 Channel Chief
“Broad-basing will ensure availability of genuine products”
Microsoft India recently embarked on a breadth strategy to expand the footprint of its OEM business.
Anil Sethi, the company’s Group Director for OEM business, shared details with CRN’s Executive Editor, Dhaval Valia.
What constitutes the OEM business for Microsoft?
The OEM business refers to any Microsoft license that goes pre-loaded on a new hardware device or any embedded device that requires Microsoft software to be operational.
There are two ways to acquire an original Microsoft software license on a new device—an OEM version from the hardware manufacturer or system builder partner, where the software is pre-installed and supported by the partner, and the retail version that comes as a fully-packaged product. The OEM business segment deals with multinational accounts (MNCs such as HP, Lenovo and Dell), named accounts (Indian OEMs like HCL, Zenith and Wipro), and the system builder channels.
There are four broad product categories that OEM transacts in: BOS (base operating systems), and information worker products like office suites, servers and mobiles.
Take us through your business strategy for FY2009.
It is our endeavor to be present in every opportunity where there is a PC, mobile phone or server being sold. As per our estimate, there are around 22,000 PC resellers in this country, plus there are mobile reseller outlets. Tier-3 cities are now seeing strong growth in both the consumer and commercial space.
This year we have taken a decision to re-assess the market size, identify business growth pockets, and drive a market engagement model that allows us to reach the relevant partners in a comprehensive yet efficient manner. As part of this exercise, we have divided the country into 14 business hubs which contribute to 82 percent of the total PC shipments in the country. Through these hubs, we intend to transact in around 250 cities and towns by the end of this financial year.
We started by scouting for partners who transact in these regions. In the process, we realized that over a period of time there were a few partners who had used their regional expertise and financial strengths to build strong regional distribution footholds.
We have appointed these partners as associate distributors (ADs) for Microsoft OEM in an effort to increase our interaction with them in a structured, programmatic manner. We are confident that these partners will help us increase our market penetration due to multiple reasons including increased credit exposure, higher business comfort and better pricing benefits.
Earlier we had three national distributors (NDs): Ingram, Redington and Esys. We recently signed up Iris as the fourth. These four will be the pillars of our business, with the ADs purchasing from them.
We have further bolstered our initiative by setting up a full-fledged tele-calling engine to support partners. This engine can be termed as the ‘go-to-place’ for information and ideas. Through the two-way engine, partners can reach us from anywhere in India. This engine will also reach out to all partners across the country, providing them information about products, services, offerings, etc.
How many RDs do you plan to have?
So far, we have signed up eight partners covering six growth zones. These partners are K K Software Solutions for NCR, Haryana and Rajasthan; M C Modi for NCR and Haryana; Alco Infotech for the eastern region; Cyberstar Infocom for the entire south and western region excluding Gujarat; Sujata Computers for Maharashtra (excluding Mumbai) and Goa; C C S Infotech for Tamil Nadu, Karnataka and Kerala; Matrix Technologies for Karnataka; and Maxtone Electronics for Mumbai.
Over the next two months, we will be covering the other eight zones by appointing one AD for each region. While shortlisting partners to join us as part of the AD program, we have tried to be objective in identifying those who have sound financial capabilities, bring in strong regional expertise, have a significant corpus of partners with whom they transact regularly, currently deal in complementary products and offerings, and are enthusiastic about the win-win proposition they could share with Microsoft by being part of the exercise.
Is there a premise for channel conflict with NDs and RDs selling to same set of channels?
The AD program was conceptualized with the intent to genuinely expand the market rather than merely add to the noise, which would essentially mean that our business would split into multiple hands rather than grow. Each AD has therefore been appointed after careful analysis of the territorial reach that he brings to the business and to ensure minimum overlap. The NDs will continue to bill the ADs to avoid conflicts.
With the appointment of ADs, we will now have visibility to those partners who directly deal with customers, and we can draft the right marketing programs to focus on their needs and expand the breadth business.
Is broad-basing distribution also linked to your overall goal of reducing piracy?
Broad-basing distribution will enable the availability of the genuine product at the last mile, thereby providing more avenues to the customer to procure genuine software. It will also provide us the opportunity to work with many more partners, and educate them about the value of genuine software. Making sure that each and every socket sold in the market has a genuine Windows license is one thing partners can do to increase their revenue and profitability without incurring any added cost.
What are the benefits provided to RDs in terms of credit, logistics, marketing support and the like?
The ADs will now be eligible to participate in all the programs that we roll out, which was not the case earlier. They are eligible to earn marketing co-op funds, which will enable them to generate demand rather than just fulfill a supply situation. Their partners too can participate in our marketing programs.
We have already embarked on a comprehensive enablement program called Microsoft Learning Circle which will train their partners on our OEM business.
Meanwhile, the tele-engine will work with the ADs to activate new partners, bring them into the Microsoft fold, answer their queries, and in the process enhance the acceptance of genuine software in India. |