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Satara, Maharashtra
Situated at the feet of the Sahyadri range, this is one of the oldest towns in Maharashtra and a treat for nature lovers. The district is famous for its power due to a chain of windmills and one of the biggest hydroelectric projects of the state—the Koyna Electric Grid. It is also the highest sugar-producing district in the state, and home to many sugar-based factories that either produce sugar-based food products or use the by-products of these factories. Adding to this, the establishment of a Maharashtra Industrial Development Corporation (MIDC) site, about 4 kms from the city, has been one of the biggest growth drivers. It has brought in a cement factory (ACC), sugar mill and marble factory.
The town is sandwiched between Pune (about 112 kms to its north) and Kolhapur (about 200 kms to its south). Pune has a big market with about 250 channel partners while Satara has just about 50. Despite being a small city, the Satara IT market has kept itself abreast with its neighboring cities like Pune. According to channel partners, they compete more with the Pune channels than their local counterparts.
Parag Maruk, CEO of Softech, says that the proximity to Pune has helped the Satara channel to stay updated by keeping a track of the latest developments. “The aware and eager public generates good demand for these developments that in return work as an incentive for us,” he says.
Channels feel that the Satara IT market has been growing at a constant pace. Informs Ganesh Toraskar, owner of Ajinkya Infosys, “Though government departments place about 90 percent of their orders with big dealers and resellers, we still get orders from the zila parishad, LIC, cooperative banks and collector’s office.” There are about of 100 educational institutes which demand regular upgradation of their systems.
About 60 percent of the demand comes from the home segment followed by corporates, banks and the manufacturing units at MIDC that amount to about 20 percent. The rest is divided between the SMB and SOHO segments. According to Riyaz Ahmed, CEO of Urotech Electro Power Systems, the home segment is bigger by quantity rather than quality. “Well-to-do people and enterprises only purchase high-end devices like laptops, while most customers shop for desktops,” says he. Apart from these, what is drawing the attention of the community is the increasing demand from SMBs for deploying an ERP solution.
Channels get their supplies from regional distributors and sub-distributors operating in the market. The absence of direct branches of national distributors gives good business to regional distributors like Softech, Baba Computers and Blue Point. According to Ahmed, national distributors have set up branches at sites like Pune and Kolhapur to facilitate larger distribution. “Two years back Ingram Micro shifted its branch from Satara to Kolhapur. “This helped them spread to adjoining cities like Ratnagiri, while at Satara their reach was confined to the district entity.”
According to Sachin Patil, owner of Safsalya System, local brands like Zenith, Essar and Sahara find decent demand, but in spite of a price difference of about Rs 3,000 between these and global brands, LG, Lenovo, HP and Compaq are doing well. Till date, no software or IT company operates in the city, but the industrial park is expected to attract many more companies.
Profile
Parag Maruk,
CEO,
Softech
“Sub-distributors may cease to exist in bigger cities”
Softech is one of the established regional distributors operating in Satara for about a decade. Standing against all odds, the company started with the sale of single PCs to households. Within the next five years it evolved into a dealer shop handling networking and maintenance projects of banks and small businesses. Today, Softech is a regional distributor and sub-distributor for a few brands; it is also a Genuine Intel dealer.
Company Snapshot
|
| Company |
Softech |
| CEO |
Parag Maruk |
| Year of Inception |
1997 |
| Products |
Desktops, UPS, laptops, printers |
| Verticals |
Home segment, corporates, banking,
government |
| Key Business |
Regional
distributor for LG, Champion (UPS); Sub-distributor of HP, Compaq |
| Turnover (2006 - 2007) |
Rs 5 Crore |
| Employees |
9 |
|
With its efficient service, Softech got identified by LG and became its regional distributor for both the Satara and Pune regions. On being asked to distinguish between the Satara and Pune markets, Parag Maruk, CEO of Softech says, “We draw more margins from the Satara business than that of Pune.” He reasons that since Pune is a bigger market they face cut-throat competition with other distributors and other brands, while in Satara LG is the leading brand in display monitors and enjoys a virtual monopoly over other brands.
Softech works primarily as a distributor for dealers, but lately it has closed a tender for providing 250 HP desktops and about 60 printers to Rayat Siksha Sanstha.
Notes Maruk, “In smaller regions like Satara, where smaller dealers and resellers exist, sub-distributors form the core of the distribution channel. “With time, sub-distributors may cease to exist in bigger cities, but they will continue to perform an important role in the channel hierarchy.”
Talking about his future plans Maruk says, “We still have a long way to go. We aim to establish Softech as a brand. Eventually, we may enter the peripherals segment with our name. Last year our business recorded growth of about 20 percent, with a turnover of about Rs 5 crore. Seeing the market upbeat we aim to achieve Rs 12 crore turnover by the end of this year. We would like to branch out to cities like Kolhapur and Mumbai.” |