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Balasore, Orissa
Balasore is a place of scenic beauty and a major tourist attraction. It is also known for Chandipur, an important defense site for the DRDO for developing and testing India's missile systems. With increasing number of companies opening their manufacturing units in the city, Balasore has emerged as one of the most promising upcountry markets.
Channel Scenario
The channel community here comprises around 50 active resellers, selling nearly 500 PCs per month. The city had a reseller association called Balasore IT Dealers Association formed in 2006, which became defunct last year, due to lack of unity among members.
Opportunities
Traditionally, corporate and government sectors are the largest IT spenders. They generate about 60 percent of the total IT demand, followed by home and SMB segment which contributes the remaining 40 percent. Balasore has a large number of manufacturing companies like Birla Nuvo, Solar Park, JSW, Birla Tyres and Balasore Alloys which create a chunk of the demand. On the government front, the DRDO and several state economic development boards are located in the city driving up IT buying. There are also many export-oriented cottage industries that also contribute to the IT demand.
Ajay Batra, CEO, Infotech Solutions says, "The corporate and government segments have been spending substantially on upgrading their IT infrastructure over the past year. They are replacing their old systems with latest Core 2 Duo systems and are also moving to better performance server platforms. With this, we have witnessed increased spending on security as well." Infotech Infosys is a leading corporate reseller with a clientele consisting of large manufacturing firms.
Around 20 percent of the IT demand in the city comes from home and educational segment. The SMB segment is another IT spender and contributes remaining 20 percent to the demand of technology products. "Some of the smaller manufacturing units have already been using computers and now they are investing their budgets in networking and connectivity solutions and business applications like ERP," says Batra.
Notebooks continue to outpace desktops with increasing importance for mobility among educational institutes, SMBs and large enterprises. And this has also meant an increased spending on wireless connectivity solutions.
Challenges
While majority of resellers are happy with the manner in which the local IT market has been performing, they are concerned by ever reducing margins owing to severe competition.
"The margins are meager due to the cut-throat competition in every segment. All shops sell same hardware and there is nothing they can do to make themselves unique from the competition apart from providing services and support," says Sangram Panda, CEO, Cyrus Software Solution.
Post-sales support is another major problem. To sustain profitability, resellers believe that after-sales service is key. But vendors often tend to ignore this vital element.
"Despite a huge growth witnessed for IT in the city, vendors have not scaled up their support infrastructure. This could prove to be a major bottleneck going forward, as customers mature they expect better service," says Batra.
Partner Profile
Sangram Panda,
CEO,
Cyrus Software Solution
Dreams to reality
Sangram Panda, proprietor of Cyrus Software Solution, developed a liking for PCs at a very young age and decided to build this interest into a career.
Company Snapshot | | Company | Cyrus Software solution | | CEO | Sangram Panda | | Year of Inception | 2000 | | Brands | Dell, Lenovo, Canon, HP, Compaq, Intel, Samsung, D-link | Primary Business | Reseller | | Employees | 11 | Turnover in 2007 | Rs 2.8 crore |
After completing his studies, he did his engineering in computer science. "I caught on to the computers when I was a kid. I was so fascinated by IT and its potential that after completing my foundation studies, I did engineering in hardware and networking," recalls Panda.
He started his business with two employees and an initial turnover of Rs 11 lakh, however, today the Cyrus team has increased to 11 and the company's turnover has crossed Rs 3 crore. "Our beginning was simple. We sold computers to small businesses and homes and did some AMC business. But with time, we built our reputation as a good service provider and this gave us a strong foothold in the corporate segment," confides Panda.
Presently Cyrus derives about 70 percent of its revenues from the corporate sector, while the rest comes from retail business. Some of Panda's major clients are ITR Chandipur, Birla Tyres, Emami Paper Mills, and Balasore School of Engineering. He also owns a 250 sq ft multi-brand store in a posh locality of the city selling HP, Lenovo and Esys products and recently added Dell to its portfolio. In the last two years, Cyrus has seen a growth of 20 percent.
Panda plans to expand his corporate reselling business throughout the state and also venture into re-distribution in a big way.
"Our main focus for sub-distribution will be on peripherals and digital accessories and after-market supplies and we plan to expand this business across the state," informs Panda adding that he is close to inking deals with a couple of leading vendors.
A talented cricket player, he loves the new version of the game, 20:20 and is a fan of the Kolkata Knight Riders. |