Cover Story
Transformation of the system
 Undeterred by the declining share of white-box PCs, leading systems builders are innovating to develop indigenous purpose built appliances that promise to have a much wider market
By Ramdas S
The market dynamics over the past several years is slowly and steadily creating a lost tribe—system builders, better known as assemblers. According to Gartner, at the beginning of the last decade the assembler market share was over 70 percent, but in the end of the decade it was hovering around 35-40 percent.
Over the last decade thousands of white PC makers across the country have abandoned the business, have taken to reselling branded PCs, or moved to other forms of business. The most common explanation given by these partners is that with the price difference between a branded MNC PC and a white PC coming down, the customers would prefer to buy a branded MNC PC.
“These days I have cases where, on some large servers, Dell has offered me prices that are cheaper than the best I can get out of my OEM suppliers of building blocks,” says Sunil Kumar, CEO of Lampo Computers.
Observes Diptarup Charkraborti, Principal Analyst, Gartner India, “Over the past decade or so, MNC PC brands have done extremely well in investing in channels and promotions, and definitely their more aggressive pricing has also helped. At the same time, system builders have also taken the easier route to reselling, and that’s making sense. The fact that the white notebook PC market never took off has also not helped system builders because the market notebook market continues to grow as compared to the desktop market.”
Nevertheless, there are a number of white box PC makers who are simply not giving up. Instead of becoming another cog in the wheel, they want to become the wheel itself. They are creating products that can help them differentiate themselves from rest of the crowd, and even make them look and perform better than the best that an HP, Dell or EMC dishes out.
These products range from embedded devices, thin clients, security and network appliances, PCs of small form factors, blade servers, 3D notebooks, and NAS and SAN solutions. Their principals are also doing their bit. Vendors such as Intel, AMD, Nvidia and Via also matches them with the right ODM and OEM suppliers, and helps the partners create niche product and solutions “Intel works with key Indian partners in enabling them to build appliances here in India,” says Rajesh Gupta, Director, Intel India. “Enabling includes early samples, match-making with ODMs outside, expert support, and validation support from the Intel development center. Then there’s a go-to-market plan for taking it to the market.”
Here are the systems builders that are leading the way in product innovations.
Connoisseur Electronics
Bengaluru-based Connoisseur Electronics has stayed focused on system building since 1991. “We started looking beyond the traditional desktop and server market once we figured out that to stay alive against stiff competition on price by MNC vendors you need to create innovative products,” explains Harish Kumar RP, CEO of Connoisseur.
Over the past decade, Connoisseur has ventured into creating specific products to address specific situations. “Initially the idea was to deliver products on a project basis or as a solution for a specific customer. However, we soon realized that we needed a more holistic approach and started building products that had a wider market,” says Kumar. “Moreover, we did not want to compete on price alone, and the focus was to build products with features that the competition could not boast of.”
At first Connoisseur was focused more on the Intel Premier Provider (IPP) Program, where IPP partners were trained to build servers and storage solutions using building blocks supplied by Intel. Later, the company also signed on with Nvidia to focus on the Nvidia Tesla-based desktop super computers besides high-end gaming notebooks. “In 2008, we released a notebook which was adjudged at that time by an independent media company as the fastest notebook in the world. We were also the first to launch the Tesla-based desktop supercomputer,” adds Kumar.
Meanwhile, the company also designed and delivered a car PC based on the Intel Atom platform to a US-based vendor. Another OEM execution was for the Indian Railways, for whom Connoisseur developed an information kiosk. However, Kumar clarified that there are no plans for building products based on such solutions.
Connoisseur is all set to launch a number of products that Kumar says will be much cheaper than the best offered by the competition. After once again being ahead of the MNC brands in launching 3D desktops and notebooks based on the Nvidia 3D vision platform, Connoisseur is all set to launch an all-in-one (AIO) with a touch-screen and 3D vision.
“At Rs 25,000, which is cheaper than all brands that sell regular AIOs, we are providing you with an AIO with touch-screen and 3D vision. This is the cheapest product in its class, and also ships with a wireless keyboard and mouse,” he adds.
The company has also launched a tablet netbook which Kumar describes as the cheapest tablet in the world. “At Rs 22,500, we offer a totally rugged tablet PC with a 10-inch screen. You cannot get a cheaper tablet in the market.”
Connoisseur is also set to launch a campaign called Go Small, Go Green, focused on nettops and netbooks. “Considering the current power situation in the country, and the environment friendliness of customers, we are launching a series of nettops and netbooks which consume just 20W of power. Both Intel and Nvidia have supported us in finding the right ODMs, and we have just launched a nettop model that could be the thinnest in the market.”
The company spends around $20,000 every quarter on R&D, a majority of which is spent in creating demo products and ODM interfacing, and for dedicated manpower.
While at present the company is selling directly, Kumar is toying with the idea of approaching peers in the industry. “We are also thinking of white labeling our products so that channel partners can brand them as their own.”
Enjay Network Solutions
The Rs 4.5 crore Vapi-based Enjay Network Solutions has stayed focused on thin clients since 1998. While during the first four years the company was selling only boot ROM-powered Network Interface Cards (NICs) to create diskless nodes, Enjay later started building its own thin clients. “The hardware is imported and we embed a firmware based on Linux. Our product is fairly indigenous that way, and today we are selling close to 40,000 thin client units and over 200,000 NICs a year,” reveals Limesh Parekh, CEO, Enjay.
Over the last couple of years, the vendor has started leveraging its strengths in open source to create devices such as NAS, firewalls, VPN gateways and kiosks.
“We have a strong open source skill set, and we have now started shipping our products in storage, security and networking. Plans are also on to look at other areas.
The idea is to bring into the SMB space some of the products and solutions that so far have only been used by enterprises,” explains Parekh.
“Market conditions in India are quite conducive for the thin client business, and we have competition from vendors such as Wyse and Ncomputing,” says Parekh. “We see Ncomputing strong in the entry-level thin client market, and Wyse in the higher end. We take a middle path, and have been successful in the SMB and education space.”
The company addresses the market through channel partners across the country, and Parekh says that most of the country is covered through distributors and stockists.
Enjay is a Microsoft Embedded partner and a Redhat Enterprise partner. The vendor also has relations with Intel and AMD. “We are now shipping thin clients using the AMD Geode processor. We also have strong relations with Intel, and have started shipping products on Atom processors,” Parekh adds.
Enjay is betting on its 17-member R&D and support team to help it come out with more products. “We have several new products for specific verticals in mind, but it’s a little too early to announce them. We have recently started shipping products for the global market, which I believe is a huge achievement for a company like ours operating from a small town like Vapi.”
Vardhman Technologies
The Rs 20 crore Mumbai-based Vardhman Technologies is yet another company trying to make a difference. In business for over 13 years, Vardhaman focuses on four areas: small form factor PCs, point of sale PCs, digital signage and thin clients.
“Today, we are actually three companies,” explains Amit Rambhia, CEO, Vardhman Technologies. “Vardhman is the flagship company and is focused on manufacturing with a plant in Daman. We are soon to start a new plant in Bhiwandi. Then there’s Panache Technologies, which is our services arm. Panache is also the brand under which our products are shipped. Finally, there’s Aditya Technologies, a company we have recently launched. Aditya will do consulting, R&D and ODM on our behalf.”
Three years ago Vardhman had bagged a large order from Gigabyte for manufacturing thin clients. While the relationship no longer exists, the contract gave the Intel partner a lot of confidence to venture into new areas of manufacturing.
One of Panache’ major breakthroughs has been shipping a PC the size of a palm. “I believe this was the smallest PC based on Intel Atom architecture at that time anywhere in the world. It was precisely the size of a BlackBerry device.”
Rambhia says that the Intel Atom processor has been a boon to manufacturers like Vardhman. “Atom comes in several flavors, and the types of devices are just left to our imagination. We have recently launched a car infotainment solution based on the Atom. We are also planning to launch tablet-like devices, which we plan to call Slate, which will also be aggressively priced.”
Vardhman is a partner of Microsoft for the Embedded Windows platform, and of Novell for the Suse Linux Appliance program.
Other plans include creating an appliance to run Tally, which Rambhia says the vendor will very soon announce.
Rambhia also informs that the vendor is planning to invest more in its consulting arm, Aditya Technologies. “We now want to be an ODM, and not wait for designs to come from Taiwan or US. We’d like to use India as a manufacturing base.”
Netweb Technologies
Delhi-headquartered, Rs 60 crore Netweb Technologies started off in 1991 as a sub-distributor, then about six ago ago it gave up distribution to set up a manufacturing plant for its high-end server and storage solutions. With alliances with Super Micro, Intel, AMD, ScaleMP and others, Netweb created a brand called Tyrone that boasts of clients like IISC, IIT-Kharagpur, IISCR and TV9.
One of the biggest focuses of Netweb is on server clusters for high performance computing (HPC). “We have the largest number of installations of HPCs in the country,” states Sandeep Lodha, Director, Netweb.
Lodha also says that Netweb was the first vendor—ahead of even EMC, IBM and HP—to launch a SAN box with InfiniBand Interconnect. “We also believe we were the earliest to offer a storage product that had SAN, NAS and VTL in one box, and supported InfiniBand, FC, 10G and Gigabit in any combination or AIO in a box that scales to 384TB.”
Netweb has invested close to Rs 20 crore in the business over the past six years, including a plant at Parwanoo in Himachal Pradesh. “We have a product engineering group in Delhi consisting of 25 engineers. The software which runs our storage and HPC solutions is mostly developed in-house,” informs Lodha.
New Era Technologies
Founded in 2001, the Rs 15 crore Mumbai-based New Era Technologies has been an Intel IPP partner focused on server and storage solutions. Like Netweb, New Era has also forged strong relationships with Super Micro to create unified storage solutions and blade servers.
“Today, we have a unified storage solution that’s almost 40-50 percent cheaper than comparable products from a NetApp or an EMC. Apart from support from vendors such as Intel, we have made considerable investments in R&D to build these products, and we have close to 15 engineers dedicated to building these products,” informs Dinesh Ochani, MD of New Era.
New Era also has also a partnership with Scalarc, a services vendor, and they have launched a product called OpenFiler. “The box delivers more than 3Gbps of storage throughput to your applications over NFS, CIFS, FTP, HTTP or even iSCSI. It’s a perfect foundation for your VMware infrastructure, or as a massively reliable File Server within your network. It supports point-in-time snapshots for easy restore too,” adds Ochani.
Also being offered is Megawall NX, a stateful packet inspection firewall with advanced key-based OpenVPN (an open source VPN software) support for VPN users. “These solutions are ready, and we’ll soon ship them. Megawall also supports Web caching and URL filtering to ensure that your bandwidth is used effectively.”
Sai Infosystems
The Rs 440 crore Ahmedabad-based Sai Infosystems was the first vendor to strike a relationship with leading thin client technology vendor NComputing to manufacture their microcontroller-based thin clients under its brand. The company has also set up a plant at Kandla in Gujarat from where it has been exporting servers and small form factor PCs. The vendor was also one of the first to ship integrated AIO PCs for the enterprise market.
“Our plant in Kandla has been shipping products to the Middle East and Africa since the past three quarters,” informs Vijay Mandora, Director, Sai.
Intel’s leading white-box partner, Sai has already assembled a wide range of server products including blades. Sai also says it has exported in excess of Rs 40 crore worth of servers and PCs over the past year.
Conclusion
There are several other partners, such as Delhi-based Spectra Technologies and Bengaluru-based Digital Waves, which are trying to build what they describe as “productized solutions,” and are looking forward to take their products to the market. Then there are vendors such as the Delhi-based iProf Learning which has introduced a tablet PC at Rs 14,990 and targeted at the education market. Yet another example is the Simputer, designed by the Bengaluru-based Simputer Trust, and manufactured, among others, by PicoPeta Computers.
While most of these home-grown vendors are going direct, all of them would like help from the rest of the channels to help them achieve their targets and grow the market. “The response from the rest of the channels has not been exciting so far, but we hope they will soon change their mindset,” says Lodha of Netweb. |