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November 24, 1997


Compaq to focus on small business segment

The small and medium business segment, alongside the enterprise-corporate segment, tops the priority list of Compaq India, a subsidiary of the US-based Compaq Computer Corp.

Almost 25 per cent of the company's revenues in the country, estimated at about Rs 3.6 billion in 1996-97, come from the SMB segment, according to Abhishek Mukherjee, country manager, Compaq India.

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Mukherjee said that though the segment is not very mature in the country, Compaq is set on it as it is the fastest growing along with the consumer and 'small-office home-office' segment (from which 15 per cent of its revenues come).

He compared these to other segments such as enterprise-corporate and the government.

"The SMB, according to our estimation, accounts for around 40 per cent of the total annual IT expenditure (in unit terms) in the country,'' said Mukherjee.

Any company which has a turnover in the range of Rs 100-2,500 million and one which has up to 100 employees is categorised as SMB by Compaq.

"Most of these companies are looking for PC servers, desktops and LANs, communications tools such as fax and mail and some accounting or financial software,'' he said. But most of the SMBs IT investment is tied more to profits than to the turnover, he added.

N Bringi Dev, head, marketing services, Compaq Computer Asia, said: "We have been creating awareness in this segment through advertising, direct marketing, product demonstrations and road shows. We are now concentrating on development and expansion of our distribution and service channels and brand equity development.''

The SMB, traditionally, uses local or assembled brands as the MNC brands are perceived to be costly. "To address this, we have brought out low-cost packages such as our Rs 99,000 offer for the ProSignia server with Novell IntraNetware,'' he said.

Compaq is not alone in this game, as lately other information technology majors such as Intel and IBM have started a renewed focus on the SMB segment. "We estimate this market to be worth about $600 millions,'' said Richard Francis, country business manager, Tata-IBM Limited.

The company, which looks at two bands of firms, with turnover up to Rs 500 million and Rs 500-2000 million, stresses more on providing solutions and value-additions rather than "boxes''. "Our intent is to focus on value-added services through our partners, as well as current applications and solutions,'' said Francis.

Tata-IBM has a concept of collaborating with "partners in development'' who are local software companies and whose solutions are ported on the IBM platform. The company plans to achieve a cost advantage by offering these to the SMB.

While the company also offers similar solutions such as its Rs 6,263 per month offer of IBM PC server with Novell IntraNetware and Lotus Domino, "we also offer homegrown packages and those developed in, collaboration with Tata-IBM,'' said Francis.

These packages include manufacturing, financing and accounting packages, distribution and retail solutions, hotel/hospital management packages and clinical and legal solutions.

The company also plans to make use of network-centric computing and Lotus groupware solutions such as Lotus Notes.

- Compiled from the Indian media

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