Having a target to enter into five new cities every year, NetGear is bullish on the growth potential of the India market. In an interaction with CRN, Marthesh Nagendra E S, Country Manager – India & SAARC, NetGear, speaks about the company’s focus, growth areas and strategies
How do you see Netgear moving, in terms of the market, technology, environment and, innovations?
We have three product divisions – CHP, SMB and service provider business. Predominantly in CHP we have Wi-Fi routers, range extenders and Wi-Fi systems. In CHP, apart from providing good Wi-Fi coverage to homes, we are also focusing on providing smart parental controls, lag free gaming and in-depth security system against hacking, phishing, malware and related things. We are coming up with routers which can provide in-depth security to all the mobile devices or connected devices at the residence. The second is a new product portfolio where we have strong product line across four verticals. One is switching; wherein we are slowly seeing a lot of demand in the POE switch series, because state governments have made a mandate to deploy security cameras in all commercial establishments. This is the reason for the increase in demand for surveillance camera; you require POE switches to power up those cameras, so that is very important. Now with so many features coming up in surveillance camera such as video analytics, wide monitoring, the power budget will be very high and the POE switch that is required to power up those cameras has to be high-end. The second vertical where we’re seeing tremendous amount of growth is on 10gig switches and with increasing number of startups and media companies – even though there are 10 users in the environment – they would be requiring high bandwidth switches. this is something which is picking up tremendously in India.
The third part we are extensively focusing on is remote management. For example, earlier the customer used to pay Rs 25,000 for the equipment and Rs 25,000 for installation and maintenance; this is changing now as the customer is not blindly paying Rs 50,000, instead they are paying Rs 50,000 on products. Instead of splitting into products and service, customers are investing heavily on the product, so that they can manage the products themselves.
Another aspect is storage. Certainly now the cloud is becoming cheaper and the good thing is we have a wide range of network that adds storage. Now people are looking for reliable and affordable solution to be deployed in their physical space rather than deploying expensive storage solutions. That’s how we are capitalising into the market and were able to grow pretty well in the storage market.
Customers, especially the SMBs, are putting their 100 per cent data on cloud; they are also deploying physical storage infrastructure at their premises in order to replicate the data between their physical location and to the cloud. Besides almost every quarter, we end up deploying solutions in at least two or three big universities. Industry automation is picking up very well as well. In our service provider division, we have LTE modems and LTE routers. The major segment where we are seeing highest growth in revenues is smart home security cameras. We have our own brand called Arlo, under which we already have home security cameras and lights.
How are you bringing the channel piece in it?
We have over 40 people working across India, and in every city we are closely working with more than 50 solution partners. Whereas, twice in a year we conduct training programmes in every city. We have a demo centre in Bengaluru, and have demo products in almost every city. Additionally, we participate in events. We are in regular touch with solution partners, so we have community centres on the website. We actively engage with the pre-sales teams in every city with each and every solution partner. Our service is strong; we are one of very few companies to offer lifetime warranty for switches and lifetime replacement. Our products are stable and we are growing aggressively.
What unique value proposition do you offer to your partners?
Stickiness is very important because we never intend to do one-time sale; it has to be a recurring business. We have been working in almost every region to build the partner community. We offer a multi-brand environment. In case of a problem, if you can resolve the problem in a short period of time, then the confidence with the solution partner will automatically increase. It is crucial to have the controlled price list circulation. If we don’t protect partner margin, definitely they will not do business because we are not lowest in the market; there is always some other player who will be selling lower than you. Most of the time, our existing customer has always referred us to other customers – 40 per cent of our storage business happens through referrals. Storage is a specialised job and the turnover will be one-tenth of the switching partner, but the margins and profitability will be more than the switching business, so obviously you cannot distribute those products in retail outlets and you cannot sell like a keyboard and mouse, it has to be controlled distribution.
How do you handhold partners amidst new market opportunities and customer requirements?
We have the product launch gate wherein we give it to select solution partners. We give it for demos and we do PR activities based on that. Before the launch we have adequate stocks of that particular product in all locations. We give launch-specific schemes in order to increase sales, and we ensure due care in launching any product in India. Apart from that, we provide training sessions, address partner concerns and increase customer experience. These steps are working well for us.
In terms of training, have you come up with a curriculum or academy for periodical upscaling of partners?
We have two kinds of training: NetGear Sales Certification Programme, a one-day training programme wherein the sales executives learn the basic features of our SMB products. Whereas, the second set of training is NetGear Pre-sales Certification, a three-day programme where people attend from all parts of India at our Bengaluru office. After the training, they have to go through an exam and once they clear that, they get a certificate which is valid for a year. The certificate has to be upgraded, because the technology changes rapidly.
How has the channel business transitioned?
Over the years, the channel business has been changing. The digital media is also picking up pretty well. India is a growing market and internet penetration is very low. In the next 10 years, there will be no problem in India, the demand will go up, thereby growing the GDP.
Any plans for channel expansion and product additions?
Slowly every year we have a target of going to newer cities. Right now we are active in close to about 14 to 15 cities, so we plan to take our business to the next five cities. Growth can happen through geography and by increasing product line. So we are planning to make the launches very successful. In 2018, we intend to become aggressive in cities like Trichy and Hubli in southern part of India. We are also planning to invest more in Vijaywada. Rajkot is picking up really well. We’re seeing almost double business year-on-year in Nagpur, so we’re planning to add more resources over there.
What would be your key thrust area for this year?
Everything is equally important. We’re very strong in the premium segment. We give parental controls, security and lag free gaming experience; so, that market has to grow because the internet is growing. In the surveillance market, definitely more and more commercial establishments are coming up which require security, safety and with state government mandating it, the POE business will increase. Data is getting doubled year-on-year, the storage has to grow up and business wireless is something which we are bidding very high because our research centre for business wireless is in Bengaluru, so we have close to over 100 engineers working for business wireless in the city. Especially in the niche segment, smart security cameras are picking up, so we try to capitalise on that. We have dedicated teams to try the business in different verticals.