Valuable Exclusivity in IT Solutions [July 2012]

Subir Bhatnagar, VP and Global Head-Solutions, AGC Networks speaks to Subhajit Roy about the features that make AGC unique in IT solutions
AGC Networks has been in the business for last 25 years, could you give us an overview of the IT solutions used in the manufacturing sector and how is your company leveraged to this sector?AGC Network is an ICT solutions provider and integrator focusing mainly on 4 types of solutions: Unified Communications, Network Infrastructure, Enterprise Applications & Data Centres and Virtualisation. These are our core focus areas. We have created an eco-system of technology partners to offer their solutions in these 4 areas to our customers.
In India, we have over 2000 customers and the top 10 names from every vertical including the government, banking and telecom sectors feature in our customer list.
Could you give us an overview on the industrial manufacturing sector?In the manufacturing industry, IT domain comprises of two categories IT infrastructure and IT or enterprise applications. The IT infrastructure comprises of data centres, computing, storage and the network infrastructure. Besides it also includes desktops and laptops for employees. IT Infrastructure in recent trends also comprises of voice communications systems/IP PBX systems, video conferencing systems etc.
There are a number of applications in the IT application section. ERP is one of the major and core application where we play a significant role. At present we are not focusing on other typical software like SCADA, shop floor automation software. Are there enough domestic players to offer such kind of ICT solutions to the manufacturing sector?There are several players existing in the market. However, AGC Networks caters to both, the infrastructure as well as the applications domain whereas the other players focus on either the applications part or the IT infrastructure part. We have an upper hand as we focus on both these areas and have a share in both the areas.
Talking about the competitiveness in the market, how good is it as far as the Indian market is concerned?Several players have a huge role to play, for instance Honeywell focuses on automation systems whereas Wipro focuses on applications. Considering the fact that there are two sections i.e. IT infrastructure and IT applications, AGC plays a role in both these areas from an IT perspective. In IT applications, we focus on areas like ERP e.g. SAP as well as Business intelligence (BI). We play a role in these segments and that makes us unique from an end-to-end perspective.
The rate of adoption of ICT solutions in the Indian market is not very optimistic, how do you find the current situation in comparison to the global manufacturing sector?As far as the rate of adoption is concerned, the Indian manufacturing sector is at par with the international standards. Our man-force and manufacturing technology sense is at par with global standards. In ICT, all the manufacturing units have been using ERP for a long period of time. The recent trend shows that they are in a consolidation phase. Most of the manufacturers are trying to consolidate different data systems into a single framework. As a recent trend most of the large manufacturing organisations are trying to consolidate various applications into data centres and virtualise them. As far as the ICT options are concerned, we are not lagging behind.
The Indian market is very price sensitive, your comments.There are lot of alternatives available, it’s a wide network. For example, if a manufacturer is setting up a factory, there are various choices available in the form of several vendors. A couple of features would be the key differentiator between the vendors. A clear look at the IT industry would highlight that there are various options available in the form of multiple suppliers, multiple vendors to offer solutions for the manufacturing sector. When we talk about the automation control systems, there are some company who have a monopoly from a market share point of view. However, there are other players with a presence in these areas. It’s a very price sensitive market, but more or less there are many cost effective solutions available in the market. That’s where the adoption comes into picture. I won’t say it’s slow but it’s just about offering right product and solutions for a particular manufacturer. In small scale industry, the telecom service provider has started offering a lot of applications in infrastructure as a cloud model.
When you talk about Siemens and Honeywell, don’t you find it difficult to compete with them because they already have a reputation in the global market?The focus areas for these companies are completely different from a solution standpoint. We are not into SCADA systems or software automation systems which are their areas of operation. We are pretty much on the other side and that’s an area where they do not play a major role. As such we do not compete with them.
You have almost more than 2,000 customers, are you looking for any kind of global expansion?We operate out of India as well. Overseas, we operate out in Australia, New Zealand, Philippines, and Middle East. We have our presence in Africa, Kenya as well as South Africa. When we talk about 2,000 customers, these are from different verticals that include banking, IT, manufacturing, as well as Public sectors. From this perspective, we can say that we are a global company and our focus is to take our core solution areas globally to customers from all verticals.
What is your annual turnover and what is the contribution of overseas since you have a presence there as well?During FY 2011-12, we have achieved the revenue of Rs. 998 crore with almost 69 per cent growth over previous year. The contribution from overseas markets is around 15 to 20 per cent.
You have collaboration with CISCO; could you give us some details about it?CISCO is one of our key technology partners for Unified Communications and Borderless Networks.
Looking at the recent economic conditions, how do you see the year ahead?As far as the manufacturing sector is concerned, the industry will try to get an intelligent insight to what’s actually happening within their business and how do they bring different information systems to a consolidated different level. International players who are entering into India will decide on the basis of their global IT standards. They would not compromise on their global standards.
In that course, as ERP is the most essential application in a manufacturing environment. IT budget spending will be around upgrading ERP systems.
What would be your strategy to gain the market share from this kind of situation and have you started implementing some new strategies?Our strategy for the manufacturing vertical would be in line with CIO’s mindshare and offering them the best suitable solutions to their priorities. One of the recent trends is application and desktop virtualisation. One of our customers dealing in the steel and power industry has started with this project. In desktop virtualisation, the desktop gets replaced by a terminal and a thin client software application and the user gets access to enterprise applications from a data centre, pretty much like a cloud model; this is one of the recent trends in the manufacturing sector. From our overall turnover the manufacturing sector contributes to around 15 per cent.
Would you like to focus on any new areas that have not yet been tapped?Business Intelligence is one of the areas. The other thing that is happening is that with a lot of IT applications and infrastructure in the manufacturing sector IT governance and compliance becomes very vital from an IT Security perspective. With new trends like mobility and BYOD trends increasing in larger enterprises, enterprise security for end devices & IT governance, risk and compliance will be the order of the day. AGC has a large practice in this area and this is one of the areas we would like to focus on.
Like Virtualisation gave us a lot of success last year and we see it will pick up in the manufacturing vertical. Also, upgrading existing network infrastructure to cater to intensive ERP kind of applications requiring larger bandwidth will be a focus area for the manufacturer as well as us. The data centre virtualisation would lead to faster computing environments and storage. This will also be one of our key focus areas.
What is unique about your BI compared to the other competitors available in the market?Our uniqueness comes in the form of execution skills, deployment skills, support skills, manpower skills etc. We have a large pool of resources to support such applications. These, together with our understanding of the manufacturing vertical, gave us an upper hand.
How did your company perform during the last year and what are your expansion plans?For the current financial year, we are targeting a revenue of Rs. 1500 crore. We definitely look at 10 per cent growth from the manufacturing revenue.
As far as our expansion plans are concerned, we will continue with the existing partners and taking their solutions to the manufacturing vertical. However if there are certain solutions that are unique and currently not available in our portfolio, we may partner with technology vendors who provide these.

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