What brings you to India?
We just concluded our regional channel meet in Colombo where we’d invited 50 key partners from the region to introduce them to our new partner program and share with them the sales and channel strategy for 2011. The Indian contingent was the largest with 25 partners.
Beginning this year, we formed a global channel organization in order to focus on creating a consistent engagement with partners.
In the past nine months we have launched a new global alliance and consulting program, and a new business partner program. Going forward, the objective is to expand CommScope ecosystems and drive channel enablement to make partners more profitable.
Does this mean that you never had a channel sales organization and programs?
That is largely true. Although we had a partner program, it wasn’t structured; it lacked clarity, differentiation and consistency. Also, we didn’t have a dedicated channel team, so the business was managed by territory managers who were responsible for both direct and channel sales.
One reason for the absence of a dedicated channel focus could be that CommScope—before acquiring the Systimax structured cabling business from Avaya in 2004—was traditionally focused on hybrid co-axial fiber cabling products for the broadcast and telecom sector, which is largely a direct business. Probably as a result, post acquisition, we lost touch with the channel.
But that is now a thing of the past. We currently have a dedicated channel team which is 100-people strong globally and the new partner program has been appreciated by our partners.
Please elaborate on this new partner program.
Although we had Authorized, Prestige and Elite partner levels, there was a lack of a defined policy and engagement framework.
In the new program we have clearly defined each level and its benefits, and the commitments partners need to make. Besides, we have made the qualification criteria for partners more stringent.
We have also added three new partner types. The first one is Solution Business Partner, which is for resellers engaged with the full design and installation of one of CommScope’s complete integrated solutions such as the iPatch or in-building wireless solutions. iPatch is our intelligent cabling solution, while the in-building wireless portfolio consists of products that allow enterprise customers to prepare their buildings for wireless coverage.
We got this portfolio through our $2.65 billion acquisition of Andrew Corporation (in 2007), which specialized in a range of wireless technologies.
The second type added is the Integration Business Partner meant for resellers who integrate CommScope solutions into a wider portfolio for customers. These partner type consist of systems and network integrators who sell compute and network infrastructure products of other brands.
The third type is the Implementation Business Partner for resellers specifically focused on the installation of a particular solution or an application.
How is your partner ecosystem in India, and what are the plans to grow it?
In India, we have alliances with the likes of HP, Brocade Cisco and Axis. Our distribution-led business is managed by Ingram, Redington and Anixter, and we have an active base of 100 partners of whom 50 are very focused on CommScope.
The intent is to upgrade the focused partners to provide iPatch and wireless solutions. Additionally, we plan to enroll and engage with many HP and Cisco partners under the Integration Business Partner program.
What I like about India is that many of our existing partners have a strong active networking and compute infrastructure business, unlike in other countries where a large number of partners are pure-play structured cabling providers or cabling contractors. This means Indian partners have stronger influence and engagement with customers.
Many solutions providers agree that CommScope has strong brand equity among customers, but they say that availability is a challenge.
We recognize availability as a challenge in India, and have been working to address it. I believe the availability issue has been addressed to a certain extent after we started our bonded warehouse in Chennai a year ago. Since then we have been stocking many products and doing rupee billing for the same.
To further improve availability and shorten delivery times, we need to forecast demand well and work with distributors to ensure the right inventory. It’s our job to ensure distributors keep healthy stocks.
With a channel team in place, forecasting will now become proactive.
The other complaint is about pricing. CommScope continues to be 30-40 percent costlier than other MNC brands.
The price differential of 30-40 percent used to exist when we didn’t have a bonded warehouse. Having the bonded warehouse has led to some cost rationalization.
Worldwide, we are restructuring our manufacturing by moving from high-cost to low-cost regions, and this will further help us rationalize pricing. Additionally, with strong channel engagement, we see better forecasting which will improve logistics and reduce associated costs.
Structured cabling forms less than 3 percent of the customer’s IT budget, hence if the technology and TCO benefits are clearly communicated, pricing isn’t such a big issue.
CommScope’s focus has always been on providing leading-edge technology; our message to the customer is built around a solution and not around components.
We are advising partners to not get into per-port cost negotiations with customers, but instead to focus on understanding their pain-points and providing them the right solutions.
We are the only company which offers fiber, copper, intelligent cabling and wireless solutions.
What’s your share of the structured cabling market globally and in India?
We believe we are a market leader with more than 25 percent share of the addressable market. However, we do not have market research figures to share with you.
We have problems with the research figures from many agencies because we believe their research doesn’t reflect the right addressable market.
For instance, many agencies continue to factor Cat 3 cables in their market research though it is outdated and sold only in the home segment. We stopped making Cat 3 cables three years ago.
Overall, in Asia Pacific and China, we have a dominant market share. In India the share is below expectation, so over the next 12-18 months we have to work to gain market leadership.