming up for intelligent patching solutions which provide ease of manageability at the central hub. The other demand is for data center solutions. We expect a lot of government institutions to consolidate their IT infrastructure, thereby fuelling the demand for data centers and leading to higher consumption of structured cabling products.”
Agrees Dileep Kumar, Director, Product Management, ADC Krone, “Despite the slump, we expect telecom, BFSI and the government to be the largest customers. The telecom sector continues to expand its offerings and has not seen any slowdown in capital expenditure so far. Most banks are on track with their branch expansions, so we don’t expect any let-up there. And of course, the government sector continues to be recession-proof.”
Milind Tamhane, Vice President for SCS Business at D-Link India, believes that demand from the IT sector has slowed down, but that “the dip in demand from this sector is being compensated by growing demand from sectors like hospitality, healthcare and education.”
New segments such as healthcare are showing demand for structured cabling because users in this segment demand high throughput. For example, doctors want quick transfer of high-quality screenshots or x-rays, and SCS can enable the transfer of such files more speedily.
Price fluctuations
A negative factor that is likely to dent the positive outlook of cabling manufacturers is the wild fluctuations in copper prices over the last 8-12 months. The price of copper, which forms a major chunk of the cost of manufacturing cables, had shot to unforeseen highs in the middle of 2008 only to reach historical lows by the end of the year.
“The primary impact of the copper price variation has been on the UTP cable, as these have high concentration of the metal. The market had seen a slowdown due to the rising prices of the UTP cable boxes. The price of copper is now back to its lower level and been stable during the last 4-6 months,” says Narain.
However the impact of lower prices of copper will take a few months to reflect in the prices of cables, as manufacturers are still sitting on significant inventory of copper bought at old prices, and hence they may be unable to lower prices, according to experts.
Technology drivers
Data center consolidation is expected to drive the acceptance of fiber-based solutions and 10G solutions in the market. Data centers have been the single largest vertical for the SCS business over the last one year, say analysts.
In addition to this, there are newer avenues such as triple plays, FTTH, data storage consolidation, and extensions of SCS to the residential domain and giga-ready homes that promise good growth for the SCS business. Comments Nagendra, “These bandwidth-hungry applications have pushed the limit of the cabling medium, be it copper or fiber.”
Adds Singh, “I believe that technologies such as virtualization, on-demand applications, VoIP and high performance computing have definitely acted as catalysts in the SCS business.”
Cabling intelligence
With richer and mission-critical applications getting delivered on the enterprise networks today, IT managers are increasingly looking for bringing intelligence to cabling. The demand for intelligent cabling, which enables proactive network monitoring and fault diagnosis, is likely to see increased adoption according to analysts. Many telecom companies are implementing 100 percent intelligent cabling solutions in their data centers.
The interest in intelligent infrastructure is on the rise because companies are looking to consolidate and streamline their infrastructure to gain greater efficiency with their assets. This inclination toward intelligent infrastructure, or, to be more specific, intelligent networks, is also because of its ability to provide an exceptional level of security.
According to Martin Isaac, Marketing Specialist, Molex India, “Intelligent cabling solutions offer a number of advantages to enterprises. Right now, because of the price-point for intelligent systems, it tends to be the larger enterprises that implement them. But Molex offers an enhanced intelligent cabling solution that is more affordable for all categories of customers.”
The power of 10
The 10G cabling market in India has matured compared to a few years ago. The growing volumes of information generated have led to the need for more storage like SAN. Fibre Channel over Ethernet is driving the adoption of 10G cabling. Experts believe that the market will grow after IEEE and ISO standardization.
Many enterprises are deploying 10G based on the future applications that would require higher bandwidth. Ideally while deploying the networking cabling infrastructure, smart enterprises ensure that it stays relevant for the next three generation of networking gears.
“A couple of years ago, CIOs had some apprehension about the RoI of 10G. However, many are now realizing that because cabling is a once-only activity, the new infrastructure they create needs to keep in mind the requirements of the next generations of applications. We are seeing most new data centers, DRCs, R&D organizations and large corporates adopting 10G as a cabling standard,” says Nagendra.
Meanwhile, the higher-speed Ethernet standard, 10 Gigabit Ethernet, is creating an environment where the Internet Protocol (IP) and delivery of advanced IP services like VoIP, IP video-conferencing and IP-based security are becoming common applications.
However not everyone are as bullish about 10G. “India has still not reached a situation where LAN bandwidth has become a limiting factor, hence 10G adoption on a wider scale will only happen when its cost becomes comparable to 1G,” says Kumar.
The Cat effect
Cat7 has witnessed adoption in some niche segments but is yet to gain momentum. This is because there is not yet enough preparedness or demand for STP cables in India.
Looking at the present scenario, it seems that Cat7 will have a tough challenge ahead. “Cat 7 is not a standard as per TIA/EIA. It is only recognised by ISO. Also, there is no special application that requires Cat 7, which cannot be done on Cat 6A. I would term the Cat 7 adoption in India as negligible and at best an aberration. Cat 7 is an ISTP (Individually Shielded Twisted Pair) cabling, which is very difficult to install. On the other hand Cat 6 is an Unshielded Twisted Pair solution, which is very easy to install. Also, most office environments do not generate that much heat that will require a Cat 7 solution, unless there is a thermal power plant within the premise,” says Belden’s Kshmendra.
Power over Ethernet
The use of Power over Ethernet (PoE) reduces power infrastructure and transmission losses to a great extent. Many active devices such as VoIP phones and Web cameras draw power only when in use. PoE technology is useful for powering IP telephones, wireless LAN access points, network cameras, remote network switches, embedded computers and other appliances where it would be inconvenient, expensive or unfeasible to supply power separately.
With the pending PoE Plus standard nearing completion, attention has been focused on temperature-related issues inherent in transmitting higher levels of power over twisted-pair cabling. This current-induced temperature elevation increases the risk of degraded physical and electrical performance which can impact overall network performance and reliability.
Says Rajesh Kumar, “Historically, a comfortable level of performance margin is considered to be 50 percent headroom to standards-specified limits (this would be equivalent to 6 dB headroom for a transmission performance parameter). Following these guidelines, the solutions that offer the most desirable levels of heat dissipation headroom in support of the PoE Plus application are category 6A F/UTP and category 7A S/FTP cabling systems.”
Cabling toward green
Considering the current market dynamics, industry experts believe that green technologies will drive investment in this segment. Structured cabling is one of the first product ranges to go green without compromising on performance and without much cost impact. The industry has witnessed a huge change in the manufacturer’s approach, be it for RoHS-compliant components or packaging. Says Tamhane, “There are suppliers working to provide even halogen-free components which are far safer for next-generation installations. We have already got an entire range which is green or RoHS-compliant. Even our plants are ISO 14001 compliant.”
Structured cabling has an indirect contribution to the green environment. For example, the Cat7 solution—which is a completely shielded solution with individual pairs also shielded—allows for sheath sharing concept. In sheath sharing users can use one four-pair cable for multiple applications i.e. two pairs for data, one pair for voice and the remaining pair for other applications. By doing this, the IT manager can avoid having multiple runs of cables for different applications. Less use of materials will contribute to a greener environment.
“Our cabling analyzers are RoHS-compliant and emit 70 percent less heat compared to conventional analyzers,” informs Nagendra of Nexans.
Adds Nair of Avaya, “We are driving new concepts in design and architecture to ensure that power savings are kept in mind. The adoption of fiber-based solutions can help reduce power consumption drastically.”
The next move
About his market strategy for the near future, Rajesh Kumar of Siemon says, “Besides technical strengths that we will be leveraging on, we intend to strengthen the distribution channel both in terms of geographic reach and the number of partners. In addition to appointing new partners, we intend to support them better in terms of technical training, sales and marketing support, customer support, etc.” Siemon is focusing more on regional distributors to expand its base. “We are also seeking sub-distributors for the southern and western markets as we see a lot of potential there,” Rajesh Kumar adds.
Tamhane of D-Link presents his company’s strategy. “The economic slump has been used by our business as a time for retrospection. The team is far more focused. We have recently de-merged ourselves into active solutions and passive solutions to come closer to end-users and to understand their distinct needs in these two areas. While our distributors and partners for the active and passive business remain the same, their strategies differ for the two product ranges.” The company has also strengthened its logistical support and says that this would be far more effective than earlier. “This year one will see greater commitment to loyal national partners,” Tamhane continues. “We will emerge as one of the few companies to actually up the ante on the marketing front and show increased commitment to support the channel in all possible ways. We expect to see a different set of competitors in 2010, with a significant restructuring in the market.” Tamhane indicated that data center solutions, IPLMS solutions, integrated residential solutions and FTTH solutions would be priority areas for D-Link in 2009. |